2018

An n u a l R e por t

For the Year Ended March 31, 2018

Financial Highlights
Years ended March 31

Thousands of
U.S. dollars

Millions of yen
Consolidated
Net sales

2014

2015

2016

2017

2018

2018

¥498,894¥524,577¥532,818¥497,611¥513,289$4,831,410

Ordinary profit (loss)

20,920

10,391(2,298)12,534

22,768214,307

Profit (loss) attributable toowners of parent

7,448(1,149)(103,449)

7,758

17,512

164,834

Total assets

393,136

416,769

281,615

269,393282,630

2,660,297

Net assets

186,033

203,108

70,35976,047

93,215877,400

Yen

U.S. dollars

Per share data:
Profit (loss) attributable toowners of parent-Basic¥27.14¥(4.18)¥(376.69)¥28.24¥63.74$0.60

Net assets

578.90623.35208.93238.07300.38

2.83
Thousands of
U.S. dollars

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

2014

2015

2016

2017

2018

2018

¥261,258¥265,840¥261,496¥260,894¥282,974$2,663,535

10,362

12,668(1,186)39,375

15,184142,922

Profit (loss)

2,355

9,376

(115,933)

36,402

17,733

166,915

Capital stock

39,97039,97039,97039,97039,970376,224

Total assets

257,506

293,447

189,623

214,940

209,349

1,970,529

Net assets

127,812136,10918,30154,75971,725675,122

Yen

U.S. dollars

Per share data:
Profit (loss)-Basic¥8.58¥34.15¥(422.15)¥132.51¥64.55$0.61

Cash dividends

8.00

13.00

−

2.00

8.00

0.08

465.23495.2666.21

198.93260.54

2.45

Net assets

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥106.24=US$1.00, the exchange rateon March 31, 2018.

CONTENTS
Financial Highlights ................................................................................................................................ 1
Business Review ..................................................................................................................................... 2(1) Consolidated Financial Statements ................................................................................................... 5
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 ......................................................................................... 12(2) Other ................................................................................................................................................ 29

1

Business Review

Business Review for the Fiscal Year 2017
Regarding the global economy in the fiscal year 2017, the US and Europe experienced a gradual recovery, and in Asia theeconomy was generally firm. In Japan, the economy mostly remained on a recovery track due in part to a gradual recovery
in personal consumption, exports and capital investment.
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 “establish profit stability through cost reduction andproductivity improvement”, “strengthening of core businesses”, and “expansion of solutions and service business”.
Net sales were ¥513,289 million (up 3% year-on-year), partially due to robust sales of POS systems for the Japanese market
and MFPs for overseas markets despite the adverse influence of the transfer of business of TOSEI CORPORATION. With
regard to profit/loss, due to factors such as increased profitability on higher sales of POS systems for the domestic market,
improvement of the model composition, and the effect of a decline in selling, general and administrative expenses, operating
profit was ¥24,546 million (up 68% year-on-year), ordinary profit was ¥22,768 million (up 82% year-on-year) and net profit
attributable to owners of parent was ¥17,512 million (up 126% year-on-year). Net profit attributable to owners of parent forthe current fiscal year was at an all-time high.
As a result of its strong business performance in the fiscal year 2017, Toshiba Tec Corporation paid a year-end dividend of¥5 per share for the fiscal year 2017, up ¥2 from the previously announced forecast, while monitoring internal reserves inorder to maintain a healthy financial position.
The business highlights for each report segment in the fiscal year 2017 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 due to improvement in demand for POS systems for major
customers and increased sales of semi-self checkout systems, self ordering systems, etc. as a result of a labor shortage.
As for POS systems for overseas markets, sales declined, including a reactionary decline due to a concentration of largescale projects in the previous fiscal year in the Americas, although sales generally remained robust in Europe and Asia.
Sales of MFPs for the Japanese market decreased, attributable in part to a lower number of units sold.
Sales of Automatic Identification systems for the Japanese market decreased, in spite of an increase in the number of unitsof label printers sold as a whole, due to a high sales composition ratio of relatively inexpensive products.
As a result, net sales from the retail solutions business were ¥324,499 million (up 1% year-on-year) partially due to robust
sales of POS systems for the Japanese market despite the adverse influence of the transfer of business of TOSEICORPORATION. Operating profit was ¥17,255 million (up 53% year-on-year), due to factors such as increased profitability
on higher sales of POS systems for the domestic market and improvement in the model composition.
Printing Solutions Business
The printing solutions business, which deals with MFPs for overseas markets, Automatic Identification systems and related
products for overseas markets, and inkjet heads for domestic and overseas markets, focused efforts on expanding sales ofstrategic products, while pioneering vertical markets and new business fields, against a difficult business background2

marked by tough competition.
Concerning MFPs for overseas markets, sales increased, due in part to increased sales to Asia, centered on China.
In Automatic Identification systems for overseas markets, sales increased due to factors including increased sales for Asiaand the effect of exchange rates.
Sales of inkjet heads were on par with the previous year due to higher sales to customers in Japan despite a decline in sales
to overseas customers.
As a result, net sales from the printing solutions business were ¥199,971 million (up 6% year-on-year). Operating profit was¥7,291 million (up 115% year-on-year), due partially to the effect of lower selling, general and administrative expenses.
Note:	Automatic Identification (AI) systems refer to systems that contain hardware and software to automatically retrieve, identify andmanage from barcodes and IC tags.

Forecasts for Fiscal Year 2018
With regard to the global economy, although a recovery should continue in the US and Europe, in Asia the economy isexpected to gradually decelerate, mainly in China. In Japan, the economy is anticipated to remain on a recovery track
partially due to a gradual recovery in personal consumption, 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 “establish profit stability through cost reduction
and productivity improvement”, “strengthening of core businesses”, and “expansion of solutions and service business”.
Main measures on a segment basis for fiscal year 2018 ending March 31, 2019 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 more significant in the Japanese market. Concurrently, efforts will be made toward the provision of
total solutions, including the development and release of new solutions to meet 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. With respect to total solutions that extensively leverage our product lines and global market
reach, efforts will be made to develop and release strategic new products, deploy sales and marketing structures tailored to
specific regions, optimize sales and service networks, and strengthen business in emerging markets.

4(1) Consolidated Financial Statements
Consolidated Balance Sheet
As of March 31, 2018 and 2017

Thousands of
U.S. dollars

Millions of yen

ASSETS

2018

2017

2018

¥57,355
67,99632,885
1,525
6,758
6,155
32,775(1,925)¥46,129
63,76932,849
1,629
6,100
7,560
32,900(2,572)$539,863
640,023
309,535
14,354
63,611
57,935308,500(18,119)

203,528

188,367

1,915,738

24,044(17,944)

25,480(19,038)

226,318(168,901)

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

6,099
41,686(33,718)

6,441
43,742(36,279)

57,408392,376(317,376)

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

7,968
45,442(39,423)

7,462
47,441(41,536)

75,000427,730(371,075)

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

6,018
1,269
11,758(6,208)

5,904
1,640
11,220(4,874)56,645
11,945
110,674(58,434)

Leased assets, net
Construction in progress
Total property, plant and equipment

5,550
1,183

6,346
1,272

52,240
11,13528,09029,068264,401

4,083
568
8,484

6,053
639
7,624

38,432
5,346
79,857

13,135

14,317

123,635

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

57,022
23,042
162,020
115,418(1,007)37,87537,640356,504

79,101

81,026

744,550¥282,630¥269,393$2,660,297

Current assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets*4

Non-current assets
Property, plant and equipment:
Buildings and structures
Accumulated depreciation

Intangible assets:
Goodwill
Customer relationship assets
Other
Total intangible assets
Investments and other assets:
Investment securities
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

*1

6,058
2,448
17,213
12,262(107)*1

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

5

Thousands of
U.S. dollars

Millions of yen

LIABILITIES AND NET ASSETS

2018

2017

2018

¥59,604
304
4,795
25,26914,443
4,771
30,754¥61,860
1,048
4,033
24,044
13,816
5,485
32,786$561,032
2,861
45,134
237,848
135,947
44,908289,477

139,942

143,076

1,317,225

5,682
35,7798,010

5,172
35,066
10,03053,483
336,775
75,39549,47250,269465,663

Total liabilities

189,415

193,346

1,782,897

Shareholders’ equity
Capital stock
Authorized-1,000,000 thousand shares
Issued- 288,145 thousand shares

39,97039,970376,224

12

11

113

35,861

19,722

337,547(5,507)−−(5,488)(51,835)−

70,33754,217662,058

2,181(22)
10,207
(655)
468

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

20,529(207)
96,075(6,165)
4,405

12,18011,189114,646

153

104

1,440

10,543

10,537

99,23893,21576,047

877,400¥282,630¥269,393$2,660,297

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

Capital surplus
Retained earnings
Treasury shares, at cost:
13,441 thousand shares in 201813,414 thousand shares in 2017
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Minimum pension liability adjustment
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*4

