BASIC COMMITMENT OF
THE TOSHIBA MACHINE GROUP
We, the Toshiba Machine Group of Companies, based on respect forhuman values, are determined to help create higher quality andcontinued progress in the lives and cultures of the world.

Commitment to People
We endeavor to serve the needs of all people, especially ourcustomers, shareholders and employees, by carrying out fair androbust business activities

Commitment to the Future
By continually developing innovative technologies centening on the fieldof mechanics, electronics and sysytems, we contribute to create
foundations of industries, strive to create a highly quality society.

Commitment to the Society
As good corporate citizens, we actively contribute to further the goals ofsociety, including ways to improve the environment and resources.

Contents
1

An Outline of the Toshiba Machine Group
Corporate Information2

Foreword

4

Financial Highlights (consolidated)

5

Overseas Operations for Fiscal Year Ended March 31, 2018

6

Overseas Offices
Financial Review

8

Consolidated Balance Sheet

10

Consolidated Statement of Income

11

Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Net Assets

12

Consolidated Statement of Cash Flows13

Notes to Consolidated Financial Statements

36

Independent Auditor's Report

37

Directors & Audit and Supervisory Board Members

An Outline of the Toshiba Machine GroupA highly respected integrated machine building group, internationallyrespected for its total capability in the production of quality plastic processing
machinery, die-casting machines, machine tools, precision machinery, industrial
robot, and electronic controls.

Based on their highly innovative technology, expertise, and experience
nurtured over decades as one of the world’s leading machine builders, the Toshiba
Machine Group’s global-type solution business provides customers, in suchvarious industries as nano-technology, optics, electronics and automotives withtotal satisfaction by careful analysis and the recommendation of optimum-type
solutions to their requirements.

Corporate Information (as of March 31, 2018)
Company Name:TOSHIBA MACHINE CO., LTD.

Headquarters: 	2068-3, Ooka, Numazu-shi,
Shizuoka-ken 410-8510, Japan
Established:

1938

Capital:¥12,484 million (US$111,283 thousand)Shares of Common Stock
Issued and Outstanding:

149,885,530 shares

Number of Shareholders:

8,415

Number of Employees:

1,770 (Consolidated: 3,273)

1

Foreword 2018
The Japanese economy in FY2017 showed gradual recovery due to the government's
implementation of economic stimulus policies and an increase in exports, resulting in continuous
improvement of corporate revenues and the employment situation, an increase in capital
investment, and recovery of individual spending. Outside Japan, the EU and American economies
had steady growth, and Chinese and Southeast Asian economies continued to recover. Overall, theinternational economy also showed gradual recovery. Meanwhile, the future of the global economy
is still unclear due to heightened uncertainties caused by geopolitical risks and policy changes inthe EU and the US.
For the machine industry, to which our group belongs, while capital investment was gradually
recovering in Japan, levels of business confidence varied with the target market and productoutside Japan.
Under these economic circumstances, our group launched on April 1, 2016, the mid-term
management plan “TM-PΣ Plan” (Toshiba Machine Profit Sigma Plan). While still following theconcept of “forward-looking and expansion” this plan establishes “shift to a high revenue
company” and “selection and concentration” as the new basic strategies. In order to secure steady
growth of our group in the global market predicted to expand in the future, we have been doing
our best to reduce the total cost, drive production reform to improve profitability, create an
optimal global procurement network, exploit new markets, develop new products for key domestic
and international markets, and increase orders.
For this consolidated fiscal year, order income was 128,139 million yen (a 9.5% increase fromthe previous consolidated fiscal year) and sales were 116,862 million yen (a 5.0% increase fromthe previous consolidated fiscal year) despite the influence of procurement delays for somematerials.
Operating income was 4,640 million yen (a 3.7% increase from the previous consolidated fiscal
year) as a result of continued profit improvement primarily in the molding machine businesssegment due to cost reduction measures, despite negative factors such as soaring material prices.
Ordinary profit was 6,982 million yen (a 29.1% increase from the previous consolidated fiscal
year) due to an increase of non-operating income such as a termination fee income and foreign
currency exchange profits. The net income which vests for the parent company's shareholders

2was 5,016 million yen (a 182.4% increase from the previous consolidated fiscal year).
The annual dividend for FY2017 was 14 yen.
Although gradual economic recovery is expected, the overall future economic climate is likely
to remain unpredictable due to developments in emerging economies such as China, the impact on
the global economy caused by the shift to a protectionist policy by the American government,
growing global concerns about trade conflicts, heightened global geopolitical risks, and foreignexchange fluctuations. Furthermore, a difficult business environment is also predicted due toincreased competition from Japanese and international companies.
The mid-term management plan “TM-PΣ Plan” (Toshiba Machine Profit Sigma Plan) launchedon April 1, 2016, establishes “shift to a high revenue company” and “selection and concentration”
as the new basic strategies.
In the “shift to a high revenue company” strategy, we implemented total cost reduction
measures (e.g., material cost reduction, procurement cost reduction, optimization of businessbases, and reduction of administrative expenses) in order to accomplish our urgent task,
recovering profitability. These measures began to produce positive results primarily in the molding
machine business segment. We will continue to implement these measures to increase
profitability. In the “selection and concentration” strategy, we will concentrate our management
resources on active markets, regions, and customers to help the whole group steadily grow.
Our group will work on thorough quality and environmental control in accordance with ISO
9001 and 14001. We are also actively engaging in corporate social responsibility programs such as
future executive training to support the group’s future, legal compliance, and social action
activities.

3

FINANCIAL HIGHLIGHTS (consolidated)
Net sales

2018

2017

2016

2015

2014

¥116,862¥111,327¥117,259¥124,373¥113,062¥79,350¥85,004¥90,733¥81,480¥27,503¥28,448¥28,851¥26,955¥4,473¥3,806¥4,788¥4,625¥3,523¥7,608¥6,522¥6,507¥1,747¥2,802¥2,210¥2,063¥1,776¥4,806¥4,312¥4,444¥2,268¥1,197¥8,748¥6,893¥11.87¥31.61¥28.36¥29.23¥12.00¥12.00

¥8.00

¥7.50

¥140,530¥158,310¥161,975¥148,680¥77,120¥93,345¥93,669¥84,217¥1,335¥1,547¥2,193¥1,766¥1,730¥1,756¥1,965¥1,840¥1,648¥1,668¥1,663¥1,551

3,236

3,286

3,466

3,454

$1,099,984

Cost of sales¥83,712$787,954

Selling, general andadministrative expenses
Operating income¥28,509$268,352¥4,640$43,678

Net income before income taxes¥6,860$64,577

Income taxes¥1,844$17,359

Net income¥5,016$47,218

Comprehensive income¥5,789$54,494

Per common share:
Net income¥41.57$0.39

Cash dividends¥14.00$0.13

Total assets¥151,232$1,423,503

Net assets¥81,334$765,577

Capital expenditures(property, plant and equipment)
Depreciation¥4,687$44,122¥2,049$19,296

R & D costs¥1,899$17,876

Number of employees

3,273

Note 1: In millions of yen (thousands of U.S. dollars), except for per-share data and number of employees.
Note 2: Yen amounts have been translated into U.S. dollars, for convenience only, at the exchange rate of¥106.24=U.S.$1. See Note 3 of the Notes to the Consolidated Financial Statements.

4Overseas Operations for Fiscal Year Ended March 31, 2018
FY2017 overseas sales were 70,505 million
yen, which was 6,989 million yen more than the

Net Sales
Millions of yen

previous year.
In China, sales increased by 37.5% from theprevious year. This increase was attributable togreater demand for injection molding machines
and extrusion machines.
In Taiwan, sales increased by 34.5% from

113,062

16,800124,373
16,207

117,259
10,747111,327
10,02628,141

32,931

29,46923,047the previous year because of increased demandfor die casting machines and extrusion
machines.
In Southeast Asia, sales increased by 1.2%

80,02473,214from the previous year due to greater demandfor die casting machines and precision machine
tools.

Total
Other
116,862 Products
6
9
,8
12
Machinels
23,700 Too

2015

2014

73,5802016

71,831

2017

80,265 Moldingry
Machine2018

In India, although demand for machine tools
decreased, sales increased by 20.2% from theprevious year due to greater demand for

Total Sales & Overseas Sales
Millions of yen

injection molding machines and die castingmachines.

124,373

Meanwhile, in North America, althoughdemand for machine tools increased, regional

117,259

111,327es
Total Sal116,862

113,062

sales decreased by 7.5% from the previous year
due to reduced demand for die castingmachines.
In Korea, sales decreased by 22.0% from theprevious year since there was only demand for

66,191

72,48164,181

injection molding machines and machine tools.
In Europe, sales decreased by 30.5% fromthe previous year due to lower demand for die
casting machines and machine tools.
As a result, the percentage of overseas sales
relative to overall sales increased from 57.1% in
the previous year to 60.3%.
The percentage of overseas sales bybusiness segment was: 80% for the molding

2014

2015

2016

63,515

2017

70,505

Overseas

Sales

2018

Export Percentages by Major Products
Machine
Tools

Other
Products

Molding
Machinery

6%
14%

machinery business, which remained
unchanged from the previous year, 14% for the80%

machine tools business (3% decrease from theprevious year), and 6% for other businesssegments (3% increase from the previousyear).

