May 10, 2016

Summary of Consolidated Financial Results
For the Year Ended March 2016 [Japan GAAP]
Name of Company:
KAGA ELECTRONICS CO., LTD.
Stock Code:8154
URL: http://www.taxan.co.jp/
Stock Exchange Listing:Tokyo Stock Exchange, First Section
Representative
Title: President & COO
Name: Ryoichi Kado
Title: Managing Director, Administration Headquarters Name: Eiji Kawamura
Contact Person
Phone:+81-(0)3-5657-0111
Date of regular general meeting of shareholders:June 29, 2016 (tentative)
Date of commencement of dividend payment:
June 30, 2016 (tentative)
Date of filing of securities report:
June 29, 2016 (tentative)
Supplementary explanatory documents:
Yes
Earnings presentation:
Yes (For institutional investors)(Yen in millions, rounded down)
1. Financial results for the current fiscal year (April 1, 2015 – March 31, 2016)(1) Result of operations (Consolidated)(Percentage figures represent year on year changes)
Profit attributable
Net sales
Operating income
Ordinary income
to owners of parent
Fiscal year ended March 2016
Fiscal year ended March 2015
Note: Comprehensive income:Million yen%

Million yen%

Million yen

245,387

(3.8)

7,788

22.4

255,143
(1.1)
6,362
24.6
FY ended March 31, 2016:
3,466 million yen
FY ended March 31, 2015:
7,592 million yen
Earnings per share
fully diluted

Earnings per share
Yen

Fiscal year ended March 2016
Fiscal year ended March 2015
Ref.: Equity in earnings/losses of affiliates%

Million yen

%

7,908

3.2

5,437

23.1

7,664
-54.3%
43.5%

31.1

4,416

13.9

Return on
equityYen

192.43156.28FY ended March 2016: -million yen

Ratio of ordinary Ratio of operating
income to assets income to net sales

%

%

%

9.0
6.3
7.8
6.0
FY ended March 2015: - million yen

3.2
2.5

(2) Financial Position (Consolidated)
Total assets

Net assets

Million yen

As of March 31, 2016
As of March 31, 2015
Ref.: Shareholders’ equity(3)

Equity ratio

Million yen

Net assets per share%Yen

124,281
61,80849.7
2,185.94
127,948
59,60346.6
2,108.04
FY ended March 2016: 61,764 million yen
FY ended March 2015: 59,564 million yen

Cash flow position (Consolidated)
Net cash providedby (used in)operating activities

Net cash providedby (used in)investing activities

Net cash providedby (used in)financing activities

Cash and cash
equivalents at endof period

Million yen

Million yen

Million yen

Million yen

9,546
9,127

(1,263)(1,465)(3,067)(4,431)

21,87917,569Fiscal year ended March 2016
Fiscal year ended March 2015
2. Dividends
End of
1Q
Yen

Dividend per share
End of End of End of
Full year
2Q
3Q
FY
Yen

Yen

Yen

Yen

Annualaggregate
amountMillion yen

Payout ratio(Consolidated)

Dividends/
net assets(Consolidated)%

Fiscal year ended March 2015
15.00
25.00
40.00
1,130
25.6
Fiscal year ended March 2016
20.00
35.00
55.00
1,554
28.6
Fiscal year ending March 2017
20.00
20.00
40.00
24.0
(estimated)
Notes: Breakdown of year-end dividend for FY3/15: Ordinary dividend: 15.00 yen; Extraordinary dividend: 10.00 yen
Breakdown of year-end dividend for FY3/16: Ordinary dividend: 20.00 yen; Extraordinary dividend: 15.00 yen

%

2.0
2.6

3. Forecast for the fiscal year ending March 2017 (Consolidated, April 1, 2016 - March 31, 2017)(Percentage figures represent year on year changes)
Profit attributable toEarnings per
Net sales
Operating income
Ordinary income
owners of parent
shareMillion yen%

Million yen%

Million yen%

Yen

First half

103,000(16.2)

1,100(73.8)

1,200(72.9)

1,100(62.6)

38.93

Full year

230,000

(6.3)

5,700

(26.8)

6,400(19.1)

4,700(13.6)

166.34*

Million yen

%

Notes
(1) Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation):
None(2) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
Note: For more information, please refer 5. Consolidated Financial Statements (5) Note to the consolidated financial statements (Changes inaccounting policies) on page 15.

(3) Number of shares outstanding (common stock)(a) Shares outstanding
As of March 31, 2016:(including treasury stock)

28,702,118

As of March 31, 2015:

28,702,118(b) Treasury stock

As of March 31, 2016:

446,824

As of March 31, 2015:

446,040(c) Average number of shares
outstanding during the year

As of March 31, 2016:

28,255,634

As of March 31, 2015:

28,256,695(Reference) Non-consolidated Financial Results
1. Financial results for the fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)(1) Result of operations (Non-consolidated)(Percentage figures represent year on year changes)
Net sales
Fiscal year ended March 2016
Fiscal year ended March 2015

Operating income

Million yen%

85,72390,138

(4.9)
(4.6)

ProfitMillion yen%

Million yen%

Million yen

%

1,077
324

231.8
181.1

3,513
2,845

23.5
32.2

2,856
1,790

59.6
164.1

Earnings per share

Earnings per share fully
diluted

Yen

Fiscal year ended March 2016
Fiscal year ended March 2015

Ordinary income

Yen101.11
63.37-(2) Financial Position (Non-consolidated)
Total assets
Million yen

As of March 31, 2016
70,396
As of March 31, 2015
73,071
Ref.: Shareholders’ equity
Fiscal year ended March 2016: 38,680 million yen

Net assets

Equity ratio

Net assets per share

Million yen%

Yen38,68037,18654.9
50.9

1,368.97
1,316.06

Fiscal year ended March 2015: 37,186 million yen

Reasons for the non-consolidated business results difference between current and previous fiscal year
Sales were affected by sluggish sales of electronic components and semiconductor in Japan and other factors. Difference inearnings was due a decline in selling, general and administrative expenses, in addition to improved overall gross profit margin.
* Status of implementation of audit procedures
The rule mandating audit procedures (under the Financial Instruments and Exchange Act) does not apply to this Summary of
Financial Results. It is under the review procedure process based upon the Financial Instruments and Exchange Act at the time of
disclosure of this report.
* Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was
prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements
for a number of reasons. For information about the forecasts, please see “Results of Operations” on page 2 of Supplementary
Information.

