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

8

Consolidated Statement of Income

10

Consolidated Statement of Comprehensive Income

11

Consolidated Statement of Changes in Net Assets

12

Consolidated Statement of Cash Flows13

Notes to Consolidated Financial Statements

14

Independent Auditor’s Report

37

Board of Directors and Corporate Data

38

Directory

39

Message from the President
In the consolidated fiscal year ended March 31, 2018, while net sales and net income at the Iwasaki ElectricGroup increased slightly from the previous fiscal year, operating income and ordinary income declined year on
year. This was due primarily to a decrease in profitability reflecting diminished sales from overseas subsidiaries
and the negative effects of a provision for repair claims related to LED lighting equipment. In the Lighting sector,
LED lighting equipment accounted for 60% of overall products. Net sales in this sector increased year on year as
we reinforced our product lineup to make it suitable for various facilities and applications while proactively
making proposals on lighting design. In the Applied Optics and Environment sector, while the UV curing business
saw a decline in sales, net sales and operating income increased overall from the previous fiscal year due toincreased orders related to information displays and environmental testing equipment.
I would like to take this opportunity to express my sincere apology for causing a great deal of inconvenience andconcern to many of our customers and shareholders as claim-related expenses significantly impacted our financial
results for the fiscal year under review. We have already taken Company-wide measures to address individual
issues that we feel should be confronted immediately. However, we believe that the underlying issues were thelack of overall optimization due to the division of responsibilities and the principle of excessive self-sufficiency.
We will make our utmost effort to further improve quality from the customers’ perspective by clarifying persons incharge of each product and establishing a structure where the entire company—encompassing the manufacturing,procurement, design and sales departments—takes responsibility for quality assurance. Based on these measures,
we are confident that we will be able to drastically reduce claim-related expenses going forward.
Next, I would like to explain about our future management policies and business expansion plans. The Iwasaki
Electric Group will continue to promote our three core strategies of expanding the LED lighting business throughthe pursuit of added value, developing new business in the Applied Optics and Environment Business, andpromoting business through strategic product launches targeting key overseas markets. In the Lighting sector, we
will aim to enhance product development and design proposals. In addition to reinforcing our in-housedevelopment capabilities, we will strengthen our ability to procure equipment and devices from outside providers,
ensuring that we will be able to promote and provide our products and services in a timely manner. Also, we will
work to expand in the field of LED lighting equipment combined with control devices, including peripheral fields,
by proposing new technologies that integrate our proprietary technologies with IoT telecommunication
technologies. In the Applied Optics and Environment sector, we will strive to create new businesses through the
integration and combination of our proprietary and external technologies while expanding businesses related tocompound environmental testing equipment. In the Overseas Business sector, we will review the businessdrastically in light of a decline in sales of lighting-related products for the fiscal year under review. Also, we will
promote the provision of regional products and services with a focus on the reinforcement of local distribution
networks and global product procurement capabilities.
The Iwasaki Electric Group is setting a goal of breaking away from the principle of self-sufficiency and striving to
optimize its workforce. At the same time, we will allocate business resources intensively to R&D and marketing
activities in order to improve our corporate value through our lighting and optical technologies. We will create
new businesses by combining optics with other technologies, thereby seeking to establish a corporate structurethat can continuously grow in the future.
June 2018
Yoshitake Ito
President and Chief Executive Officer1Consolidated Six-Year Summary
Millions of yen

Year ended March 31
2013

2014

2015

2016

2017

2018

¥52,062¥57,030¥59,476¥58,206¥56,611¥57,328

471

1,439

2,371

920

335

381

Total assets¥60,959¥67,473¥70,573¥69,636¥69,463¥70,300

Total shareholders’ equity2

20,79921,82625,96824,722

25,791

26,342Working capital

23,512

23,27023,381

27,862

25,777

23,120Long-term bank loans,less current portion

4,415

1,890

500

2,350

2,816

2,500

Amounts per share:3
Profit attributable to ownersof parent
Cash dividends¥6.34¥19.35¥31.88¥12.38¥44.34¥49.31

–

2.00

4.00

4.00

4.00

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.

