2017 An nu al R e por t
For the Year Ended March 31, 2017

Financial Highlights
Years ended March 31

Thousands of
U.S. dollars

Millions of yen
Consolidated
Net sales

2013

2014

2015

2016

2017

2017

¥403,693¥498,894¥524,577¥532,818¥497,611$4,435,431

Ordinary income (loss)

14,867

20,920

10,391(2,298)12,534

111,721

Net income (loss) attributable toowners of parent

6,212

7,448

(1,149)(103,449)

7,758

69,151

Total assets

388,512393,136

416,769

281,615

269,3932,401,221

Net assets

176,558

186,033

203,108

70,35976,047

677,841

Yen

U.S. dollars

Per share data:
Net income (loss) attributable toowners of parent-Basic¥22.64¥27.14¥(4.18)¥(376.69)¥28.24$0.25

Net assets

549.42578.90623.35208.93238.07

2.12
Thousands of
U.S. dollars

Millions of yen
Non-Consolidated
Net sales
Ordinary income (loss)

2013

2014

2015

2016

2017

2017

¥233,686¥261,258¥265,840¥261,496¥260,894$2,325,466

5,302

10,362

12,668(1,186)39,375350,967

Net income (loss)

3,901

2,355

9,376

(115,933)

36,402

324,467

Capital stock

39,97039,97039,97039,97039,970356,271

Total assets

244,368

257,506

293,447

189,623

214,940

1,915,857

Net assets

127,428

127,812136,10918,30154,759488,092

Yen

U.S. dollars

Per share data:
Net income (loss)-Basic
Cash dividends
Net assets¥14.22¥8.58¥34.15¥(422.15)¥132.51

$1.18

8.00

8.00

13.00

−

2.00

0.02

463.99465.23495.2666.21

198.93

1.77

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥112.19=US$1.00, the exchange rate
prevailing on March 31, 2017.

CONTENTS
Financial Highlights ................................................................................................................................ 1
Business Review ..................................................................................................................................... 2
Consolidated Balance Sheet .................................................................................................................... 5
Consolidated Statement of Income ......................................................................................................... 7
Consolidated Statement of Comprehensive Income ............................................................................... 8
Consolidated Statement of Changes in Net Assets.................................................................................. 9
Consolidated Statement of Cash Flows ................................................................................................ 11
Notes to Consolidated Financial Statements ......................................................................................... 121

Business Review

Business Review for the Consolidated Fiscal Year 2016
Regarding the global economy in the consolidated fiscal year 2016, the US and Europe experienced a gradual recovery, andin Asia the economy was generally firm. In the Japanese economy, despite a gradual recovery in exports and capital
investment, a lack of vigor in personal consumption, among other factors, kept the economy from achieving a full-fledged
recovery.
Under such circumstances, the Toshiba Tec Group has been diligently working to become “a global one-stop solutions
company” under the three pillars of its business strategy, namely “growth of global retail business”, “expansion of solutions
and service business”, and “establishment of a steadily profitable organization through cost reduction and productivity
improvement”.
Net sales were ¥497,611 million (down 7% compared to the previous consolidated fiscal year), partially due to the effect of
exchange rates. Meanwhile, with regard to income/loss, exchange rates were a factor that reduced profits, but owing tofactors such as increased profitability on higher sales of POS systems for the domestic market, a decline in depreciation andamortization in the global commerce solutions business, and the effect of a decline in selling, general and administrative
expenses, operating income was ¥14,649 million (up ¥13,048 million year-on-year), ordinary income was ¥12,534 million(ordinary loss of ¥2,298 million during the previous consolidated fiscal year) and net income attributable to owners ofparent was ¥7,758 million (net loss attributable to owners of parent of ¥103,449 million during the previous consolidated
fiscal year).
Furthermore, Toshiba Tec Corporation has not paid dividends since the interim dividend for the previous consolidated fiscal
year. However, with the significant recovery in business performance in the fiscal year 2016 and because the conditions
were met for making dividend payments owing to various capital policies, Toshiba Tec Corporation will resume dividend
payments from the year-end dividend for the fiscal year 2016, with a year-end dividend of ¥2 per share.
The business highlights for each report segment in the consolidated fiscal year 2016 are described below.
Retail Solutions Business
The retail solutions business, which deals with POS systems for domestic and overseas markets, and MFPs, Automatic
Identification systems and related products for the Japanese market, was committed to developing new products appropriate
to market needs, expanding sales of core products, promoting area marketing, along with reinforcing cost competitivenessto improve the profit structure, in what continues to be a highly competitive business environment.
In POS systems for the Japanese market, sales increased owing to favorable sales, mainly of POS systems for mass retailers
and restaurants.
As for POS systems for overseas markets, sales declined owing in part to the effect of exchange rates, but excluding theeffect of exchange rates, sales were on par with the previous year.
Sales of MFP for the Japanese market decreased, attributable in part to a lower number of units sold.
Regarding Automatic Identification systems for the Japanese market, although sales of supply products declined, sales wereon par with the previous year, owing to growth in the number of units sold of mobile printers for the logistics and otherindustries.
As a result, net sales from the retail solutions business were ¥320,773 million (down 1% compared to the previous
consolidated fiscal year). Meanwhile, operating income was ¥11,260 million (an operating loss of ¥11,480 million during
the previous consolidated fiscal year), due to factors such as increased profitability on higher sales of POS systems for thedomestic market, a decline in depreciation and amortization in the global commerce solutions business, and the effect of adecline in selling, general and administrative expenses.

2

Printing Solutions Business
The printing solutions business, which deals with MFPs for overseas markets, Automatic Identification systems and related
products for overseas markets, and inkjets for domestic and overseas markets, focused efforts on expanding sales ofstrategic products, while pioneering vertical markets and new business fields, and expanding sales through the promotion ofan alliance strategy, against a difficult business background marked by tough competition.
Concerning MFPs for overseas markets, despite a focus on expanding sales of strategic products, sales declined, owing inpart to intensified competition and the effect of exchange rates.
In Automatic Identification systems for overseas markets, sales decreased owing to factors including a reactionary decline
due to a concentration of large-scale projects in the previous consolidated fiscal year in the US, and the effect of exchange
rates.
Sales of inkjets increased due to higher sales to customers in Japan, North America, and Asia.
As a result, net sales from the printing solutions business were ¥189,148 million (down 14% compared to the previous
consolidated fiscal year). Operating income was ¥3,389 million (down 74% year-on-year), owing partially to the effects of
exchange rates, lower sales, and higher selling, general and administrative expenses.
Note:	Automatic Identification (AI) system refers to systems that contain hardware and software to automatically retrieve, identify andmanage from barcodes and IC tags.

Forecasts for Fiscal Year 2017
With regard to the global economy, a gradual recovery is expected to continue in the US and Europe, and in Asia theeconomy is expected to be generally firm, centered on China. In Japan, although personal consumption is expected tocontinue to lack vigor, a gradual recovery is expected, caused by a gradual recovery in exports and capital investment.
Under such circumstances, the Toshiba Tec Group will unite as one, and diligently work to become “a global one-stop
solutions company” under the three pillars of its business strategy, namely “growth of global retail business”, “expansion ofsolutions and service business”, and “establishment of a steadily profitable organization through cost reduction andproductivity improvement”.
Main measures on a segment basis for fiscal year 2017 ending March 31, 2018 are as follows:3

Retail Solutions BusinessIn the retail solutions business, efforts will be made to increase business, through expanded sales of POS systems that areleading products in both domestic and overseas markets and of MFPs and Automatic Identification systems as well as
related products that are major ones in the Japanese market. Concurrent efforts will be also made toward the provision of
total solutions, including the development and release of new ones appropriate to market needs, the deployment of sales andmarketing structures tailored to specific regions, the enhancement of service and supply businesses, and the optimization ofsales and service networks.

Printing Solutions BusinessIn the printing solutions business, efforts will be made to enhance profitability, through expanded sales of MFPs, Automatic
Identification systems and related products in overseas markets and of inkjet heads that are important products in both
domestic and overseas markets. Also, efforts will be made to develop and release strategic new products, deploy sales andmarketing structures tailored to specific regions, optimize sales and service networks, and strengthen business in emerging
markets.

4

Consolidated Balance Sheet
As of March 31, 2017 and 2016

Millions of yen

ASSETS

Thousands of
U.S. dollars (Note 1)

2017

2016

2017

¥46,129
63,76932,849
1,629
6,100
7,560
32,900(2,572)¥22,21776,47038,468
1,960
6,428
4,913
47,009(2,774)$411,169
568,402292,798
14,52054,372
67,386
293,253(22,925)

188,367

194,694

1,679,000

25,480(19,038)

27,875(20,995)

227,115(169,694)

Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation

6,441
43,742(36,279)

6,880
42,957(35,451)

57,412389,892(323,371)

Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation

7,462
47,441(41,536)

7,506
48,204(43,659)

66,512422,863(370,229)

Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation

5,904
1,640
11,220(4,874)

4,544
2,119
11,805(5,093)52,625
14,618100,009(43,444)

Lease assets, net
Construction in progress

6,346
1,272

6,711
3,583

56,565
11,33829,06831,345

259,096

6,053
639
7,624

8,633
710
7,596

53,953
5,696
67,956

14,317

16,940127,614

5,350
2,204
16,731
14,008
(655)

4,881
1,325
17,227
15,262(61)

47,687
19,645
149,131
124,860(5,838)37,64038,635335,502

81,02686,921

722,221¥269,393¥281,615$2,401,221

Current assets
Cash and deposits (Note 14)
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets (Note 12)
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment:
Buildings and structures
Accumulated depreciation

Intangible assets:
Goodwill
Customer relationships
Other

Investments and other assets:
Investment securities (Note 16)
Asset for retirement benefits (Note 4)
Deferred tax assets (Note 12)
Other
Allowance for doubtful accounts

Total non-current assets
Total assets

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

5

Thousands of
U.S. dollars (Note 1)

Millions of yen

LIABILITIES AND NET ASSETS

2017

2016

2017

¥61,860
1,048
4,033
24,044
13,816
5,485
32,786¥71,175
3,407
4,435
29,557
13,234
3,643
33,149$551,386
9,341
35,948214,315
123,148
48,890292,236

143,076

158,604

1,275,301

5,172
35,066
10,0305,954
38,687
8,010

46,100312,559
89,40250,26952,652448,070

Total liabilities

193,346

211,256

1,723,380

Shareholders’ equity
Capital stock
Authorized-1,000,000 thousand shares
Issued- 288,146 thousand shares