Index for Supplementary Information
1.

Results of Operations ....................................................................................................................................................................2
Overview on consolidated business performance ....................................................................................................................2
Overview of financial condition ...............................................................................................................................................3
Fundamental policy for earnings allocations and dividends in the current and next fiscal yeas ...............................................32.
Corporate Group ...........................................................................................................................................................................4
3.
Management Policies ....................................................................................................................................................................6(1) Fundamental management policy.............................................................................................................................................6(2) Targeted performance indicators ..............................................................................................................................................6(3) Medium- and long-term management strategies ......................................................................................................................6(4) Key issues ................................................................................................................................................................................6(5) Other important items concerning management .......................................................................................................................7
4.
Fundamental policy regarding choice of accounting standard ......................................................................................................7
5.
Consolidated Financial Statements ...............................................................................................................................................8(1) Consolidated balance sheet ......................................................................................................................................................8(2) Consolidated statements of income and comprehensive income ............................................................................................10(3) Statements of changes in net assets ........................................................................................................................................11(4) Consolidated statements of cash flows ...................................................................................................................................13(5) Notes to consolidated financial statements ............................................................................................................................15(Notes to going concern assumptions) ........................................................................................................................................15(Changes in accounting policies) ................................................................................................................................................15(Additional information) .............................................................................................................................................................15(Segment information etc.)..........................................................................................................................................................15(Per-share information) ...............................................................................................................................................................20(Subsequent events) ....................................................................................................................................................................20
6.
Non-consolidated Financial Statements ......................................................................................................................................21(1) Balance sheets ........................................................................................................................................................................21(2) Statements of income .............................................................................................................................................................24(3) Statement of changes in shareholders’ equity ........................................................................................................................25
7.
Other Information .......................................................................................................................................................................27(1) Changes in directors and corporate auditors ..........................................................................................................................27(2) Other information...................................................................................................................................................................27
(1)
(2)
(3)

1

1.

Results of Operations(1)

Overview on consolidated business performance
In the fiscal year ended March 31, 2016, the Japanese economy recovered slowly as government economic stimulus measuresand the monetary policies of the Bank of Japan supported a rebound in corporate earnings and capital expenditures alongwith an improvement in employment. However, the outlook is still uncertain because of slowing economic growth in China
and other emerging countries, the low price of crude oil, and other reasons.
In the electronics industry, the principal area of operations for the KAGA ELECTRONICS Group, demand for PCs andconsumer electronics remained weak. In addition, growth of markets for smartphones, tablets and other mobile wirelessdevices is slowing. But there is rising demand for electronic products used in automobiles and in medical and healthcare
products. There was also growth in demand in emerging countries for electronic products associated with the environment
and energy and the IoT (Note 1). As a result, the electronics industry was relatively healthy overall.
Based on the management philosophy of “Everything we do is for our customers,” the KAGA ELECTRONICS Groupestablished the Group Management Headquarters to oversee horizontal collaboration among group companies and theoperations of KAGA ELECTRONICS. There were many activities for increasing sales to major current customers, growing
outside Japan and cutting expenses.
Consolidated net sales decreased 3.8% from the previous fiscal year to 245,387 million yen, operating income increased
22.4% to 7,788 million yen, ordinary income increased 3.2% to 7,908 million yen, and profit attributable to owners of parent
increased 23.1% to 5,437 million yen.
Note 1: IoT is the abbreviation for “Internet of Things,” services, business models or technologies that connects all things through theInternet.

Business segment performance was as follows.
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components and otherproducts, electronics manufacturing service (EMS) (Note 2), and other activities)
Sales of electronic components and semiconductors used in amusement products were slow in Japan. There was growthin sales of electronic components and semiconductors used in communications equipment and in the overseas EMS
business. The result was a 3.9% decrease in segment sales to 189,486 million yen and, due to an improvement in the
gross profit margin, an increase of 34.3% in operating income to 6,515 million yen.
Note 2: Electronics manufacturing service is a term used for the provision of product development and manufacturing services on an
outsourcing basis.

(b) Information equipment (Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products,
original-brand products, and other products)
The volume of digital cameras and other products decreased and sales of housing-related products were weak. This
segment concentrated on adding new products and increasing sales of existing products. There were also businessreorganization measures that included a reexamination of the sales strategy for consumer products. Segment sales
decreased 2.7% to 40,880 million yen and operating income was up 14.7% to 811 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
Orders for the development of electronic toys and other products decreased. This segment focused on the development
and sale of animation computer graphics and game software while reorganizing unprofitable operations. Segment sales
increased 0.3% to 2,897 million yen and operating income was up 57.1% to 695 million yen.
(d) Others (Electronic device repairs and support, manufacturing and sales of amusement products, sales of sporting goods,
and other activities)
Sales of arcade amusement machines in Japan and sales of used PCs and communications equipment in the recycling
business were weak. Segment sales decreased 7.0% to 12,123 million yen and there was an operating loss of 343 million
yen compared with operating income of 169 million yen in the previous fiscal year.
In the fiscal year ending on March 31, 2017, in the electronics industry, more growth is anticipated in some market sectors,
such as automotive devices and medical and healthcare products. Emerging markets will probably grow, too. However, theoutlook is unclear because of slowing sales of mobile devices like smartphones and tablets and for other reasons.
The KAGA ELECTRONICS Group plans to achieve growth of current business operations while increasing sales activities
in growing market sectors like automotive devices. Another goal is the growth of business operations like EMS where thegroup can add value.
Based on this outlook, the current forecast for consolidated performance in the fiscal year ending on March 31, 2017 is asfollows:(Consolidated performance forecast)(Year on year)
Net sales
230,000 million yen
down 6.3%
Operating income
5,700 million yen
down 26.8%
Ordinary income
6,400 million yen
down 19.1%
Profit attributable to owners of parent
4,700 million yen
down 13.6%

2

(2)

Overview of financial condition(a) Assets, liabilities and net assets
Assets decreased 3,667 million yen from one year earlier to 124,281 million yen at the end of the fiscal year mainly
because of decrease in notes and accounts receivable-trade and inventories.
Liabilities decreased 5,872 million yen to 62,472 million yen mainly because of decrease in notes and accounts payabletrade and long-term loans payable.
Net assets increased 2,204 million yen to 61,808 million yen mainly because of profit attributable to owners of parent.
(b) Cash flows
There was a net increase of 4,310 million yen in cash and cash equivalents to 21,879 million yen at the end of the fiscal
year.
(Operating activities)
Net cash provided by operating activities was 9,546 million yen compared with 9,127 million yen one year earlier. The
profit before income taxes was the major reason.
(Investing activities)
Net cash used in investing activities was 1,263 million yen compared with 1,465 million yen one year earlier. The
primary use of cash was payments for the purchase of property, plant and equipment.
(Financing activities)
Net cash used by financing activities was 3,067 million yen compared with 4,431 million yen one year earlier. This wasprimarily decrease in repayments of long-term loans payable and cash dividends paid.

