2019

Profile
Living up to our corporate philosophy of “Employing optical technologies to create a comfortable society
and sustainable environment,” we at Iwasaki Electric Co., Ltd. have always set ambitious visions and striven toachieve our business objectives steadily by exerting our foresight and creativity. As the nation’s first company
that developed a reflective incandescent lamp, we are committed to contribute to the society by developing,
manufacturing and selling various light sources by ourselves, ahead of the competition, as the fundamental
policy of our business. Toward a brighter future, we will endeavor to realize the full potential of lights and to
make effective use of our leading-edge optical technologies as the “Light & Environment Company.”

Contents
Message from the President

1

Consolidated Six-Year Summary

2

Status of the Business3

Consolidated Balance Sheet

10

Consolidated Statement of Income

11

Consolidated Statement of Comprehensive Income

12

Consolidated Statement of Changes in Net Assets

13

Consolidated Statement of Cash Flows14

Notes to Consolidated Financial Statements

15

Independent Auditor’s Report38

Board of Directors and Corporate Data

39

Directory

40

Message from the President
During the consolidated fiscal year ended March 31, 2019, the Iwasaki Electric Group engaged in a number of
initiatives. In the Lighting sector, we endeavored to enhance the product lineup for LED lighting equipment foroutdoor use such as road, tunnel and street lamps. As a result, sales of tunnel and street lamps remained robust.
While orders for lighting equipment used in sports facilities did not grow as much as anticipated, lighting
equipment used in special environments including high ceiling lighting equipment and LED explosion-proof
lighting equipment saw strong growth in orders. In addition, we strived to expand the sales of IoT control
equipment and lighting equipment compatible with control devices by making lighting proposals on the usage of
DALI lighting control systems and DMX, thus taking proactive measures to promote new technologies andsolutions.
In the Applied Optics and Environment sector, we installed compound environmental testing equipment in ourown plants and received orders from customers in business fields related to environmental testing equipment.
Compound environmental testing equipment combines optics with other testing elements including temperature,humidity and water spraying. It is capable of conducting environmental testing on materials as well as products.
We think that this is a promising business field for the future. In business related to disinfection and sterilization,
we worked on new applications and recorded increased sales. While the UV curing business posted decreased
sales due to sluggish orders related to flat panel displays and printing, we plan to increase the number ofbusinesses with higher market shares, such as by expanding sales of in-house developed UV-LED equipment.
This year marks the 75th anniversary of the Iwasaki Electric Group. We recognize this milestone as a significant
turning point, and will aim to achieve new growth in ways other than simply pursuing the extensions of the statusquo.
With regard to the business outlook for the fiscal year ending March 31, 2020, in the Lighting sector, we havealready started and plan to push forward with a total solution business that will not only focus on the sales of
products such as lighting equipment used for road, street and sport facilities, but will also cover processes frominitial assessment to after-sales care to further expand market share in the facility lighting and special lighting
fields. For example, the conversion of road and street lamps to LED lighting commenced nine years ago in Japan,
yet only about 35% of the lighting equipment has been replaced with LED lighting products, and stock demand isestimated to be at 65%. Since a majority of orders in this business are based on lease contracts, we haveparticipated in proposal-based lease transactions as a business operator, ensuring that we can provide totalsolutions from initial assessment to maintenance. Moreover, in order to expand the field of the lighting business,
we will endeavor to develop businesses by looking ahead of the provision of relevant software and services in
addition to actual products.
In the Applied Optics and Environment sector, we will aim to develop new applications and create new businessfields by promoting the application of optical technologies and combining them with peripheral technologies. We
generate ideas through open innovation with a wide range of companies at the technology center located within
our plant, which will help to incubate and expand specific businesses in the future.
By setting a goal of breaking away from the principle of self-sufficiency and expanding businesses in the fields oflighting, optics and environment with a focus on speed, we will seek to achieve continuous growth and increase
our corporate value.
In Overseas Business sector, while we have been faced by extremely severe operating environment due to asignificant decrease in HID lamps and a decline in LED price, we still regard it as a key business for our future.
By promoting structural reforms including the suspension of LED equipment production in North America anddeveloping business bases with a focus on Southeast Asia and Australia, we will continue to make aggressive
moves to expand our overseas business.
June 2019
Yoshitake Ito
President and Chief Executive Officer1Consolidated Six-Year Summary
Millions of yen

Year ended March 31
2014

2015

2016

2017

2018

2019

¥57,030¥59,476¥58,206¥56,611¥57,328¥54,006

1,439

2,371

920

335

381

1,119

Total assets¥67,473¥70,573¥69,636¥69,463¥69,625¥67,288

Total shareholders’ equity2

21,82625,96824,722

25,791

26,342

26,921

Working capital

23,27023,381

27,862

25,777

22,13325,448Long-term bank loans,less current portion

1,890

500

2,350

2,816

2,500

5,300

Amounts per share:3
Profit attributable to ownersof parent
Cash dividends¥19.35¥31.88¥12.38¥44.34¥49.31¥144.75

2.00

4.00

4.00

4.00

40.00

40.00

For the year:
Net sales
Profit attributable to ownersof parent
At year-end:

1. As permitted by accounting standards generally accepted in Japan, amounts of less than one million yen have been omitted.
2. Total shareholders’ equity = Total net assets – Non-controlling interests.
3. Per share figures are in exact yen amounts.

Profitattributable toto owners
owners ofofparent
Profitattributableparent(Millions ofof yen)(Millionsyen)

Net Sales(Billions of yen)

2,500

80

80

2,000

60

Total Assets(Billions of yen)

60

1,500
40

40
1,000

20

20

500

0

0
'14

'15

'16

'17

'18

'19

0
'14

'15

'16

2

'17

'18

'19

'14

'15

'16

'17

'18

'19

Status of the Business
1. Management Policy, Business Environment, and Challenges Facing the Company
The Iwasaki Electric Group upholds the corporate philosophy of “Employing optical technologies to create acomfortable society and sustainable environment” and the management policy to become a “Light & Environment
Company” that contributes to energy saving and a safe environment by realizing the full potential of light andmaximizing its leading edge optical technologies.
Looking at the business environment for the Iwasaki Electric Group, while the global economy is at risk of adownturn due to the impact of trade frictions between the U.S. and China as well as the UK’s exit from the EU
and other factors, uncertainty is also increasing in the economic outlook for Japan.
Under these circumstances, in the Lighting sector, the use of LED lighting is expected to spread, supported
by national and local government programs such as subsidies for the stock demand, although price competition
will intensify. We expect that the Applied Optics and Environment sector will see consistent demand as theawareness of programs to reduce environmental burden in related markets has increased, such as the use of UV
curing.
The Iwasaki Electric Group will combine the optical technology and peripheral technologies that it has
cultivated to continue the expansion of the Lighting sector and the Applied Optics and Environment sector.
The Lighting sector will pursue the total solution business including peripheral businesses and maintenancein the fields of facility lighting and industrial lighting.
In the LED lighting equipment business, we not only improve the energy-saving performance and the qualityof light, but also pursue convenience and smartness to develop products with added value. We also work on
strengthening our design proposal ability to create the optimal lighting design that fits the individual customers’facility environment.
Especially in product development, we strengthen the procurement of equipment and devices to promptly
provide attractive products to customers. We also fuse our technology with peripheral technologies to be able tooffer unique products and services. By steadily implementing these activities, we maintain and expand our sharein the facility lighting and special lighting areas. We also promote research and development that can achieve
technologies and solutions incorporating related software and new services in addition to the hardware.
The Applied Optics and Environment sector strives to grow its three main businesses: environmental testing,
UV/EB curing, and sterilization businesses, by applying the Group’s various lighting technologies, such as
electron beams and ultraviolet rays.
The environmental testing business strives to maintain and expand its business by developing new test
equipment and a light radiation system, as well as by strengthening activities in both Japanese and international
markets.
The UV/EB cure business and the sterilization/disinfection/water treatment-related business develop new
applications and create new business fields, aiming to achieve “lighting and more” by proactively combining the
Iwasaki Electric Group’s core technologies with peripheral technologies.
The Iwasaki Electric Group aims to build a corporate structure that supports sustainable growth by improving
corporate value with its lighting and optical technologies. To achieve this goal, in the Lighting sector and theApplied Optics and Environment sector, we allocate our business resources intensively to research anddevelopment and marketing activities to promote solutions businesses and to optimize our workforce so as torespond quickly to changes in the market.

3

2. Outline of the Operating Results, etc.
Financial position, operating results and cash flows (hereinafter, “Operating Results, etc.”) of the Iwasaki ElectricGroup (Iwasaki Electric Co., Ltd. and its consolidated subsidiaries and affiliates accounted for by the equity
method) are as follows.
The Group has adopted the “Partial Revision of Accounting Standards for Tax Effect Accounting” (Corporate
Accounting Standard No. 28, February 16, 2018) and other accounting standards from the beginning of the current
fiscal year. Figures reported as of the last day of the previous fiscal year were recalculated based on these newly
adopted standards to compare the financial position between the current year and the previous year.
(1) Financial Position and Operating Results
During the fiscal year ended March 31, 2019, the global economy was on a moderate recovery track,
supported by the continued improvement in employment and income in the U.S., and steady domestic demandin the Euro block despite slowing exports. In Asia, capital investment stagnated and the economy continued todecelerate in China. The Japanese economy remained on a mild recovery track as personal spending andcapital investments in the corporate sector continued to pick up. On the other hand, uncertainty has generally
increased for the global economy in the second half of the year, with signs of an economic slowdown due tothe effects of trade frictions between the U.S. and China, and increasing concerns regarding the UK’s exit fromEU.
Under these business circumstances, the Iwasaki Electric Group focused on the three core corporate
strategies of “expanding the LED lighting business through the pursuit of added value,” “developing new
business in the Applied Optics and Environment Business,” and “promoting business through strategic productlaunches targeting key overseas markets.” In the Lighting sector, LED light sales increased while the growthof general sales in North America was slower. Sales of the Applied Optics and Environment sector decreased
as shipments by the UV curing and information equipment businesses were fewer than the projects it delivered
last year. However, operating income improved because the complaints handling costs decreased from theprevious year.
As a result, net sales amounted to ¥54,006 million (a 5.8% decrease from ¥57,328 million in the previous
fiscal year). Operating income increased to ¥1,458 million (an increase of ¥1,326 million from ¥131 million in
the previous fiscal year). Ordinary income totaled ¥1,712 million (a 649.2% increase from ¥228 million in theprevious fiscal year). Profit attributable to owners of parent increased to ¥1,119 million (a 193.6% increase
from ¥381 million in the previous fiscal year).
Operating results by business segment are described below.
Lighting Sector
In the Lighting sector, the LED light business has pursued energy saving, improved the quality of light, andexpanded the product line-up with communication control functions. The sector also used the approach of
showing actual products to prospective customers and conducting corporate seminars to promote sales of new
products. We have also strengthened our lighting design capabilities so that we can propose the creation of amore comfortable and appropriate lighting environment. In Japan, sales of large-scale floodlights decreased
due to a rebound in the delivery of large projects in the previous year, while sales of outdoor lights, highceiling lights, and special environment lights grew steadily. On the other hand, overseas sales were slow due toa delay in the development of the product lineup, especially in North America. However, operating income
improved because the complaints handling costs decreased from the previous year.
As a result, this sector reported net sales of ¥39,859 million (a 3.7% decrease from ¥41,378 million in theprevious fiscal year), and operating income of ¥2,527 million (an 80.9% increase from ¥1,396 million in theprevious fiscal year).