39,97039,970356,271

11

52,97098

19,722(41,006)

175,791(5,488)−−(5,523)(48,917)−

54,217

46,411

483,261

1,581
(6)
8,927
(720)
1,407

1,476
71
11,740(461)(1,857)

14,092(53)
79,570(6,418)12,541

11,18910,96999,733

104

116

927

10,537

12,862

93,921

76,04770,359677,841¥269,393¥281,615$2,401,221

Current liabilities
Notes and accounts payable-trade
Short-term loans payable (Note 3)
Lease obligations (Note 3)
Accounts payable - otherAccrued expenses
Income taxes payable (Note 12)
Other (Note 12)
Total current liabilities
Non-current liabilities
Lease obligations (Note 3)
Net defined benefit liability (Note 4)
Other (Note 3 and 12)
Total non-current liabilities

Capital surplus
Retained earnings
Treasury stock, at cost:
13,414 thousand shares in 2017
13,505 thousand shares in 2016
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Minimum pension liability adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

6

Consolidated Statement of Income
Years ended March 31, 2017 and 2016

Thousands of
U.S. dollars (Note 1)

Millions of yen

Net sales
Cost of sales (Notes 4 and 8)
Gross profit
Selling, general and administrative expenses (Notes 4, 6, 8 and 19)
Operating income
Non-operating income:Interest
Dividends income
Gain on sales of investment securities
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on sales and retirement of non-current assets
Foreign exchange losses
Loss on valuation of derivatives
Foreign withholding taxes
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income:Gain on sales of shares of subsidiaries
Total extraordinary income
Extraordinary expenses:
Impairment loss (Note 9)
Restructuring cost (Note 10)
Loss on transfer of business (Note 11)
Total extraordinary expenses
Income (loss) before income taxes
Income taxes (Note 12):Current
DeferredTotal
Net income (loss)
Net income (loss) attributable to:Non-controlling interests
Owners of parent

2017

2016

2017

¥497,611
298,128¥532,818
315,732$4,435,431
2,657,349

199,483
184,833

217,085
215,483

1,778,082
1,647,500

14,6491,601

130,573

250
95
−
616
459

345
93
97
−
273

2,228
847
−
5,491
4,091

1,421

810

12,666

639
173
−
629
571
1,522

962
35
837
542
55
2,277

5,696
1,542
−
5,607
5,090
13,566

3,536

4,711

31,51812,534(2,298)111,721

2,114−

18,843

2,114−

18,843−
1,002−

85,023
1,440
325

−
8,931
−

1,002

86,788

8,931

13,646(89,087)

121,633

8,623(1,461)

12,514965

76,861(13,023)

7,162
6,484

13,479(102,566)

63,83857,795(1,274)¥7,758882¥(103,449)(11,356)$69,151Yen

Per share data (Note 23)

U.S. dollars

2017

2016

2017

Net income (loss) attributable to owners of parent-Basic¥28.24¥(376.69)$0.25

Cash dividends

¥2.00

−

$0.02

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

7

Consolidated Statement of Comprehensive Income
Years ended March 31, 2017 and 2016

Thousands of
U.S. dollars (Note 1)

Millions of yen

2017

2016

2017

¥6,484¥(102,566)$57,795

Valuation difference on available-for-sale securities

106

(38)

945

Deferred gains or losses on hedges

(77)

67

(686)

Net income (loss)
Other comprehensive income

Foreign currency translation adjustments(3,232)(7,268)(28,808)

Minimum pension liability adjustments

(332)

202

(2,959)Remeasurements of defined benefit plans

3,266(2,290)29,111

Total other comprehensive income (Note 7)(269)(9,327)(2,398)¥6,214¥(111,894)$55,388

Owners of parent

7,978(111,884)

71,112

Non-controlling interests(1,764)(9)(15,723)

Comprehensive income (loss)
Comprehensive income (loss) attributable to:

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

8

Consolidated Statement of Changes in Net Assets
Years ended March 31, 2017 and 2016

Millions of yen

Shareholders’ equity

Balance at April 1, 2016

Capitalstock

CapitalsurplusRetainedearnings¥39,970¥52,970¥(41,006)¥(5,523)¥46,411

7,758

−

7,758

−

(10)

(10)

11

−

45

57

−
−

(52,970)−

52,970−−−−−¥39,970¥11¥19,722¥(5,488)¥54,217

Changes during the year
Net income attributable to owners of parent−−

Purchase of treasury stock−−

Disposal of treasury stock−

Deficit disposition
Net changes of items other than shareholders’ equity
Balance at March 31, 2017

Total
Treasurystock, at cost shareholders’equityMillions of yen

Accumulated other comprehensive income
Valuation difference
Deferredon available-for-sale gains or losses on
securities
hedgesBalance at April 1, 2016

¥1,476¥71

Foreign currencytranslation
adjustments

Minimum
pension liability
adjustments¥11,740¥(461)

Remeasurements Total accumulatedof definedother comprehensive
benefit plansincome¥(1,857)¥10,969

Subscription
rights toshares

Noncontrollinginterests

Total net
assets¥116¥12,862¥70,359

Changes during the year
Net income attributable to owners of parent

−

−

−

−

−

−

−

−

7,758

Purchase of treasury stock

−

−

−

−

−

−

−

−

(10)

Disposal of treasury stock

−

−

−

−

−

−

−

−

57

−
104

−
(77)

−
(2,812)

−
(258)

−
3,264

−
220

−
(11)

−
(2,325)−(2,116)¥1,581¥(6)¥8,927¥(720)¥1,407¥11,189¥104¥10,537¥76,047

Deficit disposition
Net changes of items other than shareholders’ equity
Balance at March 31, 2017

Thousands of U.S. dollars

Shareholders’ equity

Balance at April 1, 2016
Changes during the year
Net income attributable to owners of parent

Capitalstock

CapitalsurplusRetainedearnings

Total
Treasurystock, at cost shareholders’equity$356,271$472,145$(365,505)$(49,229)$413,682
69,151−−

69,151−

Purchase of treasury stock

−

−

−

(89)

(89)

Disposal of treasury stock

−

98

−

401

508

Deficit disposition
Net changes of items other than shareholders’ equity−−(472,145)−

472,145
−

−
−

−
−

$356,271$98$175,791$(48,917)$483,261

Balance at March 31, 2017

Thousands of U.S. dollars

Accumulated other comprehensive income
Valuation difference
Deferredon available-for-sale gains or losses on
securities
hedgesBalance at April 1, 2016
Changes during the year
Net income attributable to owners of parent

Foreign currencytranslation
adjustments

Minimum
pension liability
adjustments

Remeasurements Total accumulatedof definedother comprehensive
benefit plansincomeSubscription
rightsto shares

Noncontrollinginterests

Total net
assets$13,156$633$104,644$(4,109)$(16,552)$97,772$1,034$114,645$627,141
69,151

−

−

−

−

−

−

−

−

Purchase of treasury stock

−

−

−

−

−

−

−

−

(89)

Disposal of treasury stock

−

−

−

−

−

−

−

−

508

−
927

−
(686)

−
(25,065)−(2,300)−29,094

−
1,961

−
(98)

−
(20,724)−(18,861)$14,092$(53)$79,570$(6,418)$12,541$99,733$927$93,921$677,841

Deficit disposition
Net changes of items other than shareholders’ equity
Balance at March 31, 20179Millions of yen

Shareholders’ equity
Total
Treasurystock, at cost shareholders’equityCapitalstock

CapitalsurplusRetainedearnings¥39,970¥52,965¥64,364¥(5,542)−−(1,922)−(1,922)−−(103,449)−(103,449)

Purchase of treasury stock

−

−

−

(18)

(18)

Disposal of treasury stock
Net changes of items other than shareholders’ equity

−
−

5
−

−
−

37
−

42
−

¥39,970¥52,970¥(41,006)¥(5,523)¥46,411

Balance at April 1, 2015
Changes during the year
Cash Dividends (Note 22)
Net loss attributable to owners of parent

Balance at March 31, 2016

¥151,759

Millions of yen

Accumulated other comprehensive income
Valuation difference
Deferredon available-for-sale gains or losses on
securities
hedgesBalance at April 1, 2015
Changes during the year
Cash Dividends (Note 22)
Net loss attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’ equity
Balance at March 31, 2016

Foreign currencytranslation
adjustments

Minimum
pension liability
adjustments

Remeasurements Total accumulatedof definedother comprehensive
benefit plansincomeSubscription
rights toshares

Noncontrollinginterests

Total net
assets¥203,108¥1,513¥3¥18,014¥(568)¥440¥19,404¥116¥31,828

−

−

−

−

−

−

−

−

(1,922)

−

−

−

−

−

−

−

−

(103,449)

−

−

−

−

−

−

−

−

(18)

−
(37)

−
67

−
(6,274)−106−(2,297)−(8,435)−(0)−(18,965)42(27,401)¥1,476¥71¥11,740¥(461)¥(1,857)¥10,969¥116¥12,862¥70,359

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Numbers of shares in issue: 288,146 thousand shares in the fiscal year ended March 31, 2017.