5

Overseas Offices■ East Asia ■SHANGHAI TOSHIBA MACHINE CO., LTD.
Head Office4788, Jin Du Road,
Xinzhuang Industry Zone,
Shanghai, 201108,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)21-5442-0606
Fax : [86]-(0)21-5866-2450
URL:http://www.toshiba-machine.com.cn

Beijing Office

RECREO-CHN MEDIA PLAZA A-1001
A-1, No.15 Jian Guo Road, Chao Yang
District, Beijing, 100024,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)10-6590-8977~8
Fax : [86]-(0)10-6590-8979

Tianjin Office

Room 901, Jinyu Building,
No.57, Heiniucheng Road,
Hexi District, Tianjin, 300211,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)22-8836-3056
Fax : [86]-(0)22-2416-0380

Dalian Office

Room 1304, Gugeng International
Business Building, 138th Jinma Road,
Dalian Economic & Technological
Development Zone, Dalian, 116600,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)411-8732-7911
Fax : [86]-(0)411-8732-6899

Chongqing Office

Room 9-8, H2 Building, Diecai Center,
No. 9 Jintong Road, North New District,
Chongqing, 401122, PEOPLE'S
REPUBLIC OF CHINA
Tel : [86]-(0)23-6777-5805
Fax : [86]-(0)23-6790-5542

Ningbo Office

Room 713, Building 2, Silver City
National, No 668 jingjia Road jiangdong
District, Ningbo, Zhejiang, 315040,
PEOPLE`S REPUBLIC OF CHINA
Tel : [86]-(0)574-2795-9198
Fax : [86]-(0)574-2795-9199

TOSHIBA MACHINE (SHANGHAI) CO., LTD.
4788, Jin Du Road,
Xinzhuang Industry Zone,
Shanghai, 201108,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)21-5442-5455
Fax : [86]-(0)21-5442-5466

6■ South East Asia ■TOSHIBA MACHINE (SHENZHEN)
CO., LTD. Head Office

Room 608, Building 2, Animation Park,
Yuehai Road, Nanhai Street, Nanshan
District, Shenzhen, 518054,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)755-8625-0599
Fax : [86]-(0)755-8625-0522

Guangzhou Office

Room 311, No. 34-40, Centre South Road,
Donglian Industry Park, Dashi Street,
Panyu District, Guangzhou, 511400,
PEOPLE’S REPUBLIC OF CHINA
Tel : [86]-(0)20-2916-1330
Fax : [86]-(0)20-2916-1338

TOSHIBA MACHINE TAIWAN CO., LTD.
7F., No.168, Ruiguang Road,
Neihu District, Taipei, 114, TAIWAN
Tel : [886]-(0)2-2659-6558
Fax : [886]-(0)2-2659-6381

TOSHIBA MACHINE SOUTH EAST ASIA
PTE. LTD. Head Office
123 Pioneer Road, Singapore 639596,
SINGAPORE
Tel : [65]-68611455
Fax : [65]-68612023

Kuala Lumpur Branch

Unit No. 39-1, Block C2, Jalan PJU
1/39 Dataran Prima, 47301 Petaling
Jaya, Selangor Darul Ehsan, MALAYSIA
Tel : [60]-(0)3-7803-7544
Fax : [60]-(0)3-7803-7545

Penang Office

No. 61, Jalan Prai Jaya 4,
Bandar Prai Jaya, 13600 Prai, Penang,
MALAYSIA
Tel : [60]-(0)4-3980086
Fax : [60]-(0)4-3989652

TOSHIBA MACHINE (THAILAND) CO., LTD.
Head Office127/28 Panjathanee Tower, 23rd Floor,
Nonthree Road, Khwaeng Chong
Nonthree, Khet Yannawa, Bangkok,
10120, THAILAND
Tel : [66]-(0)2-681-0158~61
Fax : [66]-(0)2-681-0162
URL:http://www.toshiba-machine.co.jp/
thailandPT. TOSHIBA MACHINE INDONESIA

Galeri Niaga, Tanjung Barat Kav. KM 8-6.
7, JL. TB. Simatupang Kav.81, Tanjung
Barat, Jagakarsa, Jakarta Selatan, 12530,
INDONESIA
Tel : [62]-(0)21-7884-8694
Fax : [62]-(0)21-7884-8689

TOSHIBA MACHINE (VIETNAM) CO., LTD.
Head Office
2nd Floor, VIT Tower, No. 519 Kim Ma
Street, Ngoc Khanh Ward, Ba Dinh
District, Hanoi, VIETNAM
Tel : [84]-(0)24-2220-8700~1
Fax : [84]-(0)24-2220-8702

■ America ■Ho Chi Minh Office

3rd Floor, Unit 3.1A, E-Town Building,
364 Cong Hoa Street, Ward 13, Tan Binh
District, Ho Chi Minh City, VIETNAM
Tel : [84]-(0)28-3810-8658
Fax : [84]-(0)28-3810-8657

TOSHIBA MACHINE (CHENNAI)PRIVATE LIMITED
Head Office & FactoryNo. 65 (P.O. Box No. 5),
Chennai-Bangalore Highway,
Chembarambakkam,
Poonamallee Taluk, Thiruvallur,
Chennai-600123, Tamil Nadu, INDIA
Tel : [91]-(0)44-2681-2000
Fax : [91]-(0)44-2681-0303

Delhi Office

Plot No. 5, LSC Pocket 6 & 7,
Second Floor,
Sector-C, Vasant Kunj,
New Delhi-110070, INDIA
Tel : [91]-(0)11-4329-1111
Fax : [91]-(0)11-4329-1127

Mumbai Office

TOSHIBA MACHINE COMPANY,AMERICA Head Office

755 Greenleaf Avenue,
Elk Grove Village, IL 60007, U.S.A.
Tel : [1]-847-593-1616
Fax : [1]-847-593-0897
URL http://www.toshiba-machine.com/

66 Burners Lane, Kiln Farm,
Milton Keynes MK11 3HD
UNITED KINGDOMTel : [44]-(0)1908-562327
Fax : [44]-(0)1908-562348

1440 South Balboa Avenue,
Ontario, CA 91761, U.S.A.
Tel : [1]-909-923-4009
Fax : [1]-909-923-7258

New Jersey Office1578 Sussex Turnpike, Randolph,
NJ 07869, U.S.A.
Tel : [1]-973-252-9956
Fax : [1]-973-252-9959

Atlanta Office6478 Putnam Ford Drive, Suite#106, Woodstock, GA 30189, U.S.A.
Tel : [1]-678-494-8005
Fax : [1]-678-494-8006

Mexico Branch

Other Sales & Service Offices:
Kolkata, Pune, Ahmedabad, Vapi,
Bangalore, Hyderabad

TOSHIBA MACHINE COMPANY CANADA
LTD.

7/499 Moo 6, Tambol Mabyangporn,
Amphur Pluakdaeng, Rayong 21140,
THAILAND
Tel : [66]-(0)38-027313
Fax : [66]-(0)38-027317

TOSHIBA MACHINE (EU) LTD.

Los Angeles Office

Unit No. 608, Powai Plaza,
Hiranandani Business Park,
Powai, Mumbai-400076, INDIA
Tel : [91]-(0)22-6671-0992
Fax : [91]-(0)22-6671-1014

TOSHIBA MACHINEMANUFACTURING (THAILAND)
CO., LTD.

■ Europe ■Circuito Luxma No.115, Poligono
Industrial Milenio, 37290 Leon,
Guanajuato, MEXICO
Tel : [52]-477-101-8600

6 Shields Court, Suite 101, Markham,
Ontario, L3R 4S1, CANADA
Tel : [1]-905-479-9111
Fax : [1]-905-479-6098
URL http://www.toshibamachine.ca/

TOSHIBA MACHINE DO BRASIL COMERCIO
DE MAQUINAS LTDA.
Rua Cubatao, 86 Conjunto 1307, Vila
Mariana, Sao Paulo, SP CEP 04013-000,
BRASILTel : [55]-(0)11-3586-0140
Fax : [55]-(0)11-3586-0138

7

Financial Review
CONSOLIDATED BALANCE SHEETTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESMarch 31, 2018ASSETS
Current assets:
Cash and deposits (Notes 15 and 17)
Marketable securities (Notes 15, 17 and 18)
Notes and accounts receivable, trade (Note 9, 17)
Allowance for doubtful receivables
Net receivables
Inventories:
Finished products
Work in process
Raw materials and supplies
Total inventories
Deferred tax assets (Note 21)
Other current assets (Notes 17 and 19)
Total current assets
Property, plant and equipment, net (Note 5)
Intangible assets (Note 6)
Investments and other assets:
Investments in:
Unconsolidated subsidiaries and affiliates (Note 17)
Other securities (Notes 17 and 18)
Long-term loans
Deferred tax assets (Note 21)
Other investments
Total investments and other assets
Total assets

8

Millions of yen

Thousands of
U.S. dollars(Note 3)

2018

2017

2018

¥30,394404
38,531(67)
38,463¥29,914146
39,444(197)
39,246$286,091
3,804
362,682(638)
362,044

8,811
24,76578
33,6552,922
4,290
110,129

6,529
20,10082
26,713
2,772
2,823
101,615

82,940233,108
737
316,785
27,50640,385
1,036,614

21,305

21,125200,537

740

749

6,969

9,488
10,24696,447
6,858
8,008
75,381
23
19
184
87
91
864
582
691
6,507
17,03919,057
179,383¥140,530¥151,232$1,423,503
See accompanying notes to financial statements.