(Reference) Cash flow index trends
Fiscal year
ended
March 2012

Fiscal year
ended
March 2013

Fiscal year
ended
March 2014

Fiscal year
ended
March 2015

Fiscal year
ended
March 2016

Shareholders’ equity ratio
40.5%
43.5%
41.9%
46.6%
49.7%
Shareholders’ equity ratio at market value
20.9%
19.4%
32.0%
32.4%
32.5%
Debt repayment multiple
14.97 years
2.15 years
5.17 years
1.60 years
1.33 years
Interest coverage ratio
6.6
51.6
25.2
77.9
71.0
Shareholders’ equity ratio is shareholders’ equity divided by total assets.
Shareholders’ equity ratio at market value is market capitalization divided by total assets.
Debt repayment multiple is interest-bearing debt divided by operating cash flows.
Interest coverage ratio is operating cash flows divided by interest expenses.
Notes:
1. All figures are calculated based on consolidated financial data.
2. Market capitalization uses the number of shares issued less treasury stock.
3. Cash flows are operating cash flows.
4. Interest-bearing debt is the sum of all liabilities on the balance sheet on which the Group is obligated to pay interest.
(3)

Fundamental policy for earnings allocations and dividends in the current and next fiscal years
The Company’s fundamental policy is to pay a steady and consistent dividend to shareholders that reflect consolidated
performance as well as the need to establish a more powerful financial position and base of operations from a long-term
stable perspective.
Based on this policy, the Medium-term Management Plan 2018, which was announced on November 4, 2015, includes thegoal of paying a stable dividend while maintaining a consolidated payout ratio of 25% to 35%.
Consequently, KAGA ELECTRONICS plans to pay a fiscal year-end dividend of 35 yen per share, the sum of an ordinary
dividend of 20 yen and a special dividend of 15 yen to reflect results of operations in the fiscal year that ended in March 2016.
With the interim dividend of 20 yen, this will result in a dividend of 55 yen per share applicable to the fiscal year.
For the fiscal year ending on March 31, 2017, a dividend per share of 40 yen, including an interim dividend of 20 yen, isplanned.

3

2.

Corporate GroupThe KAGA ELECTRONICS group of companies (the Group) is made up of KAGA ELECTRONICS CO., LTD. (the Company),
49 consolidated subsidiaries (22 in Japan, 27 overseas) and 2 affiliates that are not accounted for using the equity method (1 inJapan, 1 overseas). These companies are engaged primarily in the following activities: the electronic components business,
including the development, manufacture and sale of semiconductors and general electronic components and EMS (electronic
manufacturing services); and the information equipment business, including the sale of personal computers and peripherals, homeelectric appliances , photography and imaging products, and original-brand products; and the software business includes the
production of computer graphics for animation, the planning and development of products for amusement devices, and otheractivities. Other businesses include repair and support services for electronic devices, manufacturing and sales of amusement
products, sales of sporting goods, and other activities.
<Japan>[Electronic components business]
Sales
KAGA TECH CO., LTD.
KAGA DEVICES CO., LTD.
AD DEVICE CORPORATION<Overseas>[Electronic components business]
Sales
KAGA (H.K.) ELECTRONICS LTD.
KAGA (SINGAPORE) ELECTRONICS PTE.LTD.
KAGA (KOREA) ELECTRONICS CO., LTD.
KAGA (TAIWAN) ELECTRONICS CO., LTD.
KAGA DEVICES (H.K.) LTD.
KAGA ELECTRONICS (USA) INC.
KAGA (SHENZHEN) TRADING CO., LTD.
AD DEVICE (H.K.) LIMITEDKAGA (EUROPE) ELECTRONICS LTD.
KAGA DEVICES INDIA PRIVATE LIMITEDAD DEVICE (Thailand) CO., Ltd.
AD DEVICE (SHANGHAI) CO., Ltd.

Manufacturing and sales
KAGA COMPONENTS CO., LTD.

[Information equipment business]
Sales
KAGA SOLUTION NETWORK CO., LTD.
KAGA HIGHTECH CO., LTD.

[Software business]
DIGITAL MEDIA LAB., INC.
ACCESS GAMES INC.
WORKBIT CORPORATIONSI ELECTRONICS LTD.
Dreams.Co.,LTD.
Three other companies

KAGA ELECTRONICS CO., LTD.
(procurement and sales)

KAGA EDUCATIONAL MARKETING CO., LTD.
KAGA TECHNO SERVICE CO., LTD.

Manufacturing and sales
KAGA COMPONENTS(HONG KONG)LIMITEDKAGA (SHENZHEN) ELECTRONICS CO.,LTD.
KAGA COMPONENTS (MALAYSIA) SDN. BHD.
KAGA (SHANGHAI) ELECTRONICS CO., LTD.
KAGA ELECTRONICS (THAILAND) CO., LTD.
DONGGUAN POWERTEK ELECTRONICS CO.,LTD.
KAGA (DALIAN) ELECTRONICS CO., LTD.
KD TEC s.r.o.
KAGA TAXAN ELECTRONICS (SUZHOU) CO.,LTD.
SUZHOU KAGA TAXAN TRADING CO., LTD.
KAGA ELECTRONICS (SUZHOU) CO., LTD.
KAGA ELECTRONICS INDONESIA, PT
HUBEI KAGA ELECTRONICS CO.,LTD.

[Other business]
MICRO SOLUTION CO., LTD.
KAGA SPORTS CO., LTD.
KAGA AGENCY CO., LTD.
KAGA AMUSEMENT CO., LTD
SICOXS CORPORATION
One other company[Other business]
KAGA AMUSEMENT MALAYSIA SDN.BHD.

