2022

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

11

Consolidated Statement of Income

13

Consolidated Statement of Comprehensive Income

14

Consolidated Statement of Changes in Net Assets

15

Consolidated Statement of Cash Flows

16

Notes to Consolidated Financial Statements

17

Independent Auditor’s Report46

Board of Directors and Corporate Data

50

Directory

51

Message from the President
At the Iwasaki Electric Group, each and every employee is missioned with serving customers with sincerity andcreating new technologies and services with the aim of contributing to the realization of a sustainable andflourishing society. We uphold the management vision of striving to become a leading-edge corporation thatsustains social and industrial infrastructure by combining optical technologies with new technologies.
Although it remains unclear as to when the COVID-19 pandemic will end, the global and domestic economies are
anticipated to recover in step with the normalization of social and economic activities. Yet, given the worldwide
shortage of semiconductors and other components and their surging prices, the current trends in oil prices andexchange rates, and the situation in Ukraine, among other factors, we project that the outlook will continue to be
unpredictable and opaque. In particular, the recent shortage of component supplies and their price increases posethe most imminent management risks, and we are working on these issues as our first priority.
The Iwasaki Electric Group has formulated its medium-term management plan, which covers the period until thefiscal year ending March 31, 2026. Under the basic policy of implementing “a growth strategy and structuralreform toward second founding,” we will work to launch new businesses and advance our Group’s structuralreform with the aim of expanding our business domains and delivering new value to society.
Until LED became the prevalent illumination light source, our Lighting business had primarily focused on the
manufacture and marketing of high-pressure discharge lamps, referred to as a high intensity discharge (HID) lightsource. As we likely need to discontinue the manufacture and marketing of HID light source lamps by the end of
the period covered by the medium-term management plan, a structural reform is required. HID light source sales
account for approximately 30% of the sales of our Lighting business. As the business has been generating profit
by the in-house manufacture of HID products, its discontinuation will inevitably exert an immense impact on our
profit/loss. To limit losses to the extent possible, we need to create new businesses to replace existing businesses.
We regard this as our “second founding.”
Since I took office as president, I have given top priority to building a degree of financial soundness that canwithstand the critical turning point where HID light source production will be discontinued after 50 years, and I
believe we have been able to improve our financial position to a certain extent. Going forward, we intend to takesteady steps to advance our structural reform and aim for expansion and growth to increase our corporate value
over the medium and long term, while placing importance on our relationships with all our stakeholders, including
shareholders, to achieve our second founding.
We will make efforts to strengthen and sophisticate our mainstay business, develop our peripheral businesses, andprovide new value to society. In addition, while focusing on providing all kinds of added value far beyond merely
supplying products, we will propel growth with the aim of offering solutions not only for existing markets, butalso for society and the environment. To this end, in line with its management vision, our Group will allocate its
management resources primarily to building new supply chains, strengthening procurement capacity, promoting
IT and DX, research and development, developing new technologies in view of social trends, and environmental
initiatives. Furthermore, by creating businesses that aim to deliver new value to society, we are determined toenhance our corporate value.
We express our deepest appreciation for your continued understanding and support.
June 2022
Yoshitake Ito
President and Chief Executive Officer1Consolidated Six-Year Summary
Millions of yen

Year ended March 31
2017

2018

2019

2020

2021

2022

¥56,611¥57,328¥54,006¥59,274¥53,587¥53,185

335

381

1,119

2,681

2,041

2,330

Total assets¥69,463¥69,625¥67,288¥69,450¥66,970¥65,585

Total shareholders’ equity2

25,791

26,342

26,921

28,982

31,32533,416

Working capital

25,777

22,13325,44827,52825,352

29,618Long-term bank loans,less current portion

2,816

2,500

5,300

4,400

600

2,550

Amounts per share:3
Profit attributable to ownersof parent
Cash dividends¥44.34¥49.31¥144.75¥348.63¥269.07¥313.01

4.00

40.00

40.00

40.00

40.00

130.00For 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.

Profit attributable
to Incomeowners of parent
Net (Loss)(Millions of yen)

Net Sales(Billions of yen)
80

80

2,500
2,000

60

Total Assets(Billions of yen)

60

1,500
40

40
1,000

20

20

500

0

0
'17

'18

'19

'20

'21

'22

0
'17

'18

'19

2

'20

'21

'22

'17

'18

'19

'20

'21

'22

Status of the Business
1. Management Policy, Business Environment, and Challenges Facing the Company
Forward-looking statements contained in this report are based on the assumptions of the Iwasaki Electric Group asof the end of the current consolidated fiscal year.
Based on its mission of “contributing to the realization of a sustainable and affluent society through the creation of
new technologies and services in which each and every employee sincerely interacts with customers,” the Iwasaki
Electric Group upholds a management vision of “aiming to be an advanced company that supports social andindustrial infrastructure by combining optical device engineering and new technologies.”
In line with this policy, the Group aims to accurately recognize changes in the social environment and growwhile fulfilling its corporate social responsibility.
The global and Japanese economies are expected to recover as social and economic activities normalize, although
it remains unclear when the COVID-19 pandemic will come to an end. However, the situation is expected toremain unpredictable due to the prolonged global semiconductor shortage, fluctuations in crude oil prices andforeign exchange rates, and the conflict in Ukraine.
Under this business environment, in the Lighting segment, government initiatives for energy conservation are
expected to accelerate toward the realization of a decarbonized society, which will continue to promote theintroduction of LED lighting and drive inventory demand. In addition, we expect continued demand related toinfrastructure development aimed at disaster prevention and mitigation in line with the national resilience policy.
As for the Applied Optics and Environment segment, in the sterilization field, demand reflecting increased
public awareness on safety and peace of mind will likely continue as we live with COVID-19 and look ahead of
the future after COVID-19. In the UV-curing systems and environmental testing equipment fields, capital
investment is expected to continue to recover. We will promote business development responding to such market
trends adequately by proposing new technologies and solutions.
The Group has formulated the Medium-term Management Plan which started from the fiscal year ended March2022 (plan period: fiscal year ended March 2022 to fiscal year ending March 2026). Under our basic policy of“Growth strategy and structural reform for the second foundation,” we will promote initiatives for new businesses
and structural reforms of the Group in order to expand our business fields and realize new value for society. As
part of such efforts, we will work on the “reinforcement and sophistication of mainstay businesses,” “expansion of
peripheral businesses,” and “provision of new value to society,” and promote the building of a foundation forgrowth to realize solutions for existing markets and social and environmental solutions by focusing on theprovision of all kinds of added value, not just products.
In the Lighting segment, we will aggressively expand our services related to lighting infrastructure, with a focus
on the fields of facility lighting and industrial lighting. The energy-saving performance of LED lighting equipment
can be further enhanced by being combined with communications and control systems. We believe that we cancreate comfortable and enjoyable lighting environments by improving the quality of light and designing the color
rendition. Moreover, as we have had an increased frequency of natural disasters in recent years, outdoor lighting
and facility lighting need to play more diverse roles and meet diverse needs. We believe that our disasterprevention and mitigation lighting systems which can provide safety and peace of mind through the illuminationof various environments in the event of a disaster will contribute as social infrastructure.
Focusing on the development of high-value-added lighting systems by combining our technologies in light
distribution and circuit control with peripheral technologies, we will not only strengthen our initiatives related toenergy service companies (ESCOs) and expand our business in the urban landscape and streetscape markets but
also strive to promote our comfortable and convenient smart lighting systems in the fields of facility lighting andindustrial lighting.
In the Applied Optics and Environment segment, we will promote business development with a focus on the3businesses using the Group’s various optical technologies, such as UV rays, infrared rays and electron beams, aswell as services and maintenance thereof. In the environmental testing equipment field and the UV/EB curing
related field, we will endeavor to expand into new markets and develop new applications in pursuit of lightinteractions and effects. In addition, we will aim to expand our businesses by developing optical technologies
related to semiconductor manufacturing processes. In the sterilization domain, it has been confirmed that theultraviolet light source installed in AIRLIA, our air circulation sterilization unit using UV rays, is highly effectiveat inactivating COVID-19. We will continue the speedy development of products that combine our highly reliable
technology with external technologies to help customers create a more hygienic environment and prevent the
spread of infectious diseases.
The Applied Optics and Environment segment will follow a medium- to long-term plan, as well as short-termplans, to pioneer new business domains dedicated to the prevention of global warming and reduction ofenvironmental impact by maximally utilizing the basic lighting technologies of the Group in combination with
peripheral technologies.
In promoting its Lighting and Applied Optics and Environment businesses, the Group will allocate management
resources with a focus on the development of supply chains and enhancement of procurement capabilities inmanufacturing, promotion of IT and DX, R&D for the expansion of solutions business, development of newtechnologies based on social trends, and environmental initiatives.
In addition, we will endeavor to increase our corporate value through contribution to sustainability including
the SDGs by creating businesses that provide new value to society.

4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.
(1) Financial Position and Operating Results
There were signs of recovery in the global economy in the current consolidated fiscal year as economic
activities resumed in Europe and the United States on the back of economic stimulus packages bygovernments, resulting in increases in personal consumption and capital investment. In China, where theeconomy had been on a moderate recovery path, the pace of economic recovery slowed due to the effects of
the restrictions on power usage and the zero-COVID policy by the government. Looking at the Japanese
economy, although state of emergency declarations were issued intermittently due to the spread of COVID-19,
there were signs of recovery during the second half of the fiscal year in line with the gradual resumption of
economic activities. However, uncertainty over the future of the economy has intensified due to soaring
resource prices, a prolonged global semiconductor shortage, rising tensions in Ukraine, and rising energy
prices.
Amid such circumstances, based on its management vision of “aiming to be an advanced company that
supports social and industrial infrastructure by combining optical device engineering and new technologies,”
the Iwasaki Electric Group has been promoting the provision of high-value-added products and services by
providing unique products and developing solution businesses, including peripheral businesses, in the Lighting
segment and Applied Optics and Environment segment. In the current consolidated fiscal year, we developed
new products that reflect market needs and actively made proposals by combining peripheral technologies. In
addition, while we continued to make efforts to maintain and improve work efficiency and productivity, ourprocurement activities were negatively impacted by the soaring prices of some materials and longer
procurement lead time.
As a result, net sales amounted to ¥53,185 million (a 0.8% decrease from the ¥53,587 million recorded in
the previous fiscal year). Operating income came to ¥3,287 million (an 11.8% increase from the ¥2,941
million recorded in the previous fiscal year). Ordinary income totaled ¥3,462 million (an 8.5% increase fromthe ¥3,191 million recorded in the previous fiscal year). Profit attributable to owners of parent was ¥2,330
million (a 14.1% increase from the ¥2,041 million recorded in the previous fiscal year).
As described in “Notes to Consolidated Financial Statements, 3. Change in Accounting Policies,” theAccounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No.
29, March 31, 2020), etc. have been applied from the beginning of the current fiscal year. For this reason,
figures for the same period of the previous fiscal year are based on different calculation methods.
Operating results by business segment are described below.
Lighting Segment
The Lighting segment worked on developing and launching on the market lighting fixtures with smart
technologies such as control system equipment using wireless and bidirectional communications as well as
lighting fixtures that can provide optimal lighting depending on the facility environment and application. In
Japan, sales of LED road lamps and LED street lamps increased thanks to public infrastructure renewal
demand from local governments and sales of lighting fixtures used in special environments remained robust as
a result of the launch of new products reflecting mainly demand from the private sector. Meanwhile, sales of
conventional light sources decreased from the previous fiscal year as the production and import and export ofmercury lamps were terminated in December 2020. Looking overseas, while sales in Southeast Asia increased
year on year, sales were sluggish in North America.
As a result, this segment reported net sales of ¥36,332 million (a 2.2% decrease from the ¥37,150 million
recorded in the previous fiscal year) and operating income of ¥3,382 million (a 3.6% decrease from the ¥3,510
million recorded in the previous fiscal year).

