CONSOLIDATED FINANCIAL STATEMENTS
TAMURA CORPORATIONAS OF MARCH 31, 2019

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, 2019, and theconsolidated statements of income, comprehensive income, changes in net assets, and cash flows for the year
then ended and a summary of significant accounting policies and other explanatory information, all expressedin Japanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statementsin accordance with accounting principles generally accepted in Japan, and for designing and operating suchinternal control as management determines is necessary to enable the preparation and fair presentation of theconsolidated 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 disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment 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 theeffectiveness of the entity’s internal control, but in making these risk assessments the auditor considers internal
controls relevant to the entity’s preparation and fair presentation of the consolidated financial statements inorder to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness 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, 2019, and their consolidated financial performance and cash flows for the year then ended inconformity 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 theconvenience of readers, and, in our opinion, the accompanying consolidated financial statements have been
properly translated on the basis described in Note 1(a).

June 26, 2019
Tokyo, JapanTAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED BALANCE SHEET

Thousands of
U.S. dollars(Note 1(a))
March 31,2019

Millions of yen
March 31,
2019
2018
ASSETSCur rent Assets:
Cash on hand and in banks (Notes 4 and 5)¥

15,990¥14,954$

144,054

Trade notes and accounts receivable (Note 5)

22,10022,773

199,099

Inventories (Note 7)

13,424

12,680120,937

Other current assets

2,853

2,555

25,703

(58)

(98)

(523)

54,30952,864489,270

Buildings and structures

21,007

17,741

189,252

Machinery and equipment

26,09826,500235,117

891

709

8,027

47,99644,950432,396(32,175)(32,889)(289,864)

Allowance for doubtful accounts
Total current assets
Pr oper ty, Plant and Equipm ent: (Notes 15)

Lease assets
Accumulated depreciation

15,821

12,061

142,532

Land

5,159

5,889

46,477

Construction in progress

1,515

2,231

13,64922,49520,181

202,658

1,719

2,373

15,486

Property, plant and equipment, net
Investments and Other Assets:
Investment securities in other than non-consolidated
subsidiaries and affiliates (Notes 5 and 6)

Investment securities in non-consolidated
subsidiaries and affiliates

2,256

2,320

20,324

Net defined benefit asset (Note 9)

1,994

1,754

17,964

Deferred tax assets (Note 14)

1,189

328

10,712Intangible assets

1,581

1,663

14,243

Other assets

593

688

5,344

Allowance for doubtful accounts

(63)

(74)

(568)

Total investments and other assets

9,269

9,052

83,505¥

Total assets

The accompanying notes are an integral part of these statements.

2

86,073¥82,097$775,433

Millions of yen
March 31,
2019
2018

Thousands of
U.S. dollars(Note 1(a))
March 31,2019

12,095$

L IABIL IT IES AN D NET ASSET
Current L iabilities:
Trade notes and accounts payable (Note 5)¥

Short-term loans (Notes 5 and 8)¥

12,646108,964

7,591

4,395

68,387

Current portion of long-term debt (Notes 5 and 8)

282

5,973

2,541

Lease obligations (Notes 5 and 8)

195

201

1,757

Income taxes payable (Note 5)

824

1,375

7,423

1,055

1,142

9,505

75

64

676

Accrued bonuses
Accrued bonuses for directors
Other current liabilities

3,294

4,308

29,67525,411

30,104228,928

Long-term debt (Notes 5 and 8)

9,279

4,754

83,595

Lease obligations (Notes 5 and 8)

531

348

4,784

Deferred tax liabilities (Note 14)

94

136

847

3,136
467

3,226
533

28,252
4,207

13,507

8,997

121,685

11,82911,829106,568

Additional paid-in capital

17,03817,037

153,495

Retained earnings

18,924

13,346

170,486

(274)

(288)

(2,468)47,51741,924

428,081

78

472

703

Total current liabilities
L ong-term L iabilities:

Net defined benefit liability (Note 9)
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 11)
Total shareholders' equity
Accumulated Other Comprehensive Income:Unrealized holding gain (loss) on securities
Translation adjustments

(37)

1,428

(333)

Retirement benefits liability adjustments (Note 9)(793)(1,215)(7,144)

(752)

685

(6,774)

153

143

1,378

Total accumulated other comprehensive income
Share Subscription Rights
Non-controlling Interests
Total net assets¥

T otal liabilities and net assets

The accompanying notes are an integral part of these statements.

3

237

244

2,135

47,15542,996424,820

86,073¥82,097$775,433

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,
2019
N et Sales

¥

2018

87,008¥

2019

85,558$783,856

Cos t of Sales (Note 13)

61,44859,609553,586

Gross profit

25,56025,949230,270

20,96020,542

188,829

4,600

5,407

41,441

Interest and dividend income

146

131

1,315

Equity in earnings of affiliates

186

210

1,676

Interest expense

(235)

(218)

(2,117)

Foreign exchange loss

(70)

(113)

(631)
24,550

Selling, general and adm inistrative expenses(Notes 12, 13 and 20)
Operating income
Other Incom e (Expenses ):Other income

2,725

288

Other expenses

(236)

(248)

(2,126)2,516

50

22,667

7,116

5,457

64,108Current

1,363

1,293

12,279Prior years' adjustment

－
(652)

583
(60)

－
(5,874)

711

1,816

6,405

6,405

3,641

57,703

Profit before income taxes
Incom e Taxes (N ote 14)

DeferredProfitProft attributable to:Non-controlling interests

8

Owners of parent

¥

6,397

11
¥

3,630

72
$

Yen

57,631
U.S. dollars

Per Share:
Basic profit attributable to owners of parent

¥

78.00

¥

44.27

$

0.70

Diluted profit attributable to owners of parent

77.51

44.00

0.70

Cash dividends per share

10.00

9.00

0.09

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,
2019Profit

¥

2018

6,405

¥

2019

3,641

$

57,703

Other Com prehensive Incom e (N ote 10):
Unrealized holding gain 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 prehensive incom e
Com prehensive incom e

(394)

151

(3,550)－(1,348)1
509－(12,144)

422

622

3,802

(124)

56

(1,117)(1,444)

1,339(13,009)

¥

4,961

¥

4,980

$

44,694

¥

4,960

¥

4,959

$

44,685

Total com prehensive incom e attributable to:
Owners of parent
Non-controlling interests

1

The accompanying notes are an integral part of these statements.

