Management Policy

TERASAKI in constant pursuit of innovativeelectrical power distribution and control systems

GlobalExpansion ofBusiness

Customerfriendly Services

Corporate Ethics

Utilization of
Human
Resources

Pursuing businesschallenges as a leadinginternational
manufacturer ofelectrical power
distribution systems formarine applications

TERASAKI REPORT
1 April 2017 ‒ 31 March 2018

Management
VisionDemonstrating
originality in industrial
markets with ourelectrical power
distribution systems

Oct. 2018

Winning in
Competitions

Reigning as the mosttrusted circuit breakers
manufacturer in theworld

Proper Profit
Distribution

Management
Philosophy

Pleasure of
Producing and
Selling Products

Offering solutions toworldwide customers
through theengineering andlifecycle businessContributing to humanhealth and security asa manufacturer of
medical devices

President's Message

Growth by further promoting

In the shipbuilding industry wherebusiness as“TEAM TERASAKI”

we have many customers, signs of an

Regarding equipment andup-turn in new orders are beginning to

infrastructure investments, the current

show, as the marine shipping market ison-going market recovery is predictedgradually picking up alongside with theto be maintaining at its gradual paceAs for the shipbuilding market,

increase in trading volume around theowing to the improving corporate

according to the World Shipbuilding

world. Moreover, ship prices appeared

earnings in Japan, while additional

The global economy in our 2017

Statistics, vessels completion worldwide

to have hit the bottom, which is stirringinvestments are anticipated inf i s c a l y e a r e n d e d 31 M a r c h 2018from January through December 2017

hopes of a rebound in the new

construction sector that is related tooverall continued on a gradual recovery

fell slightly as compared to the same

shipbuilding market. However, forecasts

the 2020 Tokyo Olympics and urban

track spearheaded by the world's

period of the previous year to about 65

indicated that more time is required

redevelopment. Overseas, capitalindustrially advanced nations, while themillion gross tonnage (down 1.6% year-

before any sort of real recovery caninvestment is expected to stay as aJapanese economy similarly on theon-year), while new orders on the othertake place due to the low prices ofresult of the global economic recovery

whole maintained its slow pacehand rose greatly to about 42 million

ordered ships, exchange rates andtrend. The situation is ripe for us torecovery, as personal spending

gross tonnage (up 126.9% year-on-year)

rising material costs. Given the

expand our business in Industrial

rebounded slightly due to theand order book has decreased for the

economic environment around us, we

Systems, Circuit Breakers, andcontinuing up-trend in production

period till December 2017 to about

will conduct our business activities toEngineering & Lifecycle Services, byactivities, steady hiring and rising wages

143 million gross tonnage (down 5.5%

increase our contribution on a per-ship

accurately identifying and swiftlyin the private sector.

against 31 December 2016).

basis and translate that into securingserving customers' needs with proactive

President■ The Economic Environment
surrounding Terasaki Group01

future sales and profits.

Taizo Terasaki

02

Financial Highlights

sales activities. Moreover, in the
Medical Devices field, we will continue■ Promoting Business as“TEAM TERASAKI”

to push for increasing orders by

Our Head Office was re-located adeveloping new products and gaining

year ago, and last November, Teratec

new customers.

Ltd, a group company was relocatedMoving forward, we will keep the

nearby. The close proximity of the offices

economic situation and market

allow us to work more efficiently andconditions under close watch as weclosely together as "TEAM TERASAKI" andsteadfast in implementing our businessfurther improve customers' satisfaction.

strategy. In the process, we will takesteps to strengthen our corporate
governance, make our businesspractices more transparent, enhance
the mobility of our operations, andreinforce our BCP (Business ContinuityPlan) so that we can sustainably growas a business.

Net sales
Operating profit
Recurring profit

36,880 million JPY(Up 12.2% from the same term last year)

2,235 million JPY(Up 17.6% from the same term last year)

2,264 million JPY(Up 0.5% from the same term last year)

Profit attributable to 1,441 million JPY
owners of the company (Down 16.1% from the same term last year)
The economic environment surrounding

As for our consolidated financial

our Group in the fiscal year ended 31 March

performance under these circumstances, overall

2018 can be summarized as follows.

sales has increased, despite a drop in sales of

In Japan, business investments in

Marine Systems in the Asian region, there was

equipment and infrastructure continued withan increase in sales of Circuit Breakers, coupled

slow-paced recovery owing to improving

by the strong sales for projects in container andcorporate earnings and other factors.