5

Applied Optics and Environment Segment
In the Applied Optics and Environment segment, sales in the UV curing business increased as a result of EB
equipment related delivery, despite sluggish sales related to printing equipment. In the environmental test
equipment business, there were signs of a recovery in capital investment, and sales of weathering test
equipment increased. In the sterilization business, sales of our air circulation sterilization unit using UV rays
decreased as reaction to the high demand related to infectious disease during the previous fiscal year, despite
our active proposals for environmental hygiene improvements to facilities used by a large and unspecified
number of people. Sales in the information equipment business remained flat.
As a result, this segment reported net sales of ¥16,899 million (a 2.5% increase from the ¥16,481 million
recorded in the previous fiscal year) and operating income of ¥1,591 million (a 40.0% increase from the¥1,136 million recorded in the previous fiscal year).
The financial position as of March 31, 2022 was as follows:
Total assets as of March 31, 2022 totaled ¥65,585 million, a decrease of ¥1,384 million compared to theprevious fiscal year-end.

Current Assets
Current assets as of March 31, 2022 totaled ¥45,162 million, a decrease of ¥32 million compared to theprevious fiscal year-end. Major factors were a decrease of ¥1,563 million in cash and deposits as a result of
repayment of short-term and long-term loans payable of ¥2,110 million, among other factors, and an increaseof ¥1,069 million in raw materials and supplies due mainly to soaring material prices.
Noncurrent Assets
Non-current assets as of March 31, 2022 totaled ¥20,422 million, a decrease of ¥1,352 million compared to theprevious fiscal year-end. Major factors were a decrease of ¥873 million in property, plant and equipment andintangible assets, due mainly to depreciation/amortization expenses, which were higher than the total value ofthe newly acquired assets, as well as the partial sale of the land of the Company’s Saitama Plant. Major factors
related to investments and other assets included a decrease of ¥363 million in investment securities as a resultof the sale of cross-shareholdings (two stocks) and the decline in market values.
Current Liabilities
Current liabilities as of March 31, 2022 totaled ¥15,544 million, a decrease of ¥4,297 million compared to theprevious fiscal year-end. Major factors included a decrease of ¥4,060 million in short-term loans payable andthe current portion of long-term loans payable as a result of repayments.
Noncurrent Liabilities
Non-current liabilities as of March 31, 2022 totaled ¥16,606 million, an increase of ¥820 million compared tothe previous fiscal year-end. Major factors included an increase of ¥1,950 million as a result of the refinancing
of long-term loans payable, and a decrease of ¥684 million in liability for retirement benefits reflecting adecrease in retirement benefit obligations.

6Net Assets
Net assets as of March 31, 2022 totaled ¥33,434 million, an increase of ¥2,092 million compared to theprevious fiscal year-end. Major factors under shareholders’ equity included an increase of ¥2,235 million inretained earnings as a result of the recognition of profit attributable to owners of parent of ¥2,330 million, andpurchases of treasury shares of ¥500 million in order to implement a flexible capital policy in response tochanges in the management environment. Major factors under accumulated other comprehensive income
included an increase of ¥513 million in foreign currency translation adjustments due to foreign exchange
fluctuations, and a decrease of ¥268 million in valuation difference on available-for-sale securities as a resultof the sale of cross-shareholdings (two stocks) and the decline in market values.
(2) Cash Flows
Cash and cash equivalents as of March 31, 2022 decreased by ¥1,563 million to ¥16,939 million compared tothe end of the previous fiscal year-end.

Cash flows from operating activities
Operating activities in the current fiscal year resulted in a net cash inflow of ¥1,417 million compared to the
net cash inflow of ¥4,094 million in the previous fiscal year.
The major factors behind the inflows were the recording of ¥3,516 million in profit before income taxes
and an increase of ¥1,207 million in depreciation expenses. The major factors behind the outflows were an
increase of ¥624 million in inventories due mainly to soaring material prices, a decrease of ¥581 million in
liability for retirement benefits as a result of the payment of retirement benefits, and an increase of ¥869
million in income taxes paid.
In the previous fiscal year, there was a cash inflow due to a decrease ¥3,092 million in notes and accounts
receivable-trade as reaction to demand related to the Tokyo Olympics and Paralympics.
Cash flows from investment activities
Net cash used in investment activities amounted to ¥193 million compared to a net cash outflow of ¥747
million in the previous fiscal year.
The major factor behind the outflows was the payment of ¥506 million for the purchases of property,
plant and equipment. The major factor behind the inflows was proceeds from sales of property, plant andequipment of ¥412 million as a result of the partial sale of the land of the Company’s Saitama Plant.
In the previous fiscal year, there was a cash outflow of ¥672 million due to purchases of property, plantand equipment.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥2,989 million compared to the net cash outflow of ¥1,060
million in the previous fiscal year.
The major factors behind the outflows were the repayment of long-term loans payable of ¥4,200 million,
purchases of treasury shares of ¥500 million in order to implement a flexible capital policy in response tochanges in the management environment, cash dividends paid of ¥306 million on the basis of continuation of
stable dividend payments. The major factor behind the inflows was proceeds from long-term loans payable of¥2,150 million as a result of the refinancing of long-term loans payable.
In the previous fiscal year, there were cash outflows due to a net decrease in long-term loans payable of¥500 million and cash dividends paid of ¥307 million.

7

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 2022.
(1) Recognition, Analysis and Discussion of Financial Position and Operating Results
The analysis of financial position for the current fiscal year is described in “2. Outline of the Operating
Results, etc.”• Business results
Gross profit
Gross profit for the year ended March 31, 2022 increased by ¥316 million from the previous fiscal year to¥17,267 million. The major factors behind this increase were as follows. The Lighting segment worked on
developing and launching on the market lighting fixtures with smart technologies such as control systemequipment using wireless and bidirectional communications as well as lighting fixtures that can provide
optimal lighting depending on the facility environment and application. In Japan, sales of LED road lamps andLED street lamps increased thanks to public infrastructure renewal demand from local governments and salesof lighting fixtures used in special environments remained robust as a result of the launch of new products
reflecting mainly demand from the private sector. Meanwhile, sales of conventional light sources decreased
from the previous fiscal year as the production and import and export of mercury lamps were terminated in
December 2020. Looking overseas, while sales in Southeast Asia increased year on year, sales were sluggish
in North America. On the other hand, in the Applied Optics and Environment segment, sales in the UV curingbusiness increased as a result of EB equipment related delivery, despite sluggish sales related to printing
equipment. In the environmental test equipment business, there were signs of a recovery in capital investment,
and sales of weathering test equipment increased. In the sterilization business, sales of our air circulation
sterilization unit using UV rays decreased as reaction to the high demand related to infectious disease during
the previous fiscal year, despite our active proposals for environmental hygiene improvements to facilities
used by a large and unspecified number of people. Sales in the information equipment business remained flat.
As a result, overall sales were ¥53,185 million, a decrease of ¥402 million from the previous consolidated
fiscal year. However, as we continued to make efforts to maintain and improve work efficiency andproductivity, cost of sales also decreased by ¥719 million from the previous consolidated fiscal year, resulting
in an increase in gross profit of ¥316 million year on year.
Operating income
Operating income for the year ended March 31, 2022 increased by ¥346 million from the previous fiscal yearto ¥3,287 million. The major factors behind this increase were a decrease in selling, general and administrative
expenses of ¥29 million from the previous fiscal year, on top of the increase in gross profit mentioned above.
Ordinary income
Ordinary income for the year ended March 31, 2022 increased by ¥270 million from the previous fiscal year to¥3,462 million. The major factors behind this increase were as follows. In terms of other income, on top of theincreases in gross profit and operating income mentioned above, foreign exchange gains of ¥44 million wererecorded in the current fiscal year due to foreign exchange fluctuations, while subsidy income of ¥155 million
was recorded in connection with COVID-19 in the previous fiscal year. In terms of other expenses, interest
expenses decreased by ¥20 million from the previous fiscal year as a result of the reduction of interest-bearing
debt.

8

Profit attributable to owners of parent
Profit attributable to owners of parent totaled ¥2,330 million in the year ended March 31, 2022, an increase of¥288 million compared to the previous fiscal year. The major factors behind this increase were as follows. In
terms of extraordinary income, on top of the increases in each profit mentioned above, proceeds from sales ofproperty, plant and equipment of ¥89 million were recorded as a result of the partial sale of the land of theCompany’s Saitama Plant, and gain on sale of investment securities of ¥20 million was recorded as a result of
the sale of cross-shareholdings (two stocks) in the current fiscal year. In terms of extraordinary loss, on theother hand, a loss on sale and retirement of non-current assets of ¥56 million was recorded in the current fiscal
year as a result of the demolition of No.1 Administration Office of the Company’s Saitama Plant, whilebusiness restructuring expenses of ¥187 million and impairment losses of ¥214 million were recorded in theprevious fiscal year. Business restructuring expenses included disposal of materials and restructuring costs at
the mercury lamp producing subsidiary upon the termination of production of mercury lamps. As explained forbusiness restructuring expenses, impairment losses included the impairment of the mercury lamp production
facilities due to the termination of mercury lamp production and the impairment related to the closing ofcorporate housing by the Company.
(2) Analysis and Discussion of Cash Flows and Information on Capital Resources and Liquidity of Funds
The analysis of cash flows for the current fiscal year is described in (2) Cash Flows under “2. Outline of the
Operating Results, etc.”• Capital resources and liquidity of funds
Funding methods and status
The Iwasaki Electric Group mainly uses its own funds internally earned through its business activities asworking capital, and also raises funds by borrowings from financial institutions. Group companies use intragroup loans from Iwasaki Electric Co., Ltd., in addition to loans from financial institutions, as appropriate
according to their cash plans, which are developed based on their respective operation policies and the
reduction of financing costs such as interest. As a result of the refinancing of long-term loans payable by theCompany during the current fiscal year, the balance of loans from financial institutions at the end of thecurrent fiscal year was ¥3,390 million, a decrease of ¥2,110 million from the end of the previous fiscal year.
Trends in capital demand
The Group has formulated the Medium-term Management Plan which started from the fiscal year ended
March 2022 (plan period: fiscal year ended March 2022 to fiscal year ending March 2026). Under our basic
policy of “Growth strategy and structural reform for the second foundation,” we are promoting initiatives for
new businesses and structural reforms of the Group in order to expand our business fields and realize newvalue for society. As part of such efforts, we will work on the “reinforcement and sophistication of mainstay
businesses,” “expansion of peripheral businesses,” and “provision of new value to society,” and promote thebuilding of a foundation for growth to realize solutions for existing markets and social and environmental
solutions by focusing on the provision of all kinds of added value, not just products. During the period of theMedium-term Management Plan, we plan to invest ¥5.0 billion in total in priority initiatives.
Capital investment and R&D expenses for the current fiscal year amounted to ¥600 million and ¥463
million, respectively. In addition, we purchased treasury shares of ¥500 million in order to implement a
flexible capital policy in response to changes in the management environment.
The Group announced the “Basic Policy on the Dividend Policy” on May 12, 2022. As for dividend
payments to shareholders, the basic policy is to maintain stable dividends, and dividends are determined inconsideration of the business performance for the current fiscal year and the business environment, while
taking into account internal reserves for future business development. Specifically, with a target consolidated
dividend payout ratio of no less than 30%, the Company will focus on the return of profit to shareholders morethan ever and pay dividends according to earnings on a continual and stable basis.
While the amount of dividends paid in the current fiscal year was ¥306 million (consolidated dividend
payout ratio of 14.9%), the Company plans to pay dividends of ¥964 million (consolidated dividend payout
9ratio of 41.5%) for the next fiscal year.
The Company secures cash on hand at a level of sales revenues for one to two months and also has
concluded credit line agreements with financial institutions to maintain liquidity in order to respond to urgent
cash demand and changes in the economic environment. The Company will continue to use cash on hand forinvestments for medium- to long-term growth, returns to shareholders, and reduction of interest-bearing debt
in the future. While paying close attention to the situation of the COVID-19 pandemic, we will securesufficient cash on hand in consideration of the need to strike a balance, such as enhancing the return of profit
to shareholders while ensuring stable financial position.
The balance of cash and cash equivalents as of the end of the current fiscal year decreased by ¥1,563
million to ¥16,939 million.
(3) Significant Accounting Estimates and Assumptions Used for the Estimation
The consolidated financial statements of the Iwasaki Electric Group are prepared in accordance with thegenerally accepted accounting principles of Japan. Significant accounting estimates used in preparing these
consolidated financial statements and the assumptions used in those estimates are described in “Notes toConsolidated Financial Statements, 2. Significant Accounting Estimates.”
For accounting estimates associated with the spread of COVID-19, please refer to “Notes to Consolidated
Financial Statements, 5. Additional Information.”