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

6

Consolidated Statement of Income
Years ended March 31, 2018 and 2017

Thousands of
U.S. dollars

Millions of yen

2018
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income:Interest income
Dividend income
Foreign exchange gains
Gain on valuation of derivatives
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on valuation of derivatives
Foreign exchange losses
Loss on sales and retirement of non-current assets
Other
Total non-operating expenses
Ordinary profit
Extraordinary income:Gain on sales of investment securities
Gain on sales of shares of subsidiaries
Gains on reversal of foreign currency translation adjustment
Total extraordinary income
Extraordinary losses:
Loss on valuation of investment securities
Restructuring cost
Total extraordinary losses
Profit before income taxes
Income taxes:
Current
Deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

2017

2018

*2

¥513,289
305,196*2¥497,611
298,128$4,831,410
2,872,703*1,*2

208,093
183,547*1,*2

199,483
184,833

1,958,707
1,727,664

24,546

14,649231,043

560
97
−
820
339

250
95
616
−
459

5,271
913
−
7,718
3,191

1,818

1,421

17,112

631
−
1,235
89
1,640

639
629
−
173
2,094

5,939
−
11,625838
15,437

*3

3,597

3,536

33,85722,76812,534

214,307

274
238
438

−
2,114
−

2,579
2,240
4,123

951

2,114

8,951

−
1,002

2,221
1,657

236
176

*3

412

1,002

3,878

23,307

13,646219,381

5,079
(572)

8,623
(1,461)47,807(5,384)

4,507

7,162

42,42318,8001,287¥17,5126,484(1,274)¥7,758

176,958
12,114$164,834

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

7

Consolidated Statement of Comprehensive Income
Years ended March 31, 2018 and 2017

Thousands of
U.S. dollars

Millions of yen

2018

2017

2018

¥18,800¥6,484$176,958

Valuation difference on available-for-sale securities

598

106

5,629

Deferred gains or losses on hedges

(16)

(77)

(151)

Foreign currency translation adjustment

732(3,232)

6,890

Minimum pension liability adjustment

76

(332)

715

3,266

(8,726)

(269)

4,358

¥19,264¥6,214$181,325

18,504

7,978

174,172760(1,764)

7,154

ProfitOther comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

(927)
*

463

*

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

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, 2018 and 2017

Millions of yen

Shareholders’ equity
Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equityBalance at April 1, 2017¥39,970¥11¥19,722¥(5,488)¥54,217

Changes during the year
Dividends of surplus−−(1,373)−(1,373)−−

17,512−

17,512

Purchase of treasury shares

−

−

−

(22)

(22)

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

−
−

0
−

−
−

3
−

4
−

¥39,970¥12¥35,861¥(5,507)¥70,337

Profit attributable to owners of parent

Balance at March 31, 2018

Millions of yen

Accumulated other comprehensive income
Valuation difference
Deferredon available-for-sale gains or losses on
securities
hedgesForeign currencytranslation
adjustment

Minimum
pension liability
adjustment

Remeasurements Total accumulatedof definedother comprehensive
benefit plansincomeSubscription
rights toshares

Noncontrollinginterests

Total net
assets¥76,047

Balance at April 1, 2017

¥1,581¥(6)¥8,927¥(720)¥1,407¥11,189¥104¥10,537

Changes during the year
Dividends of surplus

−

−

−

−

−

−

−

−

(1,373)

−

−

−

−

−

−

−

−

17,512

Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Net changes of items other than shareholders’ equity
Balance at March 31, 2018

−

−

−

−

−

−

−

−

(22)

−
600

−
(16)

−
1,280

−
65

−
(939)

−
991

−
49

−
6

4
1,046

¥2,181¥(22)¥10,207¥(655)¥468¥12,180¥153¥10,543¥93,215

Thousands of U.S. dollars

Shareholders’ equity
Capitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equityBalance at April 1, 2017

$376,224$104$185,636$(51,657)$510,326

Changes during the year
Dividends of surplus−−(12,924)−(12,924)−−

164,834−

164,834

Purchase of treasury shares

−

−

−

(207)

(207)

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

−
−

0
−

−
−

28
−

38
−

$376,224$113$337,547$(51,835)$662,058

Profit attributable to owners of parent

Balance at March 31, 2018

Thousands of U.S. dollars

Accumulated other comprehensive income
Valuation difference
Deferredon available-for-sale gains or losses on
securities
hedgesForeign currencytranslation
adjustment

Minimum
pension liability
adjustment

Remeasurements Total accumulatedof definedother comprehensive
benefit plansincomeSubscription
rightsto shares

Noncontrollinginterests

Total net
assets$715,804

Balance at April 1, 2017$14,881$(56)$84,027$(6,777)$13,244$105,318$979$99,181

Changes during the year
Dividends of surplus

−

−

−

−

−

−

−

−

(12,924)

−

−

−

−

−

−

−

−

164,834

Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares
Net changes of items other than shareholders’ equity
Balance at March 31, 2018

−

−

−

−

−

−

−

−

(207)

−
5,648

−
(151)

−
12,048−612−(8,838)

−
9,328

−
461

−
56

38
9,846

$20,529$(207)$96,075$(6,165)$4,405$114,646$1,440$99,238$877,400

9Millions of yen

Shareholders’ equity

Balance at April 1, 2016

Capitalstock

CapitalsurplusRetainedearnings

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

Changes during the year
Profit attributable to owners of parent

−

−

7,758

−

7,758

Purchase of treasury shares

−

−

−

(10)

(10)

Disposal of treasury shares

−

11

−

45

57

Deficit disposition
Net changes of items other than shareholders’ equity−−(52,970)−

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

Balance at March 31, 2017

Millions 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
adjustment

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

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

Subscription
rights toshares

Noncontrollinginterests

Total net
assets¥116¥12,862¥70,359¥10,969

Changes during the year
Profit attributable to owners of parent

−

−

−

−

−

−

−

−

7,758

Purchase of treasury shares

−

−

−

−

−

−

−

−

(10)

Disposal of treasury shares

−

−

−

−

−

−

−

−

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

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Numbers of shares in issue: 288,145 thousand shares in the fiscal year ended March 31, 2018.

10

Consolidated Statement of Cash Flows
Years ended March 31, 2018 and 2017

Thousands of
U.S. dollars

Millions of yen

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Loss (gain) on sales and retirement of property, plant and equipment
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of shares of subsidiaries
Restructuring cost
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Purchases of intangible assets
Payments for transfer of businessNet decrease (increase) in short-term loans receivable
Payments of long-term loans receivableCollections of long-term loans receivable
Payments for sales of shares of subsidiaries resulting in change in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of finance lease obligations
Repayments of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash provided by (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

*3

*2

2018

2017

2018

¥23,307
14,03689(1,247)
(315)
(658)
631
(4,253)
(756)
(983)
(274)
236
(238)
176
5,966
35,716632(610)(6,646)29,092¥13,646
13,955
173
618
410
(345)
639
7,816
4,815
(4,165)(2,114)
−
−
1,002
7,961
44,413338(723)(7,012)37,016$219,381
132,116
838(11,738)(2,965)(6,194)
5,939(40,032)(7,116)(9,253)(2,579)2,221(2,240)1,657
56,156336,182
5,949(5,742)(62,556)
273,833(8,214)
123
(13)
313
(3,349)
(320)
0
(7)
12
(289)
−
257
(11,487)(6,356)649(399)
4(2,534)
−
(2)
(29)
13
−
1,747
32
(6,876)(77,316)
1,158
(122)
2,946
(31,523)(3,012)0(66)
113(2,720)−2,419(108,123)(2,256)(2,823)
(3)
(10)
(4)
(397)
57
(5,439)(1,231)
23,46822,660(7,408)(32,144)(28)(207)(12,933)(4,631)
0(57,370)(2,654)
105,666
434,196¥46,129$539,863*2(787)(3,415)(3)(22)(1,374)(492)
0(6,095)(282)
11,226
46,129*1¥57,355*1

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

11

Notes to Consolidated Financial Statements

Basis of Presenting Consolidated Financial
Statements

The closing dates of other consolidated subsidiaries are the sameas the consolidated closing date.

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. The
consolidated financial statements include the accounts of theCompany and its subsidiaries (collectively, “Companies”).
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¥106.24 = US$1.00 prevailing as of March 31, 2018. 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.

4. Accounting policies

Significant matters forming the basis ofpreparing the consolidated financial
statements
1. Scope of consolidation(1) Number of consolidated subsidiaries: 79 companies
Kokusai Chart Corporation, a former consolidated
subsidiary, was excluded from the scope of consolidationfrom the fiscal year ended March 31, 2018, since theCompany transferred 51% of the issued shares of Kokusai
Chart Corporation. In addition, one domestic company ando n e ove r s e a s c o m p a ny h ave b e e n r e m ove d f r o mconsolidation due to liquidation.
(2) The unconsolidated subsidiary is as follows:
Not applicable

2. Application of the equity method(1)	Number of unconsolidated subsidiaries accounted for underthe equity method: Not applicable(2)	Number of affiliated companies accounted for under theequity method: Not applicable(3)	Unconsolidated subsidiaries and affiliated companies notaccounted for under the equity method:	Because it is immaterial, Advanced Supply Manufacturing
Corporation is excluded from the scope of the equity
method.