Applied Optics and Environment Sector
The Applied Optics and Environment sector worked to further cultivate the environmental testing-related field,
expand the sterilization and disinfection field, and strengthen the UV curing field. The sector also promoted
sales of new products, such as compact electron beam equipment, new xenon testers, and UV-LED radiators,
4and actively exhibited these new products at trade shows, aiming to appeal to new business fields. In theenvironmental testing business, sales of new xenon testers increased while sales of environmental testing
equipment for the automotive industry decreased from the previous fiscal year due to a decline in shipments.
The sterilization and disinfection business posted a sales increase while sales by the UV curing businessdecreased due to the weak sales in the FPDs (flat panel displays) related and printing fields. Sales by the
information equipment business decreased because shipments were fewer than the large projects it delivered
last year.
As a result, this sector reported net sales of ¥14,202 million (an 11.2% decrease from ¥15,987 million in
the previous fiscal year), and operating income of ¥807 million (a 16.6% increase from ¥692 million in theprevious fiscal year).
The financial position as of March 31, 2019, was as follows:
Total assets as of March 31, 2019, totaled ¥67,288 million, a decrease of ¥2,337 million compared to theprevious fiscal year-end.

Current Assets
Current assets as of March 31, 2019, totaled ¥43,832 million, a decrease of ¥1,046 million compared to theprevious fiscal year-end. The major factors were a decrease of ¥1,516 million in notes and accounts receivableand electronically recorded monetary claims - operating, and an increase of ¥488 million yen in cash anddeposits.
Noncurrent Assets
Noncurrent liabilities as of March 31, 2019, totaled ¥23,455 million, a decrease of ¥1,290 million, comparedto the previous fiscal year-end. Major factors were a decrease of ¥877 million yen in tangible and intangible
noncurrent assets, mainly because depreciation/amortization expenses were higher than the total value of the
newly acquired assets, and a decrease of ¥345 million yen in investments and other assets mainly due tofluctuations in market prices.
Current Liabilities
Current liabilities as of March 31, 2019, totaled ¥18,384 million, a decrease of ¥4,361 million, compared tothe previous fiscal year-end. Major factors were a decrease of ¥2,600 million yen in the current portion of
corporate bonds, a decrease of ¥416 million in the current portion of long-term loans payable, and a decreaseof ¥1,525 million in notes and accounts payable and electronically recorded obligations - operating.
Noncurrent Liabilities
Noncurrent liabilities as of March 31, 2019, totaled ¥21,966 million, an increase of ¥1,440 million, comparedto the previous fiscal year-end. Major factors were an increase of ¥2,800 million in long-term loans payable
due to additional borrowings to repay the current portion of corporate bonds and the current portion of longterm loans payable, and a decrease of ¥642 million in liability for retirement benefits.
Net Assets
Net assets as of March 31, 2019, totaled ¥26,937 million, an increase of ¥583 million compared to theprevious fiscal year-end.
Under shareholders’ equity, retained earnings increased by ¥785 million. Major factors were recognitionof profit attributable to owners of parent of ¥1,119 million and the dividend payment of ¥312 million.
Accumulated other comprehensive income decreased by ¥206 million. Major factors were an increase of¥269 million in retirement benefits liability adjustments, a decrease of ¥294 million in valuation difference on
available-for-sale securities due to fluctuations in market prices and a decrease of ¥202 million in foreign
currency translation adjustments due to the fluctuation in the exchange rates.

5(2) Cash Flows
Cash and cash equivalents as of March 31, 2019, increased by ¥488 million to ¥14,773 million compared tothe end of the previous fiscal year.

Cash flows from operating activities
Operating activities in the current fiscal year resulted in a net cash inflow of ¥2,114 million, compared to the
net cash inflow of ¥977 million in the previous fiscal year.
The main inflows were ¥1,694 million in income before income taxes and minority interests, ¥1,715
million in depreciation expenses, a decrease of ¥1,477 million in trade receivables. The main outflow was for¥1,502 in trade payables.
Cash flows from investment activities
Net cash used in investment activities amounted to ¥999 million, compared to a net cash outflow of ¥847
million in the previous fiscal year.
The major factors were payments of ¥794 million for the purchase of property, plant and equipment andpayments of ¥93 million for the purchase of intangible assets.
Payments for property, plant and equipment decreased by ¥1,097 million from the previous fiscal year, to¥1,891 million. The major reason was the construction of the Iwasaki Electric Techno Center, a newtechnology development building, in the previous fiscal year.
Also in the previous fiscal year, we also gained ¥1,139 million from the sale of investment securities as aresult of the sale of shares held for strategic purposes.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥620 million, compared to a net cash outflow of ¥598
million in the previous fiscal year.
The major factor was ¥312 million for payments of dividends.
Net cash used for short-term and long-term loans payable and corporate bonds decreased by ¥205
million, mainly as a result of refinancing of long-term loans payable and corporate bonds.

63. Management’s Analysis and Discussion of Operating Results, etc.
Management’s recognition, analysis and discussion of the Iwasaki Electric Group’s Operating Results, etc. are as
follows.
Forward-looking statements in the document are based on the judgments as of the end of the fiscal year
ended March 2019.
(1) Significant Accounting Policies and Financial Estimations
The consolidated financial statements of the Iwasaki Electric Group are prepared in accordance with thegenerally accepted accounting principles of Japan. We took into account the past results and present conditions
and used rational standards to make estimates necessary for preparing the consolidated financial statements.
However, because forward-looking statements include uncertainty, the actual results may differ fromthese estimates. Significant Accounting Policies and Financial Estimations are described in “Notes toConsolidated Financial Statements.”(2) Recognition, Analysis and Discussion of Operating Results, etc. for the Fiscal Year Ended March 2019
• Business Results
Gross profit
Gross profit for the year ended March 31, 2019, increased by ¥1,042 million from the previous fiscal year to¥16,496 million. This improvement occurred mainly because complaint handling costs, which were provided
to the reserve for complaints handling costs in the previous fiscal year in connection with defects in LED
lights (approximately ¥880 million), were not recorded in the current fiscal year.
The profit margin ratio has improved from the previous year as a result of cost improvement and otherefforts, even without the effect of the complaint-related costs last year.
Operating income
Operating income for the year ended March 31, 2019, increased by ¥1,326 million from the previous fiscal
year to ¥1,458 million. Major factors were an increase in gross profit as mentioned above, and a decrease of¥284 million in selling, general and administrative expenses as a result of the decrease in labor costs.
Ordinary income
Ordinary income for the year ended March 31, 2019, increased by ¥1,483 million from the previous fiscal yearto ¥1,712 million. Major factors were the above-mentioned increases in gross profit and operating profit, andan increase in extraordinary income, including an increase of ¥83 million in investment income by equity
method and foreign exchange gains of ¥33 million (compared to the exchange loss of ¥51 million in theprevious year).
Profit attributable to owners of parent
Profit attributable to owners of parent totaled ¥1,119 million in the year ended March 31, 2019, an increase of¥738 million compared to the previous fiscal year. Major factors are the increases in profits as mentioned
above, a decrease in extraordinary income because no gain on sales of investment securities was recorded in
the current year compared to the ¥700 million recorded in the previous fiscal year, such as for part of shares
held for strategic purposes, and an increase of ¥325 million in taxes due to the increase in profits.
Under the medium-term management plan, which completed in March 2019, the Iwasaki Electric Groupfocused on the three core corporate strategies of “expanding the LED lighting business through the pursuit ofadded value,” “developing new business in the Applied Optics and Environment Business,” and “promoting
business through strategic product launches targeting key overseas markets.” In the Lighting sector, the LED
lighting business in Japan posted sales growth in outdoor lighting, special environmental lighting, and someother areas by introducing new products. However, the sales targets could not be achieved in the international
market due to the delay in product introduction and intensified competition. The Applied Optics andEnvironment sector developed new applied products using EB and introduced new products such as UV-LED
7

radiators. However, the sales targets could not be achieved in the FPD-related UV curing business.
Based on the current conditions, the Lighting sector of the Iwasaki Electric Group promotes thedevelopment of more unique products. The sector also strengthens the development of technologies for not
only hardware, but also for related software and services. The Applied Optics and Environment sector creates
new applications and business fields by combining Iwasaki’s core technologies with peripheral technologies.
• Capital resources and liquidity of funds
The analysis of cash flow for the current fiscal year is described in (2) Cash Flows under “2. Outline of the
Operating Results, etc.”
The Iwasaki Electric Group mainly uses its own funds internally earned through its business activities asworking capital, and also raises funds by borrowings from financial institutions and private placement ofcorporate bonds.
Group companies use intra-group loans from Iwasaki Electric Co., Ltd., in addition to loans fromfinancial institutions, as appropriate, according to their cash plans, which are developed based on theirrespective operation policies and retention of financing costs such as interest.
The Company secures the cash on hand at a level of sales revenues for one to two months and also has
concluded commitment credit line agreements with financial institutions to maintain the liquidity to respond toan urgent cash demand and changes in the economic environment.
The balance of loans from financial institutions at the end of the current fiscal year was ¥7,580 million, adecrease of ¥205 million from the end of the previous fiscal year. The balance of cash and cash equivalents asof March 31, 2019, is ¥14,773 million.
The Company will use cash on hand for growth strategies, returns to shareholders, and the reduction ofinterest-bearing debts.
In the research and development area, we aggressively invest in the development of the solution businessand new applications to deliver “lighting and more” in the Applied Optics and Environment sector.
Capital investments decreased to ¥906 million in the current fiscal year. This was due to fewer large
investments than in the previous two fiscal years, during which large-scale investments were made in theconstruction of the Iwasaki Electric Techno Center, a new technology development hub within the Saitama
Plant, which was completed in the previous fiscal year.
We expect that large-scale investments in production facilities will decrease in the future as structuralchanges are expected in the Lighting sector, such as a shift to LEDs.
We plan to cover future capital investments with our own funds.

4. Important Business Agreements
Not Applicable.

8Consolidated Balance SheetAt March 31, 2019 and 2018ASSETS
Millions of yen
March 31, 2019
Current assets
Cash and deposits (Notes 20 and 24)
Notes and accounts receivable - trade (Notes 13
and 24)
Electronically recorded monetary claims operating (Notes 13 and 24)
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets¥

14,774

March 31, 2018¥

14,285

12,82014,311

2,107

2,132

7,077
1,538
4,916
653
(54)
43,832

6,930
1,550
4,898
800
(29)
44,87916,177

15,991

14,831

15,112

8,063
9,619
141
130
48,961(31,738)
17,224

8,045
9,622
136
164
49,071(31,216)
17,854

Intangible assets
Software
Other
Intangible assets, net

701
314
1,015

927
335
1,263

Investments and other assets
Investment securities (Notes 4, 10 and 24)
Deferred tax assets (Note 7)
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

4,209
475
562
(32)
5,214
23,45567,288

4,554
677
415
(19)
5,628
24,746
69,625

Noncurrent assets
Property, plant and equipment
Buildings and structures (Note 11)
Machinery, equipment and vehicles (Note11)
Tools, furniture and fixtures
Land (Notes 11 and 12)
Leased assets (Note 21)
Construction in progress
Accumulated depreciation
Property, plant and equipment, net¥

See accompanying notes to consolidated financial statements.