2

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 economic conditions in the U.S.,
Europe and Asia regions are expected to remain robust and the recovery trend of the Japanese economy is likely tocontinue on the back of strong internal and external demand, there remain uncertainties surrounding the global
economy such as the intensification of international trade friction as well as developments in U.S. policies that
could negatively affect the export business and corporate earnings.
Under these circumstances, the Iwasaki Electric Group will continue to promote the three core qualitative
strategies of “expanding the LED lighting business through the pursuit of added value,” “developing new businessin the Applied Optics and Environment Business,” and “promoting business through strategic product launches
targeting key overseas markets” set out in its Medium-Term Management Plan. In addition, the Company willtake measures to address impending quality assurance challenges and strengthen its procurement ability byrevamping its organizational structure.
In the Lighting sector, we will focus on the enhancement of product development and design proposals for
LED lighting equipment in order to create an optimal lighting environment for customers’ facilities depending on
their applications and locations. In terms of product development, we will reorganize our organizational structure
for product planning, product development and manufacturing departments while further strengthening our ability
to procure equipment and devices from outside providers in order to more quickly respond to market needs for
products and services. As for quality assurance, we will endeavor to enhance quality from the customers’
perspective by establishing a structure to reinforce quality assurance at each stage of design, development,
manufacturing, sales and service.
By steadily executing the above measures, while striving to maintain and expand market share in the facility
lighting and special lighting fields, we will promote research and development activities in order to propose andrealize new technologies and solutions by integrating our accumulated proprietary technologies with IoT
telecommunication technologies.
In the Applied Optics and Environment sector, the environmental testing business will strive to maintain andexpand its business by developing testing instruments and establishing light irradiation systems, which utilize
electron beams, UV and other various optical technologies of the Iwasaki Electric Group. Meanwhile, in the UV
curing business and the sterilization, disinfection and water treatment-related business, we will work on thedevelopment of new applications and the creation of new business fields from a medium- to long-term viewpointby proactively seeking to combine the Iwasaki Electric Group’s core technologies with peripheral technologies.
In the Overseas Business sector, the LED lighting business will strive to offer products and services that meetmarket needs by further strengthening its local sales network mainly in Southeast Asia. We will also pursue
synergy effects in conjunction with our business development in Japan while further enhancing global
procurement. Moreover, we will focus on global market expansion and product proposal across the Group incollaboration with local subsidiaries not only for the LED lighting business but also for the Applied Optics andEnvironment sector.
The Iwasaki Electric Group will continue to optimize our workforce responding to changes in the market andallocate business resources intensively to research and development activities and marketing activities to improve
our corporate value through our lighting and optical technologies and seek to establish a corporate structure thatcan continuously grow in the future.
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.
3(1) Financial Position and Operating Results
During the fiscal year ended March 31, 2018, the U.S. economy remained robust on the back of improvementin the employment and income environment. In the Euro area, the economy continued its modest recovery,
supported by resilient consumer spending. In Asia, signs of a rebound were witnessed in the employment andincome environment as exports increased in China reflecting the recovery of the global economy. The
Japanese economy also remained on a mild recovery path as personal spending as well as capital investment in
the corporate sector continued to pick up.
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, we strived to expand market share with afocus on new product development and technology proposals for LED lighting equipment for outdoor andfacility use. In the Applied Optics and Environment sector, we focused on new product development andapplication to new business fields in order to further cultivate the environmental testing-related field andstrengthen the UV curing field. However, the Lighting sector was negatively affected by provision for repair
claims related to LED lighting equipment which was recorded for the fiscal year under review.
As a result, net sales amounted to ¥57,328 million (a 1.3% increase from ¥56,611 million in the previous
fiscal year). Operating income decreased to ¥131 million (an 86.5% decrease from ¥972 million in theprevious fiscal year). Ordinary income totaled ¥228 million (a 77.2% decrease from ¥1,002 million in theprevious fiscal year). Profit attributable to owners of parent increased to ¥381 million (a 13.6% increase from¥335 million in the previous fiscal year) due primarily to gain on sales of investment securities posted during
the fiscal year under review.
Operating results by business segment are described below.
Lighting Sector
In the Lighting sector, while boosting the product line-up suitable for various facilities and applications with afocus on the outdoor lighting and high ceiling lights markets, we aggressively made proposals on lighting
design in conjunction with our products. In Japan, sales increased from the previous year as our high-output
LED floodlights were adopted for lighting equipment used in large-scale sports facilities and for nightlightequipment used in municipal sports facilities and sales of LED high ceiling lights and special lights for plantfacilities remained strong. In overseas markets, while we launched outdoor LED lighting equipments such as
road lamps in Southeast Asia, sales did not expand as much as initially planned. Meanwhile, profit declined
from the previous year due to the impact of provision for repair claims amounting to approximately 880
million yen which was recognized for the consolidated fiscal year ended March 2018 in conjunction withdefects relating to LED lighting equipment.
As a result, this sector reported sales of ¥41,378 million (a 0.7% increase from ¥41,074 million in theprevious fiscal year), and operating income of ¥1,396 million (a 46.5% decrease from ¥2,612 million in theprevious fiscal year).

Applied Optics and Environment Sector
The Applied Optics and Environment sector focused on new product development for new xenon testers andcompound environmental testing equipment while promoting them to the markets along with existing products,
which resulted in increased orders relating to environmental testing equipment mainly for the automotive
industry. Consequently, this sector posted robust net sales and operating income.
The UV curing business posted decreased sales as orders for irradiation systems for FPDs (flat panel
displays) mainly in overseas markets were lower than in the same period in the previous fiscal year, despite anincrease in orders relating to printing equipment as a result of product proposals with a focus on new products
such as UV-LED radiators.
In the information equipment business, although sales increased thanks to orders for road information
devices and tunnel warning equipment, operating income decreased due to some large-scale orders with a low
profit margin.
4

As a result, this sector reported sales of ¥15,987 million (a 2.6% increase from ¥15,580 million in theprevious fiscal year), and operating income of ¥692 million (a 146.3% increase from ¥280 million in theprevious fiscal year).
Total assets as of March 31, 2018 totaled ¥70,300 million, an increase of ¥837 million compared to theprevious fiscal year-end.

Current Assets
Current assets as of March 31, 2018 totaled ¥45,866 million, an increase of ¥622 million compared to theprevious fiscal year-end.
The major factors were an increase of ¥937 million in inventories, an increase of ¥230 million in tradenotes and accounts receivable and electronically recorded monetary claims - operating, an increase of ¥104
million in deferred tax assets, and a decrease of ¥647 million in cash and deposits.
Noncurrent Assets
Noncurrent assets as of March 31, 2018 totaled ¥24,434 million, an increase of ¥214 million compared to theprevious fiscal year-end.
The major factors were an increase of ¥327 million in intangible assets mainly due to the updating ofsystems, and a decrease of ¥204 million in investment securities held and other assets due mainly to the salesof some shares.
While property, plant and equipment increased ¥1,439 million due to the completion of the constructionof a new technology development building (Iwasaki Electric Techno Center) during the consolidated fiscal
year ended March 2018, the investment relating to this construction had commenced in the previous fiscal year
and was posted as construction in progress. As a result, construction in progress for the fiscal year underreview decreased ¥1,132 million due primarily to the transfer of the relevant amount from construction inprogress to property, plant and equipment.
Current Liabilities
Current liabilities as of March 31, 2018 totaled ¥22,746 million, an increase of ¥3,279 million compared to theprevious fiscal year-end.
The major factors were an increase of ¥2,783 million in the current portion of corporate bonds and longterm loans payable and an increase of ¥658 million in trade notes and accounts payable and electronicallyrecorded obligations - operating.
Noncurrent Liabilities
Noncurrent liabilities as of March 31, 2018 totaled ¥21,200 million, a decrease of ¥3,003 million, compared tothe previous fiscal year-end.
The major factor was a net decrease of ¥2,916 million in corporate bonds and long-term loans payable as
the proceeds of ¥1,500 million from new long-term loans were more than offset by the transfer of ¥4,416
million as a result of the transfer of corporate bonds and long-term loans payable to the current liabilities
category.
Net Assets
Net assets as of March 31, 2018 totaled ¥26,353 million, an increase of ¥561 million compared to the previous
fiscal year-end.
The major factors under shareholders’ equity were: an increase of ¥221 million in retained earnings as aresult of recording of profit attributable to owners of parent of ¥381 million, reversal of revaluation reserve forland of ¥152 million, and payment of dividends of ¥312 million.
The major factors under the accumulated other comprehensive income category were: an increase of¥314 million in remeasurements of defined benefit plans, an increase of ¥116 million in valuation difference
on available-for-sale securities, and a decrease of ¥152 million in revaluation reserve for land due to the5transfer of the amount to retained earnings following reversal of revaluation reserve for land. Consequently,
accumulated other comprehensive income resulted in a net increase of ¥331 million.
(2) Cash Flows
Cash and cash equivalents as of March 31, 2018 decreased by ¥498 million from the previous fiscal year to¥14,284 million.