5

21

9

TAMURA CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor the year ended Marc h 31, 2019
Millions of yen
Shareholders’ equity
Number ofsharesissuedBalance at April 1, 201882,771,473

Additional
paid-inCommonstock¥

Retainedearnings

capital11,829¥17,037¥

13,346

Treasurystock(Note 11)

Total
shareholders'equity

¥

¥

(288)

41,924

Changes during the year
Cash dividends paid

(819)

(819)

Profit attributable toowners of parent forthe period

6,397

6,397

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, 2019

1

(0)

(0)

(0)

14

15
－

82,771,473¥－
11,829¥1
17,038¥

5,578
18,924

14
(274)

¥

¥

5,593
47,517

Millions of yen
Accumulated other comprehensive income
Retirement

Total

benefits

accumulated

Unrealized

liability

other

Share

Non-

(loss) on

Translation

adjustments

comprehensive

Subscription

controllingsecurities

adjustments(Note 9)incomerightsinterests¥¥

holding gain

Balance at April 1, 2018

472

1,428

¥

(1,215) ¥

685

¥

143

¥

244

Total net
assets¥42,996

Changes during the year
Cash dividends paid

(819)

Profit attributable toowners of parent forthe period

6,397

Purchases of treasury stock(0)

Disposal of treasury stock
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2019

15

¥

(394)

(1,465)422(1,437)

10

(394)
78 ¥

(1,465)(37) ¥

422(793) ¥

(1,437)(752) ¥

10
153

6

¥

(7)

(1,434)

(7)
237 ¥

4,159
47,155

For the year ended Marc h 31, 2018
Millions of yen
Shareholders’ equity
Number ofsharesissuedBalance at April 1, 2017

Additional
paid-inCommonstock

82,771,473¥

capital11,829¥Treasurystock(Note 11)

Total
shareholders'equity¥¥Retainedearnings

17,037¥

10,454(281)

39,039Changes during the year
Cash dividends paid

(738)

(738)

Profit attributable toowners of parent forthe period

3,630

3,630

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, 2018

0

(7)

(7)

0

0
－

82,771,473－
11,829¥¥0
17,037

2,892
13,346

¥

(7)
(288)

¥

2,885
41,924¥

Millions of yen
Accumulated other comprehensive income
Unrealized

Balance at April 1, 2017Retirement

Total

benefits

accumulated

Deferredholding gain

gain (loss)

liability

other

Share

Non-

(loss) on

from hedging

Translation

adjustments

comprehensive

Subscription

controllingsecurities

instruments

adjustments(Note 9)incomerightsinterests

¥

¥

321

(1) ¥

866

¥

(1,837) ¥(651) ¥

127

¥

73

Total net
assets¥38,588Changes during the year
Cash dividends paid

(738)

Profit attributable toowners of parent forthe period

3,630

Purchases of treasury stock(7)

Disposal of treasury stock
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2018

0
151

¥

151
472

1

¥

1
－

562

¥

562
1,428

7

¥

622

1,336

622
(1,215) ¥

1,336
685

16

¥

16
143

171

¥

171
244

1,523

¥

4,408
42,996

For the year ended Marc h 31, 2019

Number ofsharesissuedBalance at April 1, 201882,771,473

Commonstock$

106,568

Thousands of U.S. dollars (Note 1(a))
Shareholders’ equity
Treasury
Additional
paid-in
Retained
stock
capitalearnings(Note 11)

Total
shareholders'equity$$153,486$

120,233$(2,594)

377,693

Changes during the year
Cash dividends paid

(7,378)(7,378)

Profit attributable toowners of parent forthe period

57,631

57,631

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, 2019982,771,473$－
106,568$(0)

9
153,495$

50,253
170,486

(0)

(0)

126

135

126
(2,468)$50,388428,081$

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

Total

benefits

accumulated

Unrealized

liability

other

Share

Non-

(loss) on

Translation

adjustments

comprehensive

Subscription

controllingsecurities

adjustments(Note 9)incomerightsinterests

Total net
assets$$$$holding gain

Balance at April 1, 2018

4,253

12,865$(10,946)

$

6,172

$

1,288

2,198

387,351

Changes during the year
Cash dividends paid

(7,378)

Profit attributable toowners of parent forthe period

57,631

Purchases of treasury stock(0)

Disposal of treasury stock
Net changes in items otherthan those in shareholders’equityTotal changes during the year
Balance as of March 31, 2019135
(3,550)$(3,550)703(13,198)$(13,198)
(333)

3,802
3,802
(7,144)$(12,946)$(12,946)(6,774)

The accompanying notes are an integral part of these statements.

8

90

$

90
1,378

(63)

$

(63)
2,135

(12,919)$

37,469424,820

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,
2019
Cash 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 (gain) 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 fr om Investing Ac tivities:
Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Purchase of investment securities
Proceeds from sale of investment securities

¥

2018

7,116
2,219
(87)
10
(44)
(49)
(146)
235
7
(186)
(164)
(75)
(1,434)
(83)
(741)
6,578
261
(249)
(1,921)
4,669

¥

2019

5,457
2,001
45
(5)
(56)
(215)
(131)
218
154
(210)
(93)
(2,276)(1,374)
984
(487)
4,012
208
(228)
(1,340)2,652$

64,10819,991
(784)
90
(396)
(441)
(1,315)
2,117
63(1,676)(1,477)(676)(12,919)(748)(6,676)59,261
2,351(2,243)(17,306)
42,063(6,302)
1,544
(43)
344

(3,491)
186
(357)
299

(56,775)
13,910
(387)
3,099

－

(1,113)－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 provided by (used in) financing activities
Effec t of Exc hange Rate Changes on Cash andCash Equivalents

359(4,098)(347)(4,823)

3,234(36,919)

3,321
4,831
(5,992)
(236)
(0)
0
(816)
(12)
1,096

1,062
890
(3,547)
(238)
(6)
0
(736)
(0)
(2,575)29,91943,523(53,983)(2,126)－0(7,351)
(108)
9,874

(427)

77

(3,847)Net Increa s e (Decrea se) in C a s h a nd C a s h Eq ui va lent s

1,240(4,669)

11,171

14,601

19,270131,541

Purchase of subsidiaries' shares resulting inchanges in scope of consolidation (Note 4)

Cash and Cash Equivalents at the Beginningof the Year
Cash and Cash Equivalents at the Endof the Year (N ote 4)¥915,841¥

14,601$

142,712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 ¥111=U.S. $1, the approximate rate of exchange on March 31,
2019 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, 2019, the following companies have been
excluded from consolidation: ANZEN DENGU (HUI ZHOU) CO.,LTD. as a resultof the transfer of the entire equity interests; and GUNMA TAMURACORPORATION following the completion of their liquidations .
TAMURA DEUTSCHLAND GmbH, ELSOLD GmbH & Co. KG and ELSOLD
VERWALTUNG GmbH merged and the company name was changed to TAMURAELSOLD GmbH.
TAMURA KAKEN TECH CO.,LTD. and TAMURA POWER TECHNOLOGY
CO.,LTD. merged and the company name was changed to TAIWAN TAMURATECHNOLOGY CO.,LTD..
TAMURA PENSION UK LIMITED was added as consolidated subsidiaries
because it was newly established by the Company.
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, ifany, are made in the preparation of the consolidated financial statements.
10(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).
(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 denominatedin foreign 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
are limited 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.

11

(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)
・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 the decliningbalance 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 realestate leasing contracts.
(k) Amortization of goodwill
Goodwill is amortized on a straight-line basis over 10 years.