9¥Consolidated Balance SheetAt March 31, 2019 and 2018
LIABILITIES AND NET ASSETS
Millions of yen
March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade (Note 24)
Electronically recorded obligations - operating (Note 24)
Short-term loans payable (Notes 5 and 24)
Current portion of bonds (Notes 5, 11 and 24)
Current portion of long-term loans payable (Notes 5, 11
and 24)
Income taxes payable
Accrued consumption taxes
Provision for employees’ bonuses
Provision for repair claims
Other
Total current liabilities¥

Noncurrent liabilities
Long-term loans payable (Notes 5, 11 and 24)
Deferred tax liabilities (Note 7)
Deferred tax liabilities for land revaluation (Note 12)
Liability for retirement benefits (Note 22)
Asset retirement obligations (Note 6)
Provision for share-based remuneration for directors (andother officers)
Other
Total noncurrent liabilities
Total liabilities

7,932
3,687
980
–

March 31, 2018¥10,262
2,882
970
2,600

1,300

1,716

358
553
732
169
2,670
18,384

370
64
618
628
2,632
22,746

5,300
72
1,208
13,018
62

2,500
206
1,208
13,661
77

24

–

2,279
21,96640,3502,871
20,52543,272

Commitments and contingent liabilities (Note 23)
Net assets (Note 19)
Shareholders’ equity (Note 9)
Common stock:
Authorized: 23,900,000 shares in 2018 and 2019
Issued: 7,821,950 shares in 2018 and 2019
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

8,640

8,640

2,069
13,955(140)
24,524

2,069
13,169(139)
23,739

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land （Note 12）
Foreign currency translation adjustments
Retirement benefits liability adjustments
Total accumulated other comprehensive income

1,581
2,552
(291)
(1,445)
2,396

1,875
2,531
(88)
(1,714)
2,603

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

16
26,93767,28811
26,35369,625¥

See accompanying notes to consolidated financial statements.

10¥Consolidated Statement of Income
Years ended March 31, 2019 and 2018
Millions of yen
Year ended
Year ended
March 31, 2019
March 31, 2018¥
54,006 ¥57,32837,50941,874
16,496
15,45415,03815,322
1,458
131

Net sales
Cost of sales (Note 14)
Gross profit
Selling, general and administrative expenses (Note 15)
Operating income
Other income (Note 16)
Interest and dividend income
Foreign exchange gains
Equity in earnings of affiliates
Gain on sales of noncurrent assets
Gain on sales of investment securities
Other
Total other income
Other expenses (Note 17)
Interest expenses
Foreign exchange losses
Loss on sale and retirement of noncurrent assets
Loss on valuation of investment securities
Loss on reversal of foreign currency translation adjustments due toliquidation of subsidiaries and affiliates
Other
Total other expenses
Profit before income taxes
Income taxes (Note 7)
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent¥

See accompanying notes to consolidated financial statements.

11

94
33
125
15
–
142
413

111
–
42
19
700
128
1,001

121
–
23
10

124
51
269
–

–

49

23
177
1,694

8
503
629

386
182
569

485
(242)
243

1,125
5
1,119

385
4
381

¥

Consolidated Statement of Comprehensive Income
Years ended March 31, 2019 and 2018
Millions of yen

ProfitOther comprehensive income (Note 18)
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Retirement benefits liability adjustments
Share of other comprehensive income of affiliates accounted for by equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
See accompanying notes to consolidated financial statements.

12

Year ended
March 31, 2019¥
1,125

Year ended
March 31, 2018
¥
385

(294)
(160)
269
(41)
(227)
897

116
35
314
17
484
870

¥

891
5

¥

866
4

Consolidated Statement of Changes in Net Assets
Years ended March 31, 2019 and 2018

Balance at April 1, 2018
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes in items during period
Balance at March 31, 2019

Balance at April 1, 2018
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes in items during period
Balance at March 31, 2019

Balance at April 1, 2017
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes in items during period
Balance at March 31, 2018

Balance at April 1, 2017
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes in items during period
Balance at March 31, 2018

Millions of yen
Shareholders’ equity

Number ofshares ofcommon stock
issuedCommonstock

7,821,950––––¥8,640––––¥2,069––––¥13,169
(312)
1,119
–
(21)

(¥139)
–
–
(0)
–

Total
shareholders’equity¥23,739
(312)
1,119
(0)
(21)

–

–

–

–

–

–

–
7,821,950–¥8,640–785¥2,069¥13,955
Millions of yen
Accumulated other comprehensive income(0)(¥140)

785¥24,524

CapitalsurplusRetainedearnings

Treasury
stock

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total
net assets(¥1,714)––––¥2,603
–
–
–
–

¥11
–
–
–
–

¥26,353
(312)
1,119
(0)
(21)

(202)

269

(206)

5

(201)

(202)
(¥291)

269(¥1,445)(206)¥2,3965¥16583¥26,937

Valuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreign
Retirement
currency
benefits
translation
liability
adjustments adjustments¥1,875––––¥2,531
–
–
–
–

(¥88)
–
–
–
–

(294)

21

(294)
¥1,58121¥2,552Millions of yen
Shareholders’ equity

Number ofshares ofcommon stock
issuedCommonstock

78,219,507––––¥8,640––––¥2,069––––¥12,947
(312)
381
–
152

–

–

–

–

–

–

(70,397,557)
7,821,950–¥8,640–221¥2,069¥13,169
Millions of yen
Accumulated other comprehensive income(2)(¥139)

219¥23,739

Capitalsurplus(¥137)
–
–
(2)
–

Total
shareholders’equity¥23,520
(312)
381
(2)
152

Noncontrollinginterests

Total
net assets(¥2,029)––––¥2,271
–
–
–
–

¥–
–
–
–
–

¥25,791
(312)
381
(2)
152

53

314

331

11

342

53
(¥88)

314
(¥1,714)331¥2,60311¥11

561¥26,353

Revaluation
reserve forland¥1,758––––¥2,684––––(¥141)
–
–
–
–

116

(152)

116
¥1,875(152)¥2,531

13

Treasury
stock

Total
accumulated
othercomprehensive
incomeValuationdifference on
available-forsale securities

See accompanying notes to consolidated financial statements.

Retainedearnings

Foreign
Retirement
currency
benefits
translation
liability
adjustments adjustments

Consolidated Statement of Cash Flows
Years ended March 31, 2019 and 2018
Millions of yen

Cash flows from operating activities:
Profit before income taxes
Adjustments to reconcile profit to net cash provided by(used in) operating activities:
Depreciation and amortization
Increase (decrease) in provision for employee’s bonuses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in liability for retirement benefits
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales and retirement of property, plant and equipment
Equity in (earnings) losses of affiliates
Loss (gain) on sales of investment securities
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from 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
Other
Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Purchases of treasury shares
Cash dividends paid
Other
Net 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 the beginning of the year
Cash and cash equivalents at the end of the year (Note 20)

See accompanying notes to consolidated financial statements.

14

Year ended
March 31, 2019Year ended
March 31, 2018

¥

¥

¥

1,694

629

1,715
113
38
(573)
(95)
121
(30)
7
(125)
–

1,748
(3)
(12)
(113)
(111)
124
32
250
(42)
(700)

1,477
(217)
(1,502)
(82)
2,539
97
(126)
(395)
2,114

(244)
(980)
657
142
1,377
118
(122)
(395)
977

(794)
48
(93)
(10)
–
(151)
(999)

(1,891)
221
(459)
(19)
1,139
160
(847)

10
4,100
(1,716)(2,600)
(0)
(312)
(101)
(620)
(5)
488
14,284
14,773

(50)
1,500
(633)
(1,000)
(2)
(312)
(99)
(598)
(30)
(498)
14,783
14,284¥

Notes to Consolidated Financial Statements
At March 31, 2019 and 2018

1. Summary of Significant Accounting Policies(a) Basis of presentation
The accompanying consolidated financial statements of IWASAKI ELECTRIC Co., Ltd. (the “Company”) andconsolidated subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which are
different in certain respects as to the application and disclosure requirements of International Financial ReportingStandards, and are compiled from the consolidated financial statements prepared by the Company as required by
the Financial Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated financial statements, certain reclassifications have been made to
the consolidated financial statements issued domestically in order to present them in a form which is morefamiliar to readers outside Japan. In addition, certain reclassifications of previously reported amounts have been
made to conform the consolidated financial statements for the year ended March 31, 2018 to the 2019presentation.
As permitted, amounts of less than one million yen have been omitted. As a result, the totals shown in theaccompanying consolidated financial statements do not necessarily agree with the sums of the individual amounts.
(b) Principles of consolidation and accounting for investments in affiliates
The accompanying consolidated financial statements include the accounts of the Company and all significant
subsidiaries.
The investments in significant affiliates are accounted for by the equity method.
At March 31, 2019, the numbers of consolidated subsidiaries and affiliates accounted for by the equity
method were 23 and 8, respectively. In the elimination of investments in subsidiaries, the assets and liabilities ofthe subsidiaries, including the portion attributable to minority shareholders, are recorded based on the fair value atthe time the Company acquired control of the respective subsidiaries. The Company, consolidated subsidiaries andaffiliates accounted for by the equity method are collectively referred to as the “Group” within these consolidated
financial statements.
All significant intercompany balances and transactions have been eliminated in consolidation.
Kawasato Denki Co., Ltd. was excluded from the scope of consolidation for the year ended March 31, 2019,as the company went into liquidation during the year.
(c) Accounting period
The accounting period of the Company and its domestic subsidiaries begins April 1 and ends March 31 of thefollowing year.
The accounting period of foreign consolidated subsidiaries is a fiscal year ending on December 31. The
necessary adjustments for significant transactions between the fiscal year end of the Company and the fiscal year
end of consolidated foreign subsidiaries, if any, are made in the preparation of the consolidated financial
statements.
(d) Translation of foreign currency transactions and financial statements
Monetary assets and liabilities, including non-current receivables and payables denominated in foreign currencies
are translated into yen at the rates in effect at the balance sheet date. The assets, liabilities, revenue and expense offoreign consolidated subsidiaries are translated into yen at the rate of exchange in effect at the balance sheet date,
except for the components of net assets excluding non-controlling interests which are translated at their historicalexchange rates. Foreign exchange gains and losses resulting from foreign currency transactions are credited or
charged to income. Translation differences resulting from the translation of the financial statements are included in
net assets and non-controlling interests.