10

Consolidated Statement of Cash Flows
Years ended March 31, 2017 and 2016

Millions of yen

Cash flows from operating activities
Income (loss) before income taxes
Depreciation and amortization
Impairment loss (Note 9)
Increase (decrease) in allowance for doubtful accounts
Increase in net defined benefit liability
Interest and dividends income
Interest expenses
Loss on sales and retirement of property, plant and equipment
Gain on sales of investment securities
Restructuring cost (Note 10)
Loss on transfer of businessChanges in assets and liabilities:
Decrease in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease in notes and accounts payable-trade
Other, net
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
Proceeds from transfer of business
Purchases of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation (Note 14)
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation (Note 14)
Net decrease (increase) in short-term loans receivable
Payments of long-term loans receivableCollections of long-term loans receivable
Other, net
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
Repayments of long-term loans payable
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation
Repayments of finance lease obligations
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling shareholders
Other, net
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period (Note 14)

Thousands of
U.S. dollars (Note 1)

2017

2016

2017

¥13,646
13,955
−
618
410
(345)
639
173
(2,114)
1,002−¥(89,087)
19,49685,023(1,807)
602
(439)
962
35
(97)
1,440
325

$121,633
124,387
−
5,509
3,655
(3,075)
5,696
1,542(18,843)
8,931
−

7,816
4,815
(4,165)
7,961
44,413338(723)(7,012)37,016

1,708(2,348)(15,665)
12,335
12,484443(875)(7,484)
4,567

69,66842,918(37,125)
70,960395,873
3,013(6,444)(62,501)
329,940(6,356)649(2,534)
−
(399)
4
−
1,747
(2)
(29)
13
32
(6,876)(8,724)
1,176(5,376)
600
(19)
167
(1,279)
20
3,362
(13)
15
279
(9,789)(56,654)
5,785(22,587)−(3,556)36−
15,572
(18)
(258)
116
285
(61,289)(2,256)−(3)−(2,823)
(10)
(4)
(397)
57
(5,439)(1,231)
23,46822,6601,028
3(3)(19,120)(3,046)(18)(1,925)(899)
40(23,941)(3,141)(32,304)
54,964(20,109)−(27)−(25,163)(89)(36)(3,539)508(48,480)(10,972)
209,181
201,979¥46,129¥22,660$411,169

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

11

Notes to Consolidated Financial Statements

1.	Basis of Presenting Consolidated
Financial Statements
The consolidated financial statements of TOSHIBA TECCORPORATION (the “Company”) have been prepared inaccordance with accounting principles generally accepted inJapan, which are different in certain respects as to the applicationand 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 Law of Japan.
Solely for the convenience of the readers, the consolidated
financial statements have been presented in U.S. dollars bytranslating Japanese yen amounts at the exchange rate of¥112.19 = US$1.00 prevailing as of March 31, 2017. The
translation should not be construed as a representation that theJapanese yen could be converted into U.S. dollar at the above or
any other rate of exchange. As permitted by the Financial
Instruments and Exchange Act of Japan, fractions below ¥1million are rounded off.

2.	Summary of Significant Accounting
Policies(A)	Basis of Consolidation and Accounting ofInvestments in Affiliated Companies
The consolidated financial statements include the accounts of theCompany and its subsidiaries (collectively, “Companies”). For
the years ended March 31, 2017 and 2016, the accounts of 82
and 86 subsidiaries, respectively are consolidated. All significant
inter-company transactions and accounts are eliminated inconsolidation.
The difference between the cost of investments in subsidiaries
and the fair value of the net assets acquired at the dates ofacquisition is recognized as goodwill in the consolidated balance
sheet and principally amortized by the straight-line method over
5 to 15 years.
The Company has no unconsolidated subsidiary and the affiliatedcompanies to which the equity method of accounting has been
applied for the years ended March 31, 2017 and 2016.
From the perspective of immateriality, the investments in theremaining unconsolidated subsidiaries and the affiliatedcompanies are stated at cost.
Because they are not important as a whole, Advanced Supply
Manufacturing Corporation and another company are excluded
from the scope of equity method.
Certain subsidiaries have the fiscal year end which differs fromthat of the Company. As a result, adjustments have been madefor any significant transactions as needed in consolidation thattook place during the period between the fiscal year end of thesubsidiaries and the fiscal year end of the Company.

(B) Cash and Cash Equivalents
Cash and cash equivalents in the consolidated cash flow
statement consists of cash-in-hand, deposits readily convertible
into cash, and short-term investments with low risk of pricefluctuations and with a maturity of three months or less at thetime of acquisition.

(C) Investment Securities
Marketable securities classified as “Investment securities” arerecorded at fair value, and net unrealized gains or losses after tax
effect adjustments are presented as “Valuation difference on
available-for-sale-securities” as a component of “Accumulated

12other comprehensive income” under “Net assets” in the
consolidated balance sheets. Cost of securities sold is determinedby the moving average method.
Non-marketable securities classified as “Investment securities”
are carried at cost, which is determined by the moving averagemethod.

(D) Inventories
Finished goods, merchandises and semi-finished components are
principally stated at the lower of cost, determined by the first-in,
first-out method, or net realizable value. Work-in-process andraw materials are principally stated at the lower of cost,
determined by the moving average method, or net realizablevalue. Supplies are principally stated at the latest purchase cost
method.

(E)	Property, Plant and Equipment and Depreciation
excluding leases
Property, plant and equipment are depreciated by the straightline method over their estimated useful lives.
The useful lives of principal property, plant and equipment aresummarized as follows:
Buildings and structures
15 to 38 years
Machinery, equipment and vehicles 5 to 13 years
2 to 7 years
Tools, furniture and fixtures(F)	Intangible Assets and Amortization excluding
leasesIntangible assets except for software developed for sales in themarket are amortized by the straight-line method. Amortization
for software developed for sales in the market is recorded at thegreater of either an amortizable amount based on the estimatedsales revenue or an amortizable amount based on a straight-line
method over remaining valid sales period. Software for internal
use is amortized by the straight-line method over its estimateduseful life.

(G) Leases
The Companies lease certain equipment under non-cancelable
lease agreements referred to as finance leases. Depreciation oflease assets is calculated by the straight-line method over thelease period with no residual value.

(H) Allowance for Doubtful Accounts
Allowance for doubtful accounts is provided based on pastexperience for normal receivables and on an estimate of thecollectability of receivable from companies in financial difficulty.

(I) Foreign Currency Transactions
All monetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the exchange rates
at the balance sheet date. Foreign exchange gains and losses
resulting from the currency conversion and settlement arerecognized in profit or loss.
Assets and liabilities of the consolidated foreign subsidiaries aretranslated into Japanese yen at the current exchange rate as of
the balance sheet date, and revenue and expense items aretranslated into Japanese yen at average exchange rates during theperiod. Differences arising from such translation are included inforeign currency translation adjustments and Non-controllinginterests in consolidated subsidiaries as a separate component of“Net assets”.

(J) Retirement Benefits
The estimated amount of retirement benefits for employees is
attributed to each period by the benefit formula method.
Prior service cost is amortized by the straight-line method over a
period within the average remaining service years for employees(mainly 10 years) at the time of recognition.
Actuarial gain or loss are amortized on a straight-line basis overa period (mainly 10 years), which is shorter than the averageremaining years of service of the eligible employees, from thefiscal year following the fiscal year in which differences arise.
Unrecognized actuarial gain or loss and unrecognized priorservice cost, net of tax, are recognized as “Remeasurement ofdefined benefit plans” in “Accumulated other comprehensive
income” of “Net assets”.
Certain consolidated subsidiaries use a simplified method for
calculating retirement benefit expenses and liabilities based on
the assumption that the benefits payable, which are calculated as
if all eligible employees voluntarily terminated their employment
at the current fiscal year end, approximate net defined benefit
liability at year-end.

(K) Income Taxes, Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax bases of theassets and liabilities, and are measured using the enacted tax
rates and laws which will be in effect when the temporary
differences are expected to reverse. To the extent we do notconsider it more likely than not that a deferred tax asset will berecovered, a valuation allowance is established.
The Company and its wholly owned domestic subsidiaries filetheir consolidated tax return in Japan.

(L) Consumption Taxes
Consumption taxes withheld from sales and paid uponpurchasing goods and services by the Companies are notincluded in revenues and expenses.

(M) Derivative Financial Instruments
The Company and certain subsidiaries have entered into forward
foreign exchange contracts to reduce the risk of fluctuation in
exchange rate in the foreign currency transactions related toaccounts receivable and payable denominated in foreign
currency.
Derivative financial instruments are reported at fair value withunrealized gain or loss recognized in income, except for thosewhich meet the criteria for the deferral hedge accounting underwhich unrealized gains or losses are deferred as “Deferred gains
or losses on hedges” in “Accumulated other comprehensive
income” of “Net assets”.
Receivables and payables hedged by qualified forward foreignexchange contracts are translated at the corresponding foreignexchange contract rates.

(N) Change in presentation(Consolidated Balance Sheet)“Accounts receivable – other” separately presented for the year
ended March 31, 2016, is included in “Other” under “Current
assets” since those amounts are less than the amount of 5% of
total assets. To reflect this change in the presentation, theprevious consolidated financial statement and related foot noteamounts are reclassified.
As a result of this change, “Accounts receivable – other” of¥20,168 million separately presented under “Current assets” inthe previous consolidated financial statements is reclassified as“Other”.

“Accrued expenses” included in “Other” under “Current
liabilities” for the year ended March 31, 2016, is separately
presented under “Current liabilities” since those amounts exceed
the amount of 5% of total liabilities and net assets. To reflect thischange in the presentation, the previous consolidated financial
statements and related foot note amounts are reclassified.
As a result of this change, “Accrued expenses” of ¥13,234
million included in “Other” under “Current liabilities” in theprevious consolidated financial statements is separately
presented as “Accrued expenses”.
(Consolidated Statement of Income)“Foreign withholding taxes” included in “Other” under “Nonoperating expenses” for the year ended March 31, 2016, isseparately presented since those amounts exceed the amount of
10% of total Non-operating expenses. To reflect this change inthe presentation, the previous consolidated financial statements
and related foot note amounts are reclassified.
As a result of this change, “Other” collectively presented in theprevious consolidated financial statements is reclassified as“Foreign withholding taxes” and “Other” under “Non-operating
expenses”.
(Consolidated Statement of Cash Flows)“Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation” included in “Other” under“Cash flows from investing activities” for the year ended March
31, 2016, is separately presented since its quantitative materiality
increased. To reflect this change in the presentation, the previous
consolidated financial statements and related foot note amounts
are reclassified.
As a result of this change, “Other” collectively presented in theprevious consolidated financial statements are reclassified as“Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation” and “Other”.

(O) Additional Information
T h e c o m p a ny a d o p t e d I m p l e m e n t a t i o n G u i d a n c e o n
Recoverability of Deferred Tax Assets (ASBJ Guidance No. 26
of March 28, 2016), effective from April 1, 2016.

3.	Short-Term Loans Payable and LongTerm Debt
The short-term loans payable and long-term debt (including
lease obligations) at March 31, 2017 and 2016, consist of thefollowing:
Millions of yen

Thousands of
U.S. dollars

2017

2016

2017

Short-term loans payable
Long-term loans payable¥1,04811¥1,059¥3,40716¥3,423$9,341
98$9,439Lease obligations
Less current portion

9,206(4,033)¥5,172

10,390(4,435)¥5,95482,057(35,948)$46,100

The average interest rate for short-term loans outstanding at
March 31, 2017 and 2016 is 1.29% and 1.26%, respectively.
The average interest rate for long-term loans outstanding at
March 31, 2017 and 2016 is 2.49% and 2.52%, respectively.
The average interest rate for lease obligations is omitted because
the Companies recorded the amount of lease payments inclusiveof interest in the Consolidated Balance Sheet.