LNG ships both in Japan and abroad andFor overseas business as well, economic

railways overseas. On the earnings front, bothrallies and other factors kept the current recovery

operating profit and recurring profit rose fromgoing. In the shipbuilding industry where we havethe increased sales we have posted, but profit

many customers, initial signs of an up-turn in new

attributable to owners of the company hasorders were seen and ship prices appeared to

dropped.

have hit the bottom, but the conditions did not
improve to the point of calling it a recovery andTeratec Ltd. (Head Office)03

the situation remained challenging.
04

By Product Group
Sales in Engineering & Lifecycle Services

System Products
Net sales

20,767 million JPY(Up 11.0% from the same term last year)

Orders received

Order backlog

19,030 million JPY(Up 10.4% from the same term last year)

Circuit Breaker
Products

16,190 million JPY(Down 1,737 million JPY from the end of
the last consolidated fiscal year)

System Products
56.3%

Circuit Breaker Products
43.7%

has increased as compared to the same term

Sales of Circuit Breakers in Japan haslast year, as engineering work for railway

increased as the market was gradually picking

infrastructure in Japan added to the strong

up. Overseas sales has increased as comparedsales of maintenance and replacement parts,

to the same term last year as a whole, despite

circuit breaker upgrade work, etc.

the continuing challenges in the marine markets

As a result, the sales of System products
as a whole has increased as compared to the

Net sales

16,112 million JPY(Up 13.7% from the same term last year)

Net sales
percentage by
product group(Note) We do not disclose orders received or order backlog for Circuit
breaker products because they are manufactured in accordancewith our planned production schedule.

Asia
Net sales

6,545 million JPY

Net sales

26,471 million JPY(Up 18.1% from the same term last year)

Segment profit 2,159 million JPY(Up 30.4% from the same term last year)

05

Sales of Industrial Systems has increased
despite a decrease in sales of co-generation
systems and other distributed power systems,
owing to strong sales for overseas railway
projects.

Sales of Marine Systems has increased

Sales of Medical Devices has increased,

as compared to the same term last year owing

although sales volume of medical tools andto strong sales for projects in container andequipment remained unchanged, owing to

LNG ships in Japan and abroad.

strong showing by clinical testing devices.

showing in Oceania.

Net sales(Down 11.5% from the same term last year)

3,863 million JPY(Up 26.4% from the same term last year)

Segment profit 253 million JPY(Down 30.7% from the same term last year)Japanof East Asia, primarily because of a strong

EuropeSegment profit 670 million JPY

Segment Performance by Region

same term last year.

(Up 98.0% from the same term last year)

Sales of Marine Systems has decreased as

Sales has increased as compared to thecompared to the same term last year due tosame term last year although there was a slightlesser projects, pushed-back deliveries and otherdecrease in Circuit Breakers sales as recorded

factors triggered by the slump in the marine

in the UK. The strong demand from Europe andequipment market.

Middle East markets added to the steady andSales of Circuit Breakers has increased ascompared to the same term last year, thanks to

improved sales performance in Engineering &Lifecycle Services.

the better showing in Malaysia and other regions.
Net sales percentage
by region

Japan
71.8%

Asia
17.7%

Europe10.5%

06Consolidated Financial Highlights

Consolidated Financial Statements (Summary)
Consolidated Balance Sheets (Units: Million JPY)

Net sales

Operating proﬁt/Operating proﬁt ratio(Units: Million JPY)
40,000(Units: Million JPY)

39,777 39,400

Operating proﬁt

Operating proﬁt ratio (Units: %)