12(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 asreported in the financial statements.
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 berealized.
(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
the weighted 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 sharefor the years ended March 31, 2019 and 2018 were as follows:13

Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
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]

¥

6,397

¥

3,630

$

57,631

¥
¥

－
6,397

¥
¥

－
3,630

$
$

－
57,63182,01982,01082,019

524

506

524

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

2. Unapplied Accounting Standards, etc.
・Accounting Standard for Revenue Recognition (ASBJ Statement No.29, issued
March 30, 2018)
・Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ
Guidance No.30, issued March 30, 2018)(a) Overview
The International Accounting Standards Board (IASB) and the US Financial
Accounting Standards Board (FASB) co-developed a new comprehensive revenue
recognition standard and issued “Revenue from Contracts with Customers” inMay 2014 (IFRS 15 by the IASB, ASC 606 by the FASB). Considering that IFRS
15 is applied from fiscal years beginning January 1, 2018 and ASC 606 from fiscal
years beginning after December 15, 2017, the ASBJ developed comprehensive
accounting standards for revenue recognition and issued them together with theimplementation guidance. The fundamental policy for developing the accounting
standard for revenue recognition by the ASBJ was that the accounting standard
would incorporate the fundamental principles of IFRS 15 as the starting pointfrom the perspective of comparability of financial statements, which is the one of
the benefits of achieving consistency with IFRS 15. For matters to be taken into
consideration in Japan with regard to accounting practices, etc., alternative
treatments are provided within a range that would not impair financial statementcomparability.
(b) Date of adoption
This accounting standard and implementation guidance will be adopted from thefiscal year beginning on April 1, 2021.
(c) Impact of the adoption of accounting standard, etc.
The Company is currently evaluating the effects of adopting Accounting Standard
for Revenue Recognition, etc. on its consolidated financial statements.

14

3. Accounting Changes(a) Change in accounting policies
Not applicable.
(b) Change in presentation(Partial Amendments to Accounting Standard for Tax Effect Accounting)
The Company and its consolidated subsidiaries have adopted “Partial
Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement
No. 28, February 16, 2018) (hereinafter, the “Partial Amendments”) from the
beginning of the fiscal year ended March 31, 2019. As such, deferred tax assets
and deferred tax liabilities are included within investments and other assets andlong-term liabilities, respectively, and related income tax disclosures have been
expanded.
As a result, on the consolidated balance sheet for the previous fiscal year,“Deferred tax assets” in “Current Assets” decreased by 936 million yen and“Deferred tax assets” in “Investments and Other Assets” increased by 267 million
yen. In addition, “Other current liabilities” in “Current Liabilities” decreased by
25 million yen and “Deferred tax liabilities” in “Long-term Liabilities” decreasedby 643 million yen.
Furthermore, deferred tax assets and deferred tax liabilities for a particular taxpaying company and within a particular tax jurisdiction are presented on a net
basis, and therefore total assets decreased by 669 million yen compared with theamount before the change.
Also, “Note 14. Income Taxes” in the Notes to the consolidated financial
statements has been expanded in accordance with Note 8 and Note 9 ofInterpretive Notes to Accounting for Tax Effect Accounting. However, comparative
information for the year ended March 31, 2018 has not been disclosed in Note 14
in accordance with the transitional provisions set forth in Article 7 of the Partial
Amendments.
4. Supplementary Cash Flow Information
Cash and cash equivalents in the consolidated statements of cash flows arecomposed of cash on hand, bank deposits with a maturity of 3 months or less andwhich represent a minor risk of fluctuation in value.
As of March 31, 2019 and 2018, cash and cash equivalents consisted of the following:Thousands of
U.S. dollars
2019

Millions of yen
2019
Cash on hand and in banks
Time deposits with maturities of over 3 months
Cash and cash equivalents¥¥

15,990(149)
15,841

2018¥¥

14,954(353)
14,601$$

144,054(1,342)
142,712In the year ended March 31, 2018, TAMURA DEUTSCHLAND GmbH, ELSOLDGmbH & Co. KG, ELSOLD VERWALTUNG GmbH and ESE INDUSTRIES (THAI)
CO., LTD. were included in the scope of consolidation. The composition of assets andliabilities at acquisition, and the relation between acquisition cost and payments foracquisition are as follows:

15

Millions of yen
2018
Current assets
Property, plant and equipment
Goodwill
Current liabilities
Long-term liabilities
Translation adjustments
Non-controlling interests
Acquisition costs of shares
Cash and cash equivalents
Purchase of investments in subsidiary resulting inchange in scope of consolidation

¥

1,537
825
360
(330)
(139)
(7)
(161)
2,085
(972)

¥

1,113

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
principally used 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 7 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 withinterest expense, derivative transactions such as forward foreign exchange
contracts, currency swap transactions and interest rate swap transactions are16

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.”(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 notavailable. 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, 2019 and 2018 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”).

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
Income taxes payable
Long-term debt
Lease obligations
Total liabilities
Derivatives (*)

Derivatives (*)

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
Income taxes payable
Long-term debt
Lease obligations
Total liabilities

As of March 31, 2019
Millions of yen
Book value
Fair value

1,709
39,799¥12,095
7,591
282
824
9,279
726
30,797

¥

(32)

¥

¥
¥

15,99022,1001,709
39,799

¥
¥

－
－
－
－

¥

12,095
7,591
281
824
9,431
715
30,937

¥

－
－
(1)
－
152
(11)
140

¥

(32)

¥

－

As of March 31, 2018
Millions of yen
Book value
Fair value

Difference

¥

¥

¥
¥

18

15,99022,10014,954
22,773
2,362
40,089¥12,646
4,395
5,973
1,375
4,754
549
29,692

¥

(0)

¥

¥
¥

14,954
22,773
2,362
40,089

¥
¥

－
－
－
－

¥

12,646
4,395
5,992
1,375
4,779
538
29,725

¥

－
－
19
－
25
(11)
33

¥

(0)

¥

－

As of March 31, 2019
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
Income taxes payable
Long-term debt
Lease obligations
Total liabilities
Derivatives (*)$$$

144,054
199,099
15,396
358,549$

108,964
68,3872,541
7,423
83,595
6,541
277,451

$

(288)

$

$
$

144,054
199,099
15,396
358,549

$

－
－
－
－

$

$

108,964
68,3872,532
7,423
84,964
6,441
278,711

$

$

－
－
(9)
－
1,369
(100)
1,260

$

(288)

$

－

(*) The amount is the net balance of total transactions. Amounts reported asliabilities are shown in parentheses.
Notes:
1. Methods to determine the fair value of financial instruments and othermatters related to securities and derivative transactions
AssetsCash on hand and in banks and Trade notes and accounts receivable
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 describedin “Note 6. Securities”.
Liabilities
Trade notes and accounts payable, Short-term loans and Income taxes payable
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 of comparable maturity and contract conditions.
Derivative transactions
See “Note 16. Derivative Financial Instruments”.