15

(e) Securities and investment securities
Trading securities are carried at fair market value and held-to-maturity securities are carried at amortized cost.
Available-for-sale securities with a fair market value are carried at fair market value. The difference between
the acquisition cost and the carrying value of available-for-sale securities is recognized in valuation difference on
available-for-sale securities, net of related tax effects, in net assets. Available-for-sale securities without a fairmarket value are stated at cost determined by the moving average method. The cost of available-for-sale securities
sold is calculated based by the moving average method.
During the years ended March 31, 2019 and 2018, the Company and consolidated subsidiaries had neither
trading securities nor held-to-maturity securities.
(f) Derivatives and hedging activities
The Company uses derivative financial instruments to manage the risks arising from fluctuations in foreign
currency exchange rates and their exposures to fluctuations in interest rates. The Company does not enter into
derivative transactions for trading or speculative purposes. Interest rate swaps are utilized by the Company toreduce interest rate risks. Gains or losses arising from changes in the fair value of financial instruments designatedas hedging instruments are deferred as assets or liabilities and charged to gains or losses during the same period inwhich the gains or losses on the hedged items are recognized. If interest rate swap agreements meet certain
hedging criteria, the net amount to be paid or received under the agreement is added to or deducted from theinterest on the hedged items.
Trade receivables, payable and forecasted transactions hedged by qualified forward foreign exchange
contracts are translated at the corresponding foreign exchange contract rates.
(g) Cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents include cash on hand, demand deposits and short-term investments that are easily
convertible into cash and exposed to little price fluctuation risk.
(h) Inventories
Inventories are stated at cost as determined by the weighted-average method. Balance sheet value is stated bywriting down the carrying value to reflect any decline in profitability.
(i) Property, plant and equipment, and depreciation (excluding leased assets)
Amortization of property, plant and equipment assets of the Company and its subsidiaries are principally
calculated by the declining balance method.
However, buildings acquired by the Company and its domestic subsidiaries (excluding attached facilities),
attached facilities and structures acquired on or after April 1, 2016 and assets of overseas subsidiaries are
depreciated by the straight-line method.
(j) Intangible assets and long-term prepaid expenses (excluding leased assets)
Amortization of intangible assets of the Company and its subsidiaries are principally calculated by the straightline method.
Amortization of software for internal use is calculated by the straight-line method over a useful life of 5 years.
(k) Leases
Noncancellable lease transactions that transfer substantially all risks and rewards associated with the ownership ofassets are accounted for as finance leases. All other lease transactions are accounted for as operating leases andrelating payments are charged to income as incurred.
Depreciation of leased assets under finance lease transactions, except for those that transfer ownership of theleased assets to the lessee, are calculated using the straight-line method over the lease term assuming no residual
value.

16

(l) Allowance for doubtful accounts
Allowance for doubtful accounts is provided based on the past experience for receivables, other than doubtfulreceivables, and the uncollectible amounts estimated separately for specific doubtful receivables.
(m) Provision for employees’ bonuses
The Company and domestic subsidiaries provide for payments of bonuses to employees at estimated amounts
calculated based on their payment regulations. However, at foreign subsidiaries, a provision for employees’
bonuses has not been recorded.
(n) Provision for repair claims
Provision for repair claims is provided for the amount recognized as of the end of the current fiscal year for freeinspections, and product exchanges, etc. due to product defects.
(o) Provision for share-based remuneration for directors (and other officers)
To prepare for the issuance of the Company’s shares by a trust related to the share compensation system fordirectors (excluding outside directors), the estimated value of such shares to be issued is provided according to thepoints assigned to the directors based on the Regulations for Share Issuance to Officers.
(p) Retirement benefitsa) Method of attributing the estimated retirement benefit obligation to periods
The straight-line method is used to attribute the estimated amount of retirement benefits to periods up to thecurrent fiscal year.
b) Amortization of actuarial gain or loss and prior service costs
Prior service costs are amortized as incurred by the straight-line method over a period not exceeding the
expected average remaining service years of employees (13 years).
Actuarial gain or loss is amortized from the following fiscal year after recognition using the straight-line
method over a period not exceeding the expected average remaining service years of employees (13 years).
c) Adoption of simplified method for small enterprises, etc.
Certain consolidated subsidiaries adopt a simplified method in calculating the retirement benefit obligation andretirement benefit expenses. Specifically, as for the lump-sum payment plan, the amount of retirement benefits
payable assuming the voluntary retirement of all employees at fiscal year-end is assumed to be equal toretirement benefit obligations. With regard to the corporate pension plan, the latest amount of actuarial
obligations under pension accounting is assumed to be equal to the retirement benefit obligations.
(q) Accounting for significant revenues and expenses
Accounting for revenues and costs of completed construction worka) Construction contracts in which the outcome of the part completed by the year end can be estimated reliably.
Percentage-of-completion method (The percentage of completion is estimated based on the cost incurred as apercentage of the estimated total contract cost.)b) Other construction contracts
Completed contract method(r) Consumption taxes
Consumption taxes are calculated by the tax exclusion method.

17

2. Accounting Standards Issued But Not Yet Effective•
Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement
No. 29, March 30, 2018)•
Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Implementation
Guidance No. 30, March 30, 2018)(1) Outline
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board(FASB) jointly developed comprehensive accounting standards for revenue recognition, and published“Revenue from Contracts with Customers” (IFRS 15 at IASB, Topic 606 at FASB) in May 2014. Consideringthat IFRS 15 would be effective for fiscal years beginning on or after January 1, 2018, and Topic 606 would
be effective for fiscal years starting after December 15, 2017, the ASBJ developed the comprehensive
accounting standard for revenue recognition and published it with the implementation guidance.
When the ASBJ developed the accounting standard for revenue recognition, the basic policy was to set
accounting standards that incorporate the basic principles of IFRS 15, from the viewpoint of ensuring thecomparability between financial statements, which is one of the benefits of maintaining consistency withIFRS 15. The standards also indicate that an alternative treatment may be added as long as comparability is
not impaired, considering the circumstances that special consideration should be given to the conventional
accounting practices that have been adopted in Japan.
(2) Scheduled date of adoption
The Company and its domestic subsidiaries will adopt this standard from the fiscal year starting on April 1,
2021.
(3) Impact of adopting the accounting standard and guidance
The Company is currently evaluating the effect of adopting the Accounting Standard for Revenue
Recognition and the related implementation guidance on its consolidated financial statements.

3. Change in Presentation(Change due to the adoption of Partial Amendments to Accounting Standard for Tax Effect Accounting)
The Company adopted the Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ
Statement No. 28, February 16, 2018; hereinafter the “Partial Amendments to Tax Effect Accounting Standard”)
starting from the beginning of the fiscal year ended March 31,2019. As a result, deferred tax assets are now shown
under “investments and other assets,” and deferred tax liabilities are shown under “noncurrent liabilities.” Also,
notes to the financial statements related to tax effect accounting were also changed.
As a result, “deferred tax assets” under “current assets” decreased by ¥986 million, and “deferred tax assets”
under “investments and other assets” increased by ¥312 million on the consolidated balance sheet as of March
31,2018. “Deferred tax liabilities” under “noncurrent liabilities” decreased by ¥674 million. Because deferred tax
assets and deferred tax liabilities of the same taxable entity are offset, total assets decreased by ¥674 million
compared to the amount before the change.
In the notes related to tax effect accounting, additional information described in (Comment 8) in the“Accounting Standard for Tax Effect Accounting” (excluding the total amount of the valuation allowances) and(Comment 9) in the same standard as defined in paragraphs 3 to 5 of the Partial Amendments to Tax EffectAccounting Standard has been disclosed. However, in accordance with transitional treatment under provisions ofArticle 7 of the Partial Amendments to Tax Effect Accounting Standard, the comparative information for theprevious fiscal year is not disclosed.

18

4. Securities and Investment Securities
Information regarding securities and investment securities classified as available-for-sale securities with fairmarket value at March 31, 2019 and 2018 is summarized as follows:
Millions of yen
March 31, 2019
Acquisition Carrying amount
cost(Fair market value)

Securities whose carrying
amount (fair market value)
exceeds their acquisition cost:
Equity securities
Debt securities
Government bonds
Corporate bonds
Other
Other
Subtotal
Securities whose acquisition
cost exceeds their carrying
amount (fair market value):
Equity securities
Debt securities
Government bonds
Corporate bonds
Other
Other
Subtotal
Total

March 31, 2018
Unrealized
gain (loss)

Acquisition
cost

Carrying amount(Fair market value)

Unrealized
gain (loss)¥1,047¥3,321¥2,274¥1,108¥3,794¥2,686

–
–
–
–
1,047

–
–
–
–
3,321

–
–
–
–
2,274

–
–
–
–
1,108

–
–
–
–
3,794

–
–
–
–
2,686

71

70

(1)

–

–

–

–
–
–
–
71
¥1,118––––70¥3,392––––(1)¥2,273–––––¥1,108–––––¥3,794–––––¥2,686

Notes: 1. Unlisted equity securities and investments in limited liability partnership are not included in available-for-sale securities
listed above as they do not have market prices and their fair values are not readily determinable.
2. Securities for which impairment losses were recognized
For the year ended March 31, 2019, an impairment loss of ¥10 million was recorded in securities (¥10 million in shares
under available-for-sale securities).
For the year ended March 31, 2018, no impairment losses were recognized.
In cases where the fair market value of a security at the end of the fiscal year has declined 50% or more from its acquisition
cost, an impairment loss is recognized for the full amount. In cases where the fair market value of a security at the end of
the fiscal year has declined 30% or more but less than 50% from its acquisition cost, an impairment loss is recognized forthe amount deemed necessary in consideration of the possibility of restoration, etc., on a case-by-case basis.

Information regarding the sales of investment securities classified as available-for-sale securities with fair market
value for the year ended March 31, 2019 and the year ended March 31, 2018 is summarized as follows:
Millions of yen
March 31, 2019

Equity securities
Debt securities
Government bonds
Corporation bonds
Other
Other
Total

March 31, 2018

Proceeds
from salesGrossrealized gain

Grossrealized loss

Proceeds
from salesGrossrealized gain

Grossrealized loss

–

–

–

¥1,141

¥700

–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
¥1,141

–
–
–
–
¥700

–
–
–
–
–

19

5. Short-Term Loans, Long-Term Loans and Other Long-Term Liabilities with Interest
Short-term loans from banks at an average interest rate of 0.94% amounted to ¥980 million and ¥970 million atMarch 31, 2019 and 2018, respectively.
Long-term loans, lease obligations and deposits received classified as other long-term liabilities with interest at
March 31, 2019 and 2018 consisted of the following:
Millions of yen
March 31, 2019

March 31, 2018

¥6,600¥4,216(1,300)
5,300
276
(91)
185
1,991
¥7,476(1,716)
2,500
357
(99)
258
2,517
¥5,275Loans, principally from banks, maturing in installments through 2022with an average interest rate of 0.89%
Less current portion of loans
Net
Lease obligations
Less current portion of lease obligations
Net
Deposits received with an average interest rate of 2.14%
Total

The annual maturities of long-term loans and lease obligations subsequent to March 31, 2019 are summarized
as follows:
Long-term loans

Lease obligations

Millions of yen

Millions of yen

Year ending March 31,
2021
2022
2023
2024 and thereafter

¥900
4,200
200
–

¥80
71
31
2

Bonds payable at March 31, 2019 and 2018 consisted of the following:
Name ofcompany

Issue

Date of issue

Iwasaki ElectricCo., Ltd.
Iwasaki ElectricCo., Ltd.
Iwasaki ElectricCo., Ltd.
Iwasaki ElectricCo., Ltd.

23rd Unsecured
straight bond24th Unsecured
straight bond25th Unsecured
straight bond26th Unsecured
straight bondSeptember 30,
2015
October 5,
2015
October 9,
2015
October 30,
2015

–

–

Total

Millions of yen
March 31, 2019

March 31, 2018

–
–
–
–
–

250
(250)
1,200
(1,200)
900
(900)
250
(250)
¥2,600(2,600)Interest
rate(%)

Collateral

0.41

N.A.

0.73

N.A.

0.31

N.A.

0.76

N.A.