13

The aggregate annual maturities of lease obligations (excluding
the current portion) outstanding at March 31, 2017 are as
follows:
Year ending
March 31

2019
2020
2021
2022

Millions of yen

Thousands of
U.S. dollars¥1,293
1,293
1,293
1,293
¥5,172$11,525
11,525
11,525
11,525$46,100

4. Retirement Benefits
1. Summary of Retirement Benefit Plans
The Company and its consolidated subsidiaries have either
funded or unfunded defined benefit plans and defined
contribution plans.
In defined benefit plans which are fully funded, the benefits are
determined by reference to qualification and length of service
and paid on a lump-sum or annuity basis.
In defined benefit plans which are fully unfunded, the benefits
are determined by reference to assessment and qualificationand paid on a lump-sum basis.
In addition, a part of subsidiaries use a simplified method forthe calculation of defined benefit liability and retirement
benefit cost of their defined benefit pension plans and lumpsum payment plans.
The Company and its certain domestic subsidiaries haveadopted defined contribution pension plans since October 1,
2015.
It replaces a part of the fund for lump-sum retirement benefit
plans to a defined contribution pension plan, under which theemployees manage the fund by themselves. The Company
pays the amount equivalent to the employer’s contributions
defined in the treatment of the defined contribution pension
plan as an advance payment of retirement benefits to theemployees who do not want to participate in the defined
contribution pension plan.

3)	The funded status of the plans and the amounts recognized in
the consolidated balance sheet as of March 31, 2017 and2016 for the Company’s and the consolidated subsidiaries’
defined benefit plans
Millions of yen

Funded retirement benefit
obligation
Plan assets

Unfunded retirement benefit
obligation
Net liability for retirement
benefits in the balance sheet
Net defined benefit liability
Asset for retirement benefits
Net liability for retirement
benefits in the balance sheet

2017

2016

2017

¥53,405(56,290)¥(2,885)¥55,581(54,077)¥1,504$476,023(501,738)$(25,715)¥35,747¥35,856$318,629¥32,861¥37,361$292,905¥35,066(2,204)¥38,687(1,325)$312,559(19,645)¥32,861¥37,361$292,9054)	The components of retirement benefit expense for the years
ended March 31, 2017 and 2016
Millions of yen

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

Millions of yen

Balance at the beginning of the year
Service cost
Interest cost
Actuarial gain or loss
Retirement benefit paid
Other
Balance at the end of the year

2017

2016

2017

¥3,6491,021(1,243)92
835¥4,355$32,0627,737(10,259)
7,995
5,901
$43,4445)	Retirement benefit liability adjustments included in othercomprehensive income (before tax effect) for the years ended
March 31, 2017 and 2016

2017

2016

2017

¥88,869
3,649
1,021
2,141
(4,083)(159)¥91,438$815,028
32,062
7,737(24,405)(33,684)(2,086)$794,6522)	The changes in plan assets during the years ended March 31,2017 and 2016 are follows:
Millions of yen

Balance at the beginning of the year
Expected return on plan assets
Actuarial gain or loss
Contributions by the Company
Retirement benefits paid
Other
Balance at the end of the year

14

Prior service cost
Actuarial gain (loss)

Thousands of
U.S. dollars¥91,438
3,597
868(2,738)(3,779)(234)¥89,152

Thousands of
U.S. dollars

2017

2016

2017

¥54,077
1,151
418
3,281
(2,515)(123)¥56,290¥54,333
1,243(2,072)3,370(2,349)(447)¥54,077$482,013
10,2593,726
29,245(22,417)(1,096)$501,738

Thousands of
U.S. dollars¥3,597868(1,151)897
662¥4,874

Millions of yen

2. Defined Benefit Plans
1)	The changes in the retirement benefit obligation during theyears ended March 31, 2017 and 2016 are follows:

Thousands of
U.S. dollars

Thousands of
U.S. dollars

2017

2016

2017

¥662
4,054
¥4,716¥921(4,207)¥(3,286)$5,901
36,135$42,0366)	R etirement benefit liability adjustments included inaccumulated other comprehensive income (before tax effect)
as of March 31, 2017 and 2016
Millions of yen

Unrecognized prior service cost
Unrecognized actuarial loss

Thousands of
U.S. dollars

2017

2016

2017

¥333
1,676
¥2,009¥(329)(2,390)¥(2,719)$2,96814,939$17,9077)	The plan assets
1. The plan assets, by major category, as a percentage of total
plan assets as of March 31, 2017 and 2016
Bonds
Alternatives
StocksLife insurance company general accounts
Other
Total

2017

2016

34%
27%
21%
9%
9%
100%

39%
25%
23%
9%
4%
100%

Note: “Alternatives” are mainly investments in hedge funds and real estates.

2. How to set the expected long-term rate of return on plan
assets		The Companies set the expected long-term rate of return inconsideration of target portfolio of plan assets, expectedlong-term rate of return and past performance.
8)	The assumptions used in actuarial calculation
Discount rate
Expected long term rate of return on plan assets
Expected salary increase rate

2017

2016

Mainly 1.2%
Mainly 2.5%
Mainly 5.3%

Mainly 1.2%
Mainly 2.5%
Mainly 5.3%

3. Defined Contribution Plans
Amounts which the Companies contributed to their defined
contribution plans for the years ended March 31, 2017 and2016 are ¥1,657 million ($14,770thousand) and ¥1,993
million, respectively.

5.	Contingent Liabilities
Contingent liabilities at March 31, 2017 and 2016 are as follows:
Thousands of
U.S. dollars

Millions of yen

Trade notes discounted
Guarantees on employees’
housing loans

2017

2016

2017

¥128

¥112

$1,141

92

134

820

6.	Selling, General and Administrative
Expenses

Personnel expenses
Retirement benefit expenses
Research and development expenses

Other comprehensive income for the years ended March 31,2017 and 2016 are follows:
Reclassification adjustment and income tax relating to othercomprehensive income

Thousands of
U.S. dollars

2017

2016

2017

¥78,542
4,552
24,913¥95,613
4,986
24,998$700,080
40,574
222,061

Thousands of
U.S. dollars

Millions of yen

2017

2016

Other comprehensive income
Valuation difference on available-for-sale securities
Amount incurred
¥152
¥(9)
Amount of recycling(0)(98)
Amount before tax effectadjustments
152
(108)
Tax effect adjustments(46)
70
Valuation difference on
available-for-salesecurities
¥106
¥(38)
Deferred gains or losses on hedges
Amount incurred¥(9)
Amount of recycling(102)
Amount before tax effectadjustments(112)
Tax effect adjustments
34
Deferred gains or losses
on hedges¥(77)
Foreign currency translation adjustments
Amount incurred¥(3,241)
Amount of recycling
9
Amount before tax effectadjustments(3,232)
Tax effect adjustments−
Foreign currencytranslation adjustments¥(3,232)
Minimum pension liability adjustments
Amount incurred¥(541)Tax effect adjustments
208
Minimum pension
liability adjustments¥(332)
Retirement benefit liability adjustments
Amount incurred¥3,156
Amount of recycling
1,559
Amount before tax effectadjustments
4,716
Tax effect adjustments(1,450)Retirement benefit
liability adjustments¥3,266
Total other comprehensive
incomeMajor components of selling, general and administrative
expenses for the years ended at March 31, 2017 and 2016 are as
follows:
Millions of yen

7. Other Comprehensive Income¥(269)

2017$1,355
(0)
1,355
(410)
$945

¥102
(5)

$(80)
(909)

96
(29)

(998)
303

¥67

$(686)¥(7,268)−$(28,888)80(7,268)−(28,808)−¥(7,268)$(28,808)

¥354
(151)

$(4,822)
1,854

¥202

$(2,959)¥(4,213)927$28,131
13,896(3,286)995

42,036(12,925)¥(2,290)$29,111¥(9,327)$(2,398)

8. Research and Development Expenses
Research and development costs included in administrative
expenses and manufacturing cost for the years ended March 31,2017 and 2016 are as follows:
Millions of yen

Thousands of
U.S. dollars

2017

2016

2017

¥28,161¥27,584$251,012

15

9. Impairment Loss

10. Restructuring Cost

Year ended March 31, 2017
Not applicable

The contents of Restructuring Cost for the year ended March 31,2017 and 2016 are extra retirement benefit payments and thecosts associated with the disposal of overseas operations.

Year ended March 31, 2016
The Companies are grouping the assets by the minimum unitthat generates almost independent cash flows based on theclassification for management accounting purpose.
The Companies recognized impairment loss in an amount of¥85,023 million under “Extraordinary expenses” for the year
ended March 31, 2016.
The detail is as follows.
1. I mpairment loss of Toshiba Global Commerce Solutions
Holdings Corporation and its subsidiaries
Usage
−

Type
Goodwill

Buildings and structures
Machinery, equipment and vehicles
Assets for Tools, furniture and fixtures
business Construction in progress
Customer relationships
Other intangible assets

Amount(Millions of yen)Place

¥24,489

USA andothers

799
629
239
553
32,071
25,774

USA andothersFor Global Commerce Solution Business, the Company
recognized impairment loss of ¥84,557 million.
After the acquisition of Global Commerce Solution Businessin August 2012, the Company made efforts in development of
the business and creation of synergy, however in October
2015, it was found that an investment restraint tendency of themain customers became remarkable, and uncertainties
increased in the future of the demand. As a result of reviewing
a medium-term business plan including the setup timing andthe cost of the new operation system based on above situations
conservatively, and having carried out the impairment test, theCompany recognized impairment loss of ¥65,781 million in
the second quarter ended September 30, 2015.
In addition, as a result of having carried out the impairment
test after having reviewed sales plan due to the reviews ofprojects for new customers, the Company recognizedimpairment loss of ¥18,776 million on non-current assets
including customer related assets (customer list) and operation
system for the business in the fourth quarter ended March 31,
2016.
The recoverable value is measured in terms of value in use andcalculated by discounting future cash flows at 10.0%.

Type

Assets for Buildings and structures
businessAmount(Millions of yen)

Year ended March 31, 2016
The content is a loss on the business transfer of TEC
PRECISION CO., LTD. to Kyoden Co., Ltd.