19

2. Financial instruments for which the fair value is extremely difficult tomeasure as of March 31, 2019 and 2018 were as follows:

Millions of yen
2019
2018
Available-for-sale securities withoutmarket quotations:
Unlisted securities
Total

¥
¥

2,267
2,267

¥
¥

Thousands of
U.S. dollars
2019

2,331
2,331

$
$

20,423
20,423

Because no quoted market price is available and it is extremely difficult todetermine the fair value, the above financial instruments are not included in
the preceding table.
3. The aggregate maturities of monetary claims and held-to-maturity securities
as of March 31, 2019 and 2018 were as follows:

As of March 31, 2019
Millions of yen
Due after 1 year
Due within
through 5 years
1 yearCash on hand and in banks
Trade notes and accounts receivable¥¥

15,99022,10038,090

¥

－
－
－

¥

As of March 31, 2018
Millions of yen
Due after 1 year
Due within
through 5 years
1 yearCash on hand and in banks
Trade notes and accounts receivable¥¥

14,954
22,77337,727¥¥－－－

As of March 31, 2019
Thousands of U.S. dollars
Due after 1 year
Due within
through 5 years
1 yearCash on hand and in banks
Trade notes and accounts receivable$$

144,054
199,099
343,153

$
$

－
－
－

4. The redemption schedules for long-term debt and lease obligations weredisclosed in “Note 8. Short-term Loans and Long-term Debt”.
20

6. Securities(a) As of March 31, 2019 and 2018, securities consisted of the following:Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Available-for-sale securities for whichmarket quotations are available
Acquisition cost
Book value
Unrealized gain

¥

1,498
1,708
210

¥

¥

1,659
2,362
703

¥

$
$

13,495
15,3871,892(b) Sales of securities classified as other securities and the aggregate gain and loss forthe years ended March 31, 2019 and 2018 were as follows:
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Sales proceeds
Available-for-sale securities
Aggregate gain
Available-for-sale securities
Aggregate loss
Available-for-sale securities

¥

329

¥

300

$

2,964

¥

164

¥

122

$

1,477

¥

－

¥

(29)

$

－

7. Inventories
As of March 31, 2019 and 2018, inventories consisted of the following:

Millions of yen
2019
2018
Merchandise
Finished goods
Work in process
Raw materials and supplies
Total

¥

4,690
1,009
1,586
6,139
13,424

¥

21

¥

¥

3,600
1,194
1,799
6,087
12,680Thousands of
U.S. dollars
2019
$

$

42,252
9,090
14,28855,307
120,937

8. Short-term Loans and Long-term Debt
Short-term loans as of March 31, 2019 and 2018 were principally bank overdrafts
and short-term notes bearing interest at annual average interest rates of 1.79% and1.47%, respectively.
As of March 31, 2019 and 2018, long-term debt consisted of the following:Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Long-term loans, principally from banks (*)
Lease obligations¥

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

¥

9,561
726
10,287
(282)
(195)
9,810

¥

10,727549
11,276(5,973)
(201)
5,102

¥

$

$

86,136
6,541
92,677(2,541)(1,757)88,379(*) As of March 31, 2019 and 2018, long-term loans and lease obligations consisted of
the following:Thousands of
U.S. dollars
2019

Millions of yen
2019Long-term loans, at an annual average rateof 0.93
Lease obligations, at an annual average rateof 1.72
Current portion- Long-term loans, at an annual
average rate of 0.64
Current portion- Lease obligations, at an annual
average rate of 1.74

¥

¥

2018

9,279

¥

4,754

$

83,595

531

348

4,784

282

5,973

2,541

195

201

1,757

10,287¥

11,276$

92,677

The aggregate annual maturities of long-term debt and lease obligations as of March
31, 2019 were as follows:
Millions of yen
Long-term
Lease
loans
obligations
Year ending March 31,
2021
2022
2023
2024
After above year

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

¥

200
3,760
272
144
4,903

¥

173
147
124
69
18

$

1,802
33,8742,450
1,297
44,172

$

1,559
1,324
1,117
622
162

¥

9,279

¥

531

$

83,595

$

4,784

22

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 theCompanies.
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
the Defined 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, 2019 and 2018 were as follows:
Millions of yen
2019

2018

Thousands of
U.S. dollars
2019

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¥

12,941
449
55
(142)
(602)

¥

(159)
¥

1
12,543

12,740
456
57
23
(490)

$

121
¥

34
12,941

116,586
4,045
495(1,279)(5,423)(1,432)$

8
113,000

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¥

11,578
238
(246)
519
(448)

¥

(128)
¥

23

－
11,513

10,570
220
393
735
(442)

$

101
¥

1
11,578104,306
2,144(2,216)
4,676(4,036)(1,153)$－
103,721

(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, 2019 and 2018.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018

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

¥

110

¥

7
(5)
112

¥

110

¥

10
(10)
110

$

991

$

63
(45)
1,009

(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, 2019 and 2018.
Millions of yen
2019
2018
Funded projected benefit obligation
Plan assets¥

12,075(11,513)
562
580

¥

¥

1,142

¥
¥

¥
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

Thousands of
U.S. dollars
201912,492(11,578)
914
558

$

¥

1,472

$

10,2883,136(1,994)¥3,226(1,754)$28,252(17,964)

1,142

¥

1,472

$

10,288¥$

108,784(103,721)
5,063
5,225

(4) Components of pension expense for the years ended March 31, 2019 and 2018.
Millions of yen
2019
2018
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service cost
Other
Net pension expense

¥

¥

24

457
55
(238)
370
(28)
11
627

¥

¥

466
57
(220)
327
(28)
5
607

Thousands of
U.S. dollars
2019
$

$

4,117
495
(2,144)
3,333
(252)
100
5,649

(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, 2019 and 2018.
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Prior service cost
Net actuarial difference
Total

¥
¥

28
(306)
(278)

¥

28
(649)
(621)

¥

¥
¥

(107)
1,043
936

¥

(135)
1,350
1,215

¥

252
(2,757)(2,505)$

Thousands of
U.S. dollars
2019

Millions of yen
2019
2018
Unrecognized prior service cost
Unrecognized actuarial difference
Total

$

$

(964)
9,396
8,432

$

(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, 2019 and 2018 were as follows.
2019

2018
31
47

Bonds
Equity securities
Life insurance company
general accounts
Cash and cash equivalents
Other

%

30
48

12

12

1
9
100

1
9
100

%

*Of total plan assets, 22% and 22% were included in a retirement benefit
trust (stocks, cash and bank deposits) established for the corporate pension
plan as of March 31, 2019 and 2018, 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, 2019 and 2018 were as follows.

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

2019

2018

0.0 ~ 5.3 %0.0 ~ 5.3 %1.8 ~ 3.3

1.8 ~ 3.2

2.0 ~ 5.0

3.4 ~ 5.0(c) Defined contribution plans
The required contributions by the Companies were ¥176 million ($1,586
thousand) and ¥178 million for the years ended March 31, 2019 and 2018,
respectively.

26

10. Other Comprehensive Income
Reclassification adjustments and the related tax effects for components of othercomprehensive income for the years ended March 31, 2019 and 2018 were as follows:
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018

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

¥

¥

(368)

¥

315

$

(3,315)

(123)

(95)

(1,108)

(491)
97
(394)

220
(69)
151

(4,423)873(3,550)

－

1

－

－

－

－

－
－
－

1
－
1

－
－
－

(1,318)511(11,874)

(40)

－

(360)

(1,358)10(1,348)

511
(2)
509

(12,234)
90(12,144)

(62)

370

(559)

341

252

3,073

279
143
422

622
－
622

2,514
1,288
3,802

(124)

56

(1,117)(1,444)

¥

1,339

$

(13,009)

11. Treasury Stock
The Company had 764 thousand shares and 752 thousand shares of treasury stock
as of March 31, 2019 and 2018, respectively, in order to prepare for the exercise ofstock options granted to certain directors and executive officers, subject to theapproval 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.