4. Important Business Agreements
Not Applicable.

10Consolidated Balance SheetAt March 31, 2022 and 2021
ASSETS
Millions of yen
March 31, 2022
Current assets
Cash and deposits (Notes 25 and 28)
Notes and accounts receivable - trade (Note 28)
Notes and accounts receivable - trade, andcontract assets (Note 28)
Electronically recorded monetary claims operating (Note 28)
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets¥

16,939–Noncurrent assets
Property, plant and equipment
Buildings and structures (Note 14)
Machinery, equipment and vehicles (Note14)
Tools, furniture and fixtures
Land (Notes 14 and 15)
Leased assets (Note 26)
Construction in progress
Accumulated depreciation
Property, plant and equipment, net
Intangible assets
Software
Other
Intangible assets, net
Investments and other assets
Investment securities (Notes 6, 13 and 28)
Deferred tax assets (Note 9)
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets¥

See accompanying notes to consolidated financial statements.

11

March 31, 2021¥

18,503
12,23812,719

–

1,986

1,897

5,647
1,671
5,560
680
(42)
45,162

6,085
1,451
4,490
566
(37)
45,195

15,747

15,68914,28914,338

7,426
8,941
81
120
46,606(31,562)
15,043

8,025
9,248
117
89
47,507(31,726)
15,781

196
136
332

283
186
469

4,247
265
546
(14)
5,045
20,42265,585

4,611
432
497
(15)
5,524
21,774
66,970¥Consolidated Balance SheetAt March 31, 2022 and 2021
LIABILITIES AND NET ASSETS
Millions of yen
March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade (Note 28)
Electronically recorded obligations - operating (Note 28)
Short-term loans payable (Notes 7 and 28)
Current portion of long-term loans payable (Notes 7, 14
and 28)
Income taxes payable
Accrued consumption taxes
Provision for employees’ bonuses
Provision for repair claims
Other
Total current liabilities¥

Noncurrent liabilities
Long-term loans payable (Notes 7, 14 and 28)
Deferred tax liabilities (Note 9)
Deferred tax liabilities for land revaluation (Note 15)
Liability for retirement benefits (Note 27)
Asset retirement obligations (Note 8)
Provision for share-based remuneration for directors (andother officers)
Other
Total noncurrent liabilities
Total liabilities

6,002
5,273
640

March 31, 2021

¥

5,808
5,155
700

200

4,200

804
267
731
62
1,562
15,544

537
350
756
111
2,222
19,842

2,550
9
1,024
11,465
136

600
182
1,118
12,150
134

86

69

1,332
16,60632,151

1,530
15,78535,628

Net assets (Note 24)
Shareholders’ equity (Note 11)
Common stock:
Authorized: 23,900,000 shares in 2021 and 2022
Issued: 7,821,950 shares in 2021 and 2022
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

8,640

8,640

2,069
20,498(823)
30,384

2,069
18,262(323)
28,649

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land (Note 15)
Foreign currency translation adjustments
Retirement benefits liability adjustments
Total accumulated other comprehensive income

1,623
2,136
(1)
(726)
3,031

1,891
2,348
(515)
(1,048)2,675

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

17
33,43465,58516
31,342
66,970¥See accompanying notes to consolidated financial statements.

12¥

Consolidated Statement of Income
Years ended March 31, 2022 and 2021
Millions of yen
Year ended
Year ended
March 31, 2022
March 31, 2021¥
53,185 ¥53,58735,917
36,636
17,267
16,95013,97914,0093,287
2,941

Net sales
Cost of sales (Note 17)
Gross profit
Selling, general and administrative expenses (Note 18)
Operating income
Other income (Note 19)
Interest income
Dividend income
Rental income
Dividend income of insurance
Foreign exchange gains
Share of profit of entities accounted for using the equity method
Subsidy income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Other
Total other income

3
109
10
21
44
–
–
89
20
64
364

4
101
10
24
–
2
155
6
–
61
367

Other expenses (Note 20)
Interest expenses
Foreign exchange losses
Share of loss of entities accounted for using equity method
Settlement package
Loss on sale and retirement of noncurrent assets
Business restructuring expenses (Note 21)
Impairment losses (Note 22)
Other
Total other expenses
Profit before income taxes

67
–
4
–
56
–
–
7
135
3,516

87
1
–
15
3
187
214
6
516
2,792

Income taxes (Note 9)
Income taxes - current
Income taxes - deferred
Total income taxes

1,114
72
1,186

923
(173)
750

ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

2,329
(0)
2,330

2,041
0
2,041

¥

See accompanying notes to consolidated financial statements.

13¥

Consolidated Statement of Comprehensive Income
Years ended March 31, 2022 and 2021
Millions of yen

ProfitOther comprehensive income (Note 23)
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Retirement benefits liability adjustments
Share of other comprehensive income of affiliates accounted for by equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
See accompanying notes to consolidated financial statements.

14

Year ended
March 31, 2022¥
2,329

Year ended
March 31, 2021
¥
2,041

(268)
482
322
31
567
2,897

345
(150)
423
14
633
2,675

¥

2,898
(0)

¥

2,674
0

Consolidated Statement of Changes in Net Assets
Years ended March 31, 2022 and 2021

Balance at April 1, 2021
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes during period
Balance at March 31, 2022

Balance at April 1, 2021
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes during period
Balance at March 31, 2022

Balance at April 1, 2020
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes during period
Balance at March 31, 2021

Balance at April 1, 2020
Changes during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Reversal of revaluation reserve for land
Net changes of items other thanshareholders’ equity
Total changes during period
Balance at March 31, 2021

Millions of yen
Shareholders’ equity

Number ofshares ofcommon stock
issuedCommonstock

7,821,950
–
–
–
–
–

¥8,640–––––¥2,069–––––¥18,262
–
(306)
2,330
–
211

–

–

–

–

–

–

–
7,821,950–¥8,640–2,235¥2,069¥20,498
Millions of yen
Accumulated other comprehensive income(500)(¥823)

1,735¥30,384

CapitalsurplusRetainedearnings

Treasurystock(¥323)
–
–
–
(500)
–

Total
shareholders’equity¥28,649
–
(306)
2,330
(500)
211

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total
net assets(¥1,048)–––––¥2,675
–
–
–
–
–

¥16
–
–
–
–
–

¥31,342
–
(306)
2,330
(500)
211

513

322

355

1

356

513
(¥1)

322
(¥726)

355¥3,031

1
¥17

2,092
¥33,434

Valuationdifference on
available-forsale securities

Revaluation
reserve forland

Foreign
Retirement
currency
benefits
translation
liability
adjustments adjustments¥1,891–––––¥2,348–––––(¥515)
–
–
–
–
–

(268)

(211)

(268)
¥1,623(211)¥2,136

Millions of yen
Shareholders’ equity

Number ofshares ofcommon stock
issuedCommonstock

7,821,950
–
–
–
–
–
–

¥8,640––––––¥2,069––––––¥16,466
–
(307)
2,041
–
–
61

–

–

–

–

–

–

–
7,821,950–¥8,640–1,796¥2,069¥18,262
Millions of yen
Accumulated other comprehensive income(24)(¥323)

1,771¥28,649

Capitalsurplus(¥298)
–
–
–
(32)
7
–

Total
shareholders’equity¥26,877
–
(307)
2,041
(32)
7
61

Noncontrollinginterests

Total
net assets(¥1,472)
–
–
–
–
–
–

¥2,104
–
–
–
–
–
–

¥17
–
–
–
–
–
–

¥28,999
–
(307)
2,041
(32)
7
61

(136)

423

571

(0)

570

(136)
(¥515)

423(¥1,048)571¥2,675

(0)
¥16

2,342
¥31,342

Revaluation
reserve forland¥1,546––––––¥2,410––––––(¥378)
–
–
–
–
–
–

345

(61)

345
¥1,891(61)¥2,348

15

Treasury
stock

Total
accumulated
othercomprehensive
incomeValuationdifference on
available-forsale securities

See accompanying notes to consolidated financial statements.

Retainedearnings

Foreign
Retirement
currency
benefits
translation
liability
adjustments adjustments

Consolidated Statement of Cash Flows
Years ended March 31, 2022 and 2021
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
Impairment losses
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
Purchases of treasury shares
Cash dividends paid
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year (Note 25)

See accompanying notes to consolidated financial statements.

16

Year ended
March 31, 2022

Year ended
March 31, 2021

¥

¥

¥

3,516

2,792

1,207
–
(25)
0
(581)
(113)
67
(19)
(33)
4
(20)

1,422
214
(38)
(2)
(842)
(105)
87
(3)
(3)
(2)
–

(471)
(624)
247
(904)
2,249
112
(75)
(869)
1,417

3,092
1,183
(2,459)
26
5,361
105
(88)
(1,284)
4,094

(506)
412
(81)
(60)
91
(48)
(193)

(672)
13
(54)
(39)
–
5
(747)

(60)
2,150
(4,200)
(500)
(306)
(72)
(2,989)201(1,563)18,503
16,939

(130)
400
(900)
(32)
(307)
(91)
(1,060)(42)
2,243
16,26018,503¥

Notes to Consolidated Financial Statements
At March 31, 2022 and 2021

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, 2021 to the 2022
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, 2022, the numbers of consolidated subsidiaries and affiliates accounted for by the equity
method were 22 and 7, 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.
(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.