–

–

Maturity
date
September
28, 2018
October 5,
2018
October 9,
2018
October 31,
2018–

Note: Numbers in parenthesis are scheduled redemption amounts due in 1 year or less.

6. Asset Retirement Obligations
No description is provided pursuant to the provisions of Article 92-2 of the Ordinance on Terminology, Forms,
and Preparation Methods of Consolidated Financial Statements because the amount of asset retirement obligationsat April 1, 2018 and March 31, 2019 accounted for less than 1% of total liabilities and net assets at the beginningand the end of the fiscal year.

207. Income Taxes(1) The tax effects of temporary differences that give rise to a significant portion of the deferred tax assets anddeferred tax liabilities at March 31, 2019 and 2018 were as follows:
Millions of yen
March 31, 2019

March 31, 2018

¥665
3,541
1,050
5,256
(514)

¥734
3,655
1,145
5,535
–

(3,523)–(4,038)
1,218(4,143)
1,392

(693)
(122)
(816)
¥402

(817)
(103)
(921)
¥470

Deferred tax assets:
Losses carried forward for tax purposes*1
Liability for retirement benefits
Other
Gross deferred tax assets
Valuation allowance for tax loss carryforward*1
Valuation allowance for total future deductible temporary
differences
Valuation reserve subtotal
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Other
Gross deferred tax liabilities
Net deferred tax assets*1. Tax loss carryforwards and valuation allowance expire as follows:

At March 31, 2019

Tax loss carryforwards*1

Due after 2
Due after 4
Due after 1
Due after 3
Due in 1 year
years and inyears and in Due after 5
year and in 2
years and in
Total
or less
3 years or
5 years or
years
years or less
4 years or(Millions of(Millions of
less
less
(Millions of(Millions ofless (Millions
yen)
yen)
(Millions of(Millions of
yen)
yen)
of yen)
yen)
yen)
¥2
¥160
¥147
¥18
¥30
¥305
¥665

Valuation allowance

(2)

(67)

(111)

(16)

(29)

(287)

(514)

Deferred tax assets

¥–

¥93

¥36

¥2

¥0

¥17

¥150*2*1. Tax loss carryforwards are determined by using the statutory effective tax rate.
*2. Based on comprehensive consideration of past business performance, tax payment status, and future business performance
forecast, the Company has determined that the deferred tax assets recognized for the tax loss carryforwards are recoverable.

(2) The reconciliation of the Japanese statutory tax rate and the effective tax rate applicable to the Company forthe years ended March 31, 2019 and 2018 was as follows:

Japanese statutory tax rate
(Adjustments)
Permanent non-deductible differences, including entertainment, etc.
Permanent non-taxable differences, including dividend income
Inhabitants taxes per capita, etc.
Changes in valuation reserve
Special deduction amount for income taxes
Differences in tax rate from overseas subsidiaries
Revision of deferred tax assets at fiscal year-end due to the change intax rate
Other
Effective tax rate

21

Year ended
March 31, 201930.6%

Year ended
March 31, 2018
30.9%

2.1
(1.1)
3.8
(7.6)
(1.6)
2.7

4.7
(5.7)
10.2
(6.5)
(5.2)
(3.4)

–

16.1

4.8
33.6

(2.4)
38.7

8. Rental Properties
For the years ended March 31, 2019 and 2018
No description is provided because the total amount of rental properties is immaterial.
9. Shareholders’ Equity
The Companies Law of Japan (hereafter, the “Law”) provides that an amount equal to at least 10% of the amountto be disbursed as distributions of earnings be appropriated to the legal reserve until the sum of the reserve and the
additional paid-in capital account, which is included in capital surplus in consolidated balance sheet, equals 25%of the common stock account. The Law provides that neither additional paid-in capital nor the legal reserve isavailable for dividends, but both may be used to reduce or eliminate a deficit by resolution of the shareholders or
may be transferred to common stock upon approval by the board of directors. Accordingly, the Law provides that
if the total amount of additional paid-in capital and the legal reserve exceeds 25% of the amount of common
stock, the excess may be distributed to the shareholders either as a return of capital or as dividends subject to theapproval of the shareholders.
10. Investments in Affiliates
Investments in affiliates at March 31, 2019 and 2018 amounted to ¥574 million and ¥490 million, respectively,
and are accounted for principally by the equity method.
11. Pledged Assets and Secured Liabilities
A summary of assets pledged as collateral and secured liabilities at March 31, 2019 and 2018 is presented below:
Millions of yen
March 31, 2019

March 31, 2018

¥2,155¥2,206

212

302

Land

2,579

2,579

Total

¥4,946¥5,088Current portion of bonds¥–¥2,100Current portion of long-term loans
payable880

180Long-term loans payable

2,779

1,359

Total

¥3,659¥3,639Pledged assets
Buildings and structures
Machinery, equipment and vehicles

Secured liabilities2212. Land Revaluation
Based on the Law Concerning Land Revaluation, promulgated on March 31, 1998, the Company revalued its land
used for business purposes at March 31, 2000, in accordance with the revaluation method as stated in Article 3-3.
The value of land is based on the official notice prices calculated as directed by public notification of theCommissioner of the National Tax Administration and as provided for in the Public Notice of Land Prices Act, as
stipulated in Article 2-4 of the Ordinance Implementing the Law Concerning Land Revaluation (Government
Ordinance No. 119, promulgated March 31, 1998), after making reasonable adjustments.
The differences between the revalued carrying amount and the fair value at March 31, 2019 and 2018 of land
revalued pursuant to Article 16 of the law were ¥2,276 million and ¥2,277 million, respectively.
The amount of tax effect on the revaluation differences is reported as deferred tax liabilities for land
revaluation. The revaluation difference less this tax liability is reported as revaluation reserve for land in valuationand translation adjustments.
13. Trade Notes, etc. Maturing at Fiscal Year-end
For the accounting treatment for trade notes, etc. maturing at fiscal year-end, the settlement is made at the date ofclearance, etc. As the closing date of the current fiscal year was a holiday for financial institutions, trade notes,
etc. maturing at the year-end have been included in the corresponding balances as of the current fiscal year-end.
Millions of yen

Notes receivable - trade
Electronically recorded monetary claims operating

March 31, 2019

March 31, 2018

¥257

¥319

88

160

14. Cost of Sales
Loss on valuation of inventories of ¥135 million and ¥249 million, net of the amount of the reversal, was included
in cost of sales for the years ended March 31, 2019 and 2018, respectively after writing down the carrying values
to reflect declines in profitability.
15. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2019 and 2018
were as follows. The figures in the following table have been offset against reversals.
Millions of yen
Year ended
March 31, 2019Year ended
March 31, 2018

Salaries¥5,441¥5,634

Packing and transportation costs

1,717

1,760

Provision for employees’ retirement benefits

666

664

Provision for employees’ bonuses
Provision (reversal) of allowance for doubtful
accounts

403

335

41

(0)

Research and development expenses included in selling, general and administrative expenses for the years ended
March 31, 2019 and 2018 amounted to ¥458 million and ¥457 million, respectively.

2316. Other Income
Gain on sales of noncurrent assets for the years ended March 31, 2019 and 2018 were summarized as follows:
Millions of yen
Year ended
March 31, 2019Year ended
March 31, 2018

¥13

¥19

Land

1

–

Total

¥15

¥19

Machinery, equipment and vehicles

17. Other Expenses
Loss on sales and retirement of noncurrent assets for the years ended March 31, 2019 and 2018 were summarized
as follows:
Millions of yen
Year ended
March 31, 2019Year ended
March 31, 2018

Buildings and structures

¥6

¥127

Machinery, equipment and vehicles

02

Tools, furniture and fixtures

0

2

Land

–

135

Other

15

2

Total

¥23

¥269

24

18. Statement of Comprehensive Income
Reclassification adjustments relating to other comprehensive income for the years ended March 31, 2019 and2018 were as follows:
Millions of yen
Year ended
March 31, 2019
Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments for gain (loss) included in profit
Total
Foreign currency translation adjustments:
Amount arising during the year
Reclassification adjustments for gain (loss) included in profit
Total
Retirement benefits liability adjustments:
Amount arising during the year
Reclassification adjustments for gain (loss) included in profit
Total
Share of other comprehensive income of affiliates accounted for by equity
method:Amount arising during the year
Total amount before income taxes
Income taxes
Total other comprehensive income

Year ended
March 31, 2018¥(419)
0
(418)

¥881
(700)
181

(160)
–
(160)

35
–
35

68
200
269

121
193
314

(41)
(352)
124
¥(227)

17
550
(65)
¥484

Tax effects relating to other comprehensive income for the years ended March 31, 2019 and 2018 were as follows:
Millions of yen
March 31, 2019
Valuation difference on available-for-sale securities
Before tax effectTax effect
After tax effectForeign currency translation adjustments
Before tax effectTax effect
After tax effect
Retirement benefits liability adjustments
Before tax effectTax effect
After tax effect
Share of other comprehensive income of affiliates accounted for by equity
methodBefore tax effectTax effect
After tax effectTotal other comprehensive income
Before tax effectTax effect
After tax effect25

March 31, 2018¥(418)
124
(294)

¥181
(65)
116

(160)
–
(160)

35
–
35

269
–
269

314
–
314

(41)
–
(41)

17
–
17

(352)
124
¥(227)

550
(65)
¥484

19. Supplemental Information of Consolidated Statements of Changes in Net Assets(a) Type and number of issued shares and treasury stock
For the year ended March 31, 2019
Number of shares (Thousand)April 1, 2018

Increase

Decrease

March 31, 2019

Type of issued shares
Common stock

7,821

–

–

7,821

Total

7,821

–

–

7,821

87

0

–

87

87

0

–

87

Type of treasury stock
Common stock*1, *2
Total*1. The increase of 0 thousand common shares in treasury stock is due to the buyback of fractional shares of less than one tradinglot.
*2. The number of treasury shares as of March 31, 2019 includes 80,000 shares held by the Board Benefit Trust (BBT).

For the year ended March 31, 2018
Number of shares (Thousand)April 1, 2017

Increase

Decrease

March 31, 2018

Type of issued shares
Common stock*1

78,219–70,397

7,821

Total

78,219–70,397

7,821

861

6

780

87

861

6

780

87

Type of treasury stock
Common stock*2, *3, *4
Total*1. As a result of the share consolidation of common stock at the ratio of ten shares to one share on October 1, 2017, the total
number of outstanding shares decreased by 70,397,000 shares.
*2. The increase of 6,000 common shares in treasury stock was due to an increase of less than 1,000 shares of fractional shares inline with the share consolidation, and an increase of 6,000 shares by the repurchase of fractional shares (5,000 shares before theshare consolidation and less than 1,000 shares after the share consolidation).
*3. The decrease of 780,000 common shares in treasury stock was due to the effect of the share consolidation.
*4. The number of treasury shares as of March 31, 2018 includes 80,000 shares held by the Board Benefit Trust (BBT).

(b) Matters related to dividends
1. Amount of dividends
For the year ended March 31, 2019
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 27, 2018

Commonstock

Total dividends paid
(Millions of yen)Amount of dividends
per share (Yen)

Cut-off date

Effective date

¥312

¥40

March 31, 2018

June 28, 2018

Note: “Total dividends paid” include dividends of ¥3 million corresponding to shares held by the Board Benefit Trust (BBT).