3. Year-ends of consolidated subsidiaries
Of consolidated subsidiaries, Toshiba Global Commerce
Solutions Holdings Corporation and its subsidiaries (32companies excluding Toshiba Global Commerce Solutions, Inc.,
Toshiba Global Commerce Solutions (India) Private Limited,Toshiba Global Commerce Solutions Korea, Ltd., and TTEC
Receivables LLC) and TOSHIBA TEC INFORMATIONSYSTEMS (SHENZHEN) CO., LTD. close accounts on
December 31 every year. For those subsidiaries, provisional
financial results as of 31 March are used in the preparation ofthese consolidated financial statements.

12(1) Valuation basis and method for important assets(i) Investment Securities
Marketable securities classified as “Investment
securities” are recorded at fair value, and net unrealized
gains or losses after tax effect adjustment are presented
as “Valuation difference on available-for-sale-securities”
as a component of “Accumulated other comprehensive
income” under “Net assets” in the consolidated balance
sheet. Cost of securities sold is determined by themoving average method.
Non-marketable securities classified as “Investment
securities” are carried at cost, which is determined by
the moving average method.
(ii) Derivative Financial Instruments
The Company and certain subsidiaries have entered into
forward foreign exchange contracts to reduce the risk offluctuation in exchange rate in the foreign currencytransactions related to accounts receivable and payable
denominated in foreign currency.
Derivative financial instruments are reported at fairvalue with unrealized gains or losses recognized inincome, except for those which meet the criteria for thedeferral hedge accounting under which unrealized gains
or losses are deferred as “Deferred gains or losses onhedges” in “Accumulated other comprehensive income”
of “Net assets”.
Receivables and payables hedged by qualified forward
foreign exchange contracts are translated at thecorresponding foreign exchange contract rates.
(iii) Inventories
Finished goods, merchandises and semi-finishedcomponents are principally stated at the lower of cost,
determined by the first-in, first-out method, or net
realizable value. Work-in-process and raw materials are
principally stated at the lower of cost, determined by themoving average method, or net realizable value. Supplies
are principally stated at the latest purchase cost method.
(2) 	D epreciation and amortization methods of significant
depreciable and amortizable assets(i)	Property, Plant and Equipment and Depreciation
excluding leased assets
Property, plant and equipment are depreciated by thestraight-line method over their estimated useful lives.
The useful lives of principal property, plant andequipment are summarized as follows:
Buildings and structures
15 to 38 years
Machinery, equipment and vehicles 5 to 13 years
Tools, furniture and fixtures 
2 to 7 years(ii)	Intangible Assets and Amortization excluding leased
assetsIntangible assets except for software developed for sales
in the market are amortized by the straight-line method.
Amortization for software developed for sales in themarket is recorded at the greater of either an amortizableamount based on the estimated sales revenue or anamortizable amount based on the straight-line method
over remaining valid sales period. Software for internal
use is amortized by the straight-line method over its
estimated useful life.
(iii) Leased assets
For leased assets related to finance lease transactions
without the transfer of ownership, leased assetsdepreciation is calculated on the straight-line method
over the lease term with no residual value.

business acquisitions is expensed in the year the transaction
was executed.

(3) Accounting for significant reserves
Allowance for Doubtful Accounts
Allowance for doubtful accounts is provided based on
historical experience of bad debt for trade receivables
combined with an estimate of the collectability of receivablefrom companies in financial difficulty.

(8)	S cope of cash and cash equivalents in the consolidated
statement of cash flows“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 price fluctuations and with a maturity of three months
or less at the time of acquisition.

(4) Accounting method for retirement benefit liability
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 gains or losses are amortized on a straight-line
basis over a period (mainly 10 years), which is shorter than
the average remaining years of service of the eligible
employees, from the fiscal year following the fiscal year inwhich differences arise.
Unrecognized actuarial gains or losses 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 basedon the assumption that the benefits payable, which arecalculated as if all eligible employees voluntarily terminatedtheir employment at the current fiscal year end, approximate
net defined benefit liability at year-end.
(5)	Standards of translation into yen of significant assets or
liabilities denominated in foreign currencies
All monetary receivables and payables denominated inforeign currencies are translated into Japanese yen at theexchange rates at the balance sheet date. Foreign exchange
gains and losses resulting from the currency conversion andsettlement are recognized in profit or loss.
Assets and liabilities of the consolidated foreign subsidiaries
are translated into Japanese yen at the current exchange rate
as of the balance sheet date, and revenue and expense items
are translated into Japanese yen at average exchange rates
during the period. Differences arising from such translation
are included in “Foreign currency translation adjustment”
and “Non-controlling interests” as a separate component of“Net assets”.
(6) Important hedge accounting methods
Deferred hedging is used for valuation gains and losses on
forward foreign exchange contracts. Allocation treatment isapplied to those forward exchange contracts that are eligible.
The Companies enter into hedged transactions in theordinary course of business in accordance with its internal
rules to reduce exposure of fluctuations in future foreign
currency exchange rates.
Hedging instruments are forward exchange contract andhedged items are the forecast transaction in foreign currency.
Hedge effectiveness assessment are not considerednecessary, as the Company assumes that cash flow fromfluctuations from exposure to foreign exchange rates will beidentically offset by the fluctuation in the hedging
instrument, which is contracted at the same amount.

(9)	Other important accounting policies in the preparation of
consolidated financial statements
Consumption taxes withheld from sales and paid uponpurchasing goods and services by the Companies are notincluded in revenues and expenses.
The consolidated tax payment system is applied.

Forthcoming accounting standard
1. The Company and domestic consolidated
subsidiaries“Implementation Guidance on Tax Effect Accounting (ASBJ
Guidance No. 28)” and “Implementation Guidance on
Recoverability of Deferred Tax Assets (ASBJ Guidance No.26)”
will be applied from the year ending March 31, 2019.
“Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29)” and “Implementation Guidance on
Accounting Standard for Revenue Recognition (ASBJ Guidance
No. 30)” will be applied from the year ending March 31, 2022.

2. Overseas consolidated subsidiaries
IFRS 15 and ASU 2014-09 “Revenue from Contracts with
Customers” will be applied from the year ending March 31,
2019.
IFRS 16 and ASU 2016-02 “Leases” will be applied from theyear ending March 31, 2020.

Change in presentation(Consolidated Statement of Income)“Foreign withholding taxes”, separately presented for the year
ended March 31, 2017, is included in “Other” under “Nonoperating expenses” since those amounts are less than 10% of
total Non-operating expenses. To reflect this change in thepresentation, the previous consolidated financial statements arereclassified.
As a result of this change, “Foreign withholding taxes” of ¥571
million and “Other” of ¥1,522 million for the year ended March
2017, are collectively presented in “Other” of ¥2,094 million.

(7)	T he amortization method and amortization period for
goodwill
Goodwill is amortized by the straight-line method over 5 to
15 years. Immaterial goodwill generated from minor

13

Notes to Consolidated Balance Sheet*1. Investment securities
	Investment securities issued by unconsolidated subsidiaries
and affiliated companies at March 31, 2018 and 2017 are as
follows:
Thousands of
U.S. dollars

Millions of yen

2018

Investment securities

2017

¥26

¥40

2018

$245

2. Contingent Liabilities
	Contingent liabilities at March 31, 2018 and 2017 are as
follows:

Guarantees on employees’
housing loans

2017

¥62

¥92

2018

$584

3. Trade notes discounted
	Trade notes discounted at March 31, 2018 and 2017 are as
follows:
Thousands of
U.S. dollars

Millions of yen

2018

Trade notes discounted

¥48

2017

2018

¥128

$452

*4. Bills due on the last day of the fiscal year	Bills due on the last day of the fiscal year are deemed to havebeen settled on the due date.
	The following notes matured as of the end of the period areincluded in the balance because the end of the current period
fell on a day on which financial institutions were closed.
Thousands of
U.S. dollars

Millions of yen

2018

Notes receivable - trade
Notes payable - trade

2017

¥196
17

¥−
−

2018

$1,845160

Notes to Consolidated Statement of Income*1. Selling, General and Administrative Expenses	Major components of selling, general and administrative
expenses for the years ended at March 31, 2018 and 2017
are as follows:
Millions of yen

Personnel expenses
Retirement benefit expenses
Research and development
expensesThousands of
U.S. dollars

2018

2017

2018

¥82,481
3,561¥78,5424,552$776,365
33,51824,792

24,913

233,358*2. Research and Development Expenses
	Research and development costs included in administrative
expenses and manufacturing cost for the years ended March
31, 2018 and 2017 are as follows:
Millions of yen

Research and Development
Expenses

14

Notes to Consolidated Statement ofComprehensive Income*Other comprehensive income for the years ended March 31,2018 and 2017 are as follows:
Reclassification adjustment and income tax relating to othercomprehensive income

Thousands of
U.S. dollars

Millions of yen

2018*3. Restructuring Cost	The major contents of Restructuring Cost for the year ended
March 31, 2018 and 2017 are extra retirement benefit
payments and the costs associated with the reorganization ofoverseas operations.