12.	Income Taxes and Deferred Tax Assets
and Liabilities
1. Main items of deferred tax assets and liabilities for the years
ended March 31, 2017 and 2016 are as follows:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Elimination of consolidated
unrealized gains
Intangible assets
Provision for bonuses
Net liability for retirement
benefits
Loss carried forward
Other
Total gross deferred tax assets
Valuation allowance
Total deferred tax assets

2017

2016

2017

¥1,61523,922
2,829¥1,52927,255
1,935$14,395
213,228
25,216

9,731

10,88886,737

15,5395,095¥58,734

9,566
7,834
¥59,010

138,506
45,414$523,523(34,442)¥24,292(36,869)¥22,141(306,997)$216,526

Deferred tax liabilities:
Reserve for advanced
depreciation of noncurrent assets
Valuation difference on
available-for-salesecurities
Other
Total deferred tax liabilities¥(246)¥(246)$(2,193)(670)(4,849)¥(5,766)(630)(2,970)¥(3,847)(5,972)(43,221)$(51,395)

Net deferred tax assets¥18,525¥18,294$165,122¥465

Izunokuni,
Shizuoka

Thousands of
U.S. dollars

Millions of yen

Place

As a result of appraisal Mifuku factory by an independent realestate appraiser at the time of sales and purchase agreementon the real estate, the carrying amounts of these assets werereduced to the recoverable amount, and impairment loss of¥465 million was recognized under “Extraordinary expenses”.

16

Year ended March 31, 2017
Not applicable

Note: Net deferred tax assets are included as below on consolidated balance sheet for theyears ended March 31, 2017 and 2016.

2. Impairment loss of Mifuku factory
Usage

11. Loss on Transfer of BusinessCurrent assets Deferred tax assets
Non-current assets Deferred tax assets
Current liabilities Other
Non-current liabilities Other

2017

2016

2017

¥7,560¥4,913$67,386

16,731

17,227

149,131

(44)

(57)

(392)

(5,721)(3,789)(50,994)2. Difference between statutory tax rate and effective tax rate
The following table summarizes the difference between thestatutory tax rate and the effective tax rate for the years ended
March 31, 2017 and 2016.
2017

Statutory tax rate
Effect of:Different tax rates applied to income offoreign subsidiaries
Expenses permanently not deductiblefor income tax purposes
Income permanently not taxable forincome tax purpose
Corporation tax special credit for
research expenditures
Changes in valuation allowance
Amortization of goodwill of foreignsubsidiaries
Other, net
Effective tax rates

2016

30.9%

1. Details of investment lease1) ‌Investment lease current assets
Lease revenues receivable
Interests receivable

(7.1)
1.1
(0.3)

Note

2) Investment lease - others
Lease revenues receivable
Interests receivable

(4.4)
20.2

6.7
52.5%

Thousands of
U.S. dollars

2017

2016

¥1,379(53)¥1,325

¥344
(18)
¥326

$12,292(472)$11,810¥2,613(338)¥2,275

¥407
(21)
¥385

$23,291(3,013)$20,278

Millions of yen

3. Effect of a change in the corporate income tax rate
The “Act for Partial Amendment of Act for Partial Amendmentof the Consumption Tax Act and for the Drastic Reform of theTaxation System for Ensuring Stable Financial Resources forSocial Security.” and the “Act for Partial Amendment of Act
for Partial Amendment of the Local Tax Act and Local
Allocation Tax Act for the Drastic Reform of the Taxation
System for Ensuring Stable Financial Resources for Social
Security.” were enacted by the Diet on November 18, 2016.
As a result, the effective statutory tax rate used to measure theCompany’s deferred tax assets and liabilities is changed.
The effect of the change of the effective statutory tax rate isminor.

13. Leases(A) Finance Lease as a lessee
Finance Lease transactions, except for those which meet theconditions that the ownership of the leased assets was transferredto the lessee.
1. The content of lease assets: Mainly machinery and equipment
2. Depreciation method of lease assets:
Please refer to Note 2 Summary of Significant Accounting
Policies (G) Leases.

(B) Operating Lease as a lessee
Future minimum lease payments for non-cancelable operatingleases are summarized as follows:
Millions of yen

Millions of yen

2017

2. Expected collectible amounts of lease revenues receivable areas follows :5.4

Note: The information for the year ended March 31, 2016 is omitted, because the Company
recorded loss before income taxes.

Payment due within 1 year
Payment due in more than 1 year(C) Finance Lease as a lessor

Thousands of
U.S. dollars

2017

2016

2017

¥2,937
8,923¥11,860¥873
2,848¥3,722$26,179
79,535$105,714

Within 1 year
Between 1 to 2 years
Between 2 to 3 years
Between 3 to 4 years
Between 4 to 5 years
More than 5 years

Thousands of
U.S. dollars

2017

2016

2017

¥1,379
691
669
634
617
0
¥3,993

¥344
195
135
55
20
−
¥751

$12,292
6,159
5,963
5,651
5,500
0
$35,591(D) Operating Lease as a lessor
Future minimum lease payments for non-cancelable operatingleases are summarized as follows:
Millions of yen

Payment due within 1 year
Payment due in more than 1 year

Thousands of
U.S. dollars

2017

2016

2017

¥459
602
¥1,061¥668
977¥1,646$4,091
5,366$9,457(E) Other related information
Future minimum lease payments for non-cancelable operating
sub-leases are summarized as follows:
Millions of yen

Investment lease
Current assets
OthersLease expenses payable
Current liabilities
Fixed liabilities

Thousands of
U.S. dollars

2017

2016

2017

¥1,186
1,868¥3,054¥1,3702,370¥3,741$10,571
16,650$27,222¥1,186
1,868¥3,054¥1,3702,370¥3,741$10,571
16,650$27,22217

14.	Consolidated Statement of Cash Flows

15. Financial Instruments

1. Reconciliation of cash and cash equivalents at the end of theperiod on Consolidated Statement of Cash Flows and cash anddeposits on Consolidated Balance Sheet

Overview

Millions of yen

Cash and deposits
Group deposits

Thousands of
U.S. dollars

2017

2016

2017

¥46,129−¥46,129¥22,217443¥22,660$411,169−$411,169

2. Business divestitures through equity acquisition
Year ended March 31, 2017
Not applicableYear ended March 31, 2016
The Company acquired TOSHIBA TEC MALAYSIA SDN.
BHD., Tele Dynamics Solution Sdn. Bhd., B Excelle Sdn.
Bhd. and TOSHIBA TEC (THAILAND) CO., LTD. during
the year ended March 31, 2016.
Assets and liabilities of the acquired companies and therelationship with net payments for the acquisition are as
follows:
Millions of yen

Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Non-controlling interests
Total acquisition cost
Cash and cash equivalents
Net payments for acquisition¥4,527
3,262
278(3,296)(1,720)(1,358)¥1,693(413)¥1,2793. Business combination through sales of shares of subsidiaries
Year ended March 31, 2017
The Company newly established TOSEI CORPORATION bymeans of corporate separation.
The breakdown of asset and liability, total sale value andproceeds from sales at the time of the exclusion of TOSEICORPORATION from the scope of consolidation due to salesof stock are as follows:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Profit on sales of shares of subsidiaries
Total sale value
Cash and cash equivalents
Proceeds from sales

Millions of yen

Thousands of
U.S. dollars¥3,349855(3,634)(166)
2,114¥2,520(772)¥1,747$29,851
7,621(32,391)(1,480)18,843$22,462(6,881)$15,572

Year ended March 31, 2016
It is not stated because the amount is immaterial.
4. The content of important non-cash transactions
The amount of non-cash transactions on assets and liabilities
under finance lease is ¥3,643 million ($32,472 thousand) and¥3,710 million ($33,069 thousand) for the year ended March
31, 2017 and ¥3,594 million and ¥3,632 million for the year
ended March 31, 2016, respectively.

18

1. Policy for financial instruments
The Companies, in principle, limit the scope of its cash andfund management activities to short-term deposits, etc.
The Companies use derivatives for the purpose of reducing
risks (described below) and don’t enter into derivatives for
speculative or trading purposes.
2. Types of financial instruments and related risks
Trade receivables (Notes and accounts receivable-trade) are
exposed to credit risk in relation to customers. In addition, theCompanies are exposed to foreign currency exchange rate
fluctuation risk arising from receivables denominated inforeign currencies. In principle, the foreign currency exchange
rate fluctuation risk deriving from the trade receivables
denominated in foreign currencies, net of trade payables
denominated in the same currencies, are hedged by forward
foreign exchange contracts.
Investment securities are exposed to market risk. These are theequity securities of certain enterprises with which theCompanies have business relationships.
Substantially all trade payables (Notes and accounts payabletrade) are due within one year. Although the Companies are
exposed to foreign currency exchange rate fluctuation risk
arising from those payables denominated in foreign currencies.
However the volume of trade payable is in the range ofaccounts receivable of the same currency.
Short-term loans payable are mainly for financing related tooperating activities by bank loans.
Regarding derivatives, the Companies enter into forward
foreign exchange contracts and options to reduce the foreign
currency exchange rate fluctuation risk arising from thereceivables and payables denominated in foreign currencies.
With regard to instruments, targets, policies and methods ofevaluating the effectiveness of the hedge, please refer to Note
2 Summary of Significant Accounting Policies (M) Derivative
Financial instruments.
3. Risk management for financial instruments1)	Monitoring of credit risks (the risks that related to breachof contract with client)
The Company adheres to the internal policies for its tradereceivables by having the Credit Managing divisionmonitor the status of major counterparties regularly andmanaging due dates and balances by counterparty, whileworking to detect early and mitigate any concerns aboutcollection due to the deterioration in their financial
positions and other reasons.
2)	M onitoring of market risks (the risks arising fromfluctuations in foreign exchanges rates, interest rates andothers)For trade receivables and payables denominated in foreign
currencies, the Companies identify the foreign currency
exchange rate fluctuation risk for each currency on amonthly basis and enter into forward foreign exchange
contracts to hedge such risk.
The Financial Division manages risks on derivativetransactions, in accordance with the internal policies.
Monthly reports including actual transaction data aresubmitted to Chief Financial Officer for their review.
For marketable and investment securities, the Companies
periodically review the fair values of such financial
instruments and the financial position of the issuers. In
addition, the Companies continuously evaluate whether
securities should be maintained taking into account theirfair values and relationships with the issuers.

3)	Monitoring of liquidity risk (the risk that the Companies
may not be able to meet its obligations on scheduled due
dates)
Based on the report from each division, the Companies
prepare and update their cash flow plans on a timely basis
to manage liquidity risk.
4. S upplementary explanation of the fair value of financial
instruments
The fair value of financial instruments is based on their quoted
market price, if available. When there is no quoted market
price available, the fair value is determined based onreasonable estimates. Since various assumptions and factors
are reflected in estimating the fair value, different assumptions
and factors could result in different fair value. In addition, thenotional amounts of derivatives in Note 17 Derivative
Transactions are not indicative of the actual market risk
involved in derivative transactions.