Cash flows from operating activities
Operating activities in the current fiscal year resulted in a net cash inflow of ¥977 million for the year ended
March 31, 2018 (net cash inflow of ¥957 million in the previous fiscal year).
The main factors were ¥1,748 million in depreciation expense and an increase of ¥980 million ininventories.
Cash flows from investment activities
Net cash used in investment activities amounted to ¥847 million for the year ended March 31, 2018 (net cash
outflow of ¥2,445 million in the previous fiscal year).
The major factors were proceeds of ¥1,139 million from sales of investment securities (an increase of¥1,048 million compared to the previous fiscal year) and payment of ¥1,891 million for the purchase ofproperty, plant and equipment (a decrease of ¥664 million compared to the previous fiscal year) due mainly tothe investment in construction of a building for technology development (Iwasaki Electric Techno Center)
which was completed during the fiscal year ended March 2018.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥598 million for the year ended March 31, 2018 (net cash
outflow of ¥324 million in the previous fiscal year).
The major factor for this result was payment of dividends of ¥312 million.
Net cash used for loans amounted to ¥183 million due to net increase (decrease) in long-term and shortterm loans payable and corporate bonds as a result of the refinancing of long-terms loans and corporate bonds.
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 2018.
(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.
There were no changes in accounting policies and financial estimations during the fiscal year underreview.
(2) Recognition, Analysis and Discussion of Operating Results, etc. for the Fiscal Year Ended March 2018
With regard to the Operating Results, etc. of the Iwasaki Electric Group for the fiscal year ended March 2018,
the defects relating to LED lighting equipment significantly affected profit and loss as stated in 2. (1) above.
As for repair expenses to fix the defects, provision for repair claims of approximately ¥880 million wasrecorded as the provision for anticipated repair work in the future.
While such accounting treatments for repair expenses have impacted gross profit or other earnings figures
as they were recorded as cost of sales, the expenses had been posted as extraordinary loss until the previous
fiscal year. Amid the shift of mainstay products for the Lighting sector from conventional HID lamps to LED
lights, the Lighting sector came to consider repair expenses as a cost of sales to a certain extent and include
them within sales expenses corresponding to net sales in line with drastic changes in the business environment
such as the shortening product life cycle.

6

As for profit and loss by segment, profit in the Lighting sector declined 46.5% from the previous fiscal
year as repair expenses were included in cost of sales for the Lighting sector. Meanwhile, profit in the Applied
Optics and Environment sector for the fiscal year ended March 2018 increased 146.3% from the previous
fiscal year. However, since profit for the previous fiscal year had decreased due to the effects of a loss oninventory valuation, profit for the current fiscal year increased slightly compared with the previous fiscal year
excluding such effects.
In light of the defects relating to LED lighting equipment, we have established a structure to reinforce
quality assurance at each stage of design, development, manufacturing, sales and service across the Group toaddress quality control issues.
In the Overseas Business sector, overseas sales on the whole for the fiscal year ended March 2018
declined from the previous fiscal year reflecting sluggish sales in North America in particular. As part of its
efforts to expand business through strategic product launches targeting key overseas markets, the Iwasaki
Electric Group launched outdoor LED lighting products in Southeast Asia. We will continue to offer products
and services that meet market needs by further strengthening local sales network mainly in Southeast Asia in
the future.
On the financial front, the construction of the Iwasaki Electric Techno Center (also known as
HIKARIUM), a new technology development hub within the Saitama Plant, was completed in October 2017.
As a base of technology development that brings together the Iwasaki Electric Group’s technology
departments including research and development and design teams, “HIKARIUM” will take the lead inincreasing synergy effects and strengthening collaboration with product planning and business strategy
departments by accelerating the sharing of cross-functional technical insights and information, collaboration
with leading vendors (partners) both inside and outside Japan, and product development on a global scale.
As this construction was funded by cash on hand, the balance of corporate bonds and loans payable as ofMarch 31, 2018 totaled ¥7,786 million, a decrease of ¥183 million compared to the previous fiscal year-end.
In light of its capital investment plans for the next fiscal year, the Group plans to focus on investment
aimed mainly at rationalization of production.

4. Important Business Agreements
Not Applicable.

7

Consolidated Balance SheetAt March 31, 2018 and 2017
ASSETS
Millions of yen
March 31, 2018
Current assets
Cash and deposits (Notes 19 and 23)
Notes and accounts receivable - trade (Note 12
and 23)
Electronically recorded monetary claims operating (Note 12 and 23)
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets (Note 6)
Other
Allowance for doubtful accounts
Total current assets¥

14,285

March 31, 2017¥

14,933

14,311

14,517

2,132

1,696

6,930
1,550
4,898
986
800
(29)
45,866

6,310
1,745
4,385
882
818
(44)
45,243

15,991

14,694

15,112

15,390

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

7,983
9,953
156
1,296
49,474(31,713)
17,760Intangible assets
Software
Other
Intangible assets, net

927
335
1,263

707
228
935

Investments and other assets
Investment securities (Notes 3, 9 and 23)
Deferred tax assets (Note 6)
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

4,554
365
415
(19)
5,316
24,43470,300

4,759
358
421
(17)
5,523
24,21969,463

Noncurrent assets
Property, plant and equipment
Buildings and structures (Note 10)
Machinery, equipment and vehicles (Note10)
Tools, furniture and fixtures
Land (Notes 10 and 11)
Leased assets (Note 20)
Construction in progress
Accumulated depreciation
Property, plant and equipment, net¥

See accompanying notes to consolidated financial statements.

8¥

Consolidated Balance SheetAt March 31, 2018 and 2017
LIABILITIES AND NET ASSETS
Millions of yen
March 31, 2018
Liabilities
Current liabilities
Notes and accounts payable - trade (Note 23)
Electronically recorded obligations - operating (Note 23)
Short-term loans payable (Notes 4 and 23)
Current portion of bonds (Notes 4, 10 and 23)
Current portion of long-term loans payable (Notes 4, 10
and 23)
Income taxes payable
Accrued consumption taxes
Provision for employees’ bonuses
Provision for repair claims
Other
Total current liabilities¥

Noncurrent liabilities
Bonds payable (Notes 4, 10 and 23)
Long-term loans payable (Notes 4, 10 and 23)
Deferred tax liabilities (Note 6)
Deferred tax liabilities for land revaluation (Note 11)
Liability for retirement benefits (Note 21)
Asset retirement obligations (Note 5)
Other
Total noncurrent liabilities
Total liabilities

10,262
2,882
970
2,600

March 31, 2017

¥

9,767
2,719
1,020
1,000

1,716

533

370
64
618
628
2,632
22,746

299
150
621
313
3,040
19,466

–
2,500
881
1,208
13,66177
2,871
21,20043,946

2,600
2,816
875
1,275
13,77477
2,784
24,204
43,671

Commitments and contingent liabilities (Note 22)
Net assets (Note 18)
Shareholders’ equity (Note 8)
Common stock:
Authorized: 239,000,000 shares as of March 31, 2017
23,900,000 shares as of March 31, 2018
Issued: 78,219,507 shares as of March 31, 2017
7,821,950 shares as of March 31, 2018
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

8,640

8,640

2,069
13,169(139)
23,7392,069
12,947(137)
23,520

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

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

1,758
2,684
(141)
(2,029)2,271

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

11
26,35370,300–25,791
69,463¥

See accompanying notes to consolidated financial statements.