27

12. Selling, General and Administrative Expenses
For the years ended March 31, 2019 and 2018, the significant components of selling,
general and administrative expenses were as follows:
Thousands of
U.S. dollars
2019

Millions of yen
2019
Salaries
Pension expense
Research and development expense
Freight
Provision for directors’ bonuses
Accrued bonuses

¥

2018

6,359
599
926
2,252
70
677

¥

6,133
593
1,200
2,027
60
745

$

57,2885,396
8,342
20,288631
6,099

13. Research and Development Expenses
Total research and development expenses included in manufacturing costs andselling, general and administrative expenses amounted to ¥1,067 million ($9,613
thousand) and ¥1,268 million for the years ended March 31, 2019 and 2018,
respectively.

14. Income Taxes
As of March 31, 2019, and 2018, the significant components of deferred tax assets
and liabilities were as follows:
Millions of yen
2019
Deferred tax assets:
Tax loss carryforwards(*2)
Loss on valuation of inventories
Accrued enterprise taxes
Accrued bonuses
Net defined benefit liability
Loss on valuation of investment securities
Loss on impairment of fixed assets
Unrealized profit on inventories
Other
Subtotal
Valuation allowance(*1) :Tax loss carryforwards(*2)
Deductible temporary differences
Subtotal
Total deferred tax assets
Deferred tax liabilities:
Net defined benefit asset
Unrealized holding gain (loss) on securities
Other
Total deferred tax liabilities
Net deferred tax assets

¥

¥
¥

¥

28

1,487
83
60
328
1,292
196
53
209
495
4,203
(959)
(1,218)(2,177)
2,026
190
91
651
932
1,094

2018
¥

¥
¥

¥

1,886
101
52
356
1,252
308
74
196
565
4,790
－
－
(3,810)
980
－
189
599
788
192

Thousands of
U.S. dollars
2019
$

$
$

$

13,396
748
541
2,955
11,640
1,766
477
1,883
4,459
37,865(8,640)(10,973)(19,613)
18,252
1,712
820
5,864
8,396
9,856

(*1) The decrease in the valuation allowance for tax loss carryforwards was mainly
a result of the recording of a significant amount of extraordinary income in
the fiscal year ended March 31, 2019, which was not predicted in prior fiscal
years.
(*2) The breakdown of tax loss carryforwards and deferred tax assets by
expiration is as follows.
As of March 31, 2019
Millions of yen
Tax loss

Valuation
allowance

carryforwards(1)

Within 1 year¥

Over 1 year
but within 3 years
Over 3 years
but within 5 years
Over 5 years
but within 10 years
Over 10 years
¥

24

¥

(14)

Thousands of U.S. dollars
Deferred tax
assets¥10

Tax loss

Valuation
allowance

carryforwards
(1)

$

216

$

(126)

Deferred tax
assets
$

90

525

(240)

285

4,730

(2,162)

2,568

156

－

156

1,405

－

1,405

78

(30)

48

703

(270)

433

704

(675)

29

6,342

(6,082)

260

1,487

¥

(959)

¥

528 (2)$

13,396$(8,640)$4,756 (2)(1) The Companies calculate tax loss carryforwards using the statutory tax
rate.
(2) The Companies assess the possibility of realizing deferred tax assets
based on estimated future taxable income for each taxpaying entity
calculated using the medium-term management plan.
The reconciliation between the statutory tax rate and the effective tax rates for theyears ended March 31, 2019 and 2018 was as follows:
2019
Statutory tax rate
Effect of:
Non-deductible expenses for tax purpose
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
Prior years' adjustment of income tax
Others
Effective tax rates

29

2018

30.6 %

30.9 %

1.7
(3.3)
0.4
0.3
(0.8)

2.5
(0.4)
0.5
1.5
(1.2)

(2.6)

(6.0)

(18.3)
2.7－(0.7)
10.0 %

(9.2)
2.5
10.1
2.1
33.3 %

15. Leases
Finance lease transactions (lessee)(a) Finance lease transactions with ownership transfer
Lease assets:
・Property, plant and equipment: Display units (machinery and equipment)
・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, machineryand equipment 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, 2019and 2018 were as follows:

Millions of yen
2019
Due within one year
Due after one year

¥
¥

2018

188
183
371

¥
¥

206
179
385

Thousands of
U.S. dollars
2019
$
$

1,693
1,649
3,342

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, 2019, and 2018, for which hedge accounting has not been applied aresummarized as follows:(a) Foreign currency-related transactions30

As of March 31, 2019
Millions of yen
Contract
amountDerivative transactions

Portion maturing

Fair value

over one year

Difference

Transactions outside the market:
Forward foreignexchange contracts:
Buy
USD

¥

66

¥

－

¥

0

¥

0

As of March 31, 2018
Millions of yen
Contract
amountDerivative transactions

Portion maturing
over one year

Fair value

Difference

Transactions outside the market:
Forward foreignexchange contracts:
Buy
USD

¥

87

¥

－

¥

(0)

¥

(0)

As of March 31, 2019
Thousands of U.S. dollars
Contract
amountDerivative transactions

Portion maturing

Fair value

over one year

Difference

Transactions outside the market:
Forward foreignexchange contracts:
Buy
USD

$

595

$

－

$

0

$

0

(*) Price provided by financial institutions.

(b) Rate and Currency-related transactions
The Company did not recognize any transactions during the year ended March
31,2018.
As of March 31, 2019
Millions of yen
Contract
amountDerivative transactions

Portion maturing
over one year

Fair value

Difference

Transactions outside the market:
Interest rate and currency
swaps:
Receive variable andpay fixed
Receive in U.S. dollars
and pay in Thai baht

¥

576

¥

31

576

¥

(32)

¥

(32)

As of March 31, 2019
Thousands of U.S. dollars
Contract
amountDerivative transactions

Portion maturing
over one year

Fair value

Difference

Transactions outside the market:
Interest rate and currency
swaps:
Receive variable andpay fixed
Receive in U.S. dollars

$

5,189

$

5,189

$

(288)

$

(288)

and pay in Thai baht(*) Price provided by financial institutions.

The notional amounts and the fair value of the derivative instruments outstanding
as of March 31, 2019 and 2018, for which hedge accounting has been applied aresummarized as follows:(a) Foreign currency-related transactions
As of March 31, 2019
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

¥

950

¥

－

¥

(*1)

10

－

(*1)

443

－

(*1)

Buy
USD

Trade
accounts
payable

Total

¥

32

1,403

¥

－

¥

－

As of March 31, 2018
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

¥

66

¥

－

¥

(*1)

23

－

(*1)

1,384

－

(*1)

Buy
USD

Trade
accounts
payable

Total

¥

1,473

¥

－

¥

－

As of March 31, 2019
Thousands of U.S. dollars
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

$

8,559

$

－

$

(*1)

90

－

(*1)

3,991

－

(*1)

Buy
USD

Trade
accounts
payableTotal$

12,640$－$(*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.