Fair ValueYear ended March 31, 2017
The carrying value of financial instruments in the consolidatedbalance sheet as of March 31, 2017, and their fair value are as
follows:
Items without market value are not included in the securities inthe table. (See Note2)
Millions of yen(a) Cash and deposits
and accounts(b) Notes
receivable-trade
Allowance for
doubtful accounts (*1)and(c) Marketable
investment securities
Total assets
and accounts(d) Notes
payable-trade(e) Short- term loans payable(f) Accounts payable - other(g) Lease obligations (*2)
Total liabilities(h) Derivative transactions (*3)

Consolidatedbalance sheet

Fair value

Difference¥46,129¥46,129−

63,769(3,211)60,55860,558

−

3,412

3,412

−

110,100

110,100−(61,860)(61,860)−(1,048)(24,044)(9,206)(96,160)(189)(1,048)(24,044)(8,881)(95,835)
(189)

−
−
(325)
(325)
−

Thousands of U.S. dollars
Consolidatedbalance sheet
Fair value
Difference(a) Cash and deposits
and accounts(b) Notes
receivable-trade
Allowance for
doubtful accounts (*1)$411,169−

568,402(28,621)539,781and(c) Marketable
investment securities
Total assets
and accounts(d) Notes
payable-tradeterm loans(e) Shortpayable(f) Accounts payable - other(g) Lease obligations (*2)
Total liabilities(h) Derivative transactions (*3)$411,169

539,781−

30,41330,413−

981,371

981,371−(551,386)(551,386)−(9,341)(9,341)−(214,315)(82,057)(857,117)(1,685)(214,315)(79,160)(854,221)(1,685)−(2,897)(2,897)−(*1) Allowance for doubtful accounts provided for individual customers are deducted.
(*2) Lease obligations scheduled to be repaid within one year are included.
(*3) The value of assets and liabilities arising from derivatives is shown at net value.
The liability position is shown in parenthesis.

Note: 1.	Method to determine the fair value of financial instruments and othermatters related to securities and derivative transactions(a) Cash and deposits and (b) Notes and accounts receivable-trade
Since these items are settled in a short period of time, their carrying
value approximates the fair value.
(c) Marketable and investment securities
The fair value of marketable and investment securities is based on thequoted market price. For information on securities by each holding
purpose, please refer to Note 16 Securities.
(d)	Notes and accounts payable-trade, (e) Short-term loans payableand (f) Accounts payable - other
Since these items are settled in a short period of time, their carrying
value approximates the fair value.
(g) Lease obligations
The fair market value is calculated by discounting the total amount of
the principal and interest based on the reasonably estimated interest
rate for similar borrowings.
(h) Derivative transactions
Please refer to Note 17 Derivative Transactions.
2.	F inancial instruments for which an observable market price orobservable inputs used to determine a market price doesn’t exist

Unlisted stocks

Millions of yen

Thousands of
U.S. dollars¥1,937$17,265

Because an observable market price or observable inputs used to determine
a market price doesn’t exist, the above financial instruments are notincluded in (c) Marketable and investment securities in the above table.

Year ended March 31, 2016
The carrying value of financial instruments in the consolidatedbalance sheet as of March 31, 2016, and their fair value are as
follows:
Items without market value are not included in the securities inthe table. (See Note2)
Millions of yen(a) Cash and deposits(b) Group deposits
and accounts(c) Notes
receivable-trade
Allowance for
doubtful accounts (*1)(d) Accounts receivable - otherand(e) Marketable
investment securities
Total assets
and accounts(f) Notes
payable-trade(g) Short- term loans payable(h) Accounts payable - otherTotal liabilities(i) Derivative transactions (*2)

Consolidatedbalance sheet

Fair value

Difference¥22,217443¥22,217443−−

73,717
20,16873,717
20,168

−
−

3,232

3,232

−

119,778

119,778−(71,175)(71,175)−(3,407)(29,557)(104,140)
329(3,407)(29,557)(104,140)
329

−
−
−
−

76,470(2,752)(*1) Allowance for doubtful accounts provided for individual customers are deducted.
(*2) The value of assets and liabilities arising from derivatives is shown at net value.
The liability position is shown in parenthesis.

Note: 1.	Method to determine the fair value of financial instruments and othermatters related to securities and derivative transactions(a)	Cash and deposits, (b) Group deposits, (c) Notes and accounts
receivable-trade and (d) Accounts receivable - other
Since these items are settled in a short period of time, their carrying
value approximates the fair value.
(e) Marketable and investment securities
The fair value of marketable and investment securities is based on thequoted market price. For information on securities by each holding
purpose, please refer to Note 16 Securities.
(f)	Notes and accounts payable-trade, (g) Short-term loans payableand (h) Accounts payable - other
Since these items are settled in a short period of time, their carrying
value approximates the fair value.
(i) Derivatives transaction
Please refer to Note 17 Derivative Transactions.
2.	F inancial instruments for which an observable market price orobservable inputs used to determine a market price doesn’t exist
Millions of yen

Unlisted stocks¥1,649Because an observable market price or observable inputs used to determine
a market price doesn’t exist, the above financial instruments are notincluded in (e) Marketable and investment securities in the above table.

1916. Securities

17. Derivative Transactions

1. ‌Information regarding marketable securities as of March 31,2017 and 2016 are as follows:

1. Summarized below are the amount of contract and the fairvalue of the derivative transaction for which the hedge
accounting is not applied.

Millions of yen
2017
2016
Carrying Acquisition Unrealized Carrying Acquisition Unrealized
value
cost
gain (loss)
value
cost
gain (loss)

Investment securities whose carrying value exceeds their acquisition cost:
Stocks¥3,376 ¥1,000 ¥2,375 ¥3,117¥931 ¥2,185
Investment securities whose acquisition cost exceeds their carrying value:
Stocks
35
38
(2)
114
132
(18)
Total
¥3,412 ¥1,039 ¥2,373 ¥3,232 ¥1,064 ¥2,167
Thousands of U.S. dollars
2017
Carrying value

Acquisition cost

Unrealized gain (loss)

Investment securities whose carrying value exceeds their acquisition cost:
Stocks$30,092$8,913$21,169
Investment securities whose acquisition cost exceeds their carrying value:
Stocks
312
339
(18)
Total
$30,413$9,261$21,152

2. ‌The proceeds from sales of securities, except those of theaffiliated companies, for the years ended March 31, 2017 and2016 are as follows:

Transaction outside the market
Currency-related transactions
Millions of yen
2017
Contract amount

Proceeds

Realized
loss

¥177

¥17

¥4

StocksSell:
USD ¥29,903
EUR
7,512
Buy:
USD 12,277
EUR
771
CNY
−
GBP
−
Total
¥50,465

Proceeds

Realized
loss

¥167

¥115

¥17

StocksRealized gain

$1,578$152

Realized loss

$36

3. Information regarding non-marketable securities as of March
31, 2017 and 2016 is as follows.
Millions of yen

2017

2016

Carrying value

Investment securities
Unlisted stocks
Total

20

¥1,937¥1,937¥1,649¥1,649Contract amountThousands of
U.S. dollars

2017
Carrying value$17,265$17,265

Fair
value

Unrealized
gain (loss)

Maturing Maturing
withinin more1 year than 1 year¥−−¥(148)
97¥(148)
97¥18,167
7,675

¥−
−

¥354
90

¥354
90

−
−
−
−
¥−

(136)
7
−
−
¥(179)(136)
7−−¥(179)

5,991
6,959
14,355
1,619¥54,770

−
−
−
−
¥−

(148)
(26)
(47)
(4)
¥217

(148)
(26)
(47)
(4)
¥217

Thousands of U.S. dollars
2017
Contract amount2016
Realized
gain

Thousands of U.S. dollars
2017
Proceeds

Unrealized
gain (loss)

Maturing Maturing
withinin more1 year than 1 year
Forward foreignexchange contracts

Millions of yen
2017
Realized
gain

2016
Fair
value

Fair value

Unrealized
gain (loss)

Maturing
Maturing in more
within 1 year
than 1 year
Forward foreignexchange contracts

Sell:
USD
EUR
Buy:
USD
EUR
CNY
GBP
Total

$266,539
66,958$−−$(1,319)865$(1,319)865

109,430
6,872−−$449,817

−
−
−
−
$−

(1,212)62−−$(1,596)(1,212)62−−$(1,596)*Calculation of the fair value is based on the value from financial institutions.

2. Summarized below are the amount of contract and the fairvalue of the derivative transaction for which the hedge
accounting is applied.

USD

Contract amount
Maturing
within 1 year

Fair value

Maturing in morethan 1 year

Forward foreignexchange contracts

AUD
CAD

CAD
¥3,211

¥−

¥10

3,505

−

1

USD

339

−

(10)

USD

237

−

3

EUR

USD
EUR

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-trade

Total

Main hedged items

6,554

−

(13)

82

−

(1)

261

−

2

¥14,191¥−¥(9)

Fair value

Maturing in morethan 1 year

EUR
CNY
Total

−

9

3,022

−

(89)

2,112

−

27

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-trade58,419

−

(116)

731

−

(9)

2,326

−

18

$126,491

$−

$(80)

*Calculation of the fair value is based on the value from financial institutions.