9¥Consolidated Statement of Income
Years ended March 31, 2018 and 2017
Millions of yen
Year ended
Year ended
March 31, 2018
March 31, 2017¥57,328 ¥56,611
41,87440,204
15,454
16,40615,322
15,434131
972

Net sales
Cost of sales (Note 13)
Gross profit
Selling, general and administrative expenses (Note 14)
Operating income
Other income (Note 15)
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

111
–
42
19
700
128
1,001

107
27
–
69
35
130
372

124
–
51
269
–

117
99
–
24
283

49

–

8
503
629

23
548
796

Income taxes (Note 6)
Income taxes - current
Income taxes - deferred
Total income taxes

485
(242)
243

448
(10)
438

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

385
4
381

357
21
335

Other expenses (Note 16)
Interest expenses
Equity in losses of affiliates
Foreign exchange losses
Loss on sale and retirement of noncurrent assets
Provision for repair claims
Loss on reversal of foreign currency translation adjustment due toliquidation of subsidiaries and affiliates
Other
Total other expenses
Profit before income taxes¥

See accompanying notes to consolidated financial statements.

10¥Consolidated Statement of Comprehensive Income
Years ended March 31, 2018 and 2017
Millions of yen

ProfitOther comprehensive income (Note 17)
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Retirement benefits liability adjustments
Share of other comprehensive income of associates 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.

11

Year ended
March 31, 2018¥
385

Year ended
March 31, 2017
¥
357

116
35
314
17
484
870

382
(269)
480
(23)
569
927

¥

866
4

¥

892
34

Consolidated Statement of Changes in Net Assets
Years ended March 31, 2018 and 2017

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
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
Balance at March 31, 2018

Balance at April 1, 2016
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Reversal of revaluation reserve for land
Transfer to capital surplus from retained
earnings
Change in treasury shares of parent arisingfrom transactions with non-controllinginterests
Net changes of items other thanshareholders’ equity
Balance at March 31, 2017

Balance at April 1, 2016
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Reversal of revaluation reserve for land
Transfer to capital surplus from retained
earnings
Change in treasury shares of parent arisingfrom transactions with non-controllinginterests
Net changes of items other thanshareholders’ equity
Balance at March 31, 2017

Millions of yen
Shareholders’ equity

Number ofshares ofcommon stock
issuedCommonstock

78,219,507––––¥8,640––––(70,397,557)
7,821,950–¥8,640CapitalsurplusRetainedearnings¥2,069––––Treasurystock¥12,947
(312)
381
–
152

(¥137)
–
–
(2)
–

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

–
–
–
¥2,069¥13,169(¥139)
Millions of yen
Accumulated other comprehensive income
NonValuation
Foreign
Retirement
Total
Revaluationdifference on
currency
benefits
valuation and controlling
reserve forinterests
available-fortranslation
liabilitytranslation
landsale securities
adjustment adjustments adjustments¥1,758¥2,684(¥141)(¥2,029)¥2,271
¥–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
116
¥1,875(152)¥2,531

53
(¥88)

314
(¥1,714)331¥2,60311¥11–¥23,739

Total
net assets¥25,791
(312)
381
(2)
152
342
¥26,353

Millions of yen
Shareholders’ equity

Number ofshares ofcommon stock
issuedCommonstock

78,219,507
–
–
–
–
–

¥8,640–––––¥2,016
–
–
–
(354)
–

¥13,231
(297)
335
–
–
32

(¥913)
–
–
(124)
900
–

Total
shareholders’equity¥22,974
(297)
335
(124)
546
32

–

–

354

(354)

–

–

–

–

53

–

–

53

–
78,219,507–¥8,640CapitalsurplusRetainedearnings

Treasury
stock

–
–
–
¥2,069¥12,947(¥137)
Millions of yen
Accumulated other comprehensive income
NonValuation
Foreign
Retirement
Total
Revaluationdifference on
currency
benefits
valuation and controlling
reserve forinterests
available-fortranslation
liabilitytranslation
landsale securities
adjustment adjustments adjustments¥1,377¥2,716¥163(¥2,509)¥1,747¥1,236
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–

–
¥23,520Total
net assets¥25,958
(297)
335
(124)
546
32

–

–

–

–

–

–

–

–

–

–

–

–

–

53

381
¥1,758(32)¥2,684(305)(¥141)

480(¥2,029)524¥2,271(1,236)¥–(712)¥25,791

See accompanying notes to consolidated financial statements.

12

Consolidated Statement of Cash Flows
Years ended March 31, 2018 and 2017
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
Proceeds from sales of treasury shares
Purchases of treasury shares
Payments from changes in ownership interests in subsidiaries that do not result inchange in scope of consolidation
Cash dividends paid
Dividends paid to non-controlling interests
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 19)

See accompanying notes to consolidated financial statements.

13

Year ended
March 31, 2018Year ended
March 31, 2017

¥

¥

¥

629

796

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

1,511
(124)
(2)
(112)
(108)
117
0
(45)
99
(35)

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

(775)
565
(364)
23
1,544
115
(115)
(587)
957

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

(2,555)
162
(435)
(98)
91
390
(2,445)

(50)
1,500
(633)
(1,000)
–
(2)

(100)
1,000
(33)
–
546
(124)

–

(1,195)

(312)
–
(99)
(598)
(30)
(498)
14,783
14,284

(297)
(22)
(97)
(324)
(102)
(1,914)
16,697
14,783¥

Notes to Consolidated Financial Statements
At March 31, 2018 and 2017

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, 2017 to the 2018 presentation.
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, 2018, the numbers of consolidated subsidiaries and affiliates accounted for by the equity
method were 24 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.
Aishin Co., Ltd. and EYE LIGHTING EUROPE LTD. were excluded from consolidation for the fiscal year
ended March 2018 as the companies were liquidated 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.