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term bank loans (Notes 17 and 27)
Current portion of long-term debt (Notes 17 and 27)
Notes and accounts payable, trade (Note 9, 17)
Income taxes payable (Note 21)
Accrued expenses
Warranty reserve
Other current liabilities (Note 17, 19 and 27)
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 17 and 27)
Long-term accounts payable, otherAccrued directors’ retirement benefits
Net retirement benefit liability (Note 20)
Asset retirement obligations
Deferred tax liabilities (Note 21)
Other long-term liabilities (Note 27)
Total long-term liabilities
Total liabilities

Millions of yen

Thousands of
U.S. dollars(Note 3)

2018

2017

2018

¥10,090
4,300
29,835
865
5,247
597
6,890
57,827¥10,090500
26,097
573
4,785
530
4,904
47,481$94,974
40,474
280,833
8,149
49,397
5,621
64,859544,307

—

5
30
9,312
50
2,582
89
12,07069,898

4,300
5
29
9,244
49
2,275
25
15,92963,41055
288
87,653474
24,309839
113,619
657,926

12,484
11,53869,514(16,373)
77,164

12,484
19,60067,534(25,898)
73,722

117,515
108,605
654,315(154,116)
726,319—

Contingent liabilities (Note 7)
Net assets:
Shareholders’ equity: (Note 13)
Common stock
Authorized 360,000,000 shares
Issued149,885,530 shares
Additional paid-in capital
Retained earnings
Treasury stock, at cost (29,203,575 shares in 2018, 46,195,547 shares in 2017)
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized holding gain on securities, net of tax
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets (Note 26)
Total liabilities and net assets

3,210
3,684
34,680
1
2
26
1,600
1,606
15,123(1,415)(1,123)(10,572)
3,397
4,170
39,25877,12081,334
765,577¥140,530¥151,232$1,423,503
See accompanying notes to financial statements.

9

CONSOLIDATED STATEMENT OF INCOMETOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2018
Millions of yen

Net sales
Cost of sales (Note 11)
Gross profit
Selling, general and administrative expenses (Notes 10 and 11)
Operating income
Other income:Interest and dividend income
Rent income
Foreign exchange income
Equity in earnings of affiliates
Cancellation fee income
Gain on sales of property, plant and equipment
Gain on sales of investment securities (Note 17)
OthersOther expenses and losses:
Interest expense
Foreign exchange loss
Brand fee expense
Loss on disposal of property, plant and equipment and intangible assets
Loss on valuation of shares of subsidiaries and associates
Loss on impairment of fixed assets (Note 12)
Amortization of goodwill
Others
Net income before income taxes
Income taxes (Note 21)
Current
Deferred
Net income
Net income attributable to owners of parent

Net income per share of common stock (Note 26)

2018¥116,862
83,71233,15028,5094,640

2017¥111,327
79,35031,97727,503
4,473

453
42
52
1,031

269
59
1,462

—

1,309
14

Thousands of
U.S. dollars(Note 3)2018
$1,099,984
787,954
312,030
268,352
43,678

4,264
396
499
9,713

16
92
3,013

—
4

0
150
1,945

12,322
137

100

113
469

943

—
125
107

192
9
—
—

44
1

156
875
28,363

—
1,179
1,010
414
12

—

414
792

—

1,877
231
2,895

3,905
7,463

6,860

3,523

64,577

1,903
(59)
1,844
5,016
¥5,016

1,528
218
1,747
1,776
¥1,776

17,918(558)
17,35947,218$47,2182017¥11.87

U.S. dollars(Note 3)
2018
$0.39

2018
¥41.57

Yen

See accompanying notes to financial statements.

10

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMETOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2018
Thousands of
U.S. dollars(Note 3)

Millions of yen

Net income
Other comprehensive income (loss): (Note 14)
Unrealized holding gain (loss) on securities, net of tax
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

2018¥5,0162017¥1,776

464
0
6
288
12
772
¥5,789

308
1
(267)
468
(19)
492
¥2,268

4,371
7
62
2,716
119
7,276
$54,494

5,789

2,268

54,494—2018$47,218——

See accompanying notes to financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2018
Millions of yen
Unrealized
Deferred gains
Remeasurements
Number of Common Additional Retained Treasury gain on
Translation
Total netor losses onof defined benefit
Sharesstock paid in capital earnings stock securities,
adjustments
assetshedgesplans
net of tax
Balance at April 1, 2016
166,885,530¥12,484¥19,600¥67,623 ¥(10,044)¥2,901¥—¥2,643¥(1,864) ¥93,345
Profit attributable to owners of parent
1,776
1,776
Purchases of treasury stock(15,853)(15,853)(1,824)

Cash dividends

Effect of fiscal year change of consolidated subsidiaries
Net changes in items other than shareholders’ equity
Balance at March 31, 2017
166,885,530
Profit attributable to owners of parent
Purchases of treasury stock
Cancellation of treasury stock (17,000,000)
Cash dividends
Net changes in items other than shareholders’ equity
Balance at March 31, 2018
149,885,530

Balance at April 1, 2017
Profit attributable to owners of parent
Purchases of treasury stock
Cancellation of treasury stock
Cash dividends
Net changes in items other than shareholders’ equity
Balance at March 31, 2018

(1,824)(40)

12,484¥12,484

19,60067,534
5,016(8,062)(1,467)(1,568)¥11,538¥69,514(25,898)

308
3,210

1
1

(1,043)1,600

449(1,415)473¥3,6840¥2

6¥1,606292¥(1,123)(5)
9,530¥(16,373)

(40)
(283)
77,1205,016(5)—(1,568)772¥81,334

Thousands of U.S. dollars (Note 3)
Unrealized
Deferred gains
Remeasurements
Common Additional Retained Treasury gain on
Translation
Total netor losses onof defined benefit
stock paid in capital earnings stock securities,
adjustments
assetshedgesplans
net of tax$117,515 $184,497 $635,681 $(243,769) $30,222$19$15,062 $(13,321) $725,905
47,21847,218(54)(54)—(75,892) (13,815)
89,708(14,768)(14,768)
4,458
7
62
2,749
7,276
$117,515 $108,605 $654,315 $(154,116) $34,680$26$15,123 $(10,572) $765,577
See accompanying notes to financial statements.

11

CONSOLIDATED STATEMENT OF CASH FLOWSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2018
Millions of yen

Operating activities:
Net income before income taxes
Adjustments to reconcile net income before income taxes to net cash provided by operating activities:
Depreciation
Amortization of goodwill
Loss on impairment of fixed assets
Allowance for doubtful receivables
Warranty reserve
Directors’ retirement benefit
Net defined benefit liability
Interest and dividend income
Interest expense
Cancellation fee income
Loss on valuation of shares of subsidiaries and associates
Gain or loss on sales of investment securities
Gain or loss on sales and disposal of property, plant and equipment and intangible assets
Equity in earnings of affiliates
Changes in operating assets and liabilities:
Notes and accounts receivable, trade
Inventories
Notes and accounts payable, trade
Advances received
Accrued expenses
Others
Sub totalInterest and dividend income received
Interest paid
Cancellation fee income received
Income taxes paid
Net cash provided by (used in) operating activities
Investing activities:
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Purchases of investment securities
Proceeds from sales of investment securities
Increase (decrease) in short-term loans receivableCollection of long-term loans receivable
OthersNet cash provided by (used in) investing activities
Financing activities:
Decrease in short-term bank loans
Repayment of long-term loans payable
Purchases of treasury stock
Cash dividends paid
OthersNet cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Decrease in cash and cash equivalents resulting from change of accounting period of consolidated subsidiaries
Cash and cash equivalents at end of year (Note 15)

12

Thousands of
U.S. dollars(Note 3)

2018

2017

¥6,860¥3,523$64,577¥2,049

1,730
2,294

19,296

—

1
(156)
67
1
356

(453)
100

(1,309)

44

—

52
(58)
(2)
491

(269)
113
—
—

2018

—

12
(1,477)
632
14
3,357

(4,264)943(12,322)

1,179

(16)
92
(1,031)(0)
5(1,462)(156)
873(9,713)912(6,942)
4,985
1,785
464
(1,263)
6,550
679
(102)

2,993
2,803
(582)
520
(104)
(432)
11,617
495
(125)

8,591
(65,343)
46,93016,810
4,368(11,889)
61,654
6,393(962)(1,622)
6,813(2,038)
9,948(15,270)
64,137(3,221)
20
(214)
(499)
0
0
3
(10)
(3,921)(2,322)
4
(195)
(499)
0
(0)
14
17
(2,983)(30,322)192(2,019)(4,701)0034(96)(36,913)

1,309

—

—

12,322

(885)
—
(500)
(4,706)(15,853)(54)(1,824)(14,768)(26)(265)(19,089)(19,793)
(341)
(483)
(12,466)
6,948
42,932282,947(406)——¥30,060¥30,798$289,895
See accompanying notes to financial statements.
(500)
(5)
(1,568)(28)(2,102)(51)
738
30,060NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTOSHIBA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

1. Basis of Presenting Consolidated
Financial Statements
The accompanying consolidated financial
statements of TOSHIBA MACHINE CO., LTD.
(the “Company”) and its consolidated subsidiaries(collectively, the Companies) are prepared on thebasis of accounting principles generally acceptedin Japan, which are different in certain respects
as to the application and disclosure requirementsof International Financial Reporting Standards,
and are compiled from the consolidated financial
statements prepared by the Company as requiredby the Financial Instruments and Exchange Law
of Japan. The preparation of these consolidated financial statements requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and disclosureof contingent assets and liabilities at the fiscal
year end and the reported amounts of revenues
and expenses during the reporting period. Actual
results could differ from these estimates.
Certain reclassifications and rearrangements
have been made to the consolidated financial
statements issued domestically in order to present
them in a form that is more familiar to readers
outside of Japan. In addition, the notes to the consolidated financial statements include information
which is not required under accounting principles
generally accepted in Japan but is presented herein as additional information.

2. Summary of Significant Accounting
Policies(a) Basis of consolidation and accounting for investments
in unconsolidated subsidiaries and affiliates
The consolidated financial statements include
the accounts of the Companies.
All significant intercompany transactions andaccounts and unrealized intercompany profits
among consolidated entities are eliminated in consolidation.
Investments in affiliates (15 to 50 percent-owned companies) in which the Company
has the ability to exercise significant influence,
except immaterial investments, are accounted forusing the equity method.
Unconsolidated subsidiaries and affiliates notaccounted for by the equity method are stated atcost.