For the year ended March 31, 2018
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 28, 2017

Commonstock

Total dividends paid
(Millions of yen)Amount of dividends
per share (Yen)

Cut-off date

Effective date

¥312

¥4

March 31, 2017

June 29, 2017

Notes: 1. “Total dividends paid” include dividends of ¥3 million corresponding to shares held by the Board Benefit Trust (BBT).
2. The Company conducted the share consolidation of its common stock at the ratio of ten shares to one share on October 1,
2017. The amount of dividends per share indicates the amount prior to the share consolidation.

26

2. Dividends with the cut-off date in the year under review and the effective date in the following year
For the year ended March 31, 2019
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 27, 2019

Commonstock

Total dividends
paid (Millionsof yen)Source ofdividends

Amount ofdividends per
share (Yen)

Cut-off date

Effective
date

¥312

Retainedearnings¥40

March 31, 2019

June 28, 2019

Note: “Total dividends paid” include dividends of ¥3 million corresponding to shares held by the Board Benefit Trust (BBT).

For the year ended March 31, 2018
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 27, 2018

Commonstock

Total dividends
paid (Millionsof yen)Source ofdividends

Amount ofdividends per
share (Yen)

Cut-off date

Effective
date

¥312

Retainedearnings¥40

March 31, 2018

June 28, 2018

Note: “Total dividends paid” include dividends of ¥3 million corresponding to shares held by the Board Benefit Trust (BBT).

20. Supplemental Cash Flow Information
A reconciliation of cash and cash equivalents at March 31, 2019 and 2018 to cash and deposits in theaccompanying consolidated balance sheets was as follows:

Cash and deposits
Time deposits with maturity in excess of
three months
Cash and cash equivalents

Millions of yen
March 31, 2019 March 31, 2018¥14,774¥14,285(1)(1)¥14,773¥14,284

21. Leases
Finance lease transactions, except for those that transfer ownership of leased assets to the lessee, are accounted foras explained in Note 1 (k).
Leased assets include production equipment (machinery and equipment) and dies and molds (tools, furnitureand fixtures) as property, plant and equipment, and software as intangible assets.

27

22. Employees’ Retirement Benefits
1. Outline of employees’ retirement benefit plans adopted by the Company
The Company and some of its domestic consolidated subsidiaries have two types of defined benefit plan,
namely, a defined benefit corporate pension plan (based on reserved funds) and a lump sum payment plan (nonreserved funds). At the same time, some of other consolidated subsidiaries participate in the Smaller Enterprise
Retirement Allowance Mutual Aid (SERAMA) Scheme and a defined contribution pension plan.
In addition, the Company has a multi-employer welfare pension fund plan, established by participatingcompanies. Since the amount of plan assets corresponding to the Company’s contribution cannot be reasonably
calculated, the amount is recognized in the same way as the defined contribution pension plan.
With regard to the defined-benefit pension plan and the lump-sum payment plan adopted by certain
consolidated subsidiaries, a simplified method is used in the calculation of net retirement benefit liabilities andretirement benefit expenses.
2. Retirement benefit plan (excluding the plan using the simplified method)(1) The changes in the retirement benefit obligations
Millions of yen
Year ended
Year ended
March 31, 2019
March 31, 2018¥15,720¥15,590
681
690
(148)
(84)
(1,267)(476)¥14,985¥15,720

Retirement benefit obligations at April 1
Service costs
Actuarial loss
Retirement benefits paid
Retirement benefit obligations at March 31(2) The changes in plan assets
Millions of yen
Year ended
Year ended
March 31, 2019
March 31, 2018
¥3,359¥3,084
120
106
(79)
36
360
367
(441)
(235)
¥3,318¥3,359Plan assets at April 1
Expected return on plan assets
Actuarial gainContributions by the Company
Retirement benefits paid
Plan assets at March 31(3) The funded status of the plans and the amounts recognized in the consolidated balance sheet at the end ofyear

Funded retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations
Net liability for retirement benefits in the consolidated balance sheet
Liability for retirement benefits
Net liability for retirement benefits in the consolidated balance sheet

Millions of yen
March 31, 2019
March 31, 2018
¥5,773¥6,102(3,318)(3,359)
2,455
2,743
9,212
9,617
11,667
12,36011,667
12,360¥11,667¥12,360(4) The components of retirement benefit expenses
Millions of yen
Year ended
Year ended
March 31, 2019
March 31, 2018
¥681
¥690
(120)
(106)
197
190
2
3
¥761
¥777

Service costs
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service costs
Retirement benefit expenses

28

(5) Retirement benefits liability adjustments included in other comprehensive income (before adjusting tax
effects)
The components of retirement benefits liability adjustments included in other comprehensive income (before
adjusting tax effects) were as follows:
Millions of yen
Year ended
Year ended
March 31, 2019
March 31, 2018
¥2
¥3
266
311
¥269
¥314

Prior service costs
Actuarial loss
Total(6) Retirement benefits liability adjustments included in accumulated other comprehensive income (before
adjusting tax effects)
The components of retirement benefits liability adjustments included in accumulated other comprehensive
income (before adjusting tax effects) were as follows:
Millions of yen
March 31, 2019
March 31, 2018
¥10
¥12
1,435
1,701
¥1,445¥1,714

Unrecognized prior service costs
Unrecognized actuarial loss
Total(7) Plan assets(i) Major components of plan assets
The ratio of major components against the total plan assets was as follows:%
March 31, 2019
45%
25
29
1
100%

General accounts
Stocks
Bonds
OthersTotal

March 31, 2018
46%
25
28
1
100%

(ii) Determining long-term expected return on plan assets
The long-term expected return on plan assets has been estimated based on the current and projectedpension asset allocations and the current and projected return on various assets comprising plan assets.
(8) Assumptions used in accounting for the plans
Primary assumptions used in accounting for the plans%
Year ended
March 31, 2019
0.0%
3.6%
0.0%–3.7%

Discount rateLong-term expected return on plan assets
Anticipated salary increase rate

Year ended
March 31, 2018
0.0%
3.5%
0.0%–3.7%

3. Defined benefit plan using the simplified method(1) The changes in the liability for retirement benefits calculated using the simplified method
Millions of yen
Year ended
Year ended
March 31, 2019
March 31, 2018
¥1,300¥1,269
119
102
(23)
(25)
(46)
(45)
¥1,351¥1,300Liability for retirement benefits at April 1
Retirement benefit expenses
Retirement benefits paid
Plan contributions
Liability for retirement benefits at March 31

29

(2) The funded status of the plans and the amounts recognized in the consolidated balance sheet for the plans
Millions of yen
March 31, 2019
March 31, 2018
¥525
¥504
(398)
(372)
126
131
1,224
1,169
1,351
1,300
1,351
1,300
¥1,351¥1,300Funded retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations
Net liability for retirement benefits in the consolidated balance sheet
Liability for retirement benefits
Net liability for retirement benefits in the consolidated balance sheet(3) Retirement benefit expenses
Millions of yen
Year ended
Year ended
March 31, 2019
March 31, 2018
¥119
¥102

Retirement benefit expenses calculated using the simplified method

4. Defined contribution plan
Required amounts of contribution to the defined contribution plan for consolidated subsidiaries were ¥23
million for the year ended March 31, 2019 and ¥35 million for the year ended March 31, 2018.
5. Multi-employer plan
Required contributions to the multi-employer corporate pension fund plan, which are recognized in the same
way as the defined contribution pension plan, were ¥231 million for the year ended March 31, 2019 and ¥201
million for the year ended March 31, 2018.
(1) Total funded status of the multi-employer plan
Millions of yen
March 31, 2018
March 31, 2017
¥130,908¥127,443
146,380
149,315¥(15,471)¥(21,871)

Plan assets at fair value
Actuarial obligations for the pension financing accounting
Projected benefit obligations in excess of plan assets(2) Ratio of the Group’s contribution to total contributions of the multi-employer plan
For the year ended March 31, 2018
3.69%
For the year ended March 31, 2017
3.68%
(3) Supplementary explanation
The main component of projected benefit obligation in excess of plan assets listed under (1) above was priorservice costs under pension accounting (¥18,834 million for the year ended March 31, 2018 and ¥20,384
million for the year ended March 31, 2017). Prior service costs are amortized by the straight-line method
over a period of 20 years under this plan.

23. Commitment and Contingent Liabilities
The Company has entered into commitment line contracts with 5 banks in order to ensure the timeliness of financing.
Relevant figures at March 31, 2019 and 2018 were as follows:
Millions of yen
March 31, 2019
March 31, 2018
Commitment lines extended¥1,500¥1,500Loans payable––

Unused balance¥1,500¥1,50030

This commitment line contract includes the following restrictive financial covenants for the year ended March 31,
2019:
To maintain net assets of at least ¥19.7 billion on the consolidated balance sheet at the end of each fiscal year andsecond quarter.

24. Financial Instruments
1. Matters relating to the status of financial instruments(1) Policy toward financial instruments
In light of its capital investment plans, the Group procures necessary funds for business operations related to
manufacturing and sales of lighting fixtures mainly through bank loans. Temporary surplus funds are kept inhighly liquid, secure financial assets and short-term operating funds are procured by bank loans. The Company
uses derivative transactions to manage foreign exchange risks and interest rate risks. It is the policy of theCompany not to enter into derivative transactions for speculative purposes.
(2) Details of financial instruments, associated risks and risk control measures
Trade notes and accounts receivable and electronically recorded monetary claims-operating carry customer
credit risks. These risks are addressed in accordance with the Group’s credit management rules by controllingthe due dates and balances for each customer and investigating the credit status of major customers every threemonths.
Stocks carry market risks. Most stocks are those of companies which have business relationships with theCompany and their market prices are regularly reported to the officer in charge of finance.
Notes and accounts payable and electronically recorded obligations-operating are due in one year or less.
Short-term loans payable are borrowed mainly as operating funds, bonds payable and long-term loans
payable (in principle, due in five years or less) are borrowed mainly as funds for capital investments. Floatingrate loans carry interest rate fluctuation risk and each contract is hedged by using a derivative contract (interest
rate swap) to mitigate its interest risk and stabilize interest expense. Examination of hedging effectiveness isomitted as hedging contracts have been judged to satisfy the requirements for special treatment of interest rate
swaps.
Derivative transactions are executed and managed by the Company’s financing department with theapproval of the responsible officer, in accordance with the internal rules that stipulate the authorizedindividuals and trading limits. In order to mitigate credit risks, all derivative transactions are undertaken withhighly creditworthy financial institutions.
(3) Supplemental explanation regarding fair value, etc., of financial instruments
The fair value of financial instruments includes values based on market prices and, with respect to financial
instruments without a market price, value determined by reasonable calculation. Such calculation can include
factors with variable parameters and different fair values are possible if different assumptions are employed.