Thousands of
U.S. dollars

2018

2017

2018

¥28,065¥28,161$264,166

Thousands of
U.S. dollars

Millions of yen

2018

2017

2018

Other comprehensive income
Valuation difference on available-for-sale securities
Amount incurred
¥863
¥152
Reclassification
adjustments for gains andlosses realized in net
income−(0)
Amount before tax effectadjustment
863
152
Tax effect adjustment
(265)
(46)
Valuation difference on
available-for-salesecurities
¥598
¥106
Deferred gains or losses on hedges
Amount incurred¥(32)
Reclassification
adjustments for gains andlosses realized in net
income9Amount before tax effectadjustment(23)
Tax effect adjustment
7
Deferred gains on hedges¥(16)
Foreign currency translation adjustment
Amount incurred¥1,171
Reclassification
adjustments for gains andlosses realized in net
income(438)
Amount before tax effectadjustment732
Tax effect adjustment−
Foreign currencytranslation adjustment¥732
Minimum pension liability adjustment
Amount incurred¥117
Tax effect adjustment(41)
Minimum pension
liability adjustment¥76
Remeasurements of defined benefit plans
Amount incurred¥(1,726)
Reclassification
adjustments for gains andlosses realized in net
income377
Amount before tax effectadjustment(1,349)Tax effect adjustment
422
Remeasurements ofdefined benefit plans¥(927)
Total other comprehensive
income¥463$8,123−8,123(2,494)$5,629¥(9)$(301)

(102)

85

(112)
34
¥(77)

(216)
66
$(151)¥(3,241)$11,0229(4,123)(3,232)−

6,890−¥(3,232)$6,890¥(541)
208$1,101(386)¥(332)$715¥3,156$(16,246)

1,559

3,549

4,716
(1,450)(12,698)
3,972¥3,266$(8,726)¥(269)$4,358

Notes to Consolidated Statement of Changes
in Net Assets

Year ended March 31, 20171.	The type and total number of issued shares as well as thetype and number of our treasury shares are as follows:(thousand shares)

Year ended March 31, 2018
1.	The type and total number of issued shares as well as thetype and number of our treasury shares are as follows:(thousand shares)

Number ofshares at
beginning ofcurrent period

Issued shares
Common stock
Total
Treasury shares
Common stock(Note 1, 2)
Total

Number ofsharesincreased

Number ofsharesdecreased

Number ofshares at endof current
period−−−−288,145
288,145

288,145
288,145
13,41435

913,441

13,41435

913,441

Note: 1.	The increase of 35 thousand shares in treasury shares was due topurchase requests related to the share exchange.
2.	The decrease of 9 thousand shares in treasury shares was resulting
from the exercise of subscription rights to shares.

2.	Subscription rights to shares and treasury shares subscription
rights are as follows:
Number of shares subject toBalance at
subscription rights (shares)
Type ofend of
The details
sharescurrentofAt
At endsubject toClassification
periodsubscription
beginningofsubscription
Increased Decreased
rightsof current
current (Million
rightsyen)
periodperiodthe
Subscription
Company
rights as(Parent
stock option
company)
Total

Balance at
end ofcurrent
period(Thousandsof U.S.
dollars)

−

−

−

−

−

¥153

$1,440

−

−

−

−

−

¥153

$1,440Note: All subscription rights in above table can be exercised.

3. Cash Dividends(1) Payments of dividends(Resolution)

Type ofsharesTotal amount Dividends Dividends
Record date Effective dateof dividends resource per share

Board ofDirectors’
meeting heldon May 12,
2017

Commonstock¥549 million($5,168
thousand)

Board ofDirectors’Commonmeeting heldstockon November
8, 2017¥824 million($7,756
thousand)Retainedearnings

Retainedearnings¥2($0.02)¥3($0.03)

March 31,2017

September
30, 2017

June 7, 2017

Type ofsharesTotal amount Dividends Dividends
Record date Effective dateof dividends resource per share

Board of¥1,373 million
Retained
CommonDirectors’($12,924
earnings
meeting held on stock
thousand)May 9, 2018¥5($0.05)

Number ofsharesdecreased

Number ofshares at endof current
periodIssued shares
Common stock
Total
Treasury shares
Common stock(Note 1, 2)
Total

288,145
288,145−−−−

288,145
288,145

13,50520

111

13,414

13,50520

111

13,414

Note: 1.	The increase of 20 thousand shares in treasury shares was due topurchase requests related to the share exchange.
2.	The decrease of 111 thousand shares in treasury shares was resulting
from the exercise of subscription rights to shares.

2.	Subscription rights to shares and treasury shares subscription
rights are as follows:
Number of shares subject to
subscription rights
Type of shares
Balance at end
The details of
subject toof current
At
Classification subscription
At end ofsubscription beginning
periodrightsIncreased Decreased current (Million yen)rightsof current
periodperiodthe Company Subscription
rights as
−
−
−
−
−
¥104
(Parent
company) stock option
Total
−
−
−
−
−
¥104

Note: All subscription rights in above table can be exercised.

3. Cash Dividends(1) Payments of dividends
	There is no applicable matter because of non-dividend
paying.
(2)	Dividend payments for which the record date is in the fiscal
year ended March 31, 2017, and the effective date is in thefollowing fiscal year
(Resolution)

Type ofsharesTotal amount Dividends Dividends
Record date Effective dateof dividends resource per share

Board ofDirectors’
meeting heldon May 12,
2017

Commonstock¥549 million

Retainedearnings

March 31,
2017

¥2.0

June 7, 2017

December 1,2017(2)	Dividend payments for which the record date is in the fiscal
year ended March 31, 2018, and the effective date is in thefollowing fiscal year
(Resolution)

Number ofsharesincreased

Number ofshares at
beginning ofcurrent period

Notes to Consolidated Statement of Cash
Flows
*1.	Reconciliation of balance of cash and cash equivalents at theend of period and cash and deposits in the consolidatedbalance sheet is as follows:
Millions of yen

March 31, 2018 June 5, 2018

Cash and deposits
Cash and cash equivalents

Thousands of
U.S. dollars

2018

2017

2018

¥57,355¥57,355¥46,129¥46,129$539,863$539,863

15*2.	Principal assets and liabilities of a company that ceased to bea consolidated subsidiaryYear ended March 31, 2018
The breakdown of asset and liability at the time of the exclusionof Kokusai Chart Corporation from the scope of consolidation
due to the sales of shares, the amount of the sales of shares, andpayments for sales of shares are as follows:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Non-controlling interests
Investment account after sale
Gains on sales of shares of subsidiaries
Total sale value
Cash and cash equivalents
Net: payments for sales of shares

Millions of yen

Thousands of
U.S. dollars¥1,875
997
(999)
(794)
(407)
(121)
238
789
(1,078)¥(289)$17,649
9,384(9,403)(7,474)(3,831)(1,139)2,240
7,427(10,147)$(2,720)

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 sales ofshares are as follows:

4. Details of important non-cash transactions
Assets and liabilities related to finance lease transactions
Millions of yen

Assets related to financelease transactions
Liabilities related to financelease transactions

2018

2017

2018

¥2,238¥3,643$21,066¥2,615¥3,710$24,614

Lease transactions(Lessee)

1. Finance Lease	Finance Lease transactions, except for those which meet theconditions that the ownership of the leased assets wastransferred to the lessee.
(1)	The content of leased assets:
Mainly machinery and equipment(2) Depreciation method of leased assets:	Please refer to “4. Accounting policies (2) Depreciation andamortization methods of significant depreciable andamortizable assets”.
2. Operating Lease as a lessee	Future minimum lease payments for non-cancelable
operating leases are summarized as follows:
Millions of yen

Millions of yen

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Gains on sales of shares of subsidiaries
Total sale value
Cash and cash equivalents
Proceeds from sales of shares¥3,349855(3,634)
(166)
2,114
2,520
(772)
¥1,747

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

Year ended March 31, 2017
Not applicable

16

Thousands of
U.S. dollars

2018

2017

2018

¥5,513
10,438¥15,951¥2,937
8,923¥11,860$51,892
98,249$150,141(Lessor)

1. Finance Lease(1) The details of lease investment assets(i) Lease investment assets - current assets*3. Principal assets and liabilities concerning transfer of businessYear ended March 31, 2018
The breakdown of asset and liability increased by transfer ofbusiness, value of transfer of business and payments for transferof business are as follows:
Current assets
Non-current assets
Goodwill
Current liabilities
Value of transfer of business
Unpaid amount of acquisition cost
Foreign currency translation difference
Payments for transfer of businessThousands of
U.S. dollars

Millions of yen

Thousands of
U.S. dollars

¥61
27
394
(119)
363
(36)
(7)
¥(320)

$574
254
3,709
(1,120)
3,417
(339)
(66)
$(3,012)

Millions of yen

Lease receivables
Interests receivable
Total

Thousands of
U.S. dollars

2018

2017

2018

¥3,297(402)¥2,894¥1,379(53)¥1,325$31,034(3,784)$27,240(ii) Lease investment assets - investments and other assets
Lease receivables
Interests receivable
Total¥5,144(649)¥4,495¥2,613(338)¥2,275$48,419(6,109)$42,310(2)	Expected collectible amounts of lease revenues receivable in
the following fiscal year are as follows:
Millions of yen