33－

(b) Interest rate-related transactions
As of March 31, 2019
Millions of yen
Derivative transactions
Interest-rate swaps:
Pay fixed and receive
variable

Main hedged
items

Contract
amountLong-term
debt¥Portion maturing
over one year

4,482

¥

4,420

Fair value¥(*)

As of March 31, 2018
Millions of yen
Derivative transactions
Interest-rate swaps:
Pay fixed and receive
variable

Main hedged
itemsLong-term
debt

Contract
amount¥Portion maturing

Fair value

over one year

6,581

¥

2,452

¥

(*)

As of March 31, 2019
Thousands of U.S. dollars
Derivative transactions
Interest-rate swaps:
Pay fixed and receive
variable

Main hedged
items

Contract
amountLong-term
debt$

40,378Portion maturing
over one year$

39,820Fair 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, 2019, the Company is contingently liable as a guarantor ofborrowings for non-consolidated subsidiaries (NOVEL CRYSTAL TECHNOLOGY,
INC.) in the amounts of ¥19 million ($171 thousand).
As of March 31, 2018, the Company was contingently liable as a guarantor ofborrowings for non-consolidated subsidiaries (TE ENERGY CO., LTD. andNOVEL CRYSTAL TECHNOLOGY, INC.) in the amounts of ¥274 million and¥23 million, respectively.
(b) Litigation
Bombardier Transportation Sweden AB (“BT”) submitted
a claim for compensation against TAMURA EUROPE LIMITED (“TamuraEurope”), a consolidated subsidiary of the Company, to
the International Chamber of Commerce for damages concerning malfunctions ofcertain products ordered by said company and continued the arbitration process.
Tamura-Europe received notice of the rejection of the claim for compensation on
34(*)

May 21, 2019 (Tokyo time).
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, 2016
(2) Name of entity requesting arbitration
Bombardier Transportation Sweden AB (Vasteras, Sweden)(3) Details of the request for arbitration, amount of damage claims and judgement- Details of request:
Payment for damages concerning malfunctioning products delivered by
Tamura-Europe- Amount claimed: 8,113,231 Euro (¥1,030 million as of December 31, 2018)-Judgement:
The claims was dismissed.
(4) Outlook
There was only minor impact on the financial position and operating results of
the Companies.

18. Business Combination, etc.
(Business Divestiture)
The Company transferred the thermal business (thermal-links and resistors) andequity of its consolidated sub-subsidiary company, ANZEN DENGU (HUI ZHOU)
CO., LTD., to Uchihashi Estec Co., Ltd. on September 30, 2018.
(a) Overview of business divestiture
i. Name of acquirer:
Business transfer: Uchihashi Estec Co., Ltd.
Transfer of equity: Uchihashi Hong Kong Limited
ii. Details of divested business:
Business transfer: Thermal business in the Electronic components segmentof the Company
Transfer of equity: All shares of ANZEN DENGU (HUI ZHOU) CO., LTD., a
sub-subsidiary of the Company
iii. Reason for business divestiture
The thermal market continues to be impacted by severe business conditions.
Considering this fact, the Company decided to carry out the businessdivestiture based on its judgment that the respective acquirers, through the
integration of know-how and management resources, would be better
positioned to provide stable and continuous supplies to customers and thus
grow the thermal businessiv. Date of the business divestiture
September 30, 2018
v. Overview of the business divestiture including legal form:
The Company will receive a cash consideration in return for the transfer ofthe business.
35

(b) Summary of accounting treatment
i. Gain on business transfer¥44 million ($396 thousand)ii. Carrying value and details of assets and liabilities related to transferredbusiness
Thousands of
U.S. dollars

Millions of yen
Current assets
Property, plant and equipment
Total assets
Current liabilities
Total liabilities

¥

506
112
618
130
130

$

4,559
1,009
5,568
1,171
1,171

iii. Accounting treatment
The accounting treatment is based on “Accounting Standard for Business
Divestitures” (Accounting Standards Board of Japan, Statement No. 7,
September 13, 2008) and the “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures”(ASBJ Guidance No.10, December 26, 2008).
(c) Name of reportable segments in which divested businesses was included:
Electronic components(d) Summarized profit or loss of divested business recognized in the consolidated
statements of income for the year ended March 31, 2019.
Thousands of
U.S. dollars

Millions of yen
Net Sales
Operating income

¥

948
93

$

8,541
838

19. 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, 2019 and 2018 is summarized asfollows:
Millions of yen
2019
2018
Maximum overdraft amountand total amount of loan commitment
Executed loan amounts
Net amount

36

¥

2,500

¥

1,500
1,000

¥

2,500

¥

－
2,500

Thousands of
U.S. dollars
2019$22,523$

13,5149,009

20. Stock Options(a) Stock options expenses recognized in selling, general and administrative
expenses for the years ended March 31, 2019 and 2018
Thousands of
U.S. dollars
2019

Millions of yen
2019
Selling, general and administrative expenses

¥

2018
26

¥

16

$

234

(b) Outline of stock options and changes
a. Outline of stock options
Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

The 2nd Stock Option Plan
June 29, 2005
Directors 6(Exclude outside director)
Executive officers 9
Common shares 35,000
July 1, 2005
Retirement of director andexecutive officer
N.A.

The 3rd Stock Option Plan
June 29, 2006
Directors 6(Exclude outside director)
Executive officers 6
Common shares 28,000
July 1, 2006
Retirement of director andexecutive officer
N.A.

The 4th Stock Option Plan
June 28, 2007
Directors 6(Exclude outside director)
Executive officers 7
Common shares 30,000
July 1, 2007
Retirement of director andexecutive officer
N.A.

For the period of five years fromthe next day of retirement of
director and executive officer

July 1, 2006 to

July 1, 2007 toJune 30, 2036

June 30, 2037

The 5th Stock Option Plan
June 27, 2008
Directors 6(Exclude outside director)
Executive officers 6
Common shares 42,000
July 1, 2008
Retirement of director andexecutive officer
N.A.
July 1, 2008 toJune 30, 2038

The 6th Stock Option Plan
June 26, 2009
Directors 6(Exclude outside director)
Executive officers 4
Common shares 77,000
July 1, 2009Retirement of director andexecutive officer
N.A.
July 1, 2009 toJune 30, 2039

The 7th Stock Option Plan
June 29, 2010
Directors 6(Exclude outside director)
Executive officers 6
Common shares 52,000
July 1, 2010Retirement of director andexecutive officer
N.A.
July 1, 2010 toJune 30, 2040

The 8th Stock Option Plan
June 29, 2011
Directors 6(Exclude outside director)
Executive officers 6
Common shares 65,000
July 1, 2011Retirement of director andexecutive officer
N.A.
July 1, 2011 toJune 30, 2041