31

2. Matters relating to fair value, etc. of financial instruments
The carrying amounts and fair values at March 31, 2019 and 2018 and differences are as follows. Financial
instruments whose fair value is not readily determinable are not included in the following table (See Note 2).
At March 31, 2019(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Electronically recorded monetaryclaims - operating(4) Investment securities
Total assets(5) Notes and accounts payable - trade(6) Electronically recorded obligations operating(7) Short-term loans payable(8) Bonds payable(9) Long-term loans payable
Total liabilities
Derivatives

Carrying amount(Millions of yen)
¥14,774
12,820Fair value(Millions of yen)
¥14,774
12,820Difference(Millions of yen)
¥–
–

2,107

2,107

–

3,392
¥33,094¥7,932

3,392¥33,094¥7,932

–
¥–
¥–

3,687

3,687

–

980
–
6,600
¥19,200
¥–

980
–
6,656
¥19,256
¥–

–
–
56
¥56
¥–

At March 31, 2018

(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Electronically recorded monetaryclaims - operating(4) Investment securities
Total assets(5) Notes and accounts payable - trade(6) Electronically recorded obligations operating(7) Short-term loans payable(8) Bonds payable(9) Long-term loans payable
Total liabilities
Derivatives

Carrying amount(Millions of yen)
¥14,285
14,311

Fair value(Millions of yen)
¥14,285
14,311

Difference(Millions of yen)
¥–
–

2,132

2,132

–

3,794
¥34,524¥10,262

3,794¥34,524¥10,262

–
¥–
¥–

2,882

2,882

–

970
2,600
4,216
¥20,931
¥–

970
2,606
4,244
¥20,965
¥–

–
6
27
¥33
¥–

(Notes)1) Calculation method for fair value of financial instruments and matters relating to securities and derivatives
Assets“(1) Cash and deposits,” “(2) Notes and accounts receivable - trade,” and “(3) Electronically recorded monetary claims - operating”
Book value is used as fair value because these items are to be settled in a short period of time and fair value is almost equal tobook value.
“(4) Investment securities”
Investment securities are reported at the current market prices quoted by stock exchanges. Notes relating to securities held for
different purposes are described in notes under “4. Securities and Investment Securities.”
Liabilities“(5) Notes and accounts payable - trade,” “(6) Electronically recorded obligations - operating,” and “(7) Short-term loans payable”
Book value is used as fair value because these items are to be settled in a short period of time and fair value is almost equal tobook value.
“(8) Bonds payable”
The fair value of fixed-rate corporate bonds is determined by the current value that is derived by discounting the total amountof principal and interest of a bond by the interest rate applicable for a similar new issue.
“(9) Long-term loans payable”
The fair value of long-term loans payable is determined by discounting the total amount of principal and interest of a loan by
the interest rate applicable for a similar new loan. Floating-rate long-term loans are subject to the special treatment of interest
rate swaps, in which the fair value is determined by discounting the amount of principal and interest, which factors in therelevant interest rate swap, by the interest rate reasonably estimated for a similar loan.
Derivatives
See note “25. Derivatives.”322) Financial instruments whose fair values are not readily determinable at March 31, 2019 and 2018 are as follows:
Category

Millions of yen
March 31, 2019
March 31, 2018

Unlisted equity securities

¥756

¥680

Investments in limited liability partnership

¥60

¥79

These financial instruments do not have a market price and excessive costs would be incurred in estimating their future cash
flows. Therefore, they are not included in “(4) Investment securities” as the fair value is not readily determinable.
3) Monetary claims with redemption dates subsequent to March 31, 2019 and 2018 are summarized as follows:
At March 31, 2019¥14,774
12,820Due after 1 year and in
5 years or less(Millions of yen)
¥–
–

2,107

–

¥29,701¥–

Due in 1 year or less(Millions of yen)
(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Electronically recorded monetaryclaims - operating
Total
At March 31, 2018¥14,285
14,311

Due after 1 year and in
5 years or less(Millions of yen)
¥–
–

2,132

–

¥30,729¥–

Due in 1 year or less(Millions of yen)
(1) Cash and deposits(2) Notes and accounts receivable - trade(3) Electronically recorded monetaryclaims - operating
Total4) Bonds payable, long-term loans payable and other interest-bearing liabilities with repayment dates subsequent to March 31, 2019and 2018 are summarized as follows:
At March 31, 2019

Short-term loans payable
Long-term loans payable
Total

Due after 2
Due after 4
Due after 1
Due after 3
Due in 1
years and inyears and in Due after 5
year and in 2
years and inyear or less
3 years or
5 years or
years
years or less
4 years or(Millions of
less
less
(Millions of(Millions ofless (Millions
yen)(Millions of(Millions of
yen)
yen)
of yen)
yen)
yen)
¥980
¥–
¥–
¥–
¥–
¥–
1,300
900
4,200
200
–
–
¥2,280¥900¥4,200¥200¥–¥–

At March 31, 2018

Short-term loans payable
Bonds payable
Long-term loans payable
Total

Due after 2
Due after 4
Due after 1
Due after 3
Due in 1
years and inyears and in Due after 5
year and in 2
years and inyear or less
3 years or
5 years or
years
years or less
4 years or(Millions of
less
less
(Millions of(Millions ofless (Millions
yen)(Millions of(Millions of
yen)
yen)
of yen)
yen)
yen)
¥970
¥–
¥–
¥–
¥–
¥–
2,600
–
–
–
–
–
1,716
1,300
700
300
200
–
¥5,286¥1,300
¥700
¥300
¥200
¥–

33

25. Derivatives
At March 31, 2019 and 2018, there were no derivative transactions outstanding for which hedge accounting has
not been applied.
The notional amounts and the fair value of the derivative instruments outstanding at March 31, 2019 and2018 for which hedge accounting has been applied are summarized as follows:
At March 31, 2019
Notional amount (Millions of yen)Interest rate swap hedging long-termloans payable, accounted for byshort-cut method:
Receive/floating and pay/fixed

Fair value (Millions of yen)

Maturing within one year

Maturing after one year

¥250

¥250

*1

*1. The fair value is included in the fair value of long-term loans payable, since the shortcut method is applied.

At March 31, 2018
Notional amount (Millions of yen)Interest rate swap hedging long-termloans payable, accounted for byshort-cut method:
Receive/floating and pay/fixed

Fair value (Millions of yen)

Maturing within one year

Maturing after one year

¥550

¥–

*1

*1. The fair value is included in the fair value of long-term loans payable, since the shortcut method is applied.

26. Segment Information
Segment Information (For the years ended March 31, 2019 and 2018)
1. General Information about Reportable Segments
The reportable segments of the Company are business sectors of the Group for which the Company is able toobtain separate individual financial information allowing the board of directors to conduct periodic analysis toevaluate their business performance and determine the optimum distribution of management resources.
The Group has two reportable business segments, the “Lighting Sector” engaging in the manufacture andsales of a wide range of light sources such as lamps and luminaires, and the “Applied Optics and Environment
Sector” engaging in the manufacture and sales of applied optics products and environmental products.
2. Method for Calculating Net Sales, Income or Loss, Assets, Liabilities, and Other Items in Each Reportable
Segment
In general, the method for the accounting of reportable business segments is the same as that described in the“Basis of presentation of the consolidated financial statements.” Income in the reportable segments is operating
income. Inter-group net sales or transfers are based on actual market prices.

34

3. Information on Net Sales, Income or Loss, Assets, and Other Items in Each Reportable Segment
Millions of yen

Sales:
Lighting Sector
Applied Optics and Environment Sector

Year ended March 31,
2019Year ended March 31,
2018

¥

¥

Corporate and eliminations:Lighting Sector
Applied Optics and Environment Sector
Adjustments¥
Segment Income (loss):
Lighting Sector
Applied Optics and Environment Sector¥

Adjustments¥
Segment Assets:
Lighting Sector
Applied Optics and Environment Sector¥

Adjustments¥
Depreciation and Amortization:
Lighting Sector
Applied Optics and Environment Sector

39,835
14,17054,006
24
31
55
(55)
54,006

2,527
807
3,334
(1,876)
1,458

¥

¥

37,43018,12655,556
11,731
67,288

¥

1,243
472
1,715
–
1,715

¥

686
220
906
–
906

¥

¥

Adjustments¥
Increase in Property, Plant and Equipment
and Intangible Assets:
Lighting Sector
Applied Optics and Environment Sector¥¥

Adjustments
¥

¥

¥

¥

41,352
15,97657,328
26
11
37
(37)
57,328

1,396
692
2,088
(1,957)
131

39,276
18,07457,35012,27569,625

1,290
458
1,748
–
1,748

2,074
519
2,594
–
2,594

Notes: 1. The adjustments for segment income (loss) of ¥ (1,876) million and ¥ (1,957) million at March 31, 2019 and 2018,
respectively, include corporate costs, etc., which have not been allocated to the reportable segments.
2. The adjustments for segment assets of ¥11,731 million and ¥12,275 million at March 31, 2019 and 2018 respectively,
include financial assets, etc., of the Company, which have not been allocated to the reportable segments.

35

Related Information
For the years ended March 31, 2019 and 2018
1. Information by Product and Service
No description is provided because information on segments by product and service is the same as that of thereportable segments.
2. Information by Country or Region(1) Net Sales

Japan
North America
Asia
Other
Total

Millions of yen
Year ended
Year ended
March 31, 2019 March 31, 2018
¥47,064¥48,421
4,134
5,695
2,517
2,778
289
432
¥54,006¥57,328(2) Property, Plant and Equipment
No description is provided because property, plant and equipment in Japan at March 31, 2019 and 2018 accountfor more than 90% of property, plant and equipment in the consolidated balance sheets.
3. Information on Each Major Customer
No description is provided because no individual external customer accounts for 10% or more of net sales for theyears ended March 31, 2019 and 2018 in the consolidated statements of income.

27. Amounts per Share
Per share information at and for the years ended March 31, 2019 and 2018 was as follows:

Profit attributable to owners of parent
Net assets

Yen
Year ended
Year ended
March 31, 2019 March 31, 2018
¥144.75¥49.313,480.86
3,405.90

Notes: 1. Since there were no potential shares that would have dilutive effect if issued, data on diluted net income per share is notpresented.
2. The Company conducted the share consolidation of its common stock at the ratio of ten shares to one share on October 1,
2017. Consequently, net assets per share and net income per share were calculated on the assumption that the said shareconsolidation was implemented at the beginning of the previous fiscal year.
3. For the purpose of calculating net assets per share, the Company’s shares held by the Board Benefit Trust (BBT) are
included in treasury shares excluded from the total number of outstanding shares as of the fiscal year-end (80,000 sharesfor the previous fiscal year and 80,000 shares for the current fiscal year).
For the purpose of calculating net income per share, these shares held by BBT were included in treasury shares excluded
from the calculation of the average number of outstanding shares during the fiscal year (80,000 shares for the previous
fiscal year and 80,000 shares for the current fiscal year).

36

The basis of the computation of profit attributable to owners of parent per share for the years ended March 31,
2019 and 2018 is as follows:
Millions of yen
Year ended
March 31, 2019
Profit attributable to owners ofparentAmount not attributable tonormal shareholders
Profit attributable to owners ofparent allocable to commonsharesAverage number of commonshares for the period (shares)

Year ended
March 31, 2018

¥1,119¥381––¥1,119¥381

7,734,307

7,735,131

28. Business Combinations
Not Applicable.

29. Related Party Transactions
For the year ended March 31, 2019
Not Applicable.
For the year ended March 31, 2018
Not Applicable.