# One other company# One other company

Manages and operates facility for employees
Uses
TAXAN GUAM LTD.
Uses
Japanese and overseas customers(Notes) #: Affiliates that are not accounted for using the equity method.
All other companies are consolidated subsidiaries.
4

The following consolidated subsidiary became our group company during the fiscal year that ended in March 2016.
Relationship with the Company

Name

Address

CapitalActivities

Voting rights
held
%

Joint
directors

FinancialsupportBusinessrelationship

Leasing offacilities andequipment

Persons Million yen[Other business]
SICOX
supplies
Chiyoda-ku 186 million
84.9
1
samplesTokyo
yen
to Kaga
Elec.
Notes: 1. On April 1, 2015, consolidated subsidiaries Dreams Co., Ltd. and Izakul Co., Ltd. merged with Dreams as the surviving
company and Izakul was dissolved.
2. On April 16, 2015, SICOXS CORPORATION, which develops and manufactures semiconductor substrates, became aconsolidated subsidiary.
3. On April 1, 2016, KAGA HIGHTECH CO., LTD. and KAGA AGENCY CO., LTD. merged with KAGA HIGHTECH
as the surviving company and KAGA SOLUTION NETWORK CO., LTD. and KAGA EDUCATIONAL
MARKETING CO., LTD. merged with KAGA SOLUTION NETWORK as the surviving company. On the same day,
KAGA SOLUTION NETWORK and KAGA HIGHTECH merged with KAGA SOLUTION NETWORK as thesurviving company.
SICOXSCORPORATION(Note 2)Develops andmanufactures
semiconductor
substrates. etc.

5

-

3.

Management Policies(1)

Fundamental management policy
Based on the management philosophy of “Everything we do is for our customers,” the KAGA ELECTRONICS Group is
guided by the fundamental policy of “remaining a company that contributes to the happiness of all stakeholders, including
shareholders, customers and employees, and fulfills its responsibilities to society.” The Group is dedicated to growing
consistently by responding with speed and agility to globalization of the economy and the rapidly changing electronics
industry. To accomplish this, the Group will expand its network in Japan and overseas and deepen ties among Group
companies to enhance collective strengths. The Group also has a strong commitment to corporate social responsibility,
positioning compliance and protecting the global environment as important elements of its operations.
Based on the above management philosophy and fundamental management policy, the companies of the KAGAELECTRONICS Group, which are active primarily in the electronics industry, seek to improve their results of operations
while cooperating with each other by doing business in a speedy manner that places the highest priority on rapid decisionmaking.
The key word is “F.Y.T.”
F = Flexibility (adapting adeptly to external changes)
Y = Young (staying young in thought and action)
T = Try (the spirit of always taking on challenges)(2)

Targeted performance indicators
As the electronics industry, where the Group is active, is expected to continue to grow, priority will continue to be placed on
raising the rate of sales growth and improving the return on equity.

(3)

Medium- and long-term management strategies
The rapid pace of change in the electronics industry is expected to continue. New products are appearing and existingproducts going out of date faster. Companies are moving production bases out of Japan faster, too. Amid these changes, more
growth is foreseen for the electronics industry.
In this environment, The Group is aiming to grow with KAGA ELECTRONICS, an independent electronics trading company,as its nucleus by utilizing its ability to handle all aspects of the electronics business, from upstream to downstream, including
product planning, development and processing (EMS). Backed by these distinctive strengths, the Group will work even moreclosely together to capture synergies with the goal of increasing sales and earnings while growing on a global scale.
The key word is “3G.”
General (covering everything)
Global (worldwide coverage)
Group (leveraging the collective power of the Group)(4)

Key issues
The KAGA ELECTRONICS Group is determined to continue growing while adhering to its fundamental management policy.
Based on the “F.Y.T.” and “3G” management policies explained earlier as well as on the reinforcement of corporate
governance, the Group’s management will be strengthened with the aim of increasing enterprise value while preserving
strong relationships with all stakeholders.
Additionally, the Group conducts reorganizations whenever needed in order to respond rapidly to changes in market
conditions and customer needs. Another goal is enhancing the ability to gather information quickly. At the same time, theGroup aims to capture more synergies by building stronger ties among Group companies and fostering more collaborationand mutual assistance within the Group, thereby expanding operations and improving efficiency.
 At present, the Group is concentrating on the following issues:i)Strengthening corporate governance systemii) Strengthening relationships, collaboration and mutual assistance among Group companies to realize greater synergiesiii) Reinforcing operations overseas and expanding the global networkiv) Upgrading technological skills and improving the ability to gather information with speedv)
Tackling environmental problems

6 Major initiatives for key issues during the fiscal year that ended in March 2016
1) Strengthen the corporate governance system of the KAGA ELECTRONICS GroupStrengthening corporate governance is an important issue for achieving sustained growth of the entire group. During
the fiscal year, internal controls were rigorously implemented and there were training programs for employees.
Activities also included establishing an organizational framework for consistently using and improving internal controls.
To continue strengthening corporate governance, internal controls will be used extensively throughout the Group andimproved.
2) Strengthen relationships, collaboration and mutual assistance among Group companies to realize greater synergies
The KAGA ELECTRONICS Group operates many types of businesses that involve electronics. Some of thesebusinesses are similar. To improve the efficiency of similar businesses, a Group Management Division was establishedin April 1, 2015 to oversee all group companies. The objective is to use more collaboration among group companies togenerate more synergies and operate more efficiently. Many activities are under way to accomplish these goals.
3) Reinforce operations overseas and expand the global network
As constant changes reshape the operating environment, the performance of overseas operations will have a significant
effect on the KAGA ELECTRONIC Group’s future. East Asia and Southeast Asia are key overseas regions for theGroup. In these regions, Group companies are using large numbers of people to establish and expand relationships withcompanies affiliated with Japanese companies as well as local companies. Adding and enlarging bases for the EMS
business in China, Thailand and other countries is another goal. Actions will continue in order to build a stronger
infrastructure and expand operations in East Asia and Southeast Asia.
4) Revitalize underperforming subsidiaries
The operations of underperforming subsidiaries were reexamined and reorganized and these companies worked jointlywith or merged with other subsidiaries. When revitalization was not feasible, a variety of other measures were used,
including liquidation.
Activities that take advantage of the characteristics and strengths of each subsidiary’s operations will continue in orderto improve performance while fully utilizing group synergies.
The Group regards other key issues as well as matters that require constant attention and initiatives and will work on
making the necessary refinements and improvements.
(5)

Other important items concerning management
Not applicable

4.