17(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, which are not classified as nonmarketable available-for-sale are carried atfair market value. The difference between the acquisition cost and the carrying value of available-for-salesecurities is recognized in valuation difference on available-for-sale securities, net of related tax effects, in
net assets. The cost of available-for-sale securities sold is calculated based by the moving average method.
Nonmarketable available-for-sale-securities without a fair market value, are stated at cost determined by themoving average method. Investments in limited liability partnerships and equivalent partnerships (which areconsidered Securities pursuant to Article 2, paragraph 2 of the Japanese Financial Instruments and Exchange Act)are stated under the equity method and based on the latest financial statements available on the reportable dates
specified in the respective partnership agreements.
(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 sales is basically calculated by an amortizable amount based on the estimatedsales volume within 3 years (not less than an amortizable amount based on a straight-line method over theremaining valid sales period).
Amortization of software for internal use is calculated by the straight-line method over a useful life of 5 years.

18

(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.
(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.
(n) Provision for repair claims
Provision for repair claims is provided for the amount recognized as of the end of the current fiscal year for freeinspections, and product exchanges, etc. due to product defects.
(o) Provision for share-based remuneration for directors (and other officers)
To prepare for the issuance of the Company’s shares by a trust related to the share compensation system fordirectors (excluding outside directors), the estimated value of such shares to be issued is provided according to thepoints assigned to the directors based on the Regulations for Share Issuance to Officers.
(p) Retirement benefitsa) Method of attributing the estimated retirement benefit obligation to periods
The straight-line method is used to attribute the estimated amount of retirement benefits to periods up to thecurrent fiscal year.
b) Amortization of actuarial gain or loss and prior service costs
Prior service costs are amortized as incurred by the straight-line method over a period not exceeding the
expected average remaining service years of employees (13 years).
Actuarial gain or loss is amortized from the following fiscal year after recognition using the straight-line
method over a period not exceeding the expected average remaining service years of employees (12 years).
c) Adoption of simplified method for small enterprises, etc.
Certain consolidated subsidiaries adopt a simplified method in calculating the retirement benefit obligation andretirement benefit expenses. Specifically, as for the lump-sum payment plan, the amount of retirement benefits
payable assuming the voluntary retirement of all employees at fiscal year-end is assumed to be equal toretirement benefit obligations. With regard to the corporate pension plan, the latest amount of actuarial
obligations under pension accounting is assumed to be equal to the retirement benefit obligations.
(q) Accounting for significant revenues and expenses
Based on the following 5-step approach, the Group recognizes revenue when the promised goods or services aretransferred to a customer and a customer gains the control of such goods or services.
Step 1: Identify contract with the customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when (or as) a performance obligation is satisfied.
The Group’s main businesses are the manufacturing and sales of a wide range of light sources, such as lamps
and luminaires, and the manufacturing and sales of applied optics products and environmental products. With19

respect to sales of these products, the Company primarily recognized upon shipment or delivery, depending uponwhen a customer obtains control of these products. In the case of domestic sales, the period from the time of
shipment to the time when control of the products is transferred to customers is a short period. Therefore, theCompany recognizes revenue at the time of shipment by applying the treatment of shipment standards, etc. set
forth in Paragraph 98 of the Implementation Guidance on Accounting Standard for Revenue Recognition.
Revenue is calculated to the extent that there is a high probability that there will be no material reversal ofrevenue after deducting returns, discounts, rebates, etc. from the consideration promised in the contract with acustomer. The promised consideration is recovered mostly within one year from the time when performanceobligations are satisfied, and does not include significant financial factors.
As for performance obligations that are satisfied over a certain period of time except for construction
contracts for an extremely short period, the progress in the fulfillment of the performance obligations is estimatedand revenue over a certain period of time based on the progress is recognized. As for performance obligations thatare satisfied at one time, revenue is recognized upon completion of the construction.
The method of estimating the progress in fulfillment of performance obligations is calculated by the ratio of
actual costs to estimated total costs (input method). In cases where the progress of performance obligations cannot
be reasonably estimated at the initial stage of the contract, the cost recovery method (alternative method) is
applied.

20

2. Significant Accounting Estimates
Recognition of impairment of tangible and intangible non-current assets(1) Amounts recorded in the consolidated financial statements for the current fiscal year

Tangible and intangible non-current assets
Those in the Lighting and the Applied Optics and Environment
segments of the Company
Impairment loss (excluding assets to be disposed of and idle
assets)Millions of yen
Year ended March 31,
Year ended March 31,
2022
2021
¥15,376¥16,250¥12,832¥13,659––(2) Information on the significant accounting estimates for the identified items(i) Calculation method
The Iwasaki Electric Group categorizes its assets into groups corresponding to business segment where
they are used. When withdrawal from a business associated with a group or any other similar transaction
is decided, the assets to be disposed of and idle assets related to that transaction will be transferred to a
separate group formed for each transaction.
In the current fiscal year, the Company identified signs of impairment in the asset group in theLighting segment and Applied Optics and Environment segment of the Company (¥12,832 million) ,including tangible and intangible fixed assets, due to the market values of some land having declined
significantly. However, in accordance with the Company’s criteria for recognizing impairment loss, no
impairment loss was recorded for this asset group because the total amount of undiscounted future cash
flows from the asset group exceeded its carrying amount.
Future cash flows are estimated based on the Company’s profit and loss (“P&L”) plan approved by
the Board of Directors for the following year and the growth rate estimated within the long-term average
growth rate for the second and subsequent years.
(ii) Major assumptions
Major assumptions used for estimation of the future cash flow estimates are sales by business segment
based on the demand forecast and gross profit margin that underlie the P&L plan, and the growth rate
after the P&L plan.
(iii) Impact on the next fiscal year
These major assumptions (sales by business segment, gross profit margin, and growth rate after the P&Lplan) are subject to a high level of uncertainty. In the event that they fluctuate in the future due to
unexpected economic conditions and other factors, the consolidated financial statements for the next
fiscal year may be affected.

3. Changes in Accounting Policies(Application of Accounting Standard for Revenue Recognition, etc.)“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; hereinafter the“Revenue Recognition Standard”), etc. have been adopted from the beginning of the current fiscal year. In linewith this adoption, revenue is recognized when the control of promised goods or services is transferred to acustomer at an amount it expects to receive in return for those goods or services.
In the past, the percentage-of-completion method had been applied to construction contracts in which theoutcome of the part completed can be estimated reliably and the completed contract method had been applied toother construction contracts. In line with this adoption, however, as for performance obligations that are satisfied
over a certain period of time except for construction contracts for an extremely short period, it has been changed
to the method where the progress in the fulfillment of the performance obligations is estimated and revenue over acertain period of time based on the progress is recognized. As for performance obligations that are satisfied at one
time, revenue is recognized upon completion of the contract.
The method of estimating the progress in fulfillment of performance obligations is calculated by the ratio of21

actual costs to estimated total costs (input method). In cases where the progress of performance obligations cannot
be reasonably estimated at the initial stage of the contract, the cost recovery method (alternative method) is
applied.
In adopting the Revenue Recognition Standard, etc. in accordance with the transitional treatment set forth in
the proviso of Section 84 of the Revenue Recognition Standard, the cumulative impact of retrospective applicationof the new accounting policies to prior fiscal year is adjusted to retained earnings at the beginning of the current
fiscal year, with the new accounting policies applied from the beginning balance. However, by adopting themethod prescribed in Section 86 of the Revenue Recognition Standard, the Company has not adopted the new
accounting policy retroactively to the contracts almost all of whose revenue amounts were recognized incompliance with the conventional method before the beginning of the current fiscal year. In addition, applying themethod prescribed in the note (1) for Section 86 of the Revenue Recognition Standard, the contract conditions
after modifications are reflected. The cumulative impact of these changes is added to or deducted from retained
earnings at the beginning of the current fiscal year.
“Notes and accounts receivable - trade,” which had been included in “current assets” in the balance sheet ofthe previous fiscal year, has been included in “Notes and accounts receivable - trade, and contract assets” from thecurrent fiscal year. However, in accordance with transitional treatment set forth in Section 89-2 of the Revenue
Recognition Standard, the consolidated financial statements for the previous fiscal year have not been reclassified
to reflect the change in presentation.
As a result, compared to before the adoption of the Revenue Recognition Standard, etc., notes and accounts
receivable - trade, and contract assets increased by ¥73 million and work in process decreased by ¥71 million in
the consolidated balance sheet for the current fiscal year. Similarly, in the consolidated statement of income for thecurrent fiscal year, net sales increased by ¥73 million, cost of sales increased by ¥71 million, and operating
income, ordinary income, and profit before income taxes increased by ¥2 million, respectively.
In the consolidated statement of cash flows for the current fiscal year, profit before income taxes andinventories increased by ¥2 million and ¥71 million, respectively, while notes and accounts receivable – tradedecreased by ¥73 million.
There has been no impact on the balance of retained earnings at the beginning of period in the consolidated
statement of changes in net assets for the current fiscal year.
Net assets per share and net income per share for the current fiscal year increased by ¥0.24, respectively.
However, in accordance with transitional treatment set forth in Section 89-3 of the Revenue Recognition
Standard, the Notes on Revenue Recognition for the previous fiscal year have not been disclosed.
(Application of Accounting Standard for Fair Value Measurement, etc.)“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019; hereinafter, the “Fair
Value Measurement Standard”), etc. have been adopted from the beginning of the current fiscal year, and inaccordance with the transitional treatment set forth in Section 19 of the Fair Value Measurement Standard andSection 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), theCompany has applied new accounting policies prescribed by Fair Value Measurement Standard, etc. into the
future. There has been no impact of this adoption on the consolidated financial statements.
In addition, the Company has disclosed notes on the breakdown of financial instruments by fair value level in“Notes to Consolidated Financial Statements, 28. Financial Instruments.” However, the notes did not include
comparative information for the previous fiscal year, in accordance with the transitional treatment set forth in
Section 7-4 of the “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ
Implementation Guidance No.19, July 4, 2019).

22

4. Accounting Standards Issued But Not Yet Effective•
Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System (Practical Solution
No. 42, August 12, 2021, Accounting Standards Board of Japan)(1) Outline
In response to the “Partial Amendment of the Income Tax Act, etc.” (Act No. 8 of 2020) enacted on March
27, 2020, which stipulates the review of the consolidated taxation system and the transition to the group tax
sharing system, the Accounting Standards Board of Japan (ASBJ) announced this Practical Solution to clarify
the accounting treatment and disclosure procedures for corporate and local corporate taxes and tax effectaccounting in the case of applying the group tax sharing system.
(2) Scheduled date of adoption
The Company and its domestic subsidiaries will adopt this standard from the fiscal year starting on April 1,
2022.
(3) Impact of adopting the accounting standard and guidance
The impact of adopting the “Practical Solution on the Accounting and Disclosure Under the Group Tax
Sharing System” on the consolidated financial statements is undetermined at the present time.