14

(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, 2018 and 2017, 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.

15

(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) 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.
(p) 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(q) Consumption taxes
Consumption taxes are calculated by the tax exclusion method.

16

2. Accounting Standards Issued But Not Yet Effective•“Implementation Guidance on Tax Effect Accounting” (Accounting Standards Board of Japan (“ASBJ”)
Guidance No. 28, revised February 16, 2018)•“Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, last revised
February 16, 2018)(1) Overview
Implementation Guidance on Tax Effect Accounting, etc. was amended in light of the transfer of the practicalguidelines for tax effect accounting issued by the Japanese Institute of Certified Public Accountants (JICPA)
to the Accounting Standards Board of Japan (ASBJ). While the basic contents of the practical guidelines were
followed by the Implementation Guidance, the following treatments were reviewed as deemed necessary.
(Major accounting treatments subject to the review)•
Treatment of future temporary differences arising on shares of subsidiaries, etc. in non-consolidated
financial statements•
Treatment of recoverability of deferred tax assets for companies classified as (Category 1)(2) Scheduled date of adoption
The Company will apply the implementation guidance effective from the beginning of the fiscal year ending
March 31, 2019.
(3) Impact of adopting the implementation guidance
The Company is currently evaluating the impact of adopting the implementation guidance on its consolidated
financial statements.
••“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, issued on March 30, 2018)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30,
issued on March 30, 2018)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board(FASB) jointly developed a comprehensive accounting standard for revenue recognition and issued “Revenue
from Contracts with Customers” (IFRS 15 by the IASB and Topic 606 by the FASB) in May 2014. In light of
the adoption of IFRS 15 from fiscal years commencing on or after January 1, 2018 and Topic 606 from fiscal
years commencing after December 15, 2017, the ASBJ developed a comprehensive accounting standard forrevenue recognition and issued it along with the implementation guidance.
The basic policy for the development of the Accounting Standard for Revenue Recognition by the ASBJ
is to set out the accounting standard by incorporating the basic principles of IFRS 15 as a starting point fromthe perspective of comparability among financial statements as one of the benefits of ensuring consistency
with IFRS 15. In addition, in cases where there are items for which consideration must be paid to generalpractices, etc. that have been conducted in Japan, alternative treatments shall be introduced to the extent thatcomparability is not impaired.
(2) Scheduled date of adoption
The Company will apply the accounting standards, etc. effective from the beginning of the fiscal year ending
March 31, 2022.
(3) Impact of adopting the accounting standards, etc.
The Company is currently evaluating the impact of adopting the accounting standards, etc. on its consolidated
financial statements.

17

3. Securities and Investment Securities
Information regarding securities and investment securities classified as available-for-sale securities with fairmarket value at March 31, 2018 and 2017 is summarized as follows:
Millions of yen
March 31, 2018
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, 2017
Unrealized
gain (loss)

Acquisition
cost

Carrying amount(Fair market value)

Unrealized
gain (loss)¥1,108¥3,794¥2,686¥1,472¥3,989¥2,516

–
–
–
–
1,108

–
–
–
–
3,794

–
–
–
–
2,686

–
–
–
–
1,472

–
–
–
–
3,989

–
–
–
–
2,516

–

–

–

66

63

(3)

–
–
–
–
–
¥1,108–––––¥3,794–––––¥2,686––––66¥1,539––––63¥4,052––––(3)¥2,513

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 years ended March 31, 2018 and March 31, 2017, 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, 2018 and the year ended March 31, 2017 is summarized as follows:
Millions of yen
March 31, 2018

Equity securities
Debt securities
Government bonds
Corporation bonds
Other
Other
Total

March 31, 2017

Proceeds from
sales

Gross realized
gain

Gross realized
loss

Proceeds from
sales

Gross realized
gain

Gross realized
loss¥1,141

¥700

–

¥88

¥35

–

–
–
–
–
¥1,141

–
–
–
–
¥700

–
–
–
–
–

–
–
–
–
¥88

–
–
–
–
¥35

–
–
–
–
–

18

4. Short-Term Loans, Long-Term Loans and Other Long-Term Liabilities with Interest
Short-term loans from banks at an average interest rate of 0.51% amounted to ¥970 million and ¥1,020 million atMarch 31, 2018 and 2017, respectively.
Long-term loans, lease obligations and deposits received classified as other long-term liabilities with interest at
March 31, 2018 and 2017 consisted of the following:
Millions of yen
March 31, 2018

March 31, 2017

¥4,216(1,716)
2,500
357
(99)
258
2,517
¥5,275¥3,350
(533)
2,816
201
(72)
128
2,542
¥5,488Loans, principally from banks, maturing in installments through 2022with an average interest rate of 1.11%
Less current portion of loans
Net
Lease obligations
Less current portion of lease obligations
Net
Deposits received with an average interest rate of 2.12%
Total

The annual maturities of long-term loans and lease obligations subsequent to March 31, 2018 are summarized
as follows:
Long-term loans

Lease obligations

Millions of yen

Millions of yen

Year ending March 31,
2020
2021
2022
2023 and thereafter¥1,300
700
300
200

¥87
75
67
27

Bonds payable at March 31, 2018 and 2017 consisted of the following:
Name ofcompany

Issue

Date of issue

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

20th Unsecured
straight bond
21st Unsecured
straight bond22nd Unsecured
straight bond23rd Unsecured
straight bond24th Unsecured
straight bond25th Unsecured
straight bond26th Unsecured
straight bondNovember 28,
2014
November 28,
2014
November 28,
2014
September 30,
2015
October 5,
2015
October 9,
2015
October 30,
2015

–

–

Total

Millions of yen
March 31, 2018

March 31, 2017

¥400
(400)
400
(400)
200
(200)

¥–

Collateral

0.78

N.A.

0.38

N.A.

0.45

N.A.

250

0.41

N.A.

1,200

0.73

N.A.

900

0.31

N.A.

250

0.76

N.A.