(b) Translation of foreign currencies
Monetary assets and liabilities denominated inforeign currencies are translated into Japanese
yen at the exchange rate prevailing at the balance
sheet date, except for those perfectly hedged byforward contracts, which are translated using thecontracted rate.
The foreign exchange gains and losses fromtranslation are recognized in the consolidated
statement of income to the extent that they are
not hedged by foreign exchange derivatives.
All assets and liabilities of foreign consolidated
subsidiaries are translated at the current rates
at the respective balance sheet dates, except forcomponents of shareholders’ equity which aretranslated at their historical rates. The revenue
and expense accounts of foreign consolidated subsidiaries are translated at the current rates at therespective balance sheet dates. Differences arisingfrom translation are recognized directly in foreign
currency translation adjustments in net assets.
(c) Securities
Marketable securities classified as other securities are carried at fair value with any changes in
unrealized holding gain or loss, net of income taxes, directly included in net assets.
Non-marketable securities classified as othersecurities are carried at cost. Cost of securities
sold is determined by the moving average method.
(d) Inventories
Finished products and work in process arestated at the lower of cost, determined by the individual identification method, or their net realizable value. Raw materials and supplies are statedat the lower of cost, determined by the moving
average method, or their net realizable value.
(e) Allowance for doubtful receivables
The allowance for doubtful receivables is stated at the amount determined based on the default
ratio sustained over a specific period in the pastand the estimated uncollectible amount determined based on the analysis of certain individual
accounts, including probable bad debt and claims
in bankruptcy.
(f) Warranty reserve
Warranty reserve is provided for warranty costs
to be incurred during the warranty period based13

on historical experience.
(g) Employee bonuses
The bonuses to the employees are paid twice ayear and accrued based on the estimated amounts
incurred and to be paid in the subsequent period.
(h) Depreciation of property, plant and equipment(excluding leased assets)
Depreciation of buildings is principally computed by the straight-line method, facilities attached
to buildings and other non-building structuresacquired on or after April 1, 2016 is computed by
the straight-line method and depreciation of otherproperty, plant and equipment is computed by the
declining balance method over the estimated useful lives of respective assets, principally ranging
from 3 to 60 years for buildings and structures,and from 3 to 22 years for machinery, equipment
and vehicles.
(i) Amortization of intangible assets
Computer software held for internal use isamortized by the straight-line method over thecorresponding economic useful life (5 years). Other intangible assets, including patent rights, areamortized by the straight-line method over theestimated useful lives of respective assets.
(j) Leased assets
Leased assets under finance lease transactions
that do not transfer ownership to the lessee aredepreciated by the straight-line method over thelease term with no residual value.
(k) Derivative financial instruments
All derivatives are stated at fair value. Gainsor losses arising from changes in fair value arecharged or credited to income for the period inwhich they arise, except for derivatives that aredesignated as hedging instruments. Gains or losses arising from changes in fair value of the derivatives designated as cash flow hedging instruments,
net of the applicable income taxes, are reported
as a component of net assets.
(l) Income taxes
The Companies accrue current income taxes
based on taxable income.
The Companies recognize a number of temporary differences for financial reporting purposes,
which, in the case of expenses, are not currently
deductible and in the case of income, are not currently taxable.
Income tax effects on such temporary differ-14

ences between tax and financial reporting purposes are reflected as deferred income taxes in the
consolidated financial statements using the asset
and liability method.
(m) Employees’ retirement benefits
Accrued employees’ retirement benefits areprovided based on the projected retirement benefit obligation and the fair value of plan assets at
fiscal year-end.
The retirement benefit obligation for employees is attributed to each period by the benefit formula method.
Actuarial gain or loss is amortized in the following year in which the gain or loss is recognizedprimarily by the straight-line method over a period (10 years), which is shorter than the averageremaining years of service of the employees.
(n) Directors’ retirement benefits
Domestic consolidated subsidiaries accrue an
estimated amount calculated in accordance withinternal rules for retirement benefits for directors
and corporate auditors.
(o) Amounts per share of common stock
Net income per share is computed based on
the weighted-average number of shares of common stock outstanding during a year.
Diluted net income per share is not presented
since the Company has never issued any securities
with dilutive effect, such as bonds with warrants
and convertible bonds. Cash dividends per sharerepresent the actual amount declared as applicable to the respective years.
(p) Cash equivalents
In preparing the consolidated statement ofcash flows, cash on hand, readily available deposits and short-term highly liquid investments withmaturities of not exceeding three months at thetime of purchase are considered to be cash andcash equivalents.

3. U.S. Dollar Amounts
U.S. dollar amounts are included solely for theconvenience of the readers and have been translated at the rate of ¥106.24=U.S.$1, the approximate exchange rate prevailing in the Japanese
foreign exchange market on March 31, 2018. Thistranslation should not be construed as a representation that the yen amounts actually represent,
have been, or could be converted into U.S. dollars.

4. Accounting Standards Issued But Not Yet Effective
Implementation Guidance on Tax Effect Accounting(ASBJ Guidance No.28 on February 16, 2018)
Implementation Guidance on Recoverability of Deferred Tax Assets(ASBJ Guidance No.26, revised on February 16, 2018)(a) Outline
The accounting treatment for taxable temporary differences related to investments in subsidiaries
when an entity prepares separate financial statements was modified. In addition, the accounting treatment
related to the recoverability of deferred tax assets in entities that qualify as Category 1 was clarified.
(b) Scheduled date of adoption
This implementation guidance will be applied from April 1, 2018.
(c) Impacts of the adoption of implementation guidance
The impacts on the Company’s consolidated financial statements from the adoption of this Implementation Guidance on Tax Effect Accounting and Implementation Guidance on Recoverability of Deferred Tax
Assets are being evaluated at the time of the preparation of consolidated financial statements.

Accounting Standard for Revenue Recognition(ASBJ Statement No.29 on March 30, 2018)
Implementation Guidance on Accounting Standard for Revenue Recognition(ASBJ Guidance No.30 on March 30, 2018)(a) Outline
This is a comprehensive accounting standard for revenue recognition. Specifically, the accounting standard establishes the following five-step model that will apply to revenue from customers:① : Identify the contract(s) with a customer② : Identify the performance obligations in the contract③ : Determine the transaction price④ : Allocate the transaction price to the performance obligations in the contract⑤ : Recognize revenue when (or as) the entity satisfies a performance obligation(b) Scheduled date of adoption
This accounting standard and implementation guidance will be applied from April 1, 2021.
(c) Impacts of the adoption of accounting standard and implementation guidance
The impacts on the Company’s consolidated financial statements from the adoption of this AccountingStandard for Revenue Recognition and Implementation Guidance on Accounting Standard for Revenue
Recognition are being evaluated at the time of the preparation of consolidated financial statements.

15

5. Property, Plant and Equipment
Property, plant and equipment at March 31, 2018 and 2017 consisted of the following:

Land
Buildings and structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Lease assets
Construction in progress
Sub total
Less accumulated depreciation
Property, plant and equipment, net

Millions of yen
2017
2018
¥6,439¥6,45036,28539,22725,00024,024
320
314
7,114
7,321
227
209
2,603
105
77,99077,652(56,864)(56,347)¥21,125¥21,305

Thousands of
U.S. dollars
2018$60,714369,233
226,136
2,960
68,913
1,970
994
730,920(530,383)$200,537

Depreciation expenses for the years ended March 31, 2018 and 2017 were ¥2,049 million ($19,296
thousand) and ¥1,730 million, respectively.

6. Intangible Assets
Intangible assets at March 31, 2018 and 2017 consisted of the following:

Others
Total

Millions of yen
2017
2018
¥749
¥740
¥749
¥740

Thousands of
U.S. dollars
2018$6,969$6,9697. Contingent Liabilities
As of March 31, 2018, contingent liabilities for loans guaranteed by the Company, principally on behalfof non-consolidated subsidiaries and affiliated companies, amounted to ¥1,083 million ($10,202 thousand).

8. Commitment Line
The Company has concluded commitment line contracts with three financial institutions in order toensure that it can safely and flexibly meet any demand for funds. The balance of unused committed lines
under these contracts at the end of the fiscal year was as follows:

Total amount of commitment line
Funds borrowed
Unused amountMillions of yen
2017
2018
¥10,000¥10,000——¥10,000¥10,000

Thousands of
U.S. dollars
2018$94,127—$94,127

9. Treatment of notes matured at the end of the fiscal year
Since the final day of the fiscal year falls on a holiday of financial institutions, the method is applied
where settlement of notes matured at the end of the fiscal year are accounted for on their clearing day.
Accordingly, the following notes matured at the end of the fiscal year are included in the consolidatedbalance sheet at the end of the fiscal year:

16Millions of yen
2017
2018
¥—
¥858
—
31

Notes and accounts receivable, trade
Notes and accounts payable, trade

Thousands of
U.S. dollars
2018$8,078296

10. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2018and 2017 were as follows:

Sales commission
Shipping expenses
Provision for warranty reserve
Personnel-expenses
Retirement benefit expenses
Depreciation
Rent expenses
Travel expenses
Research and development expenses
Subcontract expenses
Others
Total

Millions of yen
2017
2018
¥1,912¥2,448
3,649
3,814
442
507
11,256
11,456
692
672
665
718
750
755
1,236
1,272
1,032
1,258
576
612
5,288
4,994
¥27,503¥28,509

Thousands of
U.S. dollars
2018$23,044
35,901
4,772
107,833
6,329
6,765
7,109
11,981
11,842
5,764
47,013$268,352

11. Research and Development Costs
Research and development costs charged to income were ¥1,899 million ($17,876 thousand) and¥1,648 million for the years ended March 31, 2018 and 2017, respectively.