3,736

10

4,000

36,880

3,500

3,388

30,0003,000

8.5

25,0002,500

20,000

2,000

1,900

15,0001,500

5.8

10,000

1,000

5,000

500

35,000032,873

2014
FY

2015
FY

2016
FY

8

2,235
6.1

Recurring proﬁt

Current assets

33,37532,531

3,500

Non-current assets

13,202

13,3743,000

Property, plant and equipment

9,478

9,739

185

214

Investments and other assets

3,538

3,420

Total Assets

46,57745,906

Current liabilities

13,595

12,819Non-current liabilities

3,472

5,313

Total Liabilities

17,06818,133

4,000

3,829

3,840

6

2,252

2,264

2,000
1,500
1,000

Liabilities

500
2014
FY

2015
FY

2016
FY

2017
FY

0

2

Intangible assets

2014
FY

2015
FY

2016
FY

2017
FY

EquityShareholders' equity

Proﬁt attributable to owners of
the company /Proﬁt per share(Units: Million JPY)
3,000
2,500
2,000

2,530

Proﬁt attributable to owners of the company(Units: JPY)
Proﬁt per share
250

2,622

200

194.20 201.27

1,500

1,718

131.93

1,000

1,441
110.67500
007

Total Assets/Equity

2014
FY

2015
FY

2016
FY

2017
FY

150
100

(Units: Million JPY)
50,00044,764

Total Assets

45,39345,906Equity ratio
Equity46,577

26,48627,353

27,77229,50910,000

0

0

63.3

60

59.1

60.2

60.4

50

2014
FY

2015
FY

2016
FY

2017
FY

27,199

Capital stock

1,236

1,236

Capital surplus

2,244

2,244

Retained earnings

24,822

23,719Treasury stock, at cost△1

△1

Accumulated other comprehensive income

1,166

534

40

38

Total Equity

29,50927,772

Total Liabilities and Equity

46,57745,906(Note) Monetary amounts are rounded off to one million JPY.

45
40

28,301

Non-controlling interests55

20,00050

70
6540,00030,000(Units: %)

2014
FY

2015
FY

2016
FY

2017
FY

2017FY

2016FY

2016FY

1 April 2017
（From
to 31 March 2018）

1 April 2016
（From
to 31 March 2017）36,88026,620
10,259
8,024
2,235
334
305
2,264
27
9
2,282
709
127
1,445

32,873
22,971
9,902
8,002
1,900
582
230
2,252
410
61
2,601
639
244
1,718

Profit attributable tonon-controlling interests

4△0Profit attributable toowners of the company

1,441

1,718

(As of 31 March 2017)

Assets(Units: Million JPY)

2,500

4

0

2017
FY

9.5

2017FY(As of 31 March 2018)

Consolidated Statements of Income (Units: Million JPY)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Non-operating expenses
Recurring profit
Extraordinary income
Extraordinary loss
Profit before income taxes
Income taxes - Current
Income taxes - Deferred
Profit for the period(Note) Monetary amounts are rounded off to one million JPY.

Consolidated Statements of Cash Flows(Units: Million JPY)
2017FY

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Effect of exchange rate changes
on cash and cash equivalents
Net increase (decrease) incash and cash equivalents
Cash and cash equivalents
at beginning of year
Increase (decrease) in cash and cash equivalents
resulting from change of scope of consolidation
Cash and cash equivalents
at end of year

2016FY

1 April 2017
（From
to 31 March 2018）

1 April 2016
（From
to 31 March 2017）

2,512
△865
△880

2,486
△1,770
△213

247

△429

1,014

72

10,766

10,694△12－

11,768

10,766(Note) Monetary amounts are rounded off to one million JPY.

08

Non-consolidated Financial Statements (Summary)Corporate Information

Stock Information
Board of Directors (As of 28 June 2018)

Balance Sheets

(Units: Million JPY)

2017FY

2016FY(As of 31 March 2018)(As of 31 March 2017)16,62010,618
6,638
107
3,872
27,238

16,96011,050
6,961
118
3,970
28,011

9,862
4,328
14,1909,079
6,367
15,447

12,856
191
13,04827,23812,381
182
12,56428,011

AssetsCurrent assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
EquityShareholders' equity
Valuation and translation adjustments
Total Equity
Total Liabilities and Equity(Note) Monetary amounts are rounded off to one million JPY.