¥3,600(1,000)

–

–

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

Notes: 1. Numbers in parenthesis are scheduled redemption amounts due in 1 year or less.
2. Scheduled redemption amounts over 5 years subsequent to March 31, 2018 are summarized as follows:
Due in 1 year or
less(Millions of yen)

Due after 1 year
and in 2 years or
less(Millions of yen)

Due after 2 years
and in 3 years or
less(Millions of yen)

Due after 3 years
and in 4 years or
less(Millions of yen)

Due after 4 years
and in 5 years or
less(Millions of yen)

¥2,600

¥–

¥–

¥–

¥–

19

Maturity
date
November30, 2017
November30, 2017
November28, 2017
September
28, 2018
October 5,
2018
October 9,
2018
October 31,
2018–5. 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, 2017 and March 31, 2018 accounted for less than 1% of total liabilities and net assets at the beginningand the end of the fiscal year.
6. 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, 2018 and 2017 were as follows:
Millions of yen
March 31, 2018

March 31, 2017

¥734
3,655
1,145
5,535
(4,143)
1,392

¥718
3,621
1,121
5,461
(4,184)
1,277

(817)
(103)
(921)
¥470

(752)
(160)
(912)
¥365

Deferred tax assets:
Loss carried forward for tax purposes
Liability for retirement benefits
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on available-for-sale securities
Other
Gross deferred tax liabilities
Net deferred tax assets

Note: Net deferred tax assets for the years ended March 31, 2018 and 2017 were included in the following items on the consolidatedbalance sheets.
Millions of yen
March 31, 2018
Current assets - Deferred tax assets
Investments and other assets - Deferred tax assets
Noncurrent liabilities - Deferred tax liabilities

March 31, 2017
¥882
358
(875)

¥986
365
(881)

(2) The reconciliation of the Japanese statutory tax rate and the effective tax rate applicable to the Company forthe years ended March 31, 2018 and 2017 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 allowance
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

20

Year ended
March 31, 201830.9%

Year ended
March 31, 2017
30.9%

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

12.2
(10.7)
8.0
16.6
(2.6)
1.8

16.1

–

(2.4)
38.7

(1.1)
55.1

(3) Changes in amounts of deferred tax assets and deferred tax liabilities as a result of the change in corporate
income tax rate, etc.
Following the enactment of the U.S. tax reform legislation on December 22, 2017, the federal corporate
income tax rate, etc. will be lowered effective January 1, 2018. As a result of this tax reform, the federal
corporate income tax rate to be applied to the Group’s subsidiaries in the U.S. has been changed from 35% to21%.
The changes in the tax rate resulted in a ¥101 million decrease in deferred tax assets (amount after
deducting deferred tax liabilities) and a ¥101 million increase in income taxes - deferred as of and for the year
ended March 31, 2018.

7. Rental Properties
For the years ended March 31, 2018 and 2017
No description is provided because the total amount of rental properties is immaterial.
8. 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.
9. Investments in Affiliates
Investments in affiliates at March 31, 2018 and 2017 amounted to ¥490 million and ¥438 million, respectively,
and are accounted for principally by the equity method.
10. Pledged Assets and Secured Liabilities
A summary of assets pledged as collateral and secured liabilities at March 31, 2018 and 2017 is presented below:
Millions of yen
March 31, 2018

March 31, 2017

¥2,206

¥642

302

325

Land

2,579

2,579

Total

¥5,088¥3,547¥2,100

¥800

–

2,100

180

–

Long-term loans payable

1,359

700

Total

¥3,639¥3,600Pledged assets
Buildings and structures
Machinery, equipment and vehicles

Secured liabilities
Current portion of bonds
Bonds payable
Current portion of long-term loans
payable21

11. 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, 2018 and 2017 of land
revalued pursuant to Article 10 of the law were ¥2,277 million and ¥2,467 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.
12. 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, 2018

March 31, 2017

¥319

–

160

–

13. Cost of Sales
Loss on valuation of inventories of ¥249 million and ¥380 million, net of the amount of the reversal, was included
in cost of sales for the years ended March 31, 2018 and 2017, respectively after writing down the carrying values
to reflect declines in profitability.
14. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2018 and 2017
were as follows. The figures in the following table have been offset against reversals.
Millions of yen
Year ended
March 31, 2018Year ended
March 31, 2017

Salaries¥5,634¥5,655

Packing and transportation costs

1,760

1,743

Provision for employees’ retirement benefits

664

764

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

335

342

(0)

(1)

Research and development expenses included in selling, general and administrative expenses for the years ended
March 31, 2018 and 2017 amounted to ¥457 million and ¥419 million, respectively.

2215. Other Income
Gain on sales of noncurrent assets for the years ended March 31, 2018 and 2017 were summarized as follows:
Millions of yen
Year ended
March 31, 2018Year ended
March 31, 2017

¥19

¥26

Tools, furniture and fixtures

–

0

Land

–

20

Other

–

22

Total

¥19

¥69

Machinery, equipment and vehicles

16. Other Expenses
Loss on sales and retirement of noncurrent assets for the years ended March 31, 2018 and 2017 were summarized
as follows:
Millions of yen
Year ended
March 31, 2018Year ended
March 31, 2017

¥127

¥14

Machinery, equipment and vehicles

2

6

Tools, furniture and fixtures

2

2

Land

135

–

Other

2

1

Total

¥269

¥24

Buildings and structures23

17. Statement of Comprehensive Income
Reclassification adjustments relating to other comprehensive income for the years ended March 31, 2018 and2017 were as follows:
Millions of yen
Year ended
March 31, 2018
Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments for gain (loss) included in profit
Total
Foreign currency translation adjustment:
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 using theequity method:Amount arising during the year
Total amount before income taxes
Income taxes
Total other comprehensive income

Year ended
March 31, 2017

¥881
(700)
181

¥579
(35)
543

35
–
35

(269)
–
(269)

121
193
314

191
288
480

17
550
(65)
¥484

(23)
730
(160)
¥569

Tax effects relating to other comprehensive income for the years ended March 31, 2018 and 2017 were as follows:
Millions of yen
March 31, 2018
Valuation difference on available-for-sale securities
Before tax effectTax effect
After tax effectForeign currency translation adjustment
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 using theequity method
Before tax effectTax effect
After tax effectTotal other comprehensive income
Before tax effectTax effect
After tax effect24

March 31, 2017

¥181
(65)
116

¥543
(160)
382

35
–
35

(269)
–
(269)

314
–
314

480
–
480

17
–
17

(23)
–
(23)

550
(65)
¥484

730
(160)
¥569

18. 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, 2018
Number of shares (Thousand)April 1, 2017

Increase

Decrease

March 31, 2018

Type of issued shares
Common stock (Note 1)

78,219–70,397

7,821

Total

78,219–70,3977,821

Type of treasury stock
Common stock (Notes 2, 3
and 4)
Total

861

6

780

87

861

6

780

87

Notes: 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 sharesin line with the share consolidation, and an increase of 6,000 shares by the repurchase of fractional shares (5,000 shares
before the share 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).