12. Loss on Impairment of Fixed Assets
Grouping of assets is based on the business units, except for idle assets, which are grouped individually.
The Company wrote down the carrying amount of idle assets to the recoverable amount and recognized
loss on impairment of fixed assets ¥1 million ($12 thousand) in the consolidated statement of income forthe year ended March 31, 2018.
The recoverable amount of the assets is measured at the net selling value, which is calculated based on
the land tax assessments.
The loss on impairment of fixed assets for the year ended March 31, 2018 consisted of the following:
Millions of yen
2017
2018
Ishioka, Ibaraki, Japan:
Idle property
Land
Total

¥1
¥1

¥—
¥—

Thousands of
U.S. dollars
2018

$12
$12

17

13. Shareholders’ Equity
The Corporation Law of Japan (the “Law”), which went into effect on May 1, 2006, provides that an
amount equal to 10% of the amount to be distributed as distribution of additional paid in capital (otherthan the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capitalreserve and legal reserve, respectively, until the sum of the capital reserve and legal reserve equals 25% of
the common stock account. Such distributions can be made at any time by resolution of the shareholders
or by the Board of Directors if certain conditions are met, but neither the capital reserve nor the legal reserve is available for distributions.

14. Other Comprehensive Income
The components of other comprehensive income (loss) for the years ended March 31, 2018 and 2017
were as follows:
Millions of yen
2017
2018
Unrealized holding gain (loss) on securities:
Current period changes in unrealized gain (loss)
Reclassification adjustment
Total unrealized holding gain (loss) on securities before tax effects
Tax effects
Unrealized holding gain (loss) on securities, net of tax effects
Deferred gains or losses on hedges
Current period changes
Total deferred gains or losses on hedges before tax effects
Tax effects
Deferred gains or losses on hedges, net of tax effects
Foreign currency translation adjustments:
Current period changes
Remeasurements of defined benefit plans
Current period changes in remeasurements of defined benefit plans
Reclassification adjustment
Total remeasurements of defined benefit plans before tax effectTax effects
Remeasurements of defined benefit plans, net of tax effects
Share of other comprehensive income of affiliates accounted for using equity method
Current period changes
Total other comprehensive income (loss)

18

Thousands of
U.S. dollars
2018

¥675
(16)
659
(194)
464

¥430
(0)
430
(122)
308

$6,360(156)
6,204(1,833)
4,371

1
1
(0)
0

2
2
(0)
1

10
10
(3)
7

6

(267)

62

97
191
288
—
288

242
226
468
—
468

913
1,803
2,716
—
2,716

12
¥772

(19)
¥492

119
$7,276

15. Cash Flow Information(a) Cash and Cash Equivalents
The reconciliation between cash and time deposits in the accompanying consolidated balance sheet
and cash and cash equivalents in the accompanying consolidated statement of cash flows at March 31,2018 and 2017 were as follows:

Cash and time deposits
Marketable securities
Cash and cash equivalents

Millions of yen
2017
2018
¥29,914¥30,394146
404¥30,060¥30,798

Thousands of
U.S. dollars
2018$286,091
3,804$289,895(b) Significant non-cash transactions
Significant non-cash transactions for the years ended March 31, 2018 and 2017 were as follows:

Cancellation of treasury stocks

Millions of yen
2017
2018
¥—
¥9,530Thousands of
U.S. dollars
2018$89,708

16. Leases
This disclosure has been omitted for the year ended March 31, 2018 based on materiality.

17. Financial Instruments
Overview(a) Policy for financial instruments
The Companies invest in short-term deposits for fund management, where temporary cash surplus isinvested in low-risk financial instruments. The Companies raise funds through bank borrowings. The Companies use derivatives only to reduce risk, and do not enter into derivative transactions for speculative
trading purposes.
(b) Financial instruments, related risk and risk management system
Operating receivables, such as notes and accounts receivable, trade are exposed to customer credit
risk. The Companies try to reduce this risk by adhering to their sales management rules. Investments, consisting of marketable securities of corporations, are exposed to stock price fluctuation risk in the market.
To address this risk, the Companies review stock prices in every quarter. Operating payables, such as notes
and accounts payable, trade are mainly due within six months. Borrowings are mainly used in for normal
operations and capital investments. The maturity of borrowings is up to two years from the balance sheet
date at the maximum. Certain borrowings are exposed to interest rate fluctuation risks, but these risks arehedged by interest rate swaps.
Derivative transactions consist of interest rate swaps used for the purpose of hedging interest rate fluctuation risk associated with long-term debt, and foreign exchange forward contracts, etc. used for the purpose of hedging foreign exchange risk associated with certain assets and liabilities denominated in foreign
currencies. These derivative transactions are managed under the internal management policies, to the extent deemed necessary. Note 19, “Derivative Financial Instruments,” provides more information on hedge
accounting, hedging instruments and methods, hedging policy, hedged items and assessments of hedge
effectiveness.
The Finance Department of the Companies prepares and updates its cash flow plan to manage liquidity
risk. A part of bank borrowings are subject to terms of financial covenants. If the Companies violate theterms of the financial covenants, the terms of the borrowings may be possibly revised.
The terms of the financial covenants related to a syndicated loan contract (¥4,000 million ($37,651

19thousand) at March 31, 2018) are as follows:① At March 31 and September 30 every year, the Company must maintain net assets in the consolidated balance sheet over ¥53,325 million ($501,930 thousand).
② In the consolidated statement of income for the fiscal year ending March 31, the Company must notrecord operating loss for two consecutive years.
(c) Supplemental information on the fair value of financial instruments
Fair value of financial instruments is calculated based on market prices, or by using reasonable estimates when market prices are not available. These estimates include variable factors, and are subject tofluctuation due to a change in underlying assumptions. The contract amounts of derivatives presented in
Note 19, “Derivative Financial Instruments,” below do not represent the actual market risk associated with
derivative transactions.
Fair value of financial instruments
Carrying value of financial instruments as of March 31, 2018 and 2017, and their fair value were as follows:(Financial instruments whose fair value was extremely difficult to determine were not included.)Millions of yen
2017
2018
Carrying value Fairvalue Difference Carrying value Fair value Difference
Cash and deposits¥—¥30,394 ¥30,394¥— ¥29,914 ¥29,914
Notes and accounts receivable, trade
39,44439,4484
38,531
38,5310Marketable securities and investment securities
15,98019,1303,149
18,206
20,501
2,295¥3,154¥87,132 ¥89,428¥2,295 ¥85,338 ¥88,492
Total assets
Short-term bank loans¥—¥14,390 ¥14,390¥— ¥10,590 ¥10,590
Notes and accounts payable, trade
26,09726,097—
29,83529,835—Long-term debt
4,300
4,306
6
—
—
—
¥6
¥44,225 ¥44,225¥— ¥40,987 ¥40,994
Total liabilities
Derivatives
¥(42)
¥(42)
¥—
¥(16)
¥(16)
¥—
Thousands of U.S. dollars
2018
Carrying value Fairvalue Difference
Cash and deposits$286,091 $286,091$—
Notes and accounts receivable, trade362,682 362,687
5Marketable securities and investment securities 171,374 192,97821,604$820,147 $841,755 $21,609
Total assets
Short-term bank loans$135,448 $135,448$—
Notes and accounts payable, trade280,833 280,833—
Long-term debt———
$416,281 $416,281$—
Total liabilities
Derivatives$(152)$(152)$—

Note : Derivatives are presented as net amounts receivable or payable with net amounts payable inparentheses.
(a) Method for calculating fair value of financial instruments, short-term investments and derivativetransactions① Cash and deposits
The carrying value approximates fair value because these are due within the short-term.
② Notes and accounts receivable, trade
The fair value of notes and accounts receivable, trade is classified based on certain terms and discounted using interest rate which reflects credit risk.

20

③ Marketable securities and investment securities
For negotiable certificates of deposit, the carrying value approximates fair value because these are
due within the short-term.
Investment securities are based on quoted market prices.
④ Short-term bank loans; ⑤ Notes and accounts payable, trade
The carrying value approximates fair value because these are due within the short-term.
⑥ Long-term debt
The fair value of long-term debt is determined based on the present value of the principal and interest, discounted by the interest rate that would be applied if similar new borrowings were enteredinto.
⑦ Derivatives
Please refer to Note 19, “Derivative Financial Instruments,”(b) Financial instruments whose fair value was extremely difficult to determine at March 31, 2018 and 2017
were as follows:

Investment securities for which the market prices are not available

Millions of yen
2017
2018
¥512
¥452

Thousands of
U.S. dollars
2018$4,258Market prices are not available for these items, or the cost of estimating future cash flow is consideredprohibitive. As a result, these items are not included in ③Marketable securities and investment securities
in the above table, because their fair value is not readily determinable.
(c) The aggregate annual maturities of financial assets at March 31, 2018 and 2017 were as follows:
Millions of yen
2017
2018
Due after one Due after fiveDue after one Due after fiveDue within one
Due after ten Due within one
Due after ten
year through years throughyear through years through
year
years
year
years
five years
ten years
five years
ten years
Cash and deposits¥—¥—¥—¥30,387¥—¥—¥— ¥29,840
Notes and accounts receivable, trade
1,619
—
—
38,50822—— 37,824
Marketable securities and investment securities:
Negotiable certificates of deposit
146
—
—
—
404
—
—
—
¥—
¥—
¥69,300¥22¥—¥— ¥67,810 ¥1,619
Total
Thousands of U.S. dollars
2018
Due after one Due after fiveDue within one
Due after ten
year through years through
year
years
five years
ten years
Cash and deposits$286,026$—$—$—
Notes and accounts receivable, trade 362,469
213——
Marketable securities and investment securities:
Negotiable certificates of deposit
3,804
—
—
—
$652,299
$213
$—
$—
Total

21

(d) Annual maturities of short-term bank loans and long-term debt
Year ended March 31, 2018