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

2018

2017

2018

¥3,297
2,496
1,549
824
274
−
¥8,442¥1,379
691
669
634
617
0
¥3,993$31,034
23,494
14,580
7,756
2,579
−
$79,462

2. Operating Lease	Future minimum lease payments for non-cancelable
operating leases are summarized as follows:
Millions of yen

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

Thousands of
U.S. dollars

2018

2017

2018

¥219
1,529
¥1,749¥459
602¥1,061$2,061
14,392$16,463

3.	Amount on the consolidated balance sheet that corresponds
to sub-lease transaction and before deducting the portion ofinterest equivalent amount are summarized as follows:(1) Lease investment assets
Millions of yen

Current assets
Investments and other assets

Thousands of
U.S. dollars

2018

2017

2018

¥1,8182,453¥1,186
1,868$17,11223,089¥1,8182,453¥1,186
1,868$17,11223,089(2) Lease investment payable
Current liabilities
Non-current liabilities

Financial Instruments
1. Condition of financial instruments(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,
the Companies 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 tradereceivables denominated in foreign currencies, net of trade
payables denominated in the same currencies, are hedged byforward foreign exchange contracts.
	Investment securities are exposed to market risk. These are
the equity securities of certain enterprises with which theCompanies have business relationships.
	Substantially all trade payables (Notes and accounts payabletrade) are due within one year. The Companies are exposed
to foreign currency exchange rate fluctuation risk arisingfrom 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
Significant matters forming the basis of preparing theconsolidated financial statements “4. Accounting policies (6)Important hedge accounting methods”.

(3) Risk management for financial instruments(i)	Monitoring of credit risks (the risks related to breach ofcontract with client)	The Company adheres to the internal policies for its
trade receivables by having the Credit Managing
division monitor the status of major counterparties
regularly and managing due dates and balances bycounterparty, while working to detect early and mitigate
any concerns about collection due to the deterioration in
their financial positions and other reasons.
(ii)	Monitoring of market risks (the risks arising fromfluctuations in foreign exchanges rates, interest rates
and others)	For trade receivables and payables denominated inforeign currencies, the Companies identify the foreign
currency exchange rate fluctuation risk for eachcurrency on a monthly 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, theCompanies periodically review the fair values of suchfinancial instruments and the financial position of theissuers. In addition, the Companies continuously
evaluate whether securities should be maintained taking
into account their fair values and relationships with theissuers.
(iii)	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)	Supplementary explanation of the fair value of financial
instruments
The fair value of financial instruments is based on theirquoted 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, the notional amounts of derivatives in“Derivative Transactions” are not indicative of the actual
market risk involved in derivative transactions.

17

2. Fair value of financial instruments
Year ended March 31, 2018
	The carrying value of financial instruments in the
consolidated balance sheet as of March 31, 2018, and theirfair value are as follows:	Items without market value are not included in the securities
in the table. (See Note2)

Year ended March 31, 2017	The carrying value of financial instruments in the
consolidated balance sheet as of March 31, 2017, and theirfair value are as follows:	Items without market value are not included in the securities
in the table. (See Note2)
Millions of yen

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¥57,355¥57,355−

67,996(1,985)66,01166,011

−

4,420

4,420

−

127,790

127,790−(59,604)(59,604)−(304)(25,269)(10,477)(95,656)850(304)(25,269)(10,042)(95,220)
850

−
−
(435)
(435)
−

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)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)$539,863$539,863−

621,338

621,338−

41,60441,604−

1,202,843

1,202,843−(561,032)(561,032)−(2,861)(237,848)(98,616)(900,377)
8,001(2,861)(237,848)(94,522)(896,273)
8,001

−
−
(4,095)(4,095)−640,023(18,684)(*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.

(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−

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)
−

63,769(3,211)(*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 “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) Derivatives transaction
Please refer to “Derivative Transactions”.
2.	F inancial instruments for which an observable market price orobservable inputs used to determine a market price doesn’t exist
Thousands of
U.S. dollars

Millions of yen

Unlisted stocks

2018

2017

2018

¥1,638¥1,937$15,418

The unlisted stocks which do not have market prices are not included in(c) Marketable and investment securities in the above table, since theestimation of the fair value is deemed to be extremely difficult.

3.	Collection schedule of monetary claim and redemption
schedule of held-to-maturity securities after the consolidatedbalance sheet as of March 31, 2018 and 2017 are as follows:

Within 1 year

Cash and deposits
Notes and accounts
receivable-trade
Total

18

Millions of yen
2018
Between 1 to
Between 5 to
5 years
10 yearsMore than 10
years¥57,355−−−

67,996−−−¥125,352−−−

Millions of yen
2017
Between 1 to
Between 5 to
5 years
10 yearsWithin 1 year

Cash and deposits
Notes and accounts
receivable-trade
Total

Thousands of U.S. dollars
2018
More than 10
years¥46,129−−−

63,769−−−¥109,899−−−

Thousands of U.S. dollars
2018
Between 1 to
Between 5 to
5 years
10 yearsMore than 10
years

Within 1 year

Cash and deposits$539,863
Notes and accounts
640,023
receivable-tradeTotal$1,179,895

−

−

−

−

−

−

−

−

−

4.	Payment schedule of long-term loans payable, leaseobligations and other interest-bearing debt after the
consolidated balance sheet as of March 31, 2018 and 2017
are as follows:

Within 1
year

Short-termloans payable
¥304
Lease
4,795
obligations
Total¥5,099Within 1
year

Short-termloans payable ¥1,048
Lease
4,033
obligations
Total¥5,082

Within 1
year

Millions of yen
2018
Between 1 Between 2 Between 3 Between 4 More than 5
to 2 years to 3 years to 4 years to 5 years
years

−

−

−

−

−

3,273

1,764

550

94

−

¥3,273¥1,764

¥550

¥94

−

Millions of yen
2017
Between 1 Between 2 Between 3 Between 4 More than 5
to 2 years to 3 years to 4 years to 5 years
years

−

−

−

−

−

1,293

1,293

1,293

1,293

−

¥1,293¥1,293¥1,293¥1,293−Thousands of U.S. dollars
2018
Between 1 Between 2 Between 3 Between 4 More than 5
to 2 years to 3 years to 4 years to 5 years
years

Short-termloans payable $2,861
−
−
Lease
45,134 30,808 16,604
obligations
Total$47,995 $30,808 $16,604

−

−

−

5,177

885

−

$5,177$885−

Carrying value

Investment securities whose carrying value exceeds their acquisition cost:
Stocks$40,107$9,253$30,855
Investment securities whose acquisition cost exceeds their carrying value:
Stocks
1,487
1,600
(113)
Total
$41,604$10,862$30,742
Note:	The unlisted stocks of ¥1,638 million ($15,418 thousand) and ¥1,937
million for the year ended March 31, 2018 and 2017 which do not havemarket prices are not included in ‘’ Investment securities’’ in the abovetable, since the estimation of the fair value is deemed to be extremely
difficult.

2.	Information regarding the sales of securities, except those of
the affiliated companies, for the years ended March 31, 2018and 2017 are as follows:
Millions of yen

StocksProceeds

2018
Realized
gains

Realized
lossesProceeds

2017
Realized
gains

Realized
losses

¥286

¥274

−

¥177

¥17

¥4

Thousands of U.S. dollars
2018
Proceeds

StocksRealized gains$2,692Millions of yen
2018

2017

Unrealized
Carrying Acquisition gains
value
cost
(losses)

Unrealized
Carrying Acquisition gains
value
cost
(losses)

Investment securities whose carrying value exceeds their acquisition cost:
Stocks¥4,261¥983 ¥3,278 ¥3,376 ¥1,000 ¥2,375
Investment securities whose acquisition cost exceeds their carrying value:
Stocks
158
170
(12)
35
38
(2)
Total
¥4,420 ¥1,154 ¥3,266 ¥3,412 ¥1,039 ¥2,373−

3. Information regarding impairment of securities
Year ended March 31, 2018
	The Company has recognized an impairment loss on
securities and recorded loss on valuation of investment
securities in an amount of ¥236 million ($2,221 thousand).
Year ended March 31, 2017
	Not applicable

Derivative Transactions
1.	Summarized below are the amount of contract and the fairvalue of the derivative transaction for which the hedge
accounting is not applied.
Currency-related transactions
Transaction outside the market
Millions of yen

Contract amount

1.	Information regarding marketable securities as of March 31,2018 and 2017 are as follows:

Realized losses$2,5792018

Securities

Unrealized gains(losses)Acquisition cost

2017
Fair
value

Unrealized
gains(losses)Maturing Maturing
withinin more1 year than 1 year
Forward foreignexchange contracts

Sell:
USD ¥17,788
EUR 11,473
CNY
811
Buy:
7,418
USD
EUR
1,021
Total
¥38,513

Contract amount

Fair
value

Unrealized
gains(losses)Maturing Maturing
withinin more1 year than 1 year

¥−
−
−

¥803
207
3

¥803
207
3

¥29,903
7,512
−

¥−
−
−

¥ (148)97−¥ (148)
97
−

−
−
¥−

(113)
(17)
¥882

(113)
(17)
¥882

12,277771¥50,465

−
−
¥−

(136)
7
¥(179)(136)
7¥(179)

19

Thousands of U.S. dollars
2018
Contract amount

Fair value

Thousands of U.S. dollars
2018
Unrealized
gains (losses)

Maturing
Maturing in more
within 1 year
than 1 year$−−−

$7,5581,948
28$7,5581,948
28

69,8239,610$362,509−−$−(1,064)(160)$8,302(1,064)(160)$8,302

AUD
CAD$29,151$−$113

24,558

−

0

4,396

−

(0)

2,523

−

(0)

Accounts
payable-trade
Accounts
payable-trade

62,011

−

(405)

2,636

−

(9)

$125,311$−$(301)

Buy:

EUR
Total

2) Forward foreign exchange contracts, for which the deferral
hedge accounting is applied

Millions of yen
2018
Contract amount
Maturing
within 1 year

EUR

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade*Calculation of the fair value is based on the value from financial institutions.