5. Additional Information
Accounting estimates associated with the spread of the novel coronavirus
The effects of the novel coronavirus pandemic are expected to extend to the next fiscal year. However, assumingthat there will be no significant decline in its business performance, the Iwasaki Electric Group estimates therecoverability of deferred tax assets, impairment accounting for non-current assets, and other accounting
estimates.
The assumptions used for these estimates are highly uncertain. If the impact of the novel coronavirus
infection is prolonged or becomes more serious in the future, it may affect the Group’s business performance andfinancial position for the next year and beyond.

23

6. Securities and Investment Securities
Information regarding securities and investment securities classified as available-for-sale securities with fairmarket value at March 31, 2022 and 2021 is summarized as follows:
Millions of yen
March 31, 2022
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, 2021
Unrealized
gain (loss)

Acquisition
cost

Carrying amount(Fair market value)

Unrealized
gain (loss)¥1,016¥3,367¥2,350¥1,081¥3,811¥2,730

–
–
–
–
1,016

–
–
–
–
3,367

–
–
–
–
2,350

–
–
–
–
1,081

–
–
–
–
3,811

–
–
–
–
2,730

58

45

(13)

55

43

(11)

–
–
–
–
58
¥1,075––––45¥3,413

–
–
–
–
(13)
¥2,337––––55¥1,136––––43¥3,855

–
–
–
–
(11)
¥2,718Notes: 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, 2022 and 2021, 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.

24

Information regarding the sales of investment securities classified as available-for-sale securities with fair market
value for the year ended March 31, 2022 and the year ended March 31, 2021 is summarized as follows:
Millions of yen
March 31, 2022

Equity securities
Debt securities
Government bonds
Corporation bonds
Other
Other
Total

March 31, 2021

Proceeds
from salesGrossrealized gain

Grossrealized loss

Proceeds
from salesGrossrealized gain

Grossrealized loss

¥91

¥20

–

–

–

–

–
–
–
–
¥91

–
–
–
–
¥20

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

7. 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 ¥640 million and ¥700 million atMarch 31, 2022 and 2021, respectively.
Long-term loans, lease obligations and deposits received classified as other long-term liabilities with interest at
March 31, 2022 and 2021 consisted of the following:
Millions of yen
March 31, 2022

March 31, 2021

¥2,750¥4,800

(200)
2,550
50
(34)
15
1,244
¥3,810(4,200)
600
109
(72)
36
1,409
¥2,046Loans, principally from banks, maturing in installments through 2025with an average interest rate of 0.91%
Less current portion of loans
Net
Lease obligations
Less current portion of lease obligations
Net
Deposits received with an average interest rate of 2.19%
Total

The annual maturities of long-term loans and lease obligations subsequent to March 31, 2022 are summarized
as follows:Year ending March 31,
2024
2025
2026
2027 and thereafterLong-term loans

Lease obligations

Millions of yen

Millions of yen–¥2,150
400
–

¥5
2
1
1

8. 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, 2021 and March 31, 2022 accounted for less than 1% of total liabilities and net assets at the beginningand the end of the fiscal year.

25

9. 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, 2022 and 2021 were as follows:
Millions of yen
March 31, 2022

March 31, 2021

¥220
685
3,273
1,113
5,293
(684)

¥228
683
3,396
1,006
5,315
(626)

(3,507)(3,470)(4,191)
1,101(4,096)
1,219

(715)
(130)
(845)
¥255

(823)
(145)
(969)
¥249

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

At March 31, 2022

Tax loss carryforwards*1
Valuation allowance
Deferred tax assets

Due after 2
Due after 4
Due after 1
Due after 3
Due in 1 year
years and inyears and in Due after 5
year and in 2
years and inor 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)
¥15
¥26
¥–
¥0
¥150
¥492
–
(15)
(26)
(0)
(150)
(491)
¥–

¥–

¥–

¥–

¥–

¥1

Total
(Millions of
yen)
¥685
(684)
¥1*2

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

At March 31, 2021

Tax loss carryforwards*3

Due after 2
Due after 4
Due after 1
Due after 3
Due in 1 year
years and inyears and in Due after 5
year and in 2
years and in
Total
or less
3 years or
5 years or
years
years or less
4 years or(Millions of(Millions of
less
less
(Millions of(Millions ofless (Millions
yen)
yen)
(Millions of(Millions of
yen)
yen)
of yen)
yen)
yen)
¥107
¥19
¥29
¥–
¥67
¥458
¥683

Valuation allowance

(107)

(19)

(29)

–

(67)

(401)

(626)

Deferred tax assets

¥–

¥–

¥–

¥–

¥–

¥57

¥57*4

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

26

(2) The reconciliation of the Japanese statutory tax rate and the effective tax rate applicable to the Company forthe years ended March 31, 2022 and 2021 was as follows:

Japanese statutory tax rate
(Adjustments)
Permanent non-deductible differences, including entertainment, etc.
Permanent non-taxable differences, including dividend income
Inhabitants taxes per capita, etc.
Changes in valuation reserve
Special deduction amount for income taxes
Differences in tax rate from overseas subsidiaries
Other
Effective tax rate

Year ended
March 31, 2022
30.6%

Year ended
March 31, 2021
30.6%

0.6
(0.2)
1.8
2.7
(4.1)
0.3
2.0
33.7

0.9
(0.2)
2.2
(1.4)
(5.5)
(2.6)
2.9
26.9

10. Rental Properties
For the years ended March 31, 2022 and 2021
No description is provided because the total amount of rental properties is immaterial.
11. 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.
12. Receivables, Contract Assets and Contract Liabilities from Contract with Customers
Receivables, Contract Assets and Contract Liabilities from Contract with Customers are described in “Notes toConsolidated Financial Statements, 34. Revenue Recognition, (3) Relationship between fulfillment of
performance obligations based on contracts with customers and cash flows arising from such contracts, amount ofrevenue estimated to be recognized after the next fiscal year from the contracts with customers effective as of theend of the current fiscal year and the timing of recognition, (i) Balance of contract assets and contract liabilities.”
13. Investments in Affiliates
Investments in affiliates at March 31, 2022 and 2021 amounted to ¥546 million and ¥522 million, respectively,
and are accounted for principally by the equity method.

27

14. Pledged Assets and Secured Liabilities
A summary of assets pledged as collateral and secured liabilities at March 31, 2022 and 2021 is presented below:
Millions of yen
March 31, 2022

March 31, 2021

Buildings and structures–¥2,002

Machinery, equipment and vehicles

–

106

Land

–

2,579

Total

–

¥4,688Current portion of long-term loans
payable–¥2,480Long-term loans payable

–

119

Total

–

¥2,599Pledged assets

Secured liabilities

In the previous fiscal year, the above assets included a revolving mortgage related to banking transactions(maximum amount was ¥1,000 million), but in the current fiscal year, all the revolving mortgages as collateral
were released, so there were no assets pledged as collateral and no corresponding obligations.

15. 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, 2022 and 2021 of land
revalued pursuant to Article 16 of the law were ¥1,916 million and ¥2,062 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.
16. Revenue from Contracts with Customers
As for net sales, revenue from contracts with customers and other revenue are not stated separately. The amount ofrevenue from contracts with customers is described in “Notes to Consolidated Financial Statements, 34. Revenue
Recognition, (1) Breakdown of revenue from contracts with customers.”
17. Cost of Sales
Loss on valuation of inventories of ¥5 million and ¥176 million, net of the amount of the reversal, was included incost of sales for the years ended March 31, 2022 and 2021, respectively after writing down the carrying values toreflect declines in profitability.

28

18. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2022 and 2021
were as follows. The figures in the following table have been offset against reversals.
Millions of yen
Year ended
March 31, 2022

Year ended
March 31, 2021

Salaries¥5,133¥5,165

Packing and transportation costs

1,648

1,709

Provision for employees’ retirement benefits

657

685

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

425

427

(3)

0

Research and development expenses included in selling, general and administrative expenses for the years ended
March 31, 2022 and 2021 amounted to ¥463 million and ¥451 million, respectively.

19. Other Income
Gain on sales of noncurrent assets for the years ended March 31, 2022 and 2021 were summarized as follows:
Millions of yen
Year ended
March 31, 2022

Year ended
March 31, 2021

¥23

¥5

Tools, furniture and fixtures



0

Land

66



Total

¥89

¥6

Machinery, equipment and vehicles

20. Other Expenses
Loss on sales and retirement of noncurrent assets for the years ended March 31, 2022 and 2021 were summarized
as follows:
Millions of yen
Year ended
March 31, 2022

Year ended
March 31, 2021

¥11

¥0

Machinery, equipment and vehicles

00Tools, furniture and fixtures

0

0

Other

43

1

Total

¥56

¥3

Buildings and structures29

21. Business Restructuring Expenses
Previous fiscal year (April 1, 2020 to March 31, 2021)
In the current fiscal year, the Group implemented business structural reforms upon the termination of mercury
lamp production in the Lighting segment. The costs were recorded as business restructuring expenses.
They included special severance payments of ¥135 million, inventory valuation losses of ¥47 million, andother costs of ¥4 million.
22. Impairment Loss
Previous fiscal year (April 1, 2020 to March 31, 2021)
In the current fiscal year, the Group recorded impairment losses for the following asset groups.
Purpose
Mercury lamp production
facilities

Company housing for
employees

Location

Dalian, China

Gyoda City,
Saitama Prefecture

Type

Impairment loss
(million yen)

Buildings and structures¥1

Machinery, equipment and vehicles

46

Tools, furniture and fixtures

2

Buildings and structures

75

Land

89

Total

¥214

The Iwasaki Electric Group categorizes its assets into groups corresponding to business units where they areused. When withdrawal from a business associated with a group or any other similar transaction is decided, theassets to be disposed of and idle assets related to that transaction will be transferred to a separate group formed foreach transaction.
In the Lighting segment, the book values of mercury lamp production facilities and some other assets at
Dalian Iwasaki Electric Co., Ltd., the Group’s production site, have been reduced to their recoverable values upon
the termination of the mercury lamp production.
The book value of the company housing for employees was reduced to the recoverable amount because thehousing was closed.
The recoverable value for land is calculated based on the net sale price. The recoverable value for otherassets is calculated based on the value in use. The value in use is set to zero because future cash flows cannot be
expected.

30

23. Statement of Comprehensive Income
Reclassification adjustments relating to other comprehensive income for the years ended March 31, 2022 and2021 were as follows:
Millions of yen
Year ended
March 31, 2022
Valuation difference on available-for-sale securities:
Amount arising during the year
Reclassification adjustments for gain (loss) included in profit
Total
Foreign currency translation adjustments:
Amount arising during the year
Reclassification adjustments for gain (loss) included in profit
Total
Retirement benefits liability adjustments:
Amount arising during the year
Reclassification adjustments for gain (loss) included in profit
Total
Share of other comprehensive income of affiliates accounted for by equity
method:Amount arising during the year
Total amount before income taxes
Income taxes
Total other comprehensive income

Year ended
March 31, 2021¥(356)
(20)
(377)

¥490
–
490

482
–
482

(150)
–
(150)

103
177
281

207
216
423

31
417
149
¥567

14
778
(145)
¥633

Tax effects relating to other comprehensive income for the years ended March 31, 2022 and 2021 were as follows:
Millions of yen
March 31, 2022
Valuation difference on available-for-sale securities
Before tax effectTax effect
After tax effectForeign currency translation adjustments
Before tax effectTax effect
After tax effect
Retirement benefits liability adjustments
Before tax effectTax effect
After tax effect
Share of other comprehensive income of affiliates accounted for by equity
methodBefore tax effectTax effect
After tax effectTotal other comprehensive income
Before tax effectTax effect
After tax effect31

March 31, 2021¥(377)
108
(268)

¥490
(145)
345

482
–
482

(150)
–
(150)

281
41
322

423
–
423

31
–
31

14
–
14

417
149
¥567

778
(145)
¥633

24. 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, 2022
Number of shares (Thousand)April 1, 2021

Increase

Decrease

March 31, 2022

Type of issued shares
Common stock

7,821

–

–

7,821

Total

7,821

–

–

7,821

234

245

–

480

234

245

–

480

Type of treasury stock
Common stock*1, *2
Total*1. The increase of 245 thousand common shares in treasury shares was due to an increase of 245 thousand shares by buybacks
based on the Board’s resolutions, and an increase of 0 thousand shares by the repurchase of fractional shares.
*2. The number of treasury shares as of March 31, 2022 includes 75 thousand shares held by the Board Benefit Trust (BBT).