Short-term bank loans
Long-term debt
Total
Year ended March 31, 2017

Short-term bank loans
Long-term debt
Total
Year ended March 31, 2018

Short-term bank loans
Long-term debt
Total

Millions of yen
Due after one Due after two Due after three Due after four
Due within one
Due after five
year through years through years through years through
year
years
two years
three years four years
five years¥14,390
¥—
¥—
¥—
¥—
¥—
—
—
—
—
—
—
¥14,390
¥—
¥—
¥—
¥—
¥—
Millions of yen
Due after one Due after two Due after three Due after four
Due within one
Due after five
year through years through years through years through
year
years
two years
three years four years
five years¥10,090
¥—
¥—
¥—
¥—
¥—
500
4,300
—
—
—
—
¥10,590 ¥4,300
¥—
¥—
¥—
¥—
Thousands of U.S. dollars
Due after one Due after two Due after three Due after four
Due within one
Due after five
year through years through years through years through
year
years
two years
three years four years
five years$135,448
$—
$—
$—
$—
$—
—
—
—
—
—
—
$135,448
$—
$—
$—
$—
$—

18. Securities
Information regarding marketable securities classified as other securities included in investment securities were as follows:

Equity securities

Equity securities

Acquisition
cost¥2,696¥2,6962018
Carrying
value¥7,887¥7,887

Millions of yen
Unrealized Acquisition
gains
cost
¥2,206¥5,190¥2,206¥5,1902017
Carrying
value¥6,737¥6,737

Unrealized
gains¥4,531¥4,531Thousands of U.S. dollars
2018
Acquisition Carrying Unrealized
cost
value
gains
$25,385$74,245$48,860$25,385$74,245$48,860

Proceeds from sales and gain on sales of marketable equity securities classified as other securities were
¥25 ($239 thousand) million and ¥16 million ($156 thousand) for the year ended March 31, 2018, and ¥0
million and ¥0 million for the year ended March 31, 2017, respectively.
Negotiable certificates of deposit classified as non-marketable securities totaled ¥404 million ($3,804
thousand) and ¥146 million as of March 31, 2018 and 2017, respectively. Non-marketable equity securities
classified as other securities primarily consist of ¥120 million ($1,137 thousand) and ¥120 million as ofMarch 31, 2018 and 2017, respectively.

2219. Derivative Financial Instruments
The Companies have entered into derivative transactions (foreign exchange contracts, interest rate
swaps and currency option transactions) in order to manage certain risks arising from adverse fluctuations
in foreign currency exchange rates and in interest rates. The Company does not hold or issue derivative
financial instruments for the purpose of speculative trading. Derivative transactions are entered into by
the Finance Department under the rules approved by the Board of Directors. Derivative transactions areevaluated by the Corporate Auditing Office.
Derivatives not designated as hedging instruments at March 31, 2018 and 2017 were as follows:① Foreign exchange contracts

Hedged item

Millions of yen
2017
2018
Contract
Contract
Contract
Unrealized Contract
Unrealized
amount due Fair value
amount due Fair value
amountgain (loss) amountgain (loss)
after one year
after one year

Appropriated accounting for foreign currency
Foreign exchange contracts:
Sell:
U.S. dollars
Accounts receivable¥22
Buy:
Japanese yen
Accounts payable 1,153¥1,175
Total

Hedged item

¥—

¥0

¥0

¥—

¥—

¥—

¥—

—
¥—

(21)
¥(20)

(21)
¥(20)

787
¥787

—
¥—

(45)
¥(45)

(45)
¥(45)

Thousands of U.S. dollars
2018
Contract
Contract
Unrealized
amount due Fair value
amountgain (loss)
after one year

Appropriated accounting for foreign currency
Foreign exchange contracts:
Sell:
U.S. dollars
Accounts receivable
$208
Buy:
Japanese yen
Accounts payable 10,858$11,067
Total

$—

$9

$9

—
$—

(198)
$(189)(198)$(189)

23

Derivatives designated as hedging instruments at March 31, 2018 and 2017 were as follows:① Foreign exchange contract, etc.

Hedged item
Accounting in principle
Foreign exchange contracts:
Sell:
U.S. dollars
Appropriated accounting for foreign currency
Foreign exchange contracts:
Sell:
U.S. dollars
Total

Accounts receivable

¥193

¥—

¥3 ¥2,941¥—¥2

Accounts receivable

2,830¥3,024—¥—* 4,071¥3 ¥7,012

—
¥—

*
¥2

Hedged item
Accounting in principle
Foreign exchange contracts:
Sell:
U.S. dollars
Appropriated accounting for foreign currency
Foreign exchange contracts:
Sell:
U.S. dollars
Total

Millions of yen
2017
2018
Contract
Contract
Contract
Contract
amount due Fair value
amount due Fair value
amountamountafter one year
after one year

Thousands of U.S. dollars
2018
Contract
Contract
amount due Fair value
amountafter one year

$1,820$—$37

Accounts receivable $26,647$28,467

—
$—

*
$37

Accounts receivable

Note : Foreign exchange contracts are accounted for using the appropriation method as part of theaccounts receivable. Therefore the fair value of foreign exchange contracts is included in thefair value of the underlying accounts receivable.
② Interest rate swaps
Millions of yen

Hedged item
Special treatment
Interest rate swap:
Floating rate receipt, fixed rate payment

24

2018
Contract
Contract
amount due Fair value
amountafter one year

Short-term debt ¥4,000¥—
Long-term debt

¥—
¥—

2017
Contract
Contract
amount due Fair value
amountafter one year

¥—
¥—
¥—
¥— ¥4,500 ¥4,000¥—¥—

Hedged item
Special treatment
Interest rate swap:
Floating rate receipt, fixed rate payment

Thousands of U.S. dollars
2018
Contract
Contract
amount due Fair value
amountafter one year

Short-term debt $37,651$—$—

Interest rate swaps are accounted for as part of the short-term debt or long-term debt. Therefore thefair value of the swaps is included in the fair value of the underlying short-term debt or long-term debt.

20. Employees’ Retirement Benefits(a) Overview
The Company and certain subsidiaries have funded defined benefit plans, i.e, lump-sum payment plansand defined benefit pension plans, and defined contribution plans for employees.
Certain domestic subsidiaries participate in multiemployer pension plans. Multiemployer pension plans,
in which pension assets belonging to the Companies are not reasonably determinable, are accounted for as
if those are defined contribution plans.
Certain domestic consolidated subsidiaries have adopted the simplified method in calculating their projected benefit obligation.
(b) Defined benefit plans① The changes in the retirement benefit obligation during the years ended March 31, 2018 and 2017
were as follows:

Retirement benefit obligation at beginning of year
Service cost
Interest cost
Actuarial gain or loss
Retirement benefit paid
Retirement benefit obligation at end of year

Millions of yen
2017
2018
¥13,790¥13,878
966
921
0
0
(243)
(5)
(636)
(654)
¥13,878¥14,141

Thousands of
U.S. dollars
2018$130,630
8,678
7
(47)
(6,157)$133,110② The changes in pension plan assets during the year ended March 31, 2018 and 2017 were as follows:

Pension plan assets at beginning of year
Expected return on pension plan assets
Actuarial gain or loss
Contribution by the Companies
Retirement benefit paid
Pension plan assets at end of year

Millions of yen
2017
2018
¥4,564¥4,634
91
92
(1)
92
197
198
(218)
(187)
¥4,634¥4,829Thousands of
U.S. dollars
2018$43,618
872
866
1,869
(1,769)$45,457

25

③ The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31, 2018 and 2017 for the defined benefit plans

Funded retirement benefit obligation
Pension plan assets at fair value
Unfunded retirement benefit obligation
Net retirement benefit liability recognized in the consolidated balance sheet
Retirement benefit liability
Net retirement benefit liability recognized in the consolidated balance sheet

Millions of yen
2017
2018
¥4,552¥4,639(4,634)(4,829)
(81)
(189)
9,325
9,501
9,244
9,312
9,244
9,312
¥9,244¥9,312Thousands of
U.S. dollars
2018$43,673(45,457)(1,784)89,43787,65387,653$87,653④ The components of retirement benefit expense for the years ended March 31, 2018 and 2017 wereas follows:

Service cost
Interest assets
Expected return on pension assets
Actuarial gain or loss
Retirement benefit expense

Millions of yen
2017
2018
¥966
¥921
0
0
(91)
(92)
226
191
¥1,101¥1,021Thousands of
U.S. dollars
2018$8,678
7
(872)
1,803
$9,615⑤ Remeasurements of defined benefit plans included in other comprehensive income (before tax effect) for the years ended March 31, 2018 and 2017 were as follows:

Actuarial gain or loss
Total

Millions of yen
2017
2018
¥468
¥288
¥468
¥288

Thousands of
U.S. dollars
2018$2,716$2,716⑥ Remeasurements of defined benefit plans included in accumulated other comprehensive income(before tax effect) as of March 31, 2018 and 2017 were as follows:

Unrecognized actuarial loss
Total

26

Millions of yen
2017
2018
¥1,354¥1,065¥1,354¥1,065

Thousands of
U.S. dollars
2018$10,033$10,033

⑦ The fair value of pension plan assets, by major category, as a percentage of total plan assets as ofMarch 31, 2018 and 2017 were as follows:
Domestic bonds
Domestic equity securities
Foreign bonds
Foreign equity securities
Insurance assets (General accounts)
Other
Total

2018
52%
13
11
14
8
2
100%

2017
52%
13
11
14
8
2
100%

The expected return on pension plan assets has been estimated based on the anticipated allocation toeach asset class and the expected long-term returns on assets held in each category.
⑧ The assumptions used in accounting for the above plans were as follows:
Discount rate
Expected rate of return on pension plan assets
Expected rate of salary increase

2018
0.0%
1.8
9.4

2017
0.0%
2.0
9.4

The expected rate of salary increase was the rate of increase points calculated using the age specificindex of the expected rate of salary increase under the retirement benefits point system.
(c) Defined contribution plans
The required contributions to defined contribution plans of the Company and certain domestic consolidated subsidiaries for the years ended March 31, 2018 and 2017 were ¥170 million ($1,601 thousand) and¥169 million, respectively.
(d) Multiemployer pension plans
The required contributions to the multiemployer pension plans for the years ended March 31, 2018 and2017 were ¥32 million ($301 thousand) and ¥37 million, respectively.
① Funded status of the multiemployer pension plans as of the most recent calculation dates