Currency-related transactions
1) Net deferred gains or losses on hedges

Main hedged items

USD

USD

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

Millions of yen
2018

Fair value

Maturing in morethan 1 year

Main hedged items

CAD

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade¥3,097

¥−

¥12

2,609

−

0

467

−

(0)

268

−

(0)

EUR

Accounts
payable-trade
Accounts
payable-trade

Total

6,588

−

(43)

280

−

(1)

¥13,313

¥−

¥(32)

USD
AUD
CAD

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

Contract amount
Maturing
within 1 year

USD
USD
AUD

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-other

Total

Millions of yen
2017
Main hedged items

Sell:

Maturing in morethan 1 year

Main hedged items

AUD
CAD

USD
EUR
Total

20

1,465

−

74

856

−

55

915

−

(27)

229

−

(1)

256

−

(5)

¥4,192¥−¥109

Contract amount

Fair value

Maturing in morethan 1 year

Forward foreignexchange contracts

Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade
Accounts
receivable-trade¥3,211

¥−

¥10

3,505

−

1

339

−

(10)

237

−

3

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-trade

6,554

−

(13)

82

−

(1)

261

−

2

¥14,191

¥−

¥(9)

Sell:
USD
AUD
CAD

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

¥159

¥−

¥1

1,099

−

(36)

375

−

(2)

490

−

1

74

−

(0)

266

−

(1)

¥2,466

¥−

¥(37)

Buy:

Buy:
USD

¥13

Maturing
within 1 year

Sell:

EUR

¥−

Millions of yen
2017

Fair value

Forward foreignexchange contracts

USD

¥468

Buy:

Buy:
USD

Fair value

Maturing in morethan 1 year

Forward foreignexchange contracts

Sell:

AUD

Contract amount
Maturing
within 1 year

Forward foreignexchange contracts

EUR

Fair value

Maturing in morethan 1 year

Sell:
$167,432
107,991
7,634*Calculation of the fair value is based on the value from financial institutions.

USD

Contract amount
Maturing
within 1 year

Forward foreignexchange contracts

Forward foreignexchange contracts

Sell:
USD
EUR
CNY
Buy:
USD
EUR
Total

Main hedged items

USD
USD
AUD
Total

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-other(2)	The changes in plan assets during the years ended March 31,2018 and 2017

Thousands of U.S. dollars
2018
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$4,405$−$122

13,790

−

697

8,057

−

518

Accounts
payable-trade
Accounts
payable-otherAccounts
payable-other

8,613

−

(254)

2,155

−

(9)

2,410

−

(47)

$39,458$−$1,026

Buy:
USD
USD
AUD
Total

Retirement Benefits
1.	Summary of Retirement Benefit Plans
	The Company and its consolidated subsidiaries have both
funded and 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 ofservice and paid on a lump-sum or annuity basis.
	In defined benefit plans which are fully unfunded, thebenefits are determined by reference to assessment andqualification and paid on a lump-sum basis.
	In addition, certain subsidiaries use the simplified method
for the calculation of defined benefit liability and retirement
benefit cost of their defined benefit pension plans and lumpsum payment plans.
	The Company and certain domestic subsidiaries haveadopted defined contribution pension plans since October 1,
2015.
	The defined contribution plans are designed to replace of thefunding of defined benefit plans, whereby employees are
responsible for managing the funds themselves. For those
employees who do not want to participate in the defined
contribution benefit plan, the Companies pay an advancepayment of retirement benefits, equivalent to the employer’s
contribution of the defined contribution plan.
2. Defined Benefit Plans(1)	The changes in the retirement benefit obligation during theyears ended March 31, 2018 and 2017

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

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

Thousands of
U.S. dollars

2018

2017

2018

¥89,152
3,386
848
3,350
(3,506)(652)¥92,576¥91,438
3,597
868(2,738)(3,779)(234)¥89,152$839,157
31,871
7,982
31,532(33,001)(6,137)$871,386

2018

2017

2018

¥56,290
1,416
1,601
1,895
(2,018)(268)¥58,916¥54,077
1,151
418
3,281
(2,515)(123)¥56,290$529,838
13,32815,07017,837(18,995)(2,523)$554,556(3)	The funded status of the plans and the amounts recognizedin the consolidated balance sheet as of March 31, 2018 and2017 for the Company’s and the consolidated subsidiaries’
defined benefit plans
Thousands of
U.S. dollars

Millions of yen

Funded retirement benefit
obligation
Plan assets*Calculation of the fair value is based on the value from financial institutions.

Millions of yen

Thousands of
U.S. dollars

Millions of yen

Unfunded retirement benefit
obligation
Estimated amount for
pension fund liquidation of aconsolidated subsidiary
Net liability for retirement
benefits in the balance sheet
Net defined benefit liability
Net defined benefit asset
Net liability for retirement
benefits in the balance sheet

2018

2017

2018

¥58,905(58,916)¥(10)¥53,405(56,290)¥(2,885)$554,452(554,556)$(94)¥33,671¥35,747$316,933(329)−(3,097)¥33,331¥32,861$313,733¥35,779(2,448)¥35,066(2,204)$336,775(23,042)¥33,331¥32,861$313,733(4)	The components of retirement benefit expense for the years
ended March 31, 2018 and 2017
Millions of yen

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

Thousands of
U.S. dollars

2018

2017

2018

¥3,386848(1,416)466(89)¥3,195¥3,597868(1,151)897
662¥4,874$31,871
7,982(13,328)
4,386
(838)
$30,073(5)	Remeasurements of defined benefit plans included in othercomprehensive income (before tax effect) for the years
ended March 31, 2018 and 2017
Millions of yen

Prior service cost
Actuarial gains or losses
Total

Thousands of
U.S. dollars

2018

2017

2018

¥(89)
(1,260)¥(1,349)

¥662
4,054
¥4,716$(838)(11,860)$(12,698)21

(6)	R emeasurements of defined benefit plans included inaccumulated other comprehensive income (before tax effect)
as of March 31, 2018 and 2017
Thousands of
U.S. dollars

Millions of yen

Unrecognized prior service cost
Unrecognized actuarial losses
Total

2018

2017

2018

¥243
416
¥660

¥333
1,676
¥2,009$2,287
3,916$6,212(7) The plan assets(i)	The plan assets, by major category, as a percentage of
total plan assets as of March 31, 2018 and 2017
Bonds
Alternatives
StocksLife insurance company general accounts
Other
Total

2018

2017

36%
27%
25%
9%
3%
100%

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

The fifth new share subscription rights
as share-reward type stock option
Date of resolution

June 26, 2012

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

Date of resolution

June 27, 2013

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

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

(ii)	How to set the expected long-term rate of return on plan
assets	The Companies set the expected long-term rate of returnin consideration of target portfolio of plan assets,
expected long-term rate of return and past performance.
(8) The assumptions used in actuarial calculation
2018

2017

Discount rate
Mainly 0.5~1.2% Mainly 1.2%
Expected long term rate of return on plan assets Mainly 2.5%
Mainly 2.5%
Expected salary increase rate
Mainly 5.6%
Mainly 5.3%

3. Defined Contribution Plans
	Amounts which consolidated subsidiaries contributed totheir defined contribution plans for the years ended March
31, 2018 and 2017 were ¥1,909 million ($17,969 thousand)and ¥1,657 million, respectively.