30. Stock Options
For the year ended March 31, 2019
Not Applicable.
For the year ended March 31, 2018
Not Applicable.

31. Significant Subsequent Events
Not Applicable.

37Independent Auditor’s Report
The Board of Directors
IWASAKI ELECTRIC Co., Ltd.
We have audited the accompanying consolidated financial statements of IWASAKI ELECTRIC Co., Ltd. and its
consolidated subsidiaries, which comprise the consolidated balance sheet as at March 31, 2019, and theconsolidated statements of income, comprehensive income, changes in net assets, and cash flows for the year thenended and a summary of significant accounting policies and other explanatory information, all expressed inJapanese yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for designing and operating such internal
control as management determines is necessary to enable the preparation and fair presentation of the consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. The purpose of an audit of the consolidated financial statements is not to express an opinion on theeffectiveness of the entity’s internal control, but in making these risk assessments the auditor considers internal
controls relevant to the entity’s preparation and fair presentation of the consolidated financial statements in orderto design audit procedures that are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of IWASAKI ELECTRIC Co., Ltd. and its consolidated subsidiaries as at March
31, 2019, and their consolidated financial performance and cash flows for the year then ended in conformity withaccounting principles generally accepted in Japan.

June 27, 2019
Tokyo, Japan38

Board of Directors and Corporate Data
President and Chief Executive Officer
Yoshitake Ito
Director and Senior Executive Officer
Masanori KatoIWASAKI ELECTRIC Co., Ltd.
Date of Establishment: August 18, 1944

Director and Senior Executive Officer
Masayuki Arimatsu
Director and Senior Executive Officer
Makoto Inamori
Director and Senior Executive Officer
Sumio Uehara
Outside Director
Kenji Oya
Outside Director
Tsuneo Tanai
Audit & Supervisory Board Member
Hideya Fujii
Audit & Supervisory Board Member
Hiroaki Kato

Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-5847-8611(Until September 2019)
Nomurafudosan-higashinihonbashi Bldg. 1-1-7,
Higashinihonbashi, Chuo-ku,
Tokyo 103-0004, Japan
Phone: +81-3-5846-9010(After October 2019)https://www.eye.co.jp/
Capital: ¥8,640 million
Common Stock
Authorized: 23,900,000 shares
Issued and Outstanding: 7,821,950 shares
Number of Shareholders: 6,741

Outside Audit & Supervisory Board Member

Shouzou Watanabe
Outside Audit & Supervisory Board Member

Naoto Suzuki
Managing Executive Officer
Yoshimasa Kida
Senior Executive Officer
Tomohiko Yamada
Executive Officer
Haruhiko Hoshino
Executive Officer
Takeyuki Kakinuma

Major Shareholders
Minebear Mitsumi Inc.
The Master Trust Bank of Japan, Ltd.
DFA INTL SMALL CAP VALUE PORTFOLIO(Standing proxy: Citibank)
Japan Trustee Services Bank, Ltd. (Trust Account)Iwasaki Electric Cooperative Association Stock Ownership Plan
Mizuho Bank, Ltd.
The Meiji Yasuda Life Insurance Company
The Sumitomo Mitsui Banking Corp.
EYE LAMP employee stock ownership plan
Nippon Tochi-Tatemono Co.,Ltd
Stock Exchange Listings
Tokyo Stock Exchange 1st Section

Executive Officer
Seiji Aoyama

Correspondent Bank
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corp.
The Bank of Yokohama, Ltd.
Resona Bank, Ltd.
MUFG Bank, Ltd.

Executive Officer
Akira Urushihara

Independent Certified Public Accountants
Ernst & Young ShinNihon LLC

Executive Officer
Tsuyoshi Itokawa(As of July 1, 2019)39% of Total
3.84
3.63
2.70
2.66
2.47
2.35
2.30
2.16
2.09
1.98

Directory
Domestic Plants and Offices
Head Office
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan(Until September 2019)
Nomurafudosan-higashinihonbashi
Bldg. 1-1-7, Higashinihonbashi,
Chuo-ku, Tokyo 103-0004, Japan(After October 2019)
Phone: +81-3-5846-9010
Lighting Business Unit
Phone: +81-3-5846-9021
Applied Optics andEnvironment Sales Division
Phone: +81-3-5846-9027
Global Sales &Marketing Department
Phone: +81-3-5846-9025
Facsimile: +81-3-5846-9036
Private Sector Sales Division
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan(Until September 2019)
Yunizo-hisamatsuchokiyosubashidori Bldg. 9-9,
Nihonbashi-hisamatsucho, Chuo-ku,
Tokyo 103-0005, Japan(After August 2019)
Phone: +81-3-5847-8632

Domestic Affiliates●Manufacture
EYE LIGHTING SYSTEMSCORPORATION
Established in 1973
Manufacture of lighting luminaires,
power sources, ballasts and circuits
TSUKUBA IWASAKI CO., LTD.
Established in 1961
Manufacture of luminaires andelectrical appliances
CHICHIBU IWASAKI CO., LTD.
Established in 1985
Manufacture of Halogen lamps andpellicle products
KAN-ETSU IWASAKI CO., LTD.
Established in 1985
Manufacture of arc tubes for highpressure sodium lamps, UV lamps, andUV irradiation units
EYE ELECTRON BEAM CO., LTD.
Established in 1986
Manufacture of EB products,
EB equipment maintenance, andEB irradiation services
EYE THREE MFG. CO., LTD.
Established in 1988
Manufacture and sales of light poles,
stands and customized lighting luminaires
ITO DENKI CO., LTD.
Acquired in 1997
Manufacture of explosion proof luminaires

Saitama Plant
1-1, Ichiriyama-cho, Gyoda City,
Saitama 361-8505, Japan
Phone: +81-48-554-1111●SalesEYE GRAPHICS CO., LTD.
Established in 1977
Sales of UV applied equipment and printing
platemakers
EYE GRAPHIC SERVICE CO., LTD.
Established in 1980
Installation / relocation / maintenance for
UV applied equipment and printing platemakers
LIGHT CUBE CO., LTD.
Established in 1978
Design, manufacture, sales and applicationof luminaires and allied products
EYE ONE CO., LTD.
Established in 1987
Service trade for the Iwasaki Group, such as
insurance agency operations
EYE LIGHTING DEVICE CO., LTD.
Established in 1988
Sales of a variety of light sources andlighting luminaires
IWASAKI ELECTRIC
ENGINEERING SERVICE CO., LTD.
Established in 1994
Inspection of lighting luminaires and electricalmachinery and maintenance of applied optics
and environment diagnostic equipment
KINKI LIGHT CUBE CO., LTD.
Established in 1995
Design, manufacture and sales of luminaries
including for emergency exit sign and ofcomponents
EYE LOGISTICS CO., LTD.
Established in 1996
Autotruck carrier business and Joint delivery

Kawasato Factory
Honjo Factory

ITO DENKI HANBAI CO., LTD.
Established in 1999
Sales of explosion proof luminaries(As of July 1, 2019)40

◆Sales Office
Global Sales & Marketing Department●Manufacture
ENERGY SCIENCES, INC. (ESI)
Acquired in 1988
42 Industrial Way, Wilmington,
Massachusetts. 01887, U.S.A.
Phone: +1-978-694-9000
Facsimile: +1-978-694-9046
Manufacture and sales of EB & UV
irradiation equipment and electric equipment
EYE LIGHTING INTERNATIONAL OFNORTH AMERICA, INC. (ELINA)
Established in 1991
9150 Hendricks Road, Mentor,
OHIO. 44060, U.S.A.
Phone: +1-888-665-2677
Facsimile: +1-440-350-7001
Manufacture and sales of HID lamp,
arc tubes and outer bulbs
DALIAN IWASAKI ELECTRIC CO., LTD.
Established in 1995
Zhenpeng Industrial Area I-8-3, DalianDevelopment Zone, Dalian, 116600,
P.R. CHINA
Phone: +86-411-8751-4186
Facsimile: +86-411-8751-4189
Manufacture of HID lamps, stems and UV lamps
SPECTRA LIGHTING PTY LTD.
Acquired in 1999
15 Industrial Avenue Wacol Queensland, 4076,
AUSTRALIA
Phone: +61-7-3335-3500
Facsimile: +61-7-3335-3550
Manufacture and sales of luminaries
SPECTRA MANUFACTURING PTY LTD.
Acquired in 1999
15 Industrial Avenue Wacol Queensland, 4076,
AUSTRALIA
Phone: +61-7-3335-3502
Facsimile: +61-7-3355-3533
Manufacture and sales of streetscape luminaries●SalesEYE LIGHTING ASIA PACIFIC PTE LTD.
Established in 1988
21 Kaki Bukit Place, Eunos Techpark
Singapore 416199, SINGAPORE
Phone: +65-6742-3611
Facsimile: +65-6743-5202
Sales of lamps, luminaires and electric equipment
ELM LIGHTING SDN. BHD.
Established in 2016
No.16 & 18, Jalan Utarid U5/29, Mah Sing
Integrated IndustrialPark, Seksyen U5, 40150
Shah Alam, Selangor Darul Ehsan, Peninsular
MALAYSIA
Phone: +60-3-7832-7600
Facsimile: +60-3-7859-7847
Sales of lamps, luminaires and electric equipment
SHANGHAI IWASAKI ELECTRIC CO.,LTD.
Established in 2007
26/F suite2612 New Town Center Building,
83 Loushanguan Road, Shanghai 200336,
P.R. CHINA
Phone: + 86-21-3105-6379
Facsimile: + 86-21-3105-6371
Materials procurement in China, inspection andexports Sales in China of lamps, luminaries andelectric equipment
EYE LIGHTING (THAILAND) CO.,LTD.
Established in 2015
21F,Room No.2105-6, United Business Center
ⅡBuilding, Sukhumvit Road Soi 33, North
Klongton, Wattana, Bangkok 10110, THAILAND
Phone: +66-0-2-662-1867
Facsimile: +66-0-2-662-1868
Sales of lamps, luminaires and electric equipment
EYE LIGHTING (HONG KONG) LTD.
A joint venture with Hosoda Trading
Company, established in 1992
Room 609, Silvercord Tower 2, 30 CantonRoad, Tsimshatsui, Kowloon , HONG KONG
Phone: +852-2368-8782
Facsimile: +852-2481-2661
Sales of lamps, luminaires and electric equipment

41

LCA HOLDINGS PTY LTD.
A joint venture with Marubeni Corporation,
established in 2000
15 Industrial Avenue, Wacol Queensland 4076,
AUSTRALIA
Phone: +61-7-3335-3555
Facsimile:+61-7-3335-3522
Holding company
EYE LIGHTING AUSTRALIA PTY LTD.
Established in 1974
15 Industrial Avenue, Wacol Queensland 4076,
AUSTRALIA
Phone: +61-7-3335-3588
Facsimile: +61-7-3335-3533
Sales of lamps, luminaires and electric equipment
EYE LIGHTING NEW ZEALAND LTD.
Established in 1989
18 Levene Place, Mt.Wellington. Auckland,
NEW ZEALAND
Phone: +64-9-276-8099
Facsimile: +64-9-276-3474
Sales of lamps, luminaires and electric equipment
PERFORMANCE IN LIGHTING
AUSTRALASIA PTY LTD.
Established in 2012
157 Wellington Road, East Brisbane Queensland,
4169, AUSTRALIA
Phone: +61-7(3335)3580
Facsimile: +61-7(3335)3587
Sales of lamps and luminaires
SAMMODE LIGHTING AUSTRALASIAPTY LTD.
Established in 2015
15 Industrial Avenue, Wacol, Queensland, 4076,
AUSTRALIA
Phone: +61-7(3335)3555
Facsimile: +61-7(3335)3511
Sales of luminaires(As of July 1, 2019)