Amount of pension assets
Total amount of actuarial obligations and minimum reserve in the pension financial calculation (Note)
Difference

Millions of yen
2017
2018
¥122,897¥127,443
152,503
149,315¥(29,605)¥(21,871)

Thousands of
U.S. dollars
2018$1,199,584
1,405,453$(205,870)

Note : This item was presented as “Amount of obligations” in the previous fiscal year.
② The Companies’ portion of contributions in multiemployer pension plans
The Companies’ portion in the total contributions of the multiemployer plans

2018
0.623%

2017
0.630%The difference above was principally attributable to the differences in retained earnings of ¥6,159 million ($57,978 thousand) and ¥(112,802) million in the pension financial calculation, at March 31, 2018and 2017, respectively special reserve of ¥(7,646) million ($(71,974) thousand) and ¥105,156 million atMarch 31, 2018 and 2017 and unrecognized prior service cost of ¥20,384 million ($191,874 thousand) and¥21,959 million at March 31, 2018 and 2017, respectively.
Prior service cost of the plans is amortized by the straight-line method over 20 years. The Companies
paid and recognized premium contributions of ¥31 million ($294 thousand) and ¥32 million for amortization of prior service cost in the consolidated financial statements for the years ended March 31, 2018 and2017, respectively.

27

The Companies’ portion of contributions described above was not equal to the actual share to be allocated to the Companies.

21. Income Taxes
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries generallycomprise corporation, enterprise and prefectural and municipal inhabitants taxes. The statutory tax rates
for the years ended March 31, 2018 and 2017 were approximately 30.2% and 30.2%, respectively.
The reconciliation between the statutory tax rate and effective tax rate for the years ended March 31,2018 and 2017 were as follows:
Statutory tax rate
Per-capita portion of inhabitant tax
Permanently non-deductible expenses
Permanently non-taxable revenue such as dividends income
Change in valuation allowance
Effects of elimination in consolidation
Difference in statutory tax rates for foreign subsidiaries
Others
Effective tax rate

2018
30.2%
0.5
0.7
(0.9)
(0.3)
(1.6)
(0.2)
(1.5)
26.9%

2017
30.2%
1.1
0.7
(0.6)
5.0
14.4
1.6
(2.8)
49.6%

The significant components of deferred tax assets and liabilities at March 31, 2018 and 2017 were as follows:
Millions of yen
2017
2018
Deferred tax assets:
Allowance for doubtful receivables
Net defined benefit liability
Devaluation of inventories
Unrealized intercompany profit on inventories
Accrued employee’s bonuses
Devaluation of securities
Enterprise taxes payable
Other
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Deferral of gain on sale of fixed assets
Unrealized holding gain on securities
Asset retirement obligations
Foreign consolidated subsidiaries’ retained earnings
Affiliates’ retained earnings accounted for using equity method
Enterprise taxes receivable
OthersTotal deferred tax liabilities
Net deferred tax assets

28

Thousands of
U.S. dollars
2018

¥37
2,492
755
551
612
330
105
1,647
¥6,531(2,460)¥4,071

¥47
2,384
650
504
577
328
89
1,707
¥6,290(2,479)¥3,810$351
23,461
7,110
5,191
5,764
3,106
988
15,508$61,479(23,159)$38,319(98)(1,515)(6)(688)(1,302)—(28)¥(3,639)
¥431

(103)
(1,320)(6)(599)(1,181)(13)(0)¥(3,226)
¥584

(931)
(14,266)(58)(6,479)(12,260)—(266)$(34,259)$4,061Net deferred tax is included in the following accounts:
Millions of yen
2017
2018
¥2,772¥2,922
87
91
—
—
2,275
2,582

Current assets – Deferred tax assets
Investments and other assets – Deferred tax assets
Current liabilities – Deferred tax liabilities
Long-term liabilities – Deferred tax liabilities

Thousands of
U.S. dollars
2018$27,506864—
24,30922. Asset Retirement Obligations
This disclosure has been omitted for the year ended March 31, 2018 based on materiality.

23. Rental Property
This disclosure has been omitted for the year ended March 31, 2018 based on materiality.

24. Segment Information(a) General information about reportable segments
The reportable segments of the Companies are the business units for which the Company is able to obtain respective financial information separately in order for Board of Directors to conduct periodic assessments to determine distribution of management resources and evaluate their business results.
The Companies’ business is classified into certain segments based on the types of products and services. The Companies’ segments are categorized into the following two reportable segments: “Molding
Machinery” and “Machine Tools” based on the similarities of the economic nature, type of business andmanufacturing method:
Molding Machinery: Injection molding machines, Die casting machines, Plastic extrusion
Machine Tools:
Large size machine tools, Portal type machine tools, Machining centers, Horizontal
boring machines, High-precision machines(b) Basis of measurement for reportable segment profit or loss, segment assets and other material items
The accounting treatment for the reportable business segments is generally the same as described in Note 2,“Summary of Significant Accounting Policies.” Reportable segment income is calculated on the basis of operating
income. The prices of intersegment transactions and transfers are calculated based on the market prices.
(c) Reportable segment information
Reportable segment information of the Companies for the years ended March 31, 2018 and 2017 was as follows:Year ended March 31, 2018
Reportable segments
Molding
MachineSub total
MachineryTools
Net sales:
External customers
Inter-segment
Total
Segment income
Segment assets
OthersDepreciation
Capital expenditures¥80,265－
80,265¥4,659¥82,232¥1,062
781

Millions of yen¥23,700 ¥103,965
7
7
23,708103,973¥(1,130)¥3,529¥34,889 ¥117,122
¥714
3,606

¥1,777
4,388

Other
Products

Total¥12,896 ¥116,862
2,937
2,944
15,833
119,807¥1,005¥4,534¥21,401 ¥138,523
¥272
299

¥2,0494,687

Adjustments Consolidated¥— ¥116,862(2,944)—(2,944) 116,862¥106¥4,640¥12,709 ¥151,232¥——¥2,0494,687

29

Year ended March 31, 2017
Reportable segments
Molding
MachineSub total
MachineryTools
Net sales:
External customers
Inter-segment
Total
Segment income
Segment assets
OthersDepreciation
Capital expenditures
Year ended March 31, 2018

Net sales:
External customers
Inter-segment
Total
Segment income
Segment assets
OthersDepreciation
Capital expenditures¥71,831—
71,831¥3,525¥72,916¥1,092
483

Millions of yen¥29,469 ¥101,301
265
265
29,735
101,566¥422¥3,948¥38,216 ¥111,132
¥446
201

¥1,538685

Other
Products

Total¥10,026 ¥111,327
2,629
2,895
12,655
114,222¥402¥4,351¥18,427 ¥129,560
¥191
650

$10,005
7,359$223,081 $978,591
75
75
223,156
978,666$(10,644)$33,219$328,407 $1,102,430$6,72733,946$16,732
41,304$121,392 $1,099,984
27,64527,720149,038 1,127,704$9,460$42,679$201,444 $1,303,874$2,564
2,817¥— ¥111,327(2,895)—(2,895) 111,327¥122¥4,473¥10,969 ¥140,530¥1,7301,335

Thousands of U.S. dollars
Reportable segments
Other
Molding
MachineTotal
Sub total
Products
Machinery
Tools$755,510—
755,510$43,862$774,023

Adjustments Consolidated¥——¥1,7301,335

Adjustments Consolidated$— $1,099,984(27,720)—(27,720) 1,099,984$999$43,678$119,629 $1,423,503$19,296
44,122$——$19,296
44,122

Note : “Other products” is a business segment that is not included in the reportable segments. It included business activities related to industrial robots and electronic controls, etc.
(d) Difference between total reportable segments and consolidated financial statements
The main differences between total reportable segments and consolidated financial statements for theyears ended March 31, 2018 and 2017 were as follows:

Sales
Total reportable segments
Other products
Eliminations
Net sales in the consolidated financial statements

IncomeTotal reportable segments
Other products
Eliminations
Operating income in the consolidated financial statements

30

Millions of yen
2017
2018
¥101,566¥103,973
12,655
15,833(2,895)(2,944)¥111,327¥116,862

Thousands of
U.S. dollars
2018$978,666
149,038(27,720)$1,099,984

Millions of yen
2017
2018
¥3,948¥3,529
402
1,005
122
106
¥4,473¥4,640Thousands of
U.S. dollars
2018$33,219
9,460
999$43,678

Assets
Total reportable segments
Other productsCompany-wide assets
Eliminations
Net assets in the consolidated financial statements

Millions of yen
2017
2018
¥111,132¥117,122
18,427
21,401
11,34313,097(374)(387)¥140,530¥151,232

Thousands of
U.S. dollars
2018$1,102,430
201,444
123,279(3,650)$1,423,503

Note : Company-wide assets are mainly cash and cash equivalents, securities and investment securities that are not allocated to the reportable segments.
(e) Other information① Information about products and services
Information about products and services is not disclosed because reportable segment information isbased on products and services.
Information
about geographical areas②
Sales information by country or geographical areas for the years ended March 31, 2018 and 2017
was as follows:Japan¥46,356

Japan¥47,811Japan$436,342

United States¥13,521

Millions of yen
2018
China
Other Asia
¥28,099¥22,396

Other¥6,487

Total¥116,862

United States¥15,023

Millions of yen
2017
China
Other Asia
¥20,481¥21,058

Other¥6,952

Total¥111,327

United States$127,277

Thousands of U.S. dollars
2018
China
Other Asia
$264,491$210,813

Other$61,061

Total$1,099,984

Note : Sales figures are classified based on customer locations.
Property, plant and equipment information by country or geographical areas as of March 31, 2018 and2017 was as follows:Japan¥18,672