Fundamental policy regarding choice of accounting standard
The KAGA ELECTRONICS Group prepares consolidated financial statements based on Japanese accounting standards.
Going forward, the KAGA ELECTRONICS Group will as needed study the possibility of adopting IFRS standards with due
consideration to financial market trends, share of foreign investors and the organizational costs resulting from the adoption of
IFRS standards.

7

5.

Consolidated Financial Statements(1)

Consolidated balance sheet(Million yen)
FY 2015(As of March 31, 2015)

FY 2016(As of March 31, 2016)

ASSETS
Current assets
Cash and deposits

18,13022,516

Notes and accounts receivable-trade58,16754,795

Securities

127

166

17,276

14,898

401

266

5,024

4,010

929

849

Other

4,497

4,638

Allowance for doubtful accounts

(131)

(179)

104,424

101,961

Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures

7,834

7,838

Accumulated depreciation(2,379)(2,726)

Buildings and structures, net

5,455

5,112

Machinery, equipment and vehicles

5,689

5,474

Accumulated depreciation(3,403)(3,481)

Machinery, equipment and vehicles, net

2,285

1,992

Tools, furniture and fixtures

4,159

3,843

Accumulated depreciation(3,222)(3,029)

936

813

4,041

4,138

Tools, furniture and fixtures, net
LandConstruction in progress

6

0

12,725

12,058Goodwill

607

495

Software479

422

Total property, plant and equipment
Intangible assets

Other

44

85

1,131

1,003

Investment securities

6,351

6,519

Deferred tax assets

274

257

Guarantee deposits

846

739

Insurance funds

1,280

916

Total intangible assets
Investments and other assets

Other

2,084

1,931

Allowance for doubtful accounts(1,169)(1,107)

Total investments and other assets

9,667

9,257

Total noncurrent assets
Total assets

8

23,524

22,319127,948

124,281(Million yen)
FY 2015(As of March 31, 2015)
LIABILITIESCurrent liabilities
Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Provision for directors' bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Provision for directors' retirement benefits
Net defined benefit liability
Asset retirement obligations
Other
Total noncurrent liabilities

FY 2016(As of March 31, 2016)

40,543
5,925
3,377
1,286
189
3,289

36,858
6,295
3,311
995
185
3,523

54,612

51,169

8,253
1,231
1,501
1,643
140
963

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

13,733

11,303

Total liabilities

68,34562,472NET ASSETS
Shareholder’s equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

12,133
13,912
31,029(537)

12,133
13,91235,195(539)

Total shareholder’s equity

56,53860,702

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

790
23
2,462
(250)

681
4
713
(338)

Total accumulated other comprehensive income

3,026

1,061

38

44

Non-controlling interests
Total net assets
Total liabilities and net assets

959,60361,808

127,948

124,281(2)Consolidated statements of income and comprehensive income(Million yen)
FY 2015(April 1, 2014 – March 31, 2015)

FY 2016(April 1, 2015 – March 31, 2016)

255,143
222,405
32,73826,376
6,362

245,387
211,739
33,64825,859
7,788

150
95
292
560
116
308
1,522

64
103
277
91
269
806

117
102
219
7,664

134
477
74
686
7,908

6
28
1
36

4
1
6

25
25
257
0
26
64
19
419
7,281
2,329
525
2,855
4,426
4,416
10

9
31
9
42
43
160
39
336
7,578
1,973
171
2,145
5,433
5,437
(3)

630
23
2,457
54
3,166
7,592

(109)
(19)
(1,749)(87)(1,966)
3,466

7,580

3,472

12

(5)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Commission fee
Foreign exchange gains
House rent income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary loss
Loss on retirement of non-current assets
Impairment loss
Loss on valuation of investment securities
Loss on valuation of golf club membership
Special retirement expenses
Merger expenses
Settlement package
Other
Total extraordinary loss
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to owners of parent
Profit (loss) attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

10

(3)

Consolidated statement of changes in equity
Previous fiscal year (Apr. 1, 2014 – Mar. 31, 2015)(Million yen)
Shareholders' equity
CapitalsurplusCapital stock
Balance at the beginning of current period

12,133Retainedearnings

13,912

Treasuryshares27,414

Cumulative effects of changes inaccounting policies

Total shareholders'equity(536)

52,923

188

Restated balance

12,133

13,912

188

27,602(536)

53,112

Changes of items during period
Dividends of surplus

(988)

(988)

Profit attributable to owners of parent

4,416

4,416

Purchase of treasury stock

(1)

(1)

Net changes of items other thanshareholders' equity
Total changes of items during period

-

-

3,427

(1)

3,425

Balance at the end of current period

12,133

13,912

31,029(537)

56,538

Accumulated other comprehensive income

Balance at the
beginning of current
periodCumulative effects
of changes inaccounting policies
Restated balance

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets

161

0

5

(304)

(137)

39

52,825

188
161

0

5

(304)

(137)

39

53,014

Changes of items
during period
Dividends ofsurplus(988)

Profit attributable toowners of parent

4,416

Purchase of treasurystock
Net changes of
items other thanshareholders' equity
Total changes of items
during period

629

23

2,456

54

3,164

(1)

3,163

629

23

2,456

54

3,164

(1)

6,588

Balance at the end ofcurrent period

790

23

2,462

(250)

3,026

38

59,603(1)

11

Current fiscal year (Apr. 1, 2015 –Mar. 31, 2016)(Million yen)
Shareholders' equity
CapitalsurplusCapital stock
Balance at the beginning of current period

12,133Retainedearnings

13,912

Treasurystock

31,029Total shareholders'equity(537)

56,538Changes of items during period
Dividends of surplus(1,271)(1,271)

Profit attributable to owners of parent

5,437

5,437

Purchase of treasury shares
Disposal of treasury shares

0

(1)

(1)

0

0

Net changes of items other thanshareholders' equity
Total changes of items during period

-

0

4,165

(1)

4,164

Balance at the end of current period

12,133

13,91235,195(539)

60,702

Accumulated other comprehensive income

Balance at the
beginning of current
periodChanges of items
during period

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets

790

23

2,462

(250)

3,026

38

59,603

Dividends ofsurplus(1,271)

Profit attributable toowners of parent

5,437

Purchase of treasury
shares(1)

Disposal of treasury
sharesNet changes of
items other thanshareholders' equity
Total changes of items
during period

(109)

(19)

(1,748)(87)(1,964)

5(1,959)

(109)

(19)

(1,748)(87)(1,964)5

2,204

Balance at the end ofcurrent period

681

4

713

(338)

1,061

44

61,808

0

12

(4)

Consolidated statements of cash flows(Million yen)
FY 2015(April 1, 2014 – March 31, 2015)

FY 2016(April 1, 2015 – March 31, 2016)

Cash flows from operating activities
Profit before income taxes

7,281

7,578

Depreciation

1,907

1,604

Impairment loss

25

31

Amortization of goodwill

127

151

Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors'
retirement benefits
Increase (decrease) in provision for directors' bonuses

82

17

64

(289)

16

(6)

Increase (decrease) in allowance for doubtful accounts

141

18

Interest and dividend income

(245)

(167)

Interest expenses

117

134

Loss (gain) on sales of property, plant and equipment

(4)

(4)

Loss on retirement of non-current assets

25

9Loss (gain) on sales of investment securities

(21)

4

Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Decrease (increase) in accounts receivable - other

257

9

4,182

2,187

79

2,677

(3,141)(2,407)

(308)

(24)

Increase (decrease) in accrued expenses

129

22

Decrease (increase) in advance payments
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in other current assets

478

(335)

96

195

1,485

(59)

Increase (decrease) in other current liabilities(1,319)452

Other, net

284

(24)

Subtotal

11,741

11,774

Interest and dividend income received

241

169

Interest expenses paid

(118)

(134)

Income taxes paid

(2,687)(2,257)

Other, net

(49)

(5)

Net cash provided by (used in) operating activities

9,127

9,546

13

(Million yen)
FY 2015(April 1, 2014 – March 31, 2015)

FY 2016(April 1, 2015 – March 31, 2016)(0)(1,360)
374
(294)
(994)
624
(11)

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

(10)

-

-

8

(14)
12
(23)
100
(21)
16
(238)
374

(3)
2
(17)
375
(25)
74
(177)
629

(1,465)(1,263)(6,832)5,000(1,436)
(1)
(987)
(0)
(174)

(429)
182
(1,428)(1)(1,270)(120)

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents(4,431)(3,067)

977

(905)

4,207

4,310

Cash and cash equivalents at beginning of period

13,361

17,569Cash and cash equivalents at end of period

17,56921,879Cash flows from investing activities
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation
Payments of short-term loans receivableCollection of short-term loans receivable
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Other, net

14

(5)

Notes to consolidated financial statements(Notes to going concern assumptions)
None(Changes in accounting policies)(Application of accounting standard for concerning business combinations and other accounting standards)
Beginning with the current fiscal year, KAGA ELECTRONICS is using Accounting Standard for Business Combinations(ASBJ Statement No. 21, September 13, 2013), Accounting Standard for Consolidated Financial Statements (ASBJ
Standard No. 22, September 13, 2013) and Accounting Standard for Business Divestitures (ASBJ Statement No. 7,
September 13, 2013). As a result, when ownership changes at a subsidiary where KAGA ELECTRONICS retains control,
this difference is included in the capital surplus. In addition, the recognition of expenses associated with acquisitions has
been changed to the consolidated fiscal year in which the corresponding expense occurred. Furthermore, there is a revisionin the allocation of acquisition expenses for business combinations occurring on or after the beginning of the current fiscal
year. The revised method reflects in the consolidated financial statements in which the business combination occurred anychanges to the amount allocated to acquisition cost resulting from the confirmation of provisional accounting methods.
There are also revisions to the presentation of net income and other items and minority interests is now called noncontrolling interests. To reflect these changes in the presentation of the financial statements, fiscal year consolidated
financial statements for the previous fiscal year have been revised. For the application of these accounting standards, thetransitional measures specified in Accounting Standard for Business Combinations No. 58-2 (4), Accounting Standard forConsolidated Financial Statements No. 44-5 (4) and Accounting Standard for Business Divestitures No. 57-4 (4) were used.
These accounting standards will continue to be applied starting with the beginning of the current fiscal year.
The application of these accounting standards had negligible effect on the consolidated financial statements.
(Additional information)(Termination of discussions concerning a management integration)
UKC Holdings Corporation and KAGA ELECTRONICS Co., Ltd. signed a memorandum of understanding on November
18, 2015 concerning a management integration. Since then, the companies have been holding discussions about thisintegration. The companies have now agreed to terminate these discussions and the KAGA ELECTRONICS board of
directors approved a resolution on April 22, 2016 to take this action.
Reason for decision to cancel the memorandum of understanding
Since the memorandum of understanding was signed on November 18, 2015, UKC Holdings and KAGA ELECTRONICS
have been holding discussions for the purpose of completing this management integration. However, both companies have
now reached the decision to cancel the memorandum of understanding and terminate these discussions because of theinability to agree on specific terms concerning the management integration.
(Segment information etc.)
a. Segment information
1. Summary of reporting segments
Segments used for financial reporting are the constituent units of KAGA ELECTRONICS for which separate financial
information is available and for which the board of directors performs regular reviews for the purposes of determining the
distribution of resources and evaluating results of operations.
KAGA ELECTRONICS conducts business activities by grouping affiliated companies based on products and services
and based on comprehensive strategies for operations in Japan and overseas for products and services handled.
Consequently, KAGA ELECTRONICS and its affiliated companies have four reporting segments that are made up ofdifferent categories of products and services: electronic components, information equipment, software, and others.
The electronic components segment includes the development, manufacture and sale of semiconductors, generalelectronic components and other products, the electronics manufacturing service (EMS), and other activities. The
information equipment segment includes sales of PCs, PC peripherals, home electric appliances, photograph and imaging
products, original brand products, and other products. The software segment includes the production of computer
graphics, planning and development of amusement products, and other activities. The others segment includes themaintenance and support for electronics equipments, and sales of sports goods, and others.
2. The accounting method used for reporting business segments
The accounting method used for reporting business segments is the same as the method of presenting the consolidated
financial statements.

15

3. Information concerning sales, earnings or losses, assets, liabilities and other items for individual reporting segments
For the previous fiscal year ended March 2015 (April 1, 2014 – March 31, 2015)
Reporting segments
Adjustments*1(Million yen)Amount in the
consolidated
statement ofincome *2

Electronic
components

Informationequipment

Software

OthersTotal

197,188

42,0242,889

13,040255,143-

255,143

1,134

611

4,145

2,301

8,192

(8,192)-

198,322

42,635

7,035

15,342

263,336(8,192)

255,143

Segment income(loss)

4,852

707

442

169

6,171

190

6,362

Segment assets

112,749

15,106

2,601

7,362

137,819(9,870)127,948

Depreciation

1,085

82

342

93

1,603

(21)

1,581

Increase inproperty, plant andequipment andintangible assets

1,824

42

123

240

2,230

(575)

1,655

Net salesof which to outside
customersof which intersegment
Total

OthersFor the current fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)
Reporting segments
Adjustments*1(Million yen)Amount in the
consolidated
statement ofincome *2

Electronic
components

Informationequipment

Software

OthersTotal

189,486

40,8802,897

12,123245,387-

245,387

970

602

3,442

2,225

7,240

(7,240)-190,456

41,482

6,340

14,348

252,628(7,240)245,387

Segment income(loss)

6,515

811

695

(343)

7,679

109

7,788

Segment assets

110,317

14,581

2,776

5,831

133,507(9,226)124,281

Depreciation

1,042

68

106

103

1,321

(15)

1,305

Increase inproperty, plant andequipment andintangible assets

1,055

75

124

605

1,860

(205)

1,655

Net salesof which to outside
customersof which intersegment
Total

Others16Notes:1. The adjustment for segment information is as follows(1) Segment income(Million yen)
Fiscal year ended March 2015

Fiscal year ended March 2016

190

147

Elimination of inter-segment trade
Amortization of goodwill
Total
(2)

-

(38)

190

109

Segment assets(Million yen)
Fiscal year ended March 2015

Fiscal year ended March 2016

(12,615)(11,363)

Corporate *

2,744

2,137

Total

(9,870)(9,226)

Elimination of inter-segment trade* Major component of corporate assets is investment of idle assets (cash and investment securities etc.).
(3)

Depreciation(Million yen)

(4)

Fiscal year ended March 2015

Fiscal year ended March 2016

Elimination of inter-segment trade

(21)

(15)

Total

(21)

(15)

Fiscal year ended March 2015

Fiscal year ended March 2016

Elimination of inter-segment trade

(575)

(205)

Total

(575)

(205)

Increase in property, plant and equipment and intangible assets(Million yen)

2. Segment income is adjusted with operating income on the consolidated statements of income and comprehensive
income17

b. Associated information
For the previous fiscal year ended March 2015 (April 1, 2014 – March 31, 2015)
1. Information about individual products and services
This information is not presented because KAGA ELECTRONICS Group prepares reports in accordance with amanagement approach based on individual products and services.
2. Geographic information(1)
Net sales
Japan(Million yen)
North America

173,048

Europe5,363

East Asia
2,506

Total

74,225

255,143

Note: Net sales are classified based on the client’s geographic location.
(2)

Property, plant and equipment
Japan(Million yen)

North America

EuropeEast Asia

Total

9,406
41
71
3,206
Notes: 1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand and India

12,725

3. Information by major customers
Information by major customers is not presented because outside sales for major customers accounted for less than 10%of net sales on the consolidated statements of income.
For the current fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)
1. Information about individual products and services
This information is not presented because KAGA ELECTRONICS Group prepares reports in accordance with amanagement approach based on individual products and services.
2. Geographic information(2)
Net sales
Japan(Million yen)
North America

167,914Europe5,840

East Asia
2,662

Total

68,970245,387

Note: Net sales are classified based on the client’s geographic location.
(3)

Property, plant and equipment
Japan(Million yen)

North America

EuropeEast Asia

Total

9,243
38
65
2,711
Notes: 1. Countries and regions are classified according to geographical proximity.
2. Countries and regions outside Japan are broken down into the following geographical areas:(1) North America: United States(2) Europe: United Kingdom, Czech Republic, and Russia(3) East Asia: Hong Kong, Singapore, Taiwan, Korea, China, Malaysia, Thailand and India

12,058

3. Information by major customers
Information by major customers is not presented because outside sales for major customers accounted for less than 10%of net sales on the consolidated statements of income.
c. Information regarding segment impairment loss on non-current assets
For the previous fiscal year ended March 2015 (April 1, 2014 – March 31, 2015)(Million yen)

Impairment loss

Electronic
components

Informationequipment-

12

Software

Others
-

Total
12

25

For the current fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)(Million yen)

Impairment loss

Electronic
components

Informationequipment-

5
18

Software25

Others

Total
0

31

d. Information regarding segment amortization of goodwill and undepreciated balance
For the previous fiscal year ended March 2015 (April 1, 2014 – March 31, 2015)(Million yen)
Reporting segments

Amortization
during the period
Balance at the endof the period

Corporate /Elimination

Total

Electronic
components

Informationequipment

Software

126

0

1

-

129

-

129

592

-

15

-

607

-

607

OthersTotal

For the current fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)(Million yen)
Reporting segments

Amortization
during the period
Balance at the endof the period

Corporate /Elimination

Total

Electronic
components

Informationequipment

Software

109

-

3

-

112

38

151

483

-

12

-

495

-

495

Otherse. Information regarding segment gain on bargain purchase
For the previous fiscal year ended March 2015 (April 1, 2014 – March 31, 2015)
Omitted because insufficiently significant
For the current fiscal year ended March 2016 (April 1, 2015 – March 31, 2016)
None

19

Total

(Per-share information)(Yen)
FY 2015(April 1, 2014 – March 31, 2015)

FY 2016(April 1, 2015 – March 31, 2016)

Net assets per share

2,108.04

2,185.94

Earnings per share156.28192.43

Note: 1. Earnings per share (diluted) is not presented, since there is no potential stock which has dilution effect.
2. The basis for calculating earnings per share is as follows.
FY 2015
FY 2016(April 1, 2014 – March 31, 2015)(April 1, 2015 – March 31, 2016)
Earnings per share
Profit attributable to owners of parent(million yen)
Profit not attributable to commonshareholders (million yen)
Profit attributable to owners of parent tocommon shareholders (million yen)
Weighted average number of shares
outstanding(Subsequent events)
None

20

4,416

5,437

-

-

4,416

5,437

28,256,695

28,255,634

6.

Non-consolidated Financial Statements(1)

Balance sheets(Million yen)
FY 2015(As of March 31, 2015)

ASSETS
Current assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Securities
MerchandiseWork in process
Supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Short-term loans receivable from subsidiaries andassociates
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Structures
VehiclesTools, furniture and fixtures
Land
Lease assets
Total property, plant and equipment
Intangible assets
Trademark right
Software
Other
Total intangible assets

21

FY 2016(As of March 31, 2016)

7,933
2,859
21,259
127
3,433
19
37
426
121
498

9,600
3,285
19,830
166
3,866
5
34
633
129
427

17,843

14,302

2,528
586(6,656)2,294
318(6,428)51,01848,466

2,861
22
2
325
3,314
37

2,772
19
7
298
3,412
79

6,563

6,590

6
183
26

4
186
70

217

261

(Million yen)
FY 2015(As of March 31, 2015)
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries andassociates
Long-term loans receivable from subsidiaries
and associates
Claims provable in bankruptcy, claims
provable in rehabilitation and other
Long-term prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total noncurrent assets
Total assets

22

FY 2016(As of March 31, 2016)

5,666
7,658
28

5,866
7,658
27

11

13

1,337

987

1,971

1,949

261
275
1,793
(2,629)(1,103)

156
193
1,622
(2,562)(836)

15,272

15,07722,05321,92973,071

70,396

(Million yen)
FY 2015(As of March 31, 2015)
LIABILITIESCurrent liabilities
Notes payable-trade
Accounts payable-trade
Short-term loans payable
Short-term loans payable to subsidiaries andassociates
Current portion of long-term loans payable
Lease obligations
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for directors' bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for directors' retirement benefits
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholder’s equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholder’s equity
Valuation and translation adjustments
Valuation differences on available-for-sales
securities
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

23

FY 2016(As of March 31, 2016)

2,275
14,6401,562

1,931
13,303
732

2,043

2,601

1,428
43
885
1,608
426
416
64
180
34

2,428
59
751
1,411
65
158
107
180
309

25,61024,038

8,253
120
239
1,270
95
294

5,825
110
268
1,075
97
301

10,274

7,677

35,88431,715

12,133

12,133

13,912-

13,912
0

13,912

13,912

618

618

7,000
3,369

7,000
4,954

10,987

12,573

(537)

(539)

36,49638,080

672

587

18

13

690

600

37,186

38,68073,071

70,396

(2)Statements of income

Net sales
Cost of sales(Million yen)
FY 2015
FY 2016(April 1, 2014 – March 31, 2015) (April 1, 2015 – March 31, 2016)
90,13885,72380,70675,733Gross profit

9,431

9,989

Selling, general and administrative expenses

9,107

8,911

324

1,077

116
1,898
123
558

108
2,108
415

2,697

2,633

97
79

101
32
63

177

197

2,845

3,513

20
347
2

0
267
2

370

269

253
235
13

9
100
202
160
31

502

505

Profit before income taxes

2,713

3,277

Income taxes - current
Income taxes - deferred

793
129

236
183

Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Reversal of allowance for investment loss
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries and associates
Provision of allowance for doubtful accounts
Merger expenses
Other
Total extraordinary losses

Total income taxes
Profit

24

922

420

1,790

2,856

(3)

Statement of changes in equity
Previous fiscal year (Apr. 1, 2014 –Mar. 31, 2015)(Million yen)
Shareholders' equity
Capital surplus

Balance at the beginning of current period

Retained earnings

Capital
stock

Legal
capitalsurplusTotal
capitalsurplusLegalretainedearnings

12,133

13,912

13,912

618

Other retained
earnings
Retained
General earnings
reserve brought
forward
7,000

Total
retainedearnings

2,379

9,997

188

188

2,567

10,186

Dividends of surplus

(988)

(988)

Profit

1,790

1,790

Cumulative effects of changes in accounting
policies
Restated balance

12,133

13,912

13,912618

7,000

Changes of items during period

Purchase of treasury shares
Net changes of items other than shareholders'equityTotal changes of items during period

-

-

-

-

-

801

801

Balance at the end of current period

12,133

13,912

13,912

618

7,000

3,369

10,987

Shareholders' equity

Balance at the beginning of current period

Valuation and translation adjustments

TreasurysharesTotalshareholders'equityValuationdifferenceonavailablefor-salesecurities(536)

35,507

148

Cumulative effects of changes in accounting
policies
Restated balance

Totalvaluationandtranslation
adjustments

Deferred
gains orlosses onhedges
0

148

188
(536)

35,695

Total net
assets35,656
188

148

0

148

35,844

Changes of items during period
Dividends of surplus

(988)

(988)

Profit

1,790

1,790

(1)

(1)

Purchase of treasury shares(1)

Net changes of items other than shareholders'equity

523

18

541

541

Total changes of items during period

(1)

800

523

18

541

1,342

Balance at the end of current period(537)

36,496

672

18

690

37,18625

Current fiscal year (Apr. 1, 2015 –Mar. 31, 2016)(Million yen)
Shareholders' equity

Balance at the beginning of current
periodCapital surplus

Retained earnings

Other
capitalsurplus

Other retained
earnings
Retained
General earnings
reserve brought
forwardCapital
stock

Legal
capitalsurplus12,133

13,912-

Total
capitalsurplusLegalretainedearnings

13,912

618

7,000

Total
retainedearnings

3,369

10,987

Dividends of surplus(1,271)(1,271)

Profit

2,856

2,856

Changes of items during period

Purchase of treasury shares
Disposal of treasury shares

00

Net changes of items other thanshareholders' equity
Total changes of items during period

-

-

0

0

-

-

1,585

1,585

Balance at the end of current period

12,133

13,912

0

13,912

618

7,000

4,954

12,573

Shareholders' equity

Balance at the beginning of current
periodValuation and translation adjustments

TreasurysharesTotal shareholders' equity

Valuationdifferenceonavailablefor-salesecurities(537)

36,496

672

Deferred
gains orlosses onhedgesTotalvaluationandtranslation
adjustments

18

690

Total net
assets37,186

Changes of items during period
Dividends of surplus(1,271)(1,271)

Profit

2,856

2,856

Purchase of treasury shares

(1)

(1)

(1)

Disposal of treasury shares

0

0

0

Net changes of items other thanshareholders' equity

(84)

(5)

(90)

(90)

Total changes of items during period

(1)

1,584

(84)

(5)

(90)

1,493

Balance at the end of current period(539)

38,080

587

13

600

38,68026

7.

Other Information(1)

Changes in directors and corporate auditors
(a)

(b)

Changes in representative director
None
Changes in directors and auditors
Candidates for new outside corporate auditor

Resigning outside corporate auditor

(c)

(2)

Name
Isamu Yonekawa
Name
Masatoshi Sase

Planned date of the changes
June 29, 2016

Other information
None

27

Current position
Partner of Alpha Partners Law Office