The 9th Stock Option Plan
June 28, 2012
Directors 6(Exclude outside director)
Executive officers 6
Common shares 72,000
July 1, 2012Retirement of director andexecutive officer
N.A.
July 1, 2012 toJune 30, 2042

The 10th Stock Option Plan
June 27, 2013
Directors 6(Exclude outside director)
Executive officers 6
Common shares 78,000
July 1, 2013
Retirement of director andexecutive officer
N.A.
July 1, 2013 toJune 30, 2043

37

Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

Date of resolution
Title and number of grantees
Number of stock options
Grant dateCondition for vesting
Requisite service period
Exercise period

The 11th Stock Option Plan
June 26, 2014
Directors 6(Exclude outside director)
Executive officers 6
Common shares 52,000
July 1, 2014
Retirement of director andexecutive officer
N.A.
July 1, 2014 toJune 30, 2044

The 12th Stock Option Plan
June 26, 2015
Directors 7(Exclude outside director)
Executive officers 5
Common shares 36,000
July 1, 2015
Retirement of director andexecutive officer
N.A.
July 1, 2015 toJune 30, 2045

The 14th Stock Option Plan
June 28, 2017
Directors 6(Exclude outside director)
Executive officers 8
Common shares 37,000
July 1, 2017Retirement of director andexecutive officer
N.A.
July 1, 2017 toJune 30, 2047

The 15th Stock Option Plan
June 27, 2018
Directors 6(Exclude outside director)
Executive officers 7
Common shares 43,000
July 1, 2018
Retirement of director andexecutive officer
N.A.
July 1, 2018 toJune 30, 2048

The 13th Stock Option Plan
June 28, 2016
Directors 6(Exclude outside director)
Executive officers 5
Common shares 50,000
July 1, 2016Retirement of director andexecutive officer
N.A.
July 1, 2016 toJune 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.

b. Stock options granted and changes
The movement in the number of stock options for the year ended Mach 31,
2019 is presented after conversion to the 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(Shares)
The 2nd Stock Option Plan
June 29, 2005

The 3rd Stock Option Plan
June 29, 2006

The 4th Stock Option Plan
June 28, 2007

13,000－－1,000
12,00013,000－－2,000
11,00016,000－－3,000
13,000

－
1,000
1,000
－
－

－
2,000
2,000
－
－

－
3,000
3,000
－
－

The 5th Stock Option Plan
June 27, 2008

The 6th Stock Option Plan
June 26, 2009

The 7th Stock Option Plan
June 29, 2010

23,000－－3,000
20,00059,000－－10,00049,00042,000－－3,000
39,000

－
3,000
3,000
－
－

－
10,00010,000
－
－

－
3,000
－
－
3,000

38

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

The 8th Stock Option Plan
June 29, 2011

The 9th Stock Option Plan
June 28, 2012

46,000－－3,000
43,00061,000－－4,000
57,00074,000－－－74,000

－
3,000
－
－
3,000

－
4,000
－
－
4,000

－
－
－
－
－

The 11th Stock Option Plan
June 26, 2014

The 12th Stock Option Plan
June 26, 2015

Date of resolution

Date of resolution
Exercise price
Average stock price at exercise
Fair value at the grant date
Date of resolution
Exercise price
Average stock price at exercise
Fair value at the grant date

The 13th Stock Option Plan
June 28, 2016

50,000－－－50,00031,000－－2,000
29,00047,000－－3,000
44,000

－
－
－
－

2,000
2,000
4,000
－
－

3,000
3,000
6,000
－
－

The 14th Stock Option Plan
June 28, 2017

The 15th Stock Option Plan
June 27, 2018

36,000－－4,000
32,000－43,0002,200
3,400
37,400

－
4,000
4,000
－
－

－
3,400
3,400
－
－

Price information

Exercise price
Average stock price at exercise
Fair value at the grant date

The 10th Stock Option Plan
June 27, 2013

(Yen)
The 2nd Stock Option Plan
June 29, 2005

The 3rd Stock Option Plan
June 29, 2006

1
698－
The 5th Stock Option Plan
June 27, 2008

1
698
464
The 6th Stock Option Plan
June 26, 2009

1
572
426
The 8th Stock Option Plan
June 29, 2011

1
568
348
The 9th Stock Option Plan
June 28, 2012

1
－
203

39

1
－
151

The 4th Stock Option Plan
June 28, 2007

1
572
653
The 7th Stock Option Plan
June 29, 2010

1－
203
The 10th Stock Option Plan
June 27, 2013

1
－
163

Date of resolution

The 11th Stock Option Plan
June 26, 2014

1
－
321

Exercise price
Average stock price at exercise
Fair value at the grant date
Date of resolution

The 12th Stock Option Plan
June 26, 2015

The 14th Stock Option Plan
June 28, 2017

Exercise price
Average stock price at exercise
Fair value at the grant date

The 13th Stock Option Plan
June 28, 2016

1
718
423

1
718
229

The 15th Stock Option Plan
June 27, 2018

1
644
439

1
566
439

(c) Valuation technique used to determine the fair value of stock options
The 15th stock options granted in the fiscal year ended March 31, 2019 werevalued using the following valuation technique.
Valuation technique: Black-Scholes option-pricing model
Principal assumptions used in the option-pricing model:
Date of resolution
Expected volatility(*1)
Average expected life(*2)
Expected dividends(*3)
Risk-free interest rate(*4)

The 15th Stock Option Plan
June 27, 201843.67%
10 years
9 yen per share
0.04%(*1) Calculated based on the actual stock prices from April 2008 to June 2018.
(*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, 2018, the dividend policy of the Company and prior years’ actual
dividends.
(*4) Japanese government bond yield corresponding to the average expectedlife.

(d) Method of estimating the number of stock options to be vested
Only the actual number of forfeited stock options is reflected because it isdifficult to rationally estimate the number of stock options that will be forfeitedin 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.
40

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, reactors, AC
adaptors, battery chargers, piezoelectric ceramic products and LED-related
products. The “Electronic Chemicals / FA Systems” business manufactures solder
paste, solder resist, flux and soldering system. The “Information Equipment”
business manufactures audio mixing console for broadcast used, wirelessmicrophone system, communication network equipment and OEM products.

(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 Note 1. Significant Accounting Policies.
Segment income is based on operating income.
Inter-segment sales are recorded at the same prices used in transactions withthird parties.