Statements of Income(Units: Million JPY)

2017FYNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income
Non-operating expenses
Recurring profit
Extraordinary income
Extraordinary loss
Profit before income taxes
Income taxes - Current
Income taxes - Deferred
Profit for the period

2016FY

1 April 2017
（From
to 31 March 2018）

1 April 2016
（From
to 31 March 2017）

26,36921,466
4,902
4,875
26
943
208
761
27
7
781
9
114
657

22,28817,754
4,533
4,743
△210
791
216
364
407
59
712
45
148
519

(Note) Monetary amounts are rounded off to one million JPY.

09

Corporate Profile (As of 31 March 2018)

President

Taizo Terasaki

Shares (As of 31 March 2018)

Company Name

Terasaki Electric Co., Ltd.

Senior Managing Director

Makoto Suto

Accounting & Finance, Business
Planning, R&D, Disclosure

Head Office

6-13-47 Kamihigashi, Hirano-ku, Osaka 547-0002 Japan

Senior Managing Director

Shunji Okada

System Division

Foundation

1 October 1923

Managing Director

Yasutaka Ikeda

Circuit Breaker Division

Established

1 April 1980

Capital1,236 million JPY

Employees

1,776 (Consolidated), 570 (Non-consolidated)

Consolidated
Subsidiaries

Domestic: 5, Overseas: 8

Line of Business●Marine Systems
Power Distribution and Control Systems, Group Starter Panels
Engine Monitoring and Control Systems
Medium Voltage Switchgears

Managing Director

Kazunobu Kumazawa

Director

Masao Nishida

Director

Hirofumi Kobayashi

Director

Yoshihiro Umemoto

Director

Junji Nagase

Director

Kunio Chiyoda

Director

Shunji Takano

Marine Department
System Division
Sales and Marketing
Circuit Breaker Division
Engineering, Life Cycle
Audit & Supervisory
Committee Member
Audit & Supervisory
Committee Member (Outside)
Audit & Supervisory
Committee Member (Outside)

Distribution ofshareholders:951

Electric Equipment and Systems, Medium Voltage Switchgears●Circuit Breakers
Moulded Case Circuit Breakers, Earth Leakege Circuit Breakers, Air Circuit Breakers

Ship Operators Training

2,200
1,118
1,049
866
738
683
677
653
520
424

Share

(1,000 shares)

(%)

16.89
8.58
8.05
6.64
5.66
5.24
5.19
5.01
3.99
3.25

(Note) Share percentages are calculated without treasury stock (1,021 shares).

Financial instrument business operators
48 thousand shares 0.38%

Shares distribution
13,030thousand shares

Foreign corporation, etc.
60 6.31%
Financial instrumentbusiness operators
19 2.00%* Treasury stock is included in individual investor and others.

Foreign corporation, etc.
511 thousand shares 3.93%
Financial institution
2,520 thousand shares 19.34%
Individual investor and others
5,509 thousand shares 42.28%
Business or other corporation
4,439 thousand shares 34.07%

Individual investor and others799 84.01%

Multi Cable Transits

Engineering Services, i.e, equipment design, construction, etc

Terasaki Co,. Ltd.
Taizo Terasaki
The Master Trust Bank of Japan, Ltd.
Terasaki Trust Co.,Ltd
Kaori Aramaki
Terasaki Employee Stock Ownership
Yuzo Terasaki
Hozansha Co., Ltd.
Terasaki KyoeikaiJapan Trustee Services Bank, Ltd.

Financial institution
11 1.16%

Power Distribution Systems, Co-generation Systems

Maintenance and Servicing of Terasaki Group Products

Shares owned

Business or other corporation
62 6.52%●Industrial Systems●Engineering & Lifecycle Services

Shareholder

Distribution by Shareholders

Seafarer Training Equipment

Medical tools and equipment, Clinical testing devices

52,000,000
13,030,000
951

Major Shareholders

General Affairs Department

Terasaki Shore Connection Systems●Medical Devices

Total number of shares authorized to be issued
Total number of issued shares
Number of shareholders* Treasury stock (1,021 shares) is included in individual investor and others.

Stock Price/Traded Volume (Tokyo Stock Exchange)
Stock price (JPY)

Traded volume (shares)

2,000

1,500,000

1,600

1,200,000

1,200

900,000

800

600,000

400

300,000

0

2015

2016

2017

2018

Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.

010