For the year ended March 31, 2021
Number of shares (Thousand)April 1, 2020

Increase

Decrease

March 31, 2021

Type of issued shares
Common stock

7,821

–

–

7,821

Total

7,821

–

–

7,821

214

25

4

234

214

25

4

234

Type of treasury stock
Common stock*1, *2, *3
Total*1. The increase of 25 thousand common shares in treasury shares was due to an increase of 25 thousand shares by buybacks basedon the Board’s resolutions, and an increase of 0 thousand shares by the repurchase of fractional shares.
*2. The decrease of 4 thousand shares of common treasury shares is due to the distribution from the Board Benefit Trust (BBT).
*3. The number of treasury shares as of March 31, 2021 includes 75 thousand shares held by the Board Benefit Trust (BBT).

(b) Matters related to dividends
1. Amount of dividends
For the year ended March 31, 2022
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 25, 2021

Commonstock

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

Cut-off date

Effective date

¥306

¥40

March 31, 2021

June 28, 2021

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, 2021
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 25, 2020

Commonstock

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

Cut-off date

Effective date

¥307

¥40

March 31, 2020

June 26, 2020

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

32

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, 2022
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 28, 2022

Commonstock

Total dividends
paid (Millionsof yen)Source ofdividends

Amount ofdividends per
share (Yen)

Cut-off date

Effective
date

¥964

Retainedearnings¥130

March 31, 2022

June 28, 2022

Note: “Total dividends paid” include dividends of ¥9 million corresponding to shares held by the Board Benefit Trust (BBT).

For the year ended March 31, 2021
(Resolution)

Type

Ordinary General
Meeting of Shareholders
on June 25, 2021

Commonstock

Total dividends
paid (Millionsof yen)Source ofdividends

Amount ofdividends per
share (Yen)

Cut-off date

Effective
date

¥306

Retainedearnings¥40

March 31, 2021

June 28, 2021

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

25. Supplemental Cash Flow Information
A reconciliation of cash and cash equivalents at March 31, 2022 and 2021 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, 2022 March 31, 2021
¥16,939¥18,503¥16,939¥18,503

26. 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.

33

27. 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, 2022
March 31, 2021
¥15,920¥15,096
658
636
(80)
115
(1,071)(1,017)
–
1,095
(9)
(5)
¥15,417¥15,920

Retirement benefit obligations at April 1
Service costs
Actuarial loss
Retirement benefits paid
Change due to personnel transfer
OthersRetirement benefit obligations at March 31(2) The changes in plan assets
Millions of yen
Year ended
Year ended
March 31, 2022
March 31, 2021
¥4,379¥3,339
92
58
22
323
447
789
(369)
(384)
–
259
(9)
(5)
¥4,564¥4,379Plan assets at April 1
Expected return on plan assets
Actuarial gainContributions by the Company
Retirement benefits paid
Change due to personnel transfer
OthersPlan 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

34

Millions of yen
March 31, 2022
March 31, 2021
¥5,986¥6,187(4,564)(4,379)
1,422
1,807
9,431
9,733
10,853
11,54010,853
11,540¥10,853¥11,540

(4) The components of retirement benefit expenses
Millions of yen
Year ended
Year ended
March 31, 2022
March 31, 2021
¥658
¥636
(92)
(58)
174
213
2
2
¥743
¥794

Service costs
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service costs
Retirement benefit expenses(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, 2022
March 31, 2021
¥2
¥2
278
421
¥281
¥423

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, 2022
March 31, 2021
¥1
¥4
766
1,044
¥767
¥1,048Unrecognized 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, 2022
53%
21
25
1
100%

General accounts
Stocks
Bonds
OthersTotal

March 31, 2021
49%
24
25
2
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, 2022
0.0%
2.1%
0.0%–3.0%

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

35

Year ended
March 31, 2021
0.0%
1.8%
0.0%–3.0%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, 2022
March 31, 2021
¥609
¥1,444
59
57
(35)
(31)
(21)
(24)
–
(835)
¥612
¥609

Liability for retirement benefits at April 1
Retirement benefit expenses
Retirement benefits paid
Plan contributions
Change due to personnel transfer
Liability for retirement benefits at March 31(2) The funded status of the plans and the amounts recognized in the consolidated balance sheet for the plans
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, 2022
March 31, 2021
¥164
¥160
(190)
(175)
(26)
(14)
638
624
612
609
612
609
¥612
¥609

(3) Retirement benefit expenses

Retirement benefit expenses calculated using the simplified method

Millions of yen
Year ended
Year ended
March 31, 2022
March 31, 2021
¥59¥57

4. Defined contribution plan
Required amounts of contribution to the defined contribution plan for consolidated subsidiaries were ¥28
million for the year ended March 31, 2022 and ¥51 million for the year ended March 31, 2021.
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 ¥247 million for the year ended March 31, 2022 and ¥255
million for the year ended March 31, 2021.
(1) Total funded status of the multi-employer plan
Plan assets at fair value
Actuarial obligations for the pension financing accounting
Projected benefit obligations in excess of plan assets

Millions of yen
March 31, 2021
March 31, 2020
¥129,661¥119,769
132,336
136,406¥(2,675)¥(16,637)(2) Ratio of the Group’s contribution to total contributions of the multi-employer plan
For the year ended March 31, 2021
4.09%
For the year ended March 31, 2020
3.67%
(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 (¥12,819 million for the year ended March 31, 2021 and ¥14,756
million for the year ended March 31, 2020). Prior service costs are amortized by the straight-line method
over a period of 20 years under this plan.

36

28. 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
Notes and accounts receivable - trade 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 - trade and electronically recorded obligations - operating are due in one year
or less.
Short-term loans payable are borrowed mainly as operating funds, long-term loans payable (in principle,
due in five years or less) are borrowed mainly as funds for capital investments. Floating-rate loans carryinterest 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 is omitted 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
Since fluctuation factors are taken into account in calculating the fair value of financial instruments, adoptionof different assumptions may result in fluctuations in the fair value. In addition, the notional amounts, etc. of
derivative transactions specified in “Notes to Consolidated Financial Statements, 29. Derivatives” do notnecessarily indicate the market risks associated with derivative transactions.

37

2. Matters relating to fair value, etc. of financial instruments
The carrying amounts and fair values at March 31, 2022 and 2021 and differences are as follows.
At March 31, 2022
(1) Investment securities*2
Total assets(2) Long-term loans payable
Total liabilities
Derivatives

Carrying amount(Millions of yen)
¥3,413
3,413
2,750
2,750
¥–

Fair value(Millions of yen)
¥3,413
3,413
2,756
2,756
¥–

Difference(Millions of yen)
¥–
–
6
6
¥–

(*1) Notes are omitted for “cash,” and no description is provided for “deposits,” “notes and accounts receivable - trade, and contract
assets,” “electronically recorded monetary claims - operating,” “notes and accounts payable - trade,” “electronically recorded
obligations - operating,” and “short-term loans payable,” because these items are to be settled in a short period of time and fairvalue is almost equal to book value.
(*2) Unlisted equity securities, etc. are not included in “(1) Investment securities.” The carrying amount (fair value cannot be reliably
determined) of these financial instruments that do not have a quoted market price in an active market is as follows.
Millions of yen
March 31, 2022

Category
Unlisted equity securities¥757

Investments in limited liability partnership¥76

At March 31, 2021
(1) Investment securities*2
Total assets(2) Long-term loans payable
Total liabilities
Derivatives

Carrying amount(Millions of yen)
¥3,855
3,855
4,800
4,800
¥–

Fair value(Millions of yen)
¥3,855
3,855
4,811
4,811
¥–

Difference(Millions of yen)
¥–
–
11
11
¥–

(*1) No description is provided for “cash and deposits,” “notes and accounts receivable - trade,” “electronically recorded monetaryclaims - operating,” “notes and accounts payable - trade,” “electronically recorded monetary obligations - operating” and“short-term loans payable,” because these items are to be settled in a short period of time and fair value is almost equal to bookvalue.
(*2) The following financial instruments are not included in “(1) Investment securities” as they do not have market prices and theirfair values are not readily determinable. The carrying amount (fair value cannot be reliably determined) of these financial
instruments that do not have a quoted market price in an active market is as follows.
Category

Millions of yen
March 31, 2021

Unlisted equity securities¥730

Investments in limited liability partnership

¥25

38

(Notes)
1) Monetary claims with redemption dates subsequent to March 31, 2022 and 2021 are summarized as follows:
At March 31, 2022

¥16,939
12,719Due after 1 year and in
5 years or less(Millions of yen)
¥–
–

1,986

–

¥31,645¥–

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, 2021

¥18,503

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

12,238

–

1,897

–

¥32,639¥–

Due in 1 year or less(Millions of yen)
(1) Cash and deposits(2) Notes and accounts receivable - trade,and contract assets(3) Electronically recorded monetaryclaims - operating
Total

2) Long-term loans payable and other interest-bearing liabilities with repayment dates subsequent to March 31,
2022 and 2021 are summarized as follows:
At March 31, 2022

Short-term loans payable
Long-term loans payable
Total

Due after 2
Due after 4
Due after 1
Due after 3
Due in 1
years and inyears and in Due after 5
year and in 2
years and inyear or less
3 years or
5 years or
years
years or less
4 years or(Millions of
less
less
(Millions of(Millions ofless (Millions
yen)(Millions of(Millions of
yen)
yen)
of yen)
yen)
yen)
¥640
¥–
¥–
¥–
¥–
¥–
200
–
2,150
400
–
–
¥840
¥–
¥2,150¥400¥–¥–

At March 31, 2021

Short-term loans payable
Long-term loans payable
Total

Due after 2
Due after 4
Due after 1
Due after 3
Due in 1
years and inyears and in Due after 5
year and in 2
years and inyear or less
3 years or
5 years or
years
years or less
4 years or(Millions of
less
less
(Millions of(Millions ofless (Millions
yen)(Millions of(Millions of
yen)
yen)
of yen)
yen)
yen)
¥700
¥–
¥–
¥–
¥–
¥–
4,200
200
–
–
400
–
¥4,900
¥200
¥–
¥–
¥400
¥–

39

3) Fair value information of financial instruments by level of inputs
The fair value of financial instruments is classified into the following three levels according to theobservability and significance of inputs related to the calculation of fair value.
Level1 fair value: the fair value measured by quoted prices of identical assets or liabilities in active
markets.
Level2 fair value: the fair value measured using observable inputs other than Level 1.
Level3 fair value: fair values measured using unobservable inputs.
When multiple inputs of different categories are used in measuring fair value, the company classified fair values
into a category to which the lowest priority is assigned.
(1) Financial instruments recorded on consolidated balance sheets at fair value
As of March 31, 2022
Category
Investment securities
Available-for-sale securities
Equity securities
Derivatives
Interest rate swaps
Total assets

Fair value (Millions of yen)
Level 2
Level 3

Level 1

Total

¥3,413¥–¥–¥3,413–¥3,413

–
¥–

–
¥–

–
¥3,413(2) Financial instruments other than those recorded on consolidated balance sheets at fair value
As of March 31, 2022
Category
Long-term loans payable
Total liabilities

Fair value (Millions of yen)
Level 2
Level 3¥2,756¥2,756

Level 1
¥–
¥–

¥–
¥–

Total
¥2,756¥2,756

Notes: Explanations on valuation methods used for fair value measurement and inputs concerning fair value
measurement.
Investment securities
Investment securities, all of which are listed equity securities, are measured using quoted prices. As listed
equity securities are traded in active markets, their fair value is classified into Level 1 fair values.
Long-term loans payable
The fair value of long-term loans payable, which is determined by discounting the total amount of principal
and interest of a loan by the interest rate applicable for a similar new loan, is classified into Level 2 fair values.
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 the relevant interest rateswap, by the interest rate reasonably estimated for a similar loan.
Derivatives
The fair value is included in the fair value of long-term loans payable since the shortcut method is applied. See“Long-term loans payable” above for details.

40

29. Derivatives
At March 31, 2022 and 2021, 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, 2022 and2021 for which hedge accounting has been applied are summarized as follows:
At March 31, 2022
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

¥100

¥100

*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, 2021
Notional amount (Millions of yen)Interest rate swap hedging long-termloans payable, accounted for byshort-cut method:
Receive/floating and pay/fixed

Fair value (Millions of yen)

Maturing within one year

Maturing after one year

¥250

¥–

*1

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

30. Segment Information
Segment Information (For the years ended March 31, 2022 and 2021)
1. General Information about Reportable Segments
The reportable segments of the Company are business segments 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 Segment” engaging in the manufactureand sales of a wide range of light sources such as lamps and luminaires, and the “Applied Optics andEnvironment Segment” 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
The method for the accounting of reportable business segments is consistent with the accounting method
adopted for the preparation 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.
As described in Changes in Accounting Policies, “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020), etc. have been adopted from the beginning of the current fiscal year, andthe accounting method for revenue recognition has been changed.
As a result of this change, in the Lighting segment, net sales and segment income for the current fiscal
year increased by ¥73 million and ¥2 million, respectively, compared with the previous method.

41

3. Information on Net Sales, Income or Loss, Assets, and Other Items in Each Reportable Segment
Millions of yen
Year ended March 31,
2022
Sales:
Lighting Segment
Applied Optics and Environment Segment¥

36,312
16,872
53,185

Corporate and eliminations:Lighting Segment
Applied Optics and Environment Segment

20
27
47
(47)
53,185Adjustments¥
Segment Income (loss):
Lighting Segment
Applied Optics and Environment Segment¥

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

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

Adjustments¥
Increase in Property, Plant and Equipment andIntangible Assets:
Lighting Segment
Applied Optics and Environment Segment

¥

¥

¥

¥

3,382
1,591
4,974
(1,686)
3,287¥

34,961
16,85751,81913,766
65,585

¥

829
378
1,207
–
1,207

¥

453
146
600
–
600

Adjustments

Year ended March 31,
2021

¥

¥

¥

¥

¥

37,127
16,45953,587
22
21
44
(44)
53,587

3,510
1,136
4,647
(1,705)2,941

34,287
16,93051,21815,751
66,970

1,003
419
1,422
–
1,422

430
295
726
–
726

Notes: 1. The adjustments for segment income (loss) of ¥ (1,686) million and ¥ (1,705) million at March 31, 2022 and 2021,
respectively, include corporate costs, etc., which have not been allocated to the reportable segments.
2. The adjustments for segment assets of ¥13,766 million and ¥15,751 million at March 31, 2022 and 2021 respectively,
include financial assets, etc., of the Company, which have not been allocated to the reportable segments.

42

Related Information
For the years ended March 31, 2022 and 2021
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, 2022 March 31, 2021
¥45,689¥46,353
4,242
4,527
2,982
2,461
270
244
¥53,185¥53,587(2) Property, Plant and Equipment
No description is provided because property, plant and equipment in Japan at March 31, 2022 and 2021 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, 2022 and 2021 in the consolidated statements of income.

31. Information on Impairment Loss on Non-Current Assets by Reporting Segment
For the year ended March 31, 2022
Not applicable.
For the year ended March 31, 2021
Impairment losses on non-current assets were recorded in the following segments for the current fiscal year: ¥50
million in the Lighting segment and ¥164 million in the Corporate segment.

32. Amounts per Share
Per share information at and for the years ended March 31, 2022 and 2021 was as follows:

Profit attributable to owners of parent
Net assets

Yen
Year ended
Year ended
March 31, 2022 March 31, 2021
¥313.01¥269.07
4,551.68
4,128.69

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. 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 (75,000 sharesfor the previous fiscal year and 75,000 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 (76,000 shares for the previous
fiscal year and 75,000 shares for the current fiscal year).
3. As described in Change in Accounting Policies, “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020), etc. have been adopted from the beginning of the current fiscal year, and the transitional treatment set
forth in the proviso of Section 84 of the “Accounting Standard for Revenue Recognition” has been applied accordingly. As
a result, net assets per share and net income per share for the current fiscal year increased by ¥0.24, respectively.

43

The basis of the computation of profit attributable to owners of parent per share for the years ended March 31,
2022 and 2021 is as follows:
Millions of yen
Year ended
March 31, 2022
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, 2021

¥2,330¥2,041––¥2,330¥2,041

7,445,457

7,587,788

33. Business Combinations
There are no significant matters to be disclosed.
34. Revenue Recognition(1) Breakdown of revenue from contracts with customers
Year ended March 31, 2022
The Group’s revenue is primarily derived from revenue recognized from contracts with customers, and thefollowing information breaks down the Group’s reportable segments by region.

Japan
North America
Asia
Other
Revenue from contracts with customers
Other revenue
Sales to external customers

Millions of yen
Reportable segment
Applied Optics andLighting
Environment¥33,036¥12,652
1,920
2,322
1,190
1,792
165
105
36,312
16,872––¥36,312¥16,872

Total¥45,689
4,242
2,982
270
53,185–¥53,185(2) Information as a basis of understanding revenue from contracts with customers
Information as a basis of understanding revenue is the same as that described in “Notes to Consolidated
Financial Statements, 1. Summary of Significant Accounting Policies, (q) Accounting for significant revenue
and expenses.”44

(3) Relationship between fulfillment of performance obligations based on contracts with customers and cash
flows arising from such contracts, amount of revenue estimated to be recognized after the next fiscal year fromthe contracts with customers effective as of the end of the current fiscal year and the timing of recognition(i) Balance of contract assets and contract liabilities
Receivables arising from contracts with customers (balance atApril 1, 2021)
Receivables arising from contracts with customers (balance at
March 31, 2022)
Contract assets (balance at April 1, 2021)
Contract assets (balance at March 31, 2022)
Contract liabilities (balance at April 1, 2021)
Contract liabilities (balance at March 31, 2022)

Millions of yen
Year ended March 31, 2022
¥14,135
14,631
–
73
746
¥232

Notes: 1. Contract assets are related to consideration recognized based on the fulfillment of performance obligations forconstruction contracts and included in “notes and accounts receivable - trade, and contract assets” on the
consolidated balance sheet.
2. Contract liabilities are related to advances received from customers and included in “other” of current liabilities on
the consolidated balance sheet.
3. Of the revenue recognized in the current fiscal year, the amount included in the balance of contract liabilities at the
beginning of the fiscal year was ¥746 million.
4. The amount of revenue recognized in the current fiscal year from performance obligations satisfied (or partiallysatisfied) in the previous period was immaterial.

(ii) Transaction price allocated to remaining performance obligations
As the Group has no significant transactions with an initial expected term of contract exceeding one year,
information on remaining performance obligations has been omitted as a practical expedient. In addition,
there is no material amount of consideration arising from contracts with customers that is not included in
the transaction price.

35. Related Party Transactions
For the year ended March 31, 2022
Not Applicable.
For the year ended March 31, 2021
Not Applicable.

36. Stock Options
For the year ended March 31, 2022
Not Applicable.
For the year ended March 31, 2021
Not Applicable.

37. Significant Subsequent Events
Not Applicable.

45

Translation
Independent Auditor’s Report
The Board of Directors
IWASAKI ELECTRIC Co., Ltd.
OpinionWe have audited the accompanying consolidated financial statements of IWASAKI ELECTRIC Co., Ltd. (“theCompany”) and its consolidated subsidiaries (“the Group”), which comprise the consolidated balance sheet as at
March 31, 2022, and the consolidated statements of income, comprehensive income, changes in net assets, andcash flows for the year then ended, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, theconsolidated financial position of the Group as at March 31, 2022, and its consolidated financial performance andits consolidated cash flows for the year then ended in accordance with accounting principles generally accepted inJapan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the ethicalrequirements that are relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of theaudit of the consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do
not provide a separate opinion on these matters.

46

Determination of the necessity for impairment recognition of property, plant and equipment and intangible
assets of the Company
Description of Key Audit Matter

Auditor’s Response

Property, plant and equipment and intangible assets
in the amount of ¥15,376 million, accounting for 23%
of total assets, was recorded in the consolidatedbalance sheet as of March 31, 2022.

The audit procedures we performed for theCompany’s estimates of total undiscounted future
cash flows used in determining the necessity ofrecognition for impairment losses on property, plantand equipment and intangible assets principally are
as follows:As described in the notes to the consolidated financial
statements (Significant Accounting Estimates), forthe fiscal year under review, the Company
determined that there were indications of impairment
for the asset group including property, plant andequipment and intangible assets in the amount of¥12,832 million in the Company’s Lighting and theApplied Optics and Environment business segment,
because certain land showed signs a significant
decline in market value. However, the Company did
not recognize an impairment loss because the total
undiscounted future cash flows from the asset groupexceeded the carrying amount in determining thenecessity of recognition for impairment losses.
Estimates of future cash flows arising from thecontinued use of an asset group are based on the
Company’s profit and loss plan approved by the
Board of Directors for the following fiscal year andgrowth rates for the second and subsequent years
which are estimated within the range not exceeding
the long-term average growth rate.
As described in the notes (Significant Accounting
Estimates), the major assumptions used in estimating
future cash flows include sales by business segment
based on the demand forecasts and gross profit
margin which serve as the basis of the profit and loss
plan, as well as the growth rate for subsequent
periods not covered by the profit and loss plan.
Given that the major assumptions used to theestimates of future cash flows are subject touncertainties and require management judgment, we
determined determination of the necessity for
impairment recognition of property, plant andequipment and intangible assets of the Company to
be a key audit matter.

• We compared the estimated periods of future cash
flows with the economic remaining useful lives ofmajor assets.
• We examined the consistency of future cash flows
with the Company’s profit and loss plan approvedby the Board of Directors.
• We compared the Company’s profit and loss planfor prior years with actual results to evaluate theeffectiveness of the management’s estimation
process.
• We assessed the major assumptions including thelevel of sales by business segment based on
demand forecasts and gross profit margin thatserve as the basis of the Company’s profit and loss
plan, by discussing with the management. Also,
we compared the outcome of trend analysis basedon past performance to the level of sales bybusiness segment and gross profit margin. In
addition, we conducted a sensitivity analysis,taking into account the fluctuation caused by
future uncertainties.
• We assessed the growth rate for the subsequent
periods not covered by the Company’s profit andloss plan by reviewing the third party report. We
also assessed the management’s evaluation of
future uncertainty.

47

Other Information
The other information comprises the information included in the annual report (Yukashoken Hokokusho) that
contains audited consolidated financial statements but does not include the consolidated financial statements andour auditor’s report thereon. Management is responsible for preparation and disclosure of the other information.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing the Group’s reporting
process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management, the Corporate Auditor and the Board of Corporate Auditors for theConsolidated 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 such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability tocontinue as a going concern and disclosing, as required by accounting principles generally accepted in Japan,
matters related to going concern.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing the Group’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
• Consider internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances for our risk assessments, while the purpose of the audit of the consolidated financial statements
is not expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Group’s ability to continue as a going concern. If we conclude that a material48

uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including thedisclosures, and whether the consolidated financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation in accordance with accounting principles generally accepted inJapan.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Corporate Auditor and the Board of Corporate Auditors regarding, among othermatters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide the Corporate Auditor and the Board of Corporate Auditors with a statement that we havecomplied with the ethical requirements regarding independence that are relevant to our audit of the financial
statements in Japan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Corporate Auditor and the Board of Corporate Auditors, we determine
those matters that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determinethat a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required to bedisclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Ernst & Young ShinNihon LLC
Tokyo, Japan
June 28, 2022

Kenichi Ishida
Designated Engagement Partner
Certified Public Accountant

Masato Namekawa
Designated Engagement Partner
Certified Public Accountant

Notes to the Readers of Independent Auditor’s Report
This is an English translation of the Independent Auditor’s Report as required by the Companies Act of Japan forthe conveniences of the reader.

49

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

Director and Senior Executive Officer
Sumio Uehara
Director and Senior Executive Officer
Seiji Aoyama

1-1-7, Higashinihonbashi, Chuo-ku,
Tokyo 103-0004, Japan
Phone: +81-3-5846-9010
https://www.eye.co.jp/

Director and Senior Executive Officer
Kenji Ikeda
Outside Director
Kenji Oya
Outside Director
Tsuneo Tanai
Outside Director
Junko Sunaga
Audit & Supervisory Board Member
Hiroaki Kato
Audit & Supervisory Board Member
Haruhiko Hoshino
Outside Audit & Supervisory Board Member

Naoto Suzuki
Outside Audit & Supervisory Board Member

Capital: ¥8,640 million
Common Stock
Authorized: 23,900,000 shares
Issued and Outstanding: 7,821,950 shares(Including 405,386 shares of treasury stock)
Number of Shareholders: 5,534
Number of employees: 1,687 (Consolidated)
Major Shareholders
The Master Trust Bank of Japan, Ltd.
ESG Investment Fund
Minebea Mitsumi Inc.
Custody Bank of Japan, Ltd. (Trust account)Iwasaki Electric Cooperative Association Stock Ownership Plan
Challenge No.2 Investment Fund
Mizuho Bank, Ltd.
The Meiji Yasuda Life Insurance Company
The Sumitomo Mitsui Banking Corp.
DFA INTL SMALL CAP VALUE PORTFOLIO(Standing proxy: Citibank)Takashi Inagaki
Outside Audit & Supervisory Board Member

Stock Exchange Listings
Tokyo Stock Exchange Prime Market

Masayuki Kobayashi

Senior Executive Officer
Akira Urushibara

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

Executive Officer
Hidemi Orito

Independent Certified Public Accountants
ARK LLC

Senior Executive Officer
Tomohiko Yamada

Executive Officer
Tadashi Mizusawa
Executive Officer
Masahiko Ishihara
Executive Officer
Hiroyuki Hayakawa
Executive Officer
Makoto Ookahara(As of June 25, 2022)

50% of Total
12.50
4.72
4.04
3.39
3.00
2.70
2.48
2.43
2.27
2.22

Directory
Domestic Plants and Offices
Head Office
1-1-7, Higashinihonbashi,
Chuo-ku, Tokyo 103-0004, Japan
Phone: +81-3-5846-9010
Sales & Marketing Business Unit
Phone: +81-3-5846-9021
Applied Optics andEnvironment Sales Division
Phone: +81-3-5846-9027
Global Sales &Marketing Department
Phone: +81-3-5846-9025
Private Sector Sales Division
9-9, Nihonbashi-hisamatsucho,
Chuo-ku, Tokyo 103-0005, Japan
Phone: +81-3-5847-8632
Saitama Plant
1-1, Ichiriyama-cho, Gyoda City,
Saitama 361-8505, Japan
Phone: +81-48-554-1111

Domestic Affiliates●Manufacture
EYE LIGHTING SYSTEMSCORPORATION
Established in 1973
Manufacture of lighting fixtures,
power sources, ballasts and circuits
CHICHIBU IWASAKI CO., LTD.
Established in 1985
Manufacture of Halogen lamps andpellicle products
KAN-ETSU IWASAKI CO., LTD.
Established in 1985
Manufacture of arc tubes for highpressure sodium lamps, UV lamps, andUV irradiation units
EYE ELECTRON BEAM CO., LTD.
Established in 1986
Manufacture of EB products,
EB equipment maintenance, andEB irradiation services
EYE THREE MFG. CO., LTD.
Established in 1988
Manufacture and sales of light poles,
stands and customized lighting luminaires
ITO DENKI CO., LTD.
Acquired in 1997
Manufacture of explosion proof luminaires●SalesEYE GRAPHICS CO., LTD.
Established in 1977
Sales of UV applied equipment and printing
platemakers
EYE GRAPHIC SERVICE CO., LTD.
Established in 1980
Installation / relocation / maintenance for
UV applied equipment and printing platemakers
LIGHT CUBE CO., LTD.
Established in 1978
Design, manufacture, sales and applicationof luminaires and allied products
EYE ONE CO., LTD.
Established in 1987
Service trade for the Iwasaki Group, such as
insurance agency operations
EYE LIGHTING DEVICE CO., LTD.
Established in 1988
Sales of a variety of light sources andlighting luminaires
IWASAKI ELECTRIC
ENGINEERING SERVICE CO., LTD.
Established in 1994
Inspection of lighting luminaires and electricalmachinery and maintenance of applied optics
and environment diagnostic equipment
KINKI LIGHT CUBE CO., LTD.
Established in 1995
Sales of lighting equipment for commercial andindustrial use
EYE LOGISTICS CO., LTD.
Established in 1996
Autotruck carrier business and Joint delivery
ITO DENKI HANBAI CO., LTD.
Established in 1999
Sales of explosion proof luminaries(As of June 28, 2022)

51

◆Sales Office
Global Sales & Marketing Department●Manufacture
ENERGY SCIENCES, INC. (ESI)
Acquired in 1988
42 Industrial Way, Wilmington,
Massachusetts. 01887, U.S.A.
Phone: +1-978-694-9000
Facsimile: +1-978-694-9046
Manufacture and sales of EB & UV
irradiation equipment and electric equipment
EYE LIGHTING INTERNATIONAL OFNORTH AMERICA, INC. (ELINA)
Established in 1991
9150 Hendricks Road, Mentor,
OHIO. 44060, U.S.A.
Phone: +1-440-350-7000
Facsimile: +1-440-350-7001
Manufacture and sales of HID lamp,
arc tubes and outer bulbs
DALIAN IWASAKI ELECTRIC CO., LTD.
Established in 1995
Zhenpeng Industrial Area I-8-3, DalianDevelopment Zone, Dalian, 116600,
P.R. CHINA
Phone: +86-411-8751-4186
Facsimile: +86-411-8751-4189
Manufacture of lamps, lighting materials
and products
SPECTRA LIGHTING PTY LTD.
Acquired in 1999
15 Industrial Avenue Wacol Queensland, 4076,
AUSTRALIA
Phone: +61-7-3335-3500
Facsimile: +61-7-3335-3550
Manufacture and sales of luminaries
SPECTRA MANUFACTURING PTY LTD.
Acquired in 1999
15 Industrial Avenue Wacol Queensland, 4076,
AUSTRALIA
Phone: +61-7-3335-3502
Facsimile: +61-7-3335-3533
Manufacture and sales of streetscape luminaries●SalesEYE LIGHTING ASIA PACIFIC PTE LTD.
Established in 1988
21 Kaki Bukit Place, Eunos Techpark
SINGAPORE 416199, SINGAPORE
Phone: +65-6742-3611
Facsimile: +65-6743-5202
Sales of lamps, luminaires and electric equipment
ELM LIGHTING SDN. BHD.
Established in 2016
No.16 & 18, Jalan Utarid U5/29, Mah Sing
Integrated IndustrialPark, Seksyen U5, 40150
Shah Alam, Selangor Darul Ehsan, Peninsular
MALAYSIA
Phone: +60-3-7832-7600/+60-3-7859-7847
Facsimile: +60-3-7859-7947
Sales of lamps, luminaires and electric equipment
SHANGHAI IWASAKI ELECTRIC CO.,LTD.
Established in 2007
26/F suite2612 New Town Center Building,
83 Loushanguan Road, Shanghai 200336,
P.R. CHINA
Phone: + 86-21-6215-3677
Materials procurement in China, inspection andexports Sales in China of lamps, luminaries andelectric equipment
EYE LIGHTING (THAILAND) CO.,LTD.
Established in 2015
571 RSU Tower, 10th floor, Unit 4-5,
Sukhumvit Soi 31, Sukhumvit Road,
Klongton-Nua, Wattana, Bangkok 10110, Thailand
Phone: +66-0-2-016-6579
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
PERFORMANCE IN LIGHTING
AUSTRALASIA PTY LTD.
Established in 2012
157 Wellington Road, East Brisbane Queensland,
4169, AUSTRALIA
Phone: +61-7(3335)3580
Facsimile: +61-7(3335)3587
Sales of lamps and luminaires
SAMMODE LIGHTING AUSTRALASIAPTY LTD.
Established in 2015
15 Industrial Avenue, Wacol, Queensland, 4076,
AUSTRALIA
Phone: +61-7(3335)3555
Facsimile: +61-7(3335)3511
Sales of luminaires(As of June 28 2022)

EYE LIGHTING (HONG KONG) LTD.
A joint venture with Hosoda Trading
Company, established in 1992
Room 609, Silvercord Tower 2, 30 CantonRoad, Tsim shatsui, Kowloon , HONG KONG
Phone: +852-2368-8782
Facsimile: +852-2481-2661
Sales of lamps, luminaires and electric equipment

52

Nomurafudosan-higashinihonbashi Bldg. 1-1-7,
Higashinihonbashi, Chuo-ku,
Tokyo 103-0004, Japan
https://www.iwasaki.co.jp/