Millions of yen
2018
North America
Asia
¥198
¥2,433

Total¥21,305

Japan¥18,423

Millions of yen
2017
North America
Asia
¥198
¥2,504

Total¥21,125

Japan$175,757

Thousands of U.S. dollars
2018North America
Asia$1,872$22,908

Total$200,537

31

③ Information about major customers
Information about major customers is not disclosed, because net sales to any customer did not exceed 10% of the consolidated net sales for the years ended March 31, 2018 and 2017.
(f) Information about impairment loss on fixed assets for each reportable segment
Information about impairment loss on long-lived assets for the years ended March 31, 2018 was as follows:
Millions of yen
2018
Molding Machinery Machine Tools Other products
¥—
¥—
¥1

Adjustments
¥—

Total
¥1

Thousands of U.S. dollars
2018
Molding Machinery Machine Tools Other products Adjustments
$—
$—
$12
$—

Total
$12

There was no applicable matter for the years ended March 31, 2017.
(g) Information about amortization of goodwill and unamortized balance for each reportable segment
Information about amortization of goodwill and unamortized balance as of and for the years ended
March 31, 2017 was as follows:

Amortization of goodwill
Unamortized balance

Millions of yen
2017
Molding Machinery Machine Tools Other products Adjustments¥2,294
¥—
¥—
¥—
—
—
—
—

Total
¥2,294—

There was no amortization of goodwill for the year ended March 31, 2018.
(h) Information about gain on negative goodwill for each reportable segment
There was no applicable matter for the years ended March 31, 2018 and 2017.

25. Related Party Transactions(a) Transactions with related parties
During the years ended March 31, 2017, the Companies had operating transactions with Toshiba Corporation, a 22.1% shareholder of the Company.
A summary of the significant transactions with Toshiba Corporation for the years ended March 31, 2017
was as follows:
Millions of yen
2017
For the years ended March 31:
Acquisition of treasury stocks
Payment of brand fee¥15,284
182

Note 1: Based on the resolution by the Board of Directors on March 2, 2017, the Company acquired its
treasury stocks through Tokyo Stock Exchange Trading NeTwork System (ToSTNeT-3), via offer transactions during off-hours trading, at the closing stock price on the day before the transaction. As a result, Toshiba Corporation was removed from related parties of the Company.
Note 2: The brand fee rate had been agreed upon prior to the beginning of the respective fiscal years.
Transaction amounts are described during the term when Toshiba Corporation was a related
party of the Company.
In addition, this disclosure has been omitted for the year ended March 31, 2018 based on materiality.

32

(b) Summary of financial information for significant affiliate company
During the years ended March 31, 2018 and 2017, the Company’s significant affiliate is NuFlare Technology, Inc.
A summary of financial information with NuFlare Technology, Inc. for the years ended March 31, 2018and 2017 was as follows:

Total current assets
Total non-current assets

Millions of yen
2017
2018
¥70,932¥82,117
11,987
13,116

Thousands of
U.S. dollars
2018$772,939
123,464

Total non-current liabilities

28,716
3,471

22,0873,340

270,303
32,680Total net assets

66,516

60,832

626,101

Net sales

41,555
9,522
7,063

47,702
13,1279,750

391,146
89,631
66,484

Total current liabilities

Net income before income taxes
Net income

26. Net Income and Net Assets per Share
Net income and net assets per share as of and for the years ended March 31, 2018 and 2017 were as follows:

Net income per share
Net assets per share2018¥41.57673.96Yen

2017¥11.87638.99U.S. dollars
2018
$0.39
6.34

Basic information for the calculation of net income per share was as follows:

Weighted-average number of shares of common stockThousands of shares
2017
2018
149,609
120,686

Net income
Net income not applicable to shareholders of common stock
Net income applicable to shareholders of common stock

Millions of yen
2017
2018
¥1,776¥5,016——¥1,776¥5,016

Thousands of
U.S. dollars
2018$47,218—$47,218

Basic information for the calculation of net assets per share was as follows:

Number of shares at year-end

Thousands of shares
2017
2018
120,689
120,681

Net assets
Non-controlling interests in consolidated subsidiaries
Net assets applicable to shareholders of common stock

Millions of yen
2017
2018
¥77,120¥81,334——¥77,120¥81,334

Thousands of
U.S. dollars
2018$765,577—$765,577

33

27. Short-term Bank Loans and Long-term Debt
The annual interest rates applicable to the short-term bank loans outstanding as of March 31, 2018and 2017 ranged principally from 0.48% to 0.56% and 0.46% to 0.53%, respectively. Long-term debt as ofMarch 31, 2018 and 2017 consisted of the following:
Millions of yen
2017
2018
Loans, principally from Japanese banks and insurance companies:
maturing 2018, interest 0.52% - 0.98%
Less current portion¥4,300
4,300
4,300
¥—

¥4,8004,800
500¥4,300Thousands of
U.S. dollars
2018$40,474
40,47440,474$—

The aggregate annual maturities of finance lease obligations at March 31, 2018 were as follows:Year ending March 31
2019
2020
2021
2022
2023 and later
Total

Millions of yen
¥26
18
14
12
5
¥78

Thousands of
U.S. dollars
$245
177
139
120
55
$739

28. Subsequent Event(a) Cash dividends
The following appropriation of retained earnings, which has not been reflected in the accompanying
consolidated financial statements for the year ended March 31, 2018, was approved at the meeting of theBoard of Directors held on May 9, 2018:
Cash dividends of ¥7.00 ($0.07) per share amounting to ¥844 million ($7,952 thousand)(b) Share Consolidation and Revision of the Number of Shares per Trading Unit
At its board of directors meeting held on May 16, 2018, the Company resolved to partially amend its Articles of Incorporation for the change in the number of shares constituting one trading unit in accordancewith Paragraph 1, Article 195 of the Companies Act of Japan (the “Companies Act”) and resolved to submit the proposal for the consolidation of shares to the 95th annual general meeting of shareholders heldon June 22, 2018. The proposal was approved at the said annual general meeting.
1. Change in the Number of Shares constituting One Trading Unit
(1) Purpose of the change
As announced in the “Action Plan for Consolidating Trading Units,” Japan’s stock exchanges aim to
standardize the trading units for common shares of all domestic listed companies at 100 shares. As an
entity in listed on the Tokyo Stock Exchange, the Company respects the objectives of the plan, and will
accordingly change the number of shares constituting one trading unit of the Company’s shares to 100
shares from 1,000 shares currently adopted.
(2) Detail of the change
Change the number of shares per unit from 1,000 shares to 100 shares.
(3) Effective date of the change
October 1, 201834

2. Share Consolidation(1) Purpose of share consolidation
As described above in “1. Change in the Number of Shares constituting One Trading Unit”, alongwith the change in the number of shares constituting one trading unit from 1,000 shares to 100 shares,
the Company will also consolidate 5 shares into 1 share with the objective of meeting the standard investment unit considered optimal by the stock exchanges (¥50,000 or more and less than ¥500,000),aiming to have the Company’s shares stably held by shareholders and taking consideration of changes
in stock prices in the medium to long term.
(2) Details of the share consolidation① Type of shares to be consolidated:
Common stock② Method of consolidation and ratio:
The Company shall consolidate the shares on October, 1, 2018 at the ratio of 5 shares to 1 share heldby the shareholders registered in the final register of shareholders on September 30, 2018 (substantially on September 28, 2018).
③ Total number of authorized shares as of the effective date
72,000,000 shares
Pursuant to provisions in Paragraph 2, Article 182 of the Companies Act, the Articles of Incorporation that amend the total number of shares authorized will be deemed to have changed on the effective date of October 1, 2018.
④ Number of shares to be reduced through the consolidation:
Total number of outstanding shares before the consolidation (as of March 31,2018)
Number of share to be reduced through the consolidation
Total number of outstanding shares after the consolidation

Shares
149,885,530
119,908,424
29,977,106

Note : “Number of share to be reduced through the consolidation” and “Total number of outstanding
shares after the consolidation” are the theoretical values calculated by multiplying the total
number of outstanding shares before the consolidation by the share consolidation ratio.
(3) Treatment of fractional shares
In the case that fractional shares of less than one share arises as a result of the share consolidation,such shares will be disposed in a bulk sale by the Company in accordance with Article 235 of the Companies Act. The proceeds of the said sale will be distributed to the shareholders holding such fractional
shares in proportion to their respective fractions.
3. ScheduleMay 16, 2018
June 22, 2018
September 25, 2018
September 26, 2018
October 1, 2018

Resolution at the board of directors meeting
Resolution at the 95th annual general meeting of shareholders
Last day of trading in 1,000 sharesStart day of trading in 100 shares
Effective date of share consolidation and change in the number of shares constituting
one trading unit

4. Effect on per share information
Assuming that the share consolidation was executed on April 1, 2016, per share information for theyears ended March 31, 2017 and 2018 is as follows:

Net income per share
Net assets per share2018¥207.83
3,369.80

Yen

2017¥59.37
3,194.97

U.S. dollars
2018
$1.96
31.72

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Independent Auditor's Report36Directors & Audit and Supervisory Board Members

Directors Chairman and Chief Executive Officer		 Yukio Iimura
President and Chief Operating Officer
		 Takahiro Mikami
Representative Director and Executive Operating Officer
		 Shigetomo Sakamoto
Director and Senior Managing Executive Officer
		 Akiyoshi Kobayashi
Director and Managing Executive Officers
		 Jun Koike
		 Eiichi Goto
Outside Directors
		 Yoshihiro Ogura
		 Kiyoshi Sato
		 Seigo Iwasaki
Audit and Supervisory Board Members

		 Teruyuki Makino
		 Hiroshi Takahashi
		 Yutaka Usami

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