(c) Information on net sales, income or loss, assets and liabilities, and other items by
the reportable segment
Year ended March 31, 2019
Millions of yen

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
FA Systems
Equipment

¥

¥

Other
(*1)

Subtotal

Total

Adjustments(*2)

87,008¥

Consoli－
dated
(*3)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

54,79528,084

¥

4,123

¥

87,002

¥

6

¥

－

¥

87,008

－

80

78

158

665

823

(823)

－

54,79528,164

4,201

87,160671

87,831(823)

87,008

¥

962

¥

3,572

¥

481

¥

5,015

¥

18

¥

5,033

¥

(433)

¥

4,600

¥

1,175

¥

912

¥

109

¥

2,196

¥

8

¥

2,204

¥

15

¥

2,219

¥

65

¥

42

¥

－

¥

107

¥

－

¥

107

¥

－

¥

107

¥

3,873

¥

2,153

¥

77

¥

6,103

¥

2

¥

6,105

¥

14

¥

6,119

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

41

Year ended March 31, 2018
Millions of yen

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
FA Systems
Equipment

¥

¥

Other
(*1)

Subtotal

Total

Adjustments(*2)

85,558733
86,291¥

Consoli－
dated
(*3)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

55,875－55,87525,37964
25,443

¥

4,224
8
4,232

¥

85,47872
85,550

¥

80
661
741

¥

－
(733)
(733)

¥

85,558－85,558

¥

2,197

¥

3,244

¥

490

¥

5,931

¥

80

¥

6,011

¥

(604)

¥

5,407

¥

1,083

¥

790

¥

105

¥

1,978

¥

11

¥

1,989

¥

12

¥

2,001

¥

63

¥

－

¥

－

¥

63

¥

－

¥

63

¥

－

¥

63

¥

4,030

¥

861

¥

67

¥

4,958

¥

3

¥

4,961

¥

32

¥

4,993

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

Year ended March 31, 2019
Thousands of U.S. dollars

Electronic
Components

Reportable segments
Electronic
Chemicals /Information
Equipment
FA Systems

$

$

Other
(*1)

Subtotal

Total

Adjustments(*2)

783,856$

Consoli－
dated
(*3)

Net Sales
SalesCustomers
Inter-segment
Segment
income (loss)

493,649

253,009$

37,144$

783,802

$

54

$

－

$

783,856

－

720

703

1,423

5,991

7,414

(7,414)－

493,649

253,729

37,847785,225

6,045

791,270(7,414)

783,856

$

8,667

$

32,180

$

4,333

$

45,180$162$

45,342$(3,901)$

41,441$

10,586

$

8,216

$

982

$

19,784$72$

19,856$135$

19,991

$

586

$

378

$

－

$

964

$

－

$

964

$

－

$

964

$

34,892$

19,396$694$

54,982$18$

55,000$126$

55,126

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, 2019 and 2018.
(*2) Adjustments for segment income (loss) were as follows:
Millions of yen
2019Inter-segment eliminations
Corporate costs (*)
Total

¥

68
(501)
(433)

¥

2018
¥
¥

67
(671)
(604)

Thousands of
U.S. dollars
2019
$
$

613
(4,514)(3,901)(*) 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.
42

(*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.

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

SalesCustomers

SalesCustomers

SalesCustomers

Electronic
Components

Year ended March 31, 2019
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

¥

¥

54,79528,084

¥

4,123

¥

Consolidated
6¥87,008

Electronic
Components

Year ended March 31, 2018
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

Consolidated

¥

¥

¥

55,87525,379

¥

4,224

¥

80

Electronic
Components

Year ended March 31, 2019
Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment
Other

$

$

493,649

253,009$

37,144$85,558

Consolidated

54$

783,856(2) Information by geographical area
i. SalesJapan
Net Sales¥

37,110China¥

24,187

Year ended March 31, 2019
Millions of yen
North and
South
Other Asia
EuropeAmerica¥

14,155

43

¥

7,502

¥

3,764

Consoli－
dated

Other
¥

290

¥

87,008

JapanNet Sales

¥

China

38,474¥Japan
Net Sales$Year ended March 31, 2018
Millions of yen
North and
South
Other Asia
EuropeAmerica

25,206

¥

$

¥

5,721

¥

2,905

¥

Year ended March 31, 2019
Thousands of U.S. dollars
North and
South
Other Asia
EuropeAmericaChina334,324

12,937217,901$

127,523$

67,586$33,910Consoli－
dated

Other
315

¥

Consoli－
dated

Other
$

2,612

85,558$783,856

ii. Property, plant and equipment
Year ended March 31, 2019
Millions of yen

Japan
Property, plantand equipment¥

14,972

China
¥

3,532

EuropeOther Asia
¥

3,289

North andSouth
America

¥

458

¥

244

Consoli－
dated¥

22,495

Year ended March 31, 2018
Millions of yen

Japan
Property, plantand equipment¥

12,982

China
¥

3,477

EuropeOther Asia
¥

2,980

North andSouth
America

¥

513

¥

229

Consoli－
dated¥

20,181

Year ended March 31, 2019
Thousands of U.S. dollars

Japan
Property, plantand equipment$

134,883

China$

31,820

Other Asia$

29,631

North andSouth
America

Europe
$

4,126

$

2,198

(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, 2019 and 2018.

44

Consoli－
dated$

202,658(e) Information about impairment loss on fixed assets for each reportable segment
Fiscal year ended March 31, 2019: Not applicable
Fiscal year ended March 31, 2018: Not applicable(f) Information about amortization and balance of goodwill for each reportablesegment:

Amortization
Balance as ofMarch 31

Amortization
Balance as ofMarch 31

Amortization
Balance as ofMarch 31

Electronic
Components

Year ended March 31, 2019
Millions of yen
Electronic
Information
Chemicals /FA Systems
Equipment
Other

¥

¥

65
77

42

¥

370

－

¥

－

Electronic
Components
¥

¥

150

－

¥

363

－

¥

－

Electronic
Components
$

$

694

378

$

3,333

－
－

¥

$

107
447

Consolidated
－

¥

63
513

－

Year ended March 31, 2019
Thousands of U.S. dollars
Electronic
Chemicals /Information
FA Systems
Equipment
Other

586

－
－

Year ended March 31, 2018
Millions of yen
Electronic
Chemicals /Information
FA Systems
Equipment
Other

63

Consolidated

Consolidated
－

$

－

964
4,027

(g) Information about gains on negative goodwill for each reportable segment
Fiscal year ended March 31, 2019: Not applicable
As of March 31, 2018, the “Electronic Chemicals / FA Systems” business recorded¥2 million gain on negative goodwill. It was due to the consolidation of ESE
INDUSTRIES (THAI) CO., LTD as a subsidiary.

45

22. Related Party Transactions
Fiscal year ended March 31, 2019: Not applicable

RelatedParty
ClosefamilymemberName

Location

CapitalItsuyaTamura－－Year ended March 31, 2018
Ownership
Ratio of
VotingRelationBusiness or
Rightsship
Occupation

Detail ofTransaction

Transaction
AmountExecutive
adviser

Payment ofadvisory fee¥12 million(Owened)Direct: 0.0%

Payment ofadvisory fee(*1) Itsuya Tamura, the executive advisor of the Company, is the father of Naoki
Tamura, the representative director and the chairman of the Company. The
Company believes that management systems can be further strengthened byreceiving Itsuya Tamura’s advice on overall management based on his long
business experience, profound insight and strong connections gained throughhis involvement in management as the representative director and thechairman of the Company in the past.
Itsuya Tamura resigned the executive advisor of the Company on March 31,
2018.
Remuneration is determined in accordance with the Company’s internal rules.
(*2)“Amount of transaction” excludes consumption taxes, while “Ending balance”
is reported inclusive of consumption taxes.

23. Subsequent Events
There were no significant subsequent events for the years ended March 31, 2019and 2018.

46

EndingBalance－