2) Forward foreign exchange contracts, for which the deferral
hedge accounting is applied
Millions of yen
2017
Contract amount

Fair value

Maturing in morethan 1 year

Forward foreignexchange contracts

USD
Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade¥3,938

¥−

¥96

1,675

−

31

682

−

(7)

182

−

3

Accounts
payable-trade
Accounts
payable-trade
Accruedexpenses

4,500

−

(11)

Buy:
USD

31,242

Sell:

Sell:

CAD

$89

Maturing
within 1 year

Forward foreignexchange contracts

AUD

$−

Main hedged items

Contract amount
Maturing
within 1 year

EUR

$28,621

Buy:

Millions of yen
2016

USD

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade

Total

Buy:
USD

EUR
AUD

Sell:

EUR

Fair value

Maturing in morethan 1 year

Sell:

Millions of yen
2017

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade

Contract amount

Forward foreignexchange contracts

1) Net deferred gains or losses on hedges

USD

Main hedged items

Maturing
within 1 year

Currency-related transactions

Main hedged items

Thousands of U.S. dollars
2017

178

−

(0)

1

−

(0)

¥11,159

¥−

¥111

AUD
CAD

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade

¥159

¥−

¥1

1,099

−

(36)

375

−

(2)

490

−

1

74

−

(0)

Buy:
USD
USD
AUD

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-other

Total

266

−

(1)

¥2,466¥−¥(37)

Millions of yen
2016
Main hedged items

Contract amount
Maturing
within 1 year

Fair value

Maturing in morethan 1 year

Forward foreignexchange contracts

Sell:
USD
AUD
CAD

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade

¥335

¥−

¥15

393

−

(3)

553

−

14

Accounts
payable-trade
Accounts
payable-other

1,196

−

(61)

249

−

(0)

¥2,728

¥−

¥(35)

Buy:
USD
AUD
Total

21

3. Information concerning sales, profit or loss, assets and otheritems by reportable segment is as follows:

Thousands of U.S. dollars
2017
Main hedged items

Contract amount
Maturing
within 1 year

Fair value
Millions of yen

Maturing in morethan 1 year

Forward foreignexchange contracts

Sell:
USD
AUD
CAD

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade$1,417

$−

$9

9,796

−

(321)

3,343

−

(18)

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-other

4,368

−

9

660

−

(0)

2,371

−

(9)

$21,981$−$(330)

Buy:
USD
USD
AUD
Total

*Calculation of the fair value is based on the value from financial institutions.

18. Segment Information(A) Business Segments
1. Summary of reportable segments
The reportable segments of the Companies are components ofan entity for which discrete financial information is available
and regularly reviewed by the Board of Directors for the
purpose of making decisions about resources to be allocated tothe segments and assess the segments’ performance.
The Companies report on “Retail Solutions BusinessCompanies” and “Printing Solutions Business Companies” asreportable segments.
“Retail Solutions Business Group” is engaged in development,
manufacturing, sales, maintenance services, etc. of POS
Systems, MFPs and Auto ID systems for domestic market and
POS Systems, printers and solution related products foroverseas market.
“Printing Solution Business Group” is engaged indevelopment, manufacturing, sales, maintenance services, etc.
of MFPs, Auto ID systems and related solution products foroverseas market.
2. The calculation method for amounts of sales, income, assets
and other items per reportable segments
The accounting policies of the segments are substantially thesame as those described in the significant accounting policies
in Note 2 Summary of Significant Accounting Policies.
Intersegment sales and transfers are calculated at theprevailing market prices.

Thousands of
U.S. dollars

2017

2016

2017

¥318,065
2,707
320,773¥322,475
2,334
324,809$2,835,057
24,1292,859,194

179,545
9,603
189,148(12,310)¥497,611

210,342
9,832
220,174(12,166)¥532,818

1,600,365
85,596
1,685,961(109,725)$4,435,431

Segment Profit (Loss)
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥11,260
3,389¥14,649¥(11,480)
13,082¥1,601$100,365
30,208$130,573

Segment Assets
Retail Solutions Business Group
Printing Solutions Business Group
Adjustments
Consolidated¥128,236
129,109
12,047¥269,393¥147,900
130,175
3,539¥281,615$1,143,025
1,150,807
107,380$2,401,221

Depreciation
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥3,5398,073¥11,613¥7,266
8,208¥15,474$31,545
71,958$103,512

Amortization of goodwill
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated

¥−
2,342
¥2,342¥1,042
2,979¥4,022$−
20,875$20,875

Capital Expenditures
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥4,1098,029¥12,138¥6,937
10,315¥17,252$36,625
71,566$108,191

Net Sales
Retail Solutions Business Group
Unaffiliated customers
Intersegment
Total
Printing Solutions Business Group
Unaffiliated customers
Intersegment
Total
Adjustments
Consolidated

Notes: 1.	Adjustments of segment assets are corporate assets, and consist of cash and cash
equivalents and investment securities in the amount of ¥12,047 million ($107,380
thousand) and ¥3,539 million as of March 31, 2017 and 2016, respectively.
2.	Segment profit (loss) corresponds to operating income of Consolidated Statementof Income.

(B) Related Information
1. Products and service information
Millions of yen

Net sales of Retail
Net sales of MFP

Thousands of
U.S. dollars

2017

2016

2017

¥308,408
189,202¥497,611¥309,977
222,840¥532,818$2,748,979
1,686,443$4,435,431*Retail: POS systems, Auto ID systems and related products, etc.
*MFP:	Multi Function Peripherals, facsimiles, office printers, multi-function peripheraldevices, scanner function and document management to be realized in one piece22

2. Information by geographical area
Millions of yen

Net SalesJapan
The Americas
EuropeAsia and others
Total

Property, plant and equipmentJapan
The Americas
EuropeAsia and others
Total

Thousands of
U.S. dollars

2017

2016

2017

¥208,091
149,202
95,73544,581¥497,611¥200,493
168,098
111,865
52,360¥532,818$1,854,809
1,329,905
853,329
397,371$4,435,431¥13,489
3,885
7,571
4,121
¥29,068¥14,424
3,475
8,909
4,534
¥31,345$120,234
34,62967,48436,732$259,096

Criteria of geographical segmentation and the name of countries
or areas mainly included in each segment except for Japan are as
follows:
1) Criteria: geographical closeness2) Countries & Areas2)-1. The Americas
U.S.A., Canada, Mexico, Puerto Rico, Venezuela, Brazil,
Chile2)-2. Europe
U.K., France, Germany, Spain, Switzerland, Belgium, Italy,
Netherlands, Sweden, Norway, Denmark, Finland, Poland2)-3. Asia and others
Singapore, Malaysia, Indonesia, China, Australia, Korea,
Thailand3. Information by major customer
Information by major customer is omitted since no single
customer accounted for more than 10% of net sales for theyears ended March 31, 2017 and 2016.
4. Information about impairment loss on non-current assets byreportable segment
Millions of yen

2017

Retail Solutions Business Group
Printing Solutions Business Group
Consolidated

¥−
−
¥−

2016

¥84,557465¥85,023

2017

2016

Balance at endof period

Retail Solutions Business Group
Printing Solutions Business Group
Consolidated

¥−
6,053
¥6,053¥−
8,633¥8,633

Year ended March 31, 2016
Not applicable

19. Stock Option Plan
The stock options outstanding as of March 31, 2017 are as
follows:
1. The amount and the accounting subject in relation to the stock
options existing for the year ended March 31, 2017.
Selling, general and administrative expenses for the years
ended March 31, 2017 and 2016 are ¥45 million ($401
thousand) and ¥41 million, respectively.
2. The size of stock option and its circumstances
1) General information
The fourth new share subscription rights
as share-reward type stock option
Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note 1)

128,000 shares of Common stock

Date of issuanceAugust 2, 2011

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

From August 3, 2011 to August 2, 2041
The fifth new share subscription rights
as share-reward type stock option

Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note 1)

156,000 shares of Common stock

Date of issuanceAugust 2, 2012

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

From August 3, 2012 to August 2, 2042
The sixth new share subscription rights
as share-reward type stock option

Thousands of
U.S. dollars

2017

$−
−
$−

5. Information on amortization of goodwill and unamortizedbalance by reportable segment
Millions of yen

6. Information on negative goodwill by reportable segment
Year ended March 31, 2017
Not applicable

Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note 1)

89,000 shares of Common stock

Date of issuance

July 31, 2013

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

From August 1, 2013 to July 31, 2043
The seventh new share subscription rights
as share-reward type stock option

Thousands of
U.S. dollars

2017
Balance at endof period$−
53,953$53,953

For the amount of amortization of goodwill, it is omitted as it isdisclosed in “Segment Information”.

Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note 1)

79,000 shares of Common stock

Date of issuance

July 31, 2014

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

From August 1, 2014 to July 31, 2044

23

The eighth new share subscription rights
as share-reward type stock option2)-2. Per share data

Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note 1)

69,000 shares of Common stock

Date of issuance

July 29, 2015

Exercised price

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

From July 30, 2015 to July 29, 2045

The average priceat the time of exercising
Official price at the dateof offered

The ninth new share subscription rights
as share-reward type stock option
Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note 1)

113,000 shares of Common stock

Date of issuanceAugust 31, 2016

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

From September 1, 2016 to August 31,
2046

Exercised price
The average priceat the time of exercising
Official price at the dateof offered

Note: 1. The amount is converted into the number of shares.
2. Fixed term of the right is not given.
		Subscription rights may be exercised in a lump-sum within expiration
cycle and 10 days after a beneficiary resigns from directors or corporate
officers.

2)	The size of stock option and movement
	Addressed is the amount of stock options existing as ofMarch 31, 2017.
	As for the number of stock options, it is converted into thenumber of shares.

The fourth new
The fifth new
The sixth new
share
share
share
subscription
subscription
subscription
rightsrightsrightsas share-reward as share-reward as share-reward
type stock option type stock option type stock option
Before the resolution
End of the preceding term

−

−

−

Offered−−−Cancelled−−−

Vested−−−Outstanding

−

−

−

24,00029,00038,000After the resolution
End of the preceding term
VestedExercised
Cancelled
Outstanding

−

−

−

15,00018,00028,000

−

−

−

9,000

11,00010,000The seventh new The eighth new The ninth new
share
share
share
subscription
subscription
subscription
rightsrightsrightsas share-reward as share-reward as share-reward
type stock option type stock option type stock option
Before the resolution
End of the preceding term

−

−

−

Offered−−113,000

Cancelled−−−

Vested−−113,000

Outstanding

−

−

−

61,00064,000−−−113,000

Exercised

27,00023,000−Cancelled−−−

34,00041,000113,000

After the resolution
End of the preceding term
Vested24

Outstanding

The seventh new The eighth new The ninth new
share
share
share
subscription
subscription
subscription
rights as
rights as
rights as
share-reward
share-reward
share-reward
type stock option type stock option type stock option¥1¥1¥1($0.01)($0.01)($0.01)¥367¥367−($3.27)($3.27)
¥667
¥602
¥403
($5.95)($5.37)($3.59)

3. The evaluation of fair price of stock option1)	The fair value of the stock option price is determined using aBlack–Scholes model.
2) General information and the method of estimation
The ninth new share subscription rights
as share-reward type stock option
Stock market volatility (Note 1)

43.6%

Estimated residual period (Note 2)

1.8 years

Estimated dividends (Note 3)¥0 ($0.0) per share

Risk-free rate (Note 4)2)-1. The number of stock options

The fourth new
The fifth new
The sixth new
share
share
share
subscription
subscription
subscription
rights as
rights as
rights as
share-reward
share-reward
share-reward
type stock option type stock option type stock option¥1¥1¥1($0.01)($0.01)($0.01)
¥402
¥403
¥366
($3.58)($3.59)($3.26)
¥316
¥291
¥550
($2.82)($2.59)($4.90)(0.21%)

Note: 1.	The figure is calculated on a weekly basis based on the actual stock prices
for the period from the week of November 3, 2014, 1.8 years (expected
remaining period) prior to the grant date to the preceding week of grantdate.
2.	The calculation is based on the condition that the Company’s directors or
corporate officers are resigned and the option was exercised exactly after
the day of resignation.
		For tenure of directors and executive officers, the Company has calculated
the average tenure remaining term at the date of grant based on the
average tenure.
3.	The estimated figure is based on the actual dividend amount for the year
ended March 31, 2016.
4.	The yield of government bond is in accordance with estimated residual
period.