Stock Option Plan
The stock options outstanding as of March 31, 2018 are as
follows:
1.	The amount and the accounting classification of the stock
options existing for the year ended March 31, 2018	Selling, general and administrative expenses for the years
ended March 31, 2018 and 2017 were ¥53 million ($499
thousand) and ¥45 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

22

Date of resolution

June 23, 2011

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 seventh new share subscription rights
as share-reward type stock option
Date of resolution

June 27, 2014

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
The eighth new share subscription rights
as share-reward type stock option

Date of resolution

July 13, 2015

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

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

From July 30, 2015 to July 29, 2045
The ninth new share subscription rights
as share-reward type stock option

Date of resolution

July 27, 2016

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

The tenth new
share
subscription
rightsas share-reward
type stock option

The tenth new share subscription rights
as share-reward type stock option
Date of resolution

June 28, 2017

Qualified beneficiaries

18 of the Company directors and corporate
officers

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

88,000 shares of Common stock

Date of issuanceAugust 9, 2017

End of the preceding term

Condition of exercising(Note 2)

Offered

Vesting period

No conditional period required

Cancelled

Subscription rights exercise period

From August 10, 2017 to August 9, 2047

Vested(2) The size of stock option and movement
	Addressed is the amount of stock options existing as ofMarch 31, 2018.
	As for the number of stock options, it is converted into thenumber of shares.
(shares)(i) The number of stock options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
June 23, 2011

June 26, 2012

June 27, 2013

Before the resolution
End of the preceding term

−

−

−

Offered−−−Cancelled−−−

Vested−−−Outstanding

−

−

−

9,000

11,00010,000

Vested−−−Exercised−−−

Cancelled

−

−

−

9,000

11,00010,000

Outstanding

The 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
Date of resolution

June 27, 2014

July 13, 2015

July 27, 2016

End of the preceding term

−

−

−

Offered−−Cancelled−−

Vested−−−Outstanding−−−
113,000

Before the resolution−
88,000−88,000

Outstanding−

After the resolution
End of the preceding term
Vested−88,000Exercised−

Cancelled
Outstanding−
88,000(ii) Per share data
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
Date of resolution

June 23, 2011

June 26, 2012

June 27, 2013

Exercised price¥1($0.01)¥1($0.01)¥1($0.01)−−−¥316($2.97)¥291($2.74)¥550($5.18)

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

The 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

After the resolution
End of the preceding term

June 28, 2017

Before the resolution

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.

Date of resolution

Date of resolution

Date of resolution

June 27, 2014

July 13, 2015

July 27, 2016

Exercised price¥1($0.01)¥1($0.01)¥1($0.01)−¥611($5.75)¥611($5.75)¥667($6.28)¥602($5.67)¥403($3.79)

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

The tenth new
share
subscription
rightsas share-reward
type stock option
Date of resolution

June 28, 2017−

Exercised price¥1($0.01)−

The average priceat the time of exercising
Official price at the dateof offered−¥605($5.69)

After the resolution
34,00041,000

VestedEnd of the preceding term

−

−

−

Exercised

−

3,000

6,000

Cancelled
Outstanding

−

−

−

34,00038,000107,000

23

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

36.1%

Estimated residual period (Note 2)

1.6 years

Estimated dividends (Note 3)¥2 ($0.02) per share

Risk-free rate (Note 4)(0.11%)

Note: 1.	The figure is calculated on a weekly basis based on the actual stock
prices for the period from the week of December 28, 2015, 1.6 years(expected remaining period) prior to the grant date to the preceding
week of grant date.
2.	T he 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 theyear ended March 31, 2017.
4.	T he yield of government bond is in accordance with estimatedresidual 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.

Income Taxes and Deferred Tax Assets andLiabilities
1.	Significant components of deferred tax assets and liabilities
for the years ended March 31, 2018 and 2017 are as follows:
Millions of yen

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

Thousands of
U.S. dollars

2018

2017

2018

¥1,62020,531
2,791¥1,61523,922
2,829$15,248
193,251
26,271

9,818

9,731

92,413

18,166
2,922¥55,851(32,483)¥23,368

15,5395,095¥58,734(34,442)¥24,292

170,990
27,504$525,706(305,751)$219,955

Deferred tax liabilities:
Reserve for advanced
depreciation of noncurrent assets
Valuation difference on
available-for-salesecurities
Other
Total deferred tax liabilities¥(22)¥(246)$(207)(930)(2,140)¥(3,094)(670)(4,849)¥(5,766)(8,754)(20,143)$(29,123)

Net deferred tax assets¥20,274¥18,525$190,832

Note: Net deferred tax assets are included as below on consolidated balance
sheet for the years ended March 31, 2018 and 2017.

Thousands of
U.S. dollars

Millions of yen

Current assets Deferred tax assets
Non-current assets Deferred tax assets
Current liabilities Other
Non-current liabilities Other

2018

2017

2018

¥6,155¥7,560$57,935

17,213

16,731

162,020

(43)

(44)

(405)

(3,050)(5,721)(28,709)

2.	Significant factors in the 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, 2018 and 2017.
2018

Statutory tax rate
Effect of:Different tax rates applied to profit 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
Foreign tax credits
Tax system reform
Liquidation of consolidated subsidiaries
Other, net
Effective tax rates

2017

30.9%

30.9%

(1.9)

(7.1)

0.5

1.1

(0.1)

(0.3)

(4.2)

(4.4)

1.5

20.2

2.9

5.4

(1.4)
(3.4)
(2.1)
(3.4)
19.3%

(0.3)
−
−
7.0
52.5%

3. Effect of a change in the corporate income tax rate
	The Tax Cuts and Jobs Act was enacted on December 22,
2017, and the federal corporation tax rate applied to US
consolidated subsidiaries was reduced from 35% to 21%.
As a result of this reduction, deferred tax assets which is theamount less the deferred tax liability amount increased by¥767 million ($7,220 thousand), foreign currency transaction
adjustment increased by ¥35 million ($329 thousand) andincome taxes-deferred decreased by ¥803 million ($7,558
thousand) for the year ended March 31, 2018.

Business Combination
Business Divestitures
On November 8, 2017, the Company resolved at the Board of
Directors’ meeting that it would accept the tender offer from
NAKABAYASHI CO., LTD starting from November 9, 2017,
to transfer a portion of the shares of Kokusai Chart Corporation
owned by the Company.
On December 14, 2017, the Company transferred 3,060 thousand
shares, which account for 51% of the issued shares of Kokusai
Chart Corporation owned by the Company.
1. The overview of the business divestiture is as follow:(1) Company name to which the shares were transferred
NAKABAYASHI CO.,LTD.
(2) Contents of the business transferred	Development, manufacture and sales of charts, ribbons, andconsumables

24

(3) Purpose of the share transfer
	Kokusai Chart Corporation was the Company’s consolidated
subsidiary and has contributed to the growth of theCompanies due to a stable earnings structure.
	Due to the escalating competition in the market of recording
paper and meter reading paper, the Company judged that
Ko k u s a i C h a r t C o r p o r a t i o n c a n m a ke c o n t i n u o u s
improvements to corporate value by taking advantage of
production facilities, customer base and expert knowledge
ow n e d b y NA K A BAYA S H I C O . , LT D . G iv e n t h ecircumstances, the Company applied for this tender offer andtransferred a part of the shares owned by the Company.
	The Company will continue to maintain good cooperation
with Kokusai Chart Corporation as in the past.
(4) Date of the share transfer
December 14, 2017(5) Other matters concerning overview of the transaction
	Share transfer in consideration for cash or cash equivalentsonly
2. Overview of accounting treatments(1) Amount of gain on transfer
Gain on sales of shares of subsidiaries¥238 million ($ 2,240 thousand)(2)	Proper book value of assets and liabilities related to thebusiness transferred and major components
Current assets
Non-current assets
Total assets

Current liabilities
Non-current liabilities
Total liabilities

Millions of yen

Thousands of
U.S. dollars¥1,875997¥2,873$17,649
9,384$27,043

Millions of yen

Thousands of
U.S. dollars

¥999
794
¥1,793$9,4037,474$16,877

Asset retirement obligations
Information of asset retirement obligations was omitted as its
amount is immaterial.

Segment Information, etc.
(Segment information)
1. Summary of reportable segments
	The reportable segments of the Companies are components
of an entity for which discrete financial information isavailable and regularly reviewed by the Board of Directors
for the purpose of making decisions about resources to beallocated to the segments and assess the segments’performance.
	The Companies report on “Retail Solutions Business Group”
and “Printing Solutions Business Group” as reportablesegments.
	“Retail Solutions Business Group” is engaged indevelopment, manufacturing, sales, maintenance services,
etc. of POS Systems for domestic and overseas market,
MFPs for domestic market, Auto ID systems and related
products for domestic market.
	“Printing Solutions Business Group” is engaged indevelopment, manufacturing, sales, maintenance services,
etc. of MFPs for overseas market, Auto ID systems andrelated products for overseas market, and Inkjet printheads
for domestic and overseas market.
2.	The calculation method for amounts of sales, profit or loss,
assets and other items per reportable segments
	The accounting policies of the segments are substantially thesame as those described in Significant matters forming thebasis of preparing the consolidated financial statements.
	Intersegment sales and transfers are calculated at theprevailing market prices.