For the year ended March 31, 2017
Number of shares (Thousand)April 1, 2016

Increase

Decrease

March 31, 2017

Type of issued shares
Common stock

78,219––78,219

Total

78,219––78,219Common stock (Notes)

3,856

805

3,800

861

Total

3,856

805

3,800

861

Type of treasury stock

Notes: 1. The increase of 805,000 common shares in treasury stock was due to an increase of 800,000 shares by the acquisition by
the Board Benefit Trust (BBT) and an increase of 5,000 shares by the repurchase of fractional shares.
2. The decrease of 3,800,000 common shares in treasury stock was a decrease of 3,000,000 shares due to private allocation oftreasury shares to Minebea Co., Ltd. (renamed Minebea Mitsumi Inc. on January 27, 2017), a decrease of 800,000 sharesby selling treasury shares to the Board Benefit Trust (BBT) by private allocation, and a decrease of less than 1,000 sharesby sales of treasury shares to increase the fractional shares held by shareholders to one trading unit.
3. The number of treasury shares as of March 31, 2017 includes 800,000 shares held by the Board Benefit Trust (BBT).

(b) Matters related to dividends
1. Amount of dividends
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.

25

For the year ended March 31, 2017
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 28, 2016

Commonstock

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

Cut-off date

Effective date

¥297

¥4

March 31, 2016

June 29, 2016

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, 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).

For the year ended March 31, 2017
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 28, 2017

Commonstock

Total dividends
paid (Millionsof yen)Source ofdividends

Amount ofdividends per
share (Yen)

Cut-off date

Effective
date

¥312

Retainedearnings¥4

March 31, 2017

June 29, 2017

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

19. Supplemental Cash Flow Information
A reconciliation of cash and cash equivalents at March 31, 2018 and 2017 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, 2018 March 31, 2017¥14,285¥14,933(1)(149)¥14,284¥14,783

20. 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.

26

21. 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, 2018
March 31, 2017¥15,590¥15,726
690
698
(84)
(122)
(476)
(712)
¥15,720¥15,590

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, 2018
March 31, 2017
¥3,084¥2,894
106
67
36
68
367
368
(235)
(314)
¥3,359¥3,084

Plan 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, 2018
March 31, 2017
¥6,102¥6,098(3,359)(3,084)
2,743
3,013
9,617
9,491
12,36012,505
12,36012,505¥12,360¥12,505(4) The components of retirement benefit expenses
Millions of yen
Year ended
Year ended
March 31, 2018
March 31, 2017
¥690
¥698
(106)
(67)
190
286
3
2
¥777
¥920

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

27

(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, 2018
March 31, 2017
¥3
¥2
311
477
¥314
¥480

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, 2018
March 31, 2017
¥12
¥16
1,701
2,013
¥1,714¥2,029Unrecognized 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, 2018
46%
25
28
1
100%

General accounts
Stocks
Bonds
OthersTotal

March 31, 2017
45%
26
23
6
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, 2018
0.0%
3.5%
0.0%–3.7%

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

Year ended
March 31, 2017
0.0%
2.3%
0.0%–3.4%

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, 2018
March 31, 2017
¥1,269¥1,246
102
136
(25)
(48)
(45)
(65)
¥1,300¥1,269Liability for retirement benefits at April 1
Retirement benefit expenses
Retirement benefits paid
Plan contributions
Liability for retirement benefits at March 31

28

(2) The funded status of the plans and the amounts recognized in the consolidated balance sheet for the plans
Millions of yen
March 31, 2018
March 31, 2017
¥504
¥490
(372)
(335)
131
154
1,169
1,114
1,300
1,269
1,300
1,269
¥1,300¥1,269Funded 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, 2018
March 31, 2017
¥102
¥136

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 ¥35
million for the year ended March 31, 2018 and ¥36 million for the year ended March 31, 2017.
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 ¥201 million for the year ended March 31, 2018 and ¥200
million for the year ended March 31, 2017.
(1) Total funded status of the multi-employer plan
Millions of yen
March 31, 2017
March 31, 2016
¥127,443¥122,897
149,315
152,503¥(21,871)¥(29,605)

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, 20173.68%
For the year ended March 31, 2016
3.44%
(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 (¥20,384 million for the year ended March 31, 2018 and ¥21,959
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.

22. 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, 2018 and 2017 were as follows:
Millions of yen
March 31, 2018
March 31, 2017
Commitment lines extended¥1,500¥1,500Loans payable––

Unused balance¥1,500¥1,50029This commitment line contract includes the following restrictive financial covenants for the year ended March 31,
2018:
To maintain net assets of at least ¥19.3 billion on the consolidated balance sheet at the end of each fiscal year andsecond quarter.

23. 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.

30

2. Matters relating to fair value, etc. of financial instruments
The carrying amounts and fair values at March 31, 2018 and 2017 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, 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
¥–

At March 31, 2017

(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)
¥14,933
14,517

Fair value(Millions of yen)
¥14,933
14,517

Difference(Millions of yen)
¥–
–

1,696

1,696

–

4,052
¥35,199¥9,767

4,052¥35,199¥9,767

–
¥–
¥–

2,719

2,719

–

1,020
3,600
3,350
¥20,456
¥–

1,020
3,612
3,384
¥20,503
¥–

–
12
34
¥47
¥–

(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 “3. 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 “24. Derivatives.”312) Financial instruments whose fair values are not readily determinable at March 31, 2018 and 2017 are as follows:
Category

Millions of yen
March 31, 2018
March 31, 2017

Unlisted equity securities

¥680

¥620

Investments in limited liability partnership

¥79

¥86

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, 2018 and 2017 are summarized as follows:
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
Total
At March 31, 2017¥14,933
14,517

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

1,696

–

¥31,146¥–

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, 2018and 2017 are summarized as follows:
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
¥–

At March 31, 2017

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)¥1,020
¥–
¥–
¥–
¥–
¥–
1,000
2,600
–
–
–
–
533
1,416
1,000
400
–
–
¥2,553¥4,016¥1,000
¥400
¥–
¥–

32

24. Derivatives
At March 31, 2018 and 2017, 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, 2018 and2017 for which hedge accounting has been applied are summarized as follows:
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.

At March 31, 2017
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

¥1,050¥550*1*1. The fair value is included in the fair value of long-term loans payable, since the shortcut method is applied.

25. Segment Information
Segment Information (For the years ended March 31, 2018 and 2017)
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.