4. The method of estimating the number of stock options vested
Fundamentally, only the actual number of cancelled stock
options is shown as it is difficult to estimate the possible
number of cancelled stock options.

20. Business Combination
Year ended March 31, 2017
Corporate split and share transfer relating to the business of
TOSEI CORPORATIONThe Company resolved at the Board of Directors’ meeting held
on November 30, 2016 that, with an intention to transfer thebusiness operated by TOSEI CORPORATION (“TOSEI”), a
consolidated subsidiary, to KYODEN AREANET INC.
(“KYODEN AN”) to transfer 90% of the shares issued by acompany (the “Company Incorporated through Incorporationtype Company Split”) established through a corporate split (the“Split”) to KYODEN AN (hereafter referred to as the “Share
Transfer”) on March 31, 2017. On November 30, 2016, theCompany entered into an agreement on the Share Transfer andtransferred the shares on March 31, 2017.
The overview of the Split and the Share Transfer is as follows:
1. Company name to which the shares were transferred
KYODEN AREANET INC.
2. Contents of the business transferred
Manufacturing and sales of cleaning equipment for business
use, vacuum packaging machines and cleaning-related
equipment for industrial parts
3. Purpose of the Split and the Share Transfer
TOSEI is a wholly owned subsidiary of the Company, engaged
in manufacturing and sales of cleaning equipment for business
use, vacuum packaging machines and cleaning-related
equipment for industrial parts and has contributed to thegrowth of the Companies for many years with the stable profit
structure. On the other hand, the Companies will continue toallocate management resources selectively to its corebusinesses under the vision to aim for enforcing andexpanding service solution business through mutual
cooperation between Retail Solution Business Group focusing
on POS Systems, Auto ID Systems, etc. and Printing Solution
Business Group.
Given the circumstances, the Company judged that it is bestfor TOSEI to aim for sustainable growth going forward, whiletransferring the business of TOSEI to KYODEN AN andinvesting necessary resources under KYODEN AN.
In order to transfer the business of TOSEI, the control of its
business was transferred to the Company Incorporated throughIncorporation-type Company Split and 90% of the sharesissued by the Company Incorporated through Incorporationtype Company Split were transferred to KYODEN AN.
4. Date of the Split and Share Transfer
March 31, 2017

6. Overview of accounting treatments
1) Amount of gain on transfer
	Gain on sales of shares of subsidiaries¥2,114 million ($18,843 thousand)2)	Proper book value of assets and liabilities related to thebusiness transferred and the major components
Millions of yen

Thousands of
U.S. dollars¥3,349855¥4,205$29,851
7,621$37,481Millions of yen

Thousands of
U.S. dollars¥3,634166¥3,800$32,391
1,480$33,871

Current assets
Non-current assets
Total assets

Current liabilities
Non-current liabilities
Total liabilities

7. N ame of the reportable segment to which the business
transferred belonged
Retail Solution Business Group
8. P rofit related to the business transferred recorded in theConsolidated Statement of Income for the year ended March
31, 2017
Millions of yen

Thousands of
U.S. dollars¥10,946600$97,567
5,348

Net sales
Operating income

21. Transactions with Related Parties
Year ended March 31, 2017(¥=Million, US$=Thousand)StatusName

Address

Parentcompany

Toshiba
Corporation

Minato-ku,
TokyoBusinessrelationshipTransaction

Transaction
amountPurchase of
informationequipment andConcurrent
position as
directors

Purchase of
informationequipment¥4,301($38,337)

Percentage ofBusinessvoting rights held
Energy systems,social infrastructure Direct: 52.7%¥200,000($1,782,690) systems and storage Indirect: 0.1%
devices
CapitalBalance at
fiscal year end
Accounts¥169
payable-trade($1,506)
Accounts¥787
payable ($7,015)
otherAccount item

Accruedexpenses¥684($6,097)

With regard to the amounts above, consumption taxes are not included in both of
the amount of transactions and the ending balance.
Note:	Transaction Terms and Policies for Determining Transaction Terms, etc	Purchase of information equipments is determined by price negotiations,taking market prices into account.

5. Other matters concerning overview of the transaction
Share transfer in consideration for cash only

25

23. Per Share Information

Year ended March 31, 2016(¥=Million)
StatusParentcompany

Businessrelationship
Deposits offunds andBorrowing offunds,
Concurrent
position as
directors

Name

Address

CapitalToshiba
Corporation

Minato-ku,
Tokyo¥439,901

Transaction

Transaction
amountAccount item

Deposits offunds andBorrowing offunds(Note)

Interest
expenses¥23

Business

Percentage of voting
rights held

Manufacturing andsales of digitalproducts andDirect: 52.7%
electronic devices Indirect: 0.1%
and homeappliances
Balance at
fiscal year end

Short-termloan payable

Per share information at March 31, 2017 and 2016 is as follows:Yen

Net assets per share
Net income (loss) per share
Net income per share fully diluted

U.S. dollars

2017

2016

¥238.07
28.24
28.20

¥208.93(376.69)
−

2017

$2.12
$0.25
$0.25

* For the year ended March 31 2016, although there were dilutive potential common shares,
net income per share fully diluted were not presented due to the recording of a net loss.
* Net loss per share and net income per share fully diluted were calculated on the basis of
the following data.

¥1,474

Thousands of
U.S. dollars

Millions of yen

With regard to the amounts above, consumption taxes are not included in both of
the amount of transactions and the ending balance.
Note:	Concerning deposits of funds, it’s difficult to figure out transaction amountbecause fund settlement is performed whenever needed.
	Therefore, only the balance at the end of fiscal year is stated.

22. Cash Dividends
Year ended March 31, 2017
1. Cash dividends paid
There is no applicable matter because of non-dividend paying.

2017

Net income (loss) per share
Net income (loss)
attributable to owners ofparentAmounts not attributable tocommon stock
Net income (loss)
attributable to shareholdersof parent related tocommon stock
Average number of sharesof common stock during
the period (thousand
shares)

2016

2017

¥7,758¥(103,449)$69,151

−

−

−

7,758

(103,449)

69,151

274,700

274,625

−

−

328

−

328

−

−

−

2. Year-end dividends of the following fiscal year
(Resolution)

Type ofsharesBoard ofDirectors held Common
stock
on May 12,
2017(Resolution)

Type ofsharesBoard ofDirectors held Common
stock
on May 12,
2017

Total amountof dividends(Millions of yen)¥549
Total amountof dividends(Thousands of
US dollars)$4,893

Dividend Dividends
resource per share Record date Effective date
(Yen)

Retainedearnings¥2.0

March 31,2017

June 7, 2017

Dividend Dividend
resource per share

Record date Effective date

Retainedearnings

March 31,2017

(US dollars)$0.02

June 7, 2017

Year ended March 31, 2016
1. Cash dividends paid
(Resolution)

Type ofsharesBoard ofDirectors held Common
stockon June 16,
2015

Total amountof dividends(Millions of yen)

¥1,922

Dividend Dividend
resource per share

Record date Effective date

Retainedearnings

March 31,
2015

(Yen)

¥7.0

24. Subsequent Event
Not applicable

June 29, 2015

2. Year-end dividends of the following fiscal year
There is no applicable matter because of non-dividend paying.

26

Net income per share fully
dilutedAdjustment to net income
Increase in number ofcommon stocks (thousand
shares)Share subscription rights
including in the increase in
number of common stock(thousand shares)
Outline of the residual securities
excluded from the calculationof the fully diluted net income
per share because they have no
dilutive effects

−

27

28

Corporate Data
1-11-1, Osaki, Shinagawa-ku, Tokyo 141-8562, Japan
Tel: +81-3-6830-9100
Fax: +81-3-6684-4001
http://www.toshibatec.com
Established: February 21, 1950
Employees: 3,467 <Consolidated: 20,239> (as of March 31, 2017)
Common Stock: ¥39,970 million (as of March 31, 2017)
Stock Listing: Tokyo Stock Exchange (1st Section)

Board of Directors and Audit & Supervisory Board (as of June 28, 2017)
President and Chief Executive Officer◊Takayuki Ikeda
Directors

Masatsugu Sakabe
Hiroshi Tangoku
Toshifumi Matsumoto
Kazuo Yajima
Yukio Inoue
Naohiro Yamaguchi
Shinichiro Akiba
Michio Kuwahara
Shin Nagase◊:Representative Director

Audit & Supervisory Board Members

Haruo Kawasumi
Yoshinari Sato
Takehiko Ouchi
Hideo Tabuchi

Main Consolidated Companies (as of March 31, 2017)• TOSHIBA AMERICA BUSINESS SOLUTIONS, INC.
• TOSHIBA GLOBAL COMMERCE SOLUTIONS, INC.
• TOSHIBA TEC INFORMATION SYSTEMS (SHENZHEN) CO., LTD.
• TOSHIBA TEC SOLUTION SERVICES CORPORATION• TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LTD.
• TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH• TOSHIBA TEC SINGAPORE PTE LTD.
• TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
• P.T. TEC INDONESIA• TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
• TOSEI CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS MEXICO, S. DE R.L. DE C.V.
• TOSHIBA TEC U.K. IMAGING SYSTEMS LIMITED• TOSHIBA TEC MALAYSIA MANUFACTURING SDN. BHD.
• TEC INFORMATION SYSTEMS CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS (U.K.) LIMITED• TER CORPORATION• KOKUSAI CHART CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS (NETHERLANDS) B.V.
• TOSHIBA GLOBAL COMMERCE SOLUTIONS HOLDINGS CORPORATIONThis report is printed on paper certified by the Forest Stewardship Council (FSC)with “non-VOC ink,” 100% vegetable ink for “waterless printing.”