(3) Accounting treatments
	The difference between the consolidated carrying amountand the sale value is recorded in gains on sales of shares ofsubsidiaries under extraordinary income.
3.	Name of the reportable segment to which the business
transferred belonged
Retail Solutions Business Group
4.	Profit related to the business transferred recorded in theConsolidated Statement of Income for the year ended March
31, 2018
Net sales
Operating profit

Millions of yen

Thousands of
U.S. dollars¥1,38833$13,065311

25

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

2018

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

2017

2018

¥318,065
2,707
320,773$3,053,567
828
3,054,396

188,878
11,093
199,971(11,181)¥513,289

179,545
9,603
189,148(12,310)¥497,611

1,777,843
104,415
1,882,257(105,243)$4,831,410

Segment Profit
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥17,255
7,291¥24,546¥11,260
3,389¥14,649$162,415
68,628$231,043

Segment Assets
Retail Solutions Business Group
Printing Solutions Business Group
Adjustments
Consolidated¥131,773
117,621
33,235¥282,630¥128,236
129,109
12,047¥269,393$1,240,333
1,107,125
312,829$2,660,297

Depreciation
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥3,452
8,374¥11,826¥3,5398,073¥11,613$32,492
78,822$111,314

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

¥−
2,210
¥2,210¥−2,342¥2,342$−20,802$20,802

Capital Expenditures
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥3,802
10,380¥14,183¥4,1098,029¥12,138$35,787
97,703$133,500

Notes: 1.	Adjustments of segment assets are corporate assets, and consist of
cash and cash equivalents and investment securities in the amount of¥33,235 million ($312,829 thousand) and ¥12,047 million as of March
31, 2018 and 2017, respectively.
2.	S egment profit corresponds to operating profit of Consolidated
Statement of Income.

Thousands of
U.S. dollars

2018

2017

2018

Net SalesJapan
The Americas
EuropeAsia and others
Total¥217,770
146,675
100,493
48,350¥513,289¥208,091
149,202
95,73544,581¥497,611$2,049,793
1,380,601
945,905
455,102$4,831,410

Property, plant and equipmentJapan
The Americas
EuropeAsia and others
Total¥12,168
3,393
8,642
3,885
¥28,090¥13,489
3,885
7,571
4,121
¥29,068$114,533
31,937
81,34436,568$264,401

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 closeness(2) Countries & Areas(i)	The Americas	U.S.A., Canada, Mexico, Venezuela,
Brazil, Chile(ii)	Europe	U . K . , F r a n c e , G e r m a ny, S p a i n ,S w i t z e r l a n d , B e l g i u m , I t a l y,
N e t h e r l a n d s , S w e d e n , N o r w a y,
Denmark, Finland, Poland(iii)	Asia and others	Singapore, Malaysia, Indonesia,
China, Australia, Korea, Thailand
3. 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, 2018 and 2017.

(Information about impairment loss on non-current
assets by reportable segment)
Year ended March 31, 2018
Not applicableYear ended March 31, 2017
Not applicable(Information on amortization of goodwill andunamortized balance by reportable segment)(Related Information)
1. Products and service information
Millions of yen

Thousands of
U.S. dollars

2018

2017

2018

¥320,119
193,170¥513,289¥308,408
189,202¥497,611$3,013,168
1,818,242$4,831,410*Retail: POS systems, Auto ID systems and related products, etc.
*MFP:	Multi Function Peripherals that realize facsimiles, office printers,
multi-function peripheral devices, scanner function and document
management with one machine.

26

Millions of yen

Thousands of
U.S. dollars¥324,411
88
324,499

Net sales of Retail
Net sales of MFP
Total

2. Information by geographical area

Millions of yen

2018

2017

Balance at endof period

Retail Solutions Business Group
Printing Solutions Business Group
Consolidated

¥−
4,083
¥4,083¥−
6,053¥6,053Thousands of
U.S. dollars

2018
Balance at endof period$−
38,432$38,432

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

Per Share Information(Information on negative goodwill by reportablesegment)

Per share information at March 31, 2018 and 2017 is as follows:Year ended March 31, 2018
Not applicable

Yen

Year ended March 31, 2017
Not applicable

Net assets per share
Profit per share
Profit per share fully diluted(Information about related parties)
1. Transactions with related parties(1) Transactions between the Company and related parties(i) Parent company and major shareholder of the Company
Year ended March 31, 2018(¥=Million, US$=Thousand)
Name

Address

Parentcompany

Toshiba
Corporation

Minato-ku,
Tokyo

Energy systems,social infrastructure Direct: 52.7%¥499,999
systems and($4,706,316)
Indirect: 0.1%
electronic devices

BusinessrelationshipTransaction

Transaction
amountClassification

Balance at
fiscal year end

Deposits offunds¥7,297($68,684)

Receipt ofinterests¥227($2,137)

Deposit paidin group−

Deposits offunds andConcurrent
position as
directors

CapitalBusiness

Percentage ofvoting rights held(%)

StatusYear ended March 31, 2017(¥=Million)
StatusName

Address

CapitalParentcompany

Toshiba
Corporation

Minato-ku,
Tokyo¥200,000

Transaction

Transaction
amountBusinessrelationship

Purchase of
informationequipment andConcurrent
position as
directors

Purchase of
informationequipment¥4,301Business

Percentage ofvoting rights held(%)

Energy systems,social infrastructure Direct: 52.7%
systems and storage Indirect: 0.1%
devices

Balance atClassification
fiscal year end

Accounts
payable-trade¥169

Accounts
payableother¥787

Accruedexpenses¥684

U.S. dollars

2018

2017

¥300.38
63.74
63.67

¥238.07
28.24
28.20

2018

$2.83
0.60
0.60

* Profit per share and profit per share fully diluted were calculated on the basis of thefollowing data.
Thousands of
U.S. dollars

Millions of yen

Profit per share
Profit attributable toowners of parent
Amounts not attributable tocommon stock
Profit attributable toshareholders of parent
related to common stock
Average number of sharesof common stock during
the period (thousand
shares)Profit per share fully diluted
Adjustment to profit
Increase in number ofcommon stocks (thousand
shares)Share subscription rights
included in the increase in
number of common stock(thousands shares)
Outline of the residual securities
excluded from the calculationof the fully diluted profit per
share because they have no
dilutive effects

2018

2017

2018

¥17,512¥7,758$164,834−−−

17,512

7,758

164,834

274,718

274,700

−

−

305

328

305

328

−

−

−

Note: 1.	With regard to the amounts above, transaction amount does notinclude consumption taxes, but the ending balance includes
consumption taxes.
2.	Transaction Terms and Policies for Determining Transaction
Terms, etc
		Purchase of information equipments is determined by pricenegotiations, taking market prices into account.
		C o n c e rn in g d ep osi t s of f un ds, i t ’s di f ficu lt t o fi gure outtransaction amount because fund settlement is performed
whenever needed.
		Therefore, only the average balance during the period is stated.
		Concerning deposits of funds, the Company receives presentationof interest from the parties and decides taking into accountmainly prevailing rate of market.

(2)	T ransactions between the Company’s consolidated
subsidiaries and related parties
Year ended March 31, 2018
Not applicableYear ended March 31, 2017
Not applicable
2. Notes to parent company or important affiliated companies(1) Information about parent company
	Toshiba Corporation (listed on the Tokyo Stock Exchange
and the Nagoya Stock Exchange)27

Significant Subsequent Events
Change in the number of shares constituting one
trading unit and share consolidation

The Company resolved at the Board of Directors’ meeting heldon May 9, 2018 to change the number of shares constituting one
trading unit and the articles of incorporation and to submit a
proposal for share consolidation to the 93rd Annual General
Meeting of Shareholders to be held on June 26, 2018. The
proposal was approved by the Annual General Meeting of
Shareholders.
1.	Reason for the change in the number of shares constituting
one trading unit and share consolidation
	For the purpose of improving market convenience forinvestors, Tokyo Stock Exchange and stock exchanges acrossJapan published the Action Plan for Consolidating Trading
Units and plan to complete the standardization of trading
units for common stock issued by all domestically listedcompanies (transition to 100-share trading units) by October
1, 2018. In light of the intent of this action plan, as acompany listed on the Tokyo Stock Exchange, the Company
has proposed reducing the number of shares constituting one
trading unit from 1,000 to 100, and also the Company has
implemented the share consolidation in order to adjust theinvestment unit to an appropriate level while taking shareprice fluctuations over the medium to long term into account.
2. Details of the change	The number of shares constituting one trading unit will bechanged from 1,000 to 100 on October 1, 2018.

(2) Ratio of the share consolidation
	On October 1, 2018, shares held by shareholders recorded on
the latest shareholders’ register as of September 30, 2018,(effectively September 28, 2018) will be consolidated at a
5-to-1 ratio.
(3) Number of shares to be reduced through consolidation
288,145,704
230,516,564
57,629,140

Note: S hares to be reduced through consolidation and “Total shares
outstanding after consolidation” are theoretical values calculated on the
total number of shares outstanding before consolidation and the shareconsolidation ratio.

(4) Total number of authorized shares on the effective date	For the purpose of normalizing total number of authorizedshares in accordance with decreasing numbers of total shares
outstanding by share consolidation, total number ofauthorized shares will decrease in the same ratio as the ratioof share consolidation on October 1, 2018.
Authorized shares before change
Authorized shares after change

1,000,000,000
200,000,000

4. Treatment of fractional shares
	Regarding any fractional shares that may result from theshare consolidation, pursuant to the provisions of theCompanies Act, the Company shall sell all such fractional
shares in a block and distribute the proceeds to theshareholders who have held the fractional shares inproportion to their respective fractions.

28

Date of the resolution of the Board of Directors’ meeting May 9, 2018
Date of the resolution of the Annual General Meetingof Shareholders
June 26, 2