33

3. Information on Net Sales, Income or Loss, Assets, and Other Items in Each Reportable Segment
Millions of yen
Year ended March 31,
2018Year ended March 31,
2017

¥

¥

Sales:
Lighting Sector
Applied Optics and Environment
Sector

15,57456,611

26

36

¥

11
37
(37)
57,328

¥

6
43
(43)
56,611

¥

1,396

¥

2,612

¥

692
2,088
(1,957)
131

¥

280
2,893
(1,920)972¥

39,951¥39,301¥

18,07458,025
12,27570,300¥17,811
57,113
12,35069,463

¥

1,290

¥

1,143

¥

458
1,748
–
1,748

¥

367
1,511
–
1,511

¥

2,074

¥

2,250

¥

519
2,594
–
2,594

¥

842
3,093
–
3,093

Adjustments

Adjustments

Segment Assets:
Lighting Sector
Applied Optics and Environment
SectorAdjustments

Depreciation and Amortization:
Lighting Sector
Applied Optics and Environment
SectorAdjustments

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

41,037

15,97657,328

Corporate and eliminations:Lighting Sector
Applied Optics and Environment
SectorSegment Income (loss):
Lighting Sector
Applied Optics and Environment
Sector

41,352Adjustments

Notes: 1. The adjustments for segment income (loss) of ¥ (1,957) million and ¥ (1,920) million at March 31, 2018 and 2017,
respectively, include corporate costs, etc., which have not been allocated to the reportable segments.
2. The adjustments for segment assets of ¥12,275 million and ¥12,350 million at March 31, 2018 and 2017 respectively,
include financial assets, etc., of the Company, which have not been allocated to the reportable segments.

34

Related Information
For the years ended March 31, 2018 and 2017
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, 2018 March 31, 2017
¥48,421¥46,363
5,695
6,673
2,778
3,108
432
466
¥57,328¥56,611(2) Property, Plant and Equipment
No description is provided because property, plant and equipment in Japan at March 31, 2018 and 2017 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, 2018 and 2017 in the consolidated statements of income.

26. Amounts per Share
Per share information at and for the years ended March 31, 2018 and 2017 was as follows:

Profit attributable to owners of parent
Net assets

Yen
Year ended
Year ended
March 31, 2018 March 31, 2017¥49.31¥44.34
3,405.90
3,334.09

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 (49,000 shares for the previous
fiscal year and 80,000 shares for the current fiscal year).

35

The basis of the computation of profit attributable to owners of parent per share for the years ended March 31,2018 and 2017 is as follows:
Millions of yen
Year ended
March 31, 2018
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, 2017

¥381

¥335

–

–

¥381

¥335

7,735,131

7,574,611

27. Business Combinations
Not Applicable.

28. Related Party Transactions
For the year ended March 31, 2018
Not Applicable.
For the year ended March 31, 2017
Not Applicable.

29. Stock Options
For the year ended March 31, 2018
Not Applicable.
For the year ended March 31, 2017
Not Applicable.

30. Significant Subsequent Events
Not Applicable.

36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, 2018, 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, 2018, and their consolidated financial performance and cash flows for the year then ended in conformity withaccounting principles generally accepted in Japan.

June 27, 2018
Tokyo, Japan37

Board of Directors and Corporate Data
President and Chief Executive Officer
Yoshitake Ito
Director and Managing Executive Officer
Kazuo Saotome

IWASAKI ELECTRIC Co., Ltd.
Date of Establishment: August 18, 1944

Director and Senior Executive Officer
Masanori Kato
Director and Senior Executive Officer
Masayuki Arimatsu
Director and Senior Executive Officer
Makoto Inamori

Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-5847-8611
http://www.eye.co.jp/
Capital: ¥8,640 million

Outside Director
Shungo Hiromura
Outside Director
Kenji Ohya
Audit & Supervisory Board Member
Hideya Fujii
Audit & Supervisory Board Member
Teruo Yoshii
Outside Audit & Supervisory Board Member

Koichi Ikeda
Outside Audit & Supervisory Board Member

Shouzou Watanabe
Managing Executive Officer
Yoshimasa Kida
Senior Executive Officer
Sumio Uehara
Executive Officer
Haruhiko Hoshino
Executive Officer
Tomohiko Yamada
Executive Officer
Takeyuki Kakinuma

Common Stock
Authorized: 23,900,000 shares
Issued and Outstanding: 7,821,950 shares
Number of Shareholders: 7,246
Major Shareholders
Minebear Mitsumi Inc.
The Master Trust Bank of Japan, Ltd.
Mizuho Bank, Ltd.
The Meiji Yasuda Life Insurance Company
Iwasaki Electric Cooperative Association Stock Ownership Plan
DFA INTL SMALL CAP VALUE PORTFOLIO(Standing proxy: Citibank)
The Sumitomo Mitsui Banking Corp.
EYE LAMP employee stock ownership plan
Japan Trustee Services Bank, Ltd. (Trust Account)
Nippon Tochi-Tatemono Co.,Ltd
Stock Exchange Listings
Tokyo Stock Exchange 1st Section
Correspondent Bank
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corp.
The Bank of Yokohama, Ltd.
Resona Bank, Ltd.
MUFG Bank, Ltd.
Independent Certified Public Accountants
Ernst & Young ShinNihon LLC

Executive Officer
Tsuyoshi Itokawa
Executive Officer
Seiji Aoyama(As of July 1, 2018)38% of Total
3.87
2.83
2.37
2.32
2.28
2.22
2.18
2.02
2.00
1.99

Directory
Domestic Plants and Offices
Head Office
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-5847-8611
Sales Business Division
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-5847-8624
Local Offices: 39 locations
Private Sector Sales Division
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-5847-8632
Lighting Solution Sales office
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-6861-0040
Global Sales & Marketing Division
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-5847-8630
Facsimile: +81-3-5847-8647
Applied Optics andEnvironment Sales Division
Bakurocho-daiichi Bldg. 1-4-16,
Nihonbashi-bakurocho, Chuo-ku,
Tokyo 103-0002, Japan
Phone: +81-3-5847-8637

Domestic AffiliatesƔManufacture
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 luminairesƔSalesEYE 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

Development and Production
Saitama Plant
1-1, Ichiriyama-cho, Gyoda City,
Saitama 361-8505, Japan
Phone: +81-48-554-1111

ITO DENKI HANBAI CO., LTD.
Established in 1999
Sales of explosion proof luminaries

Honjo Factory
Kawasato Factory(As of July 1, 2018)

39

䕺Sales Office
Global Sales & Marketing DivisionƔManufacture
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 equipmentƔSalesEYE 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

EYE LIGHTING INTERNATIONAL OFNORTH AMERICA, INC. (ELINA)
Established in 1989
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

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

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 QLD 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 QLD 4076,
Australia
Phone: +61-7-3335-3502
Facsimile: +61-7-3355-3533
Manufacture and sales of streetscapeluminaries

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
䊡Building, 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
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 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(As of July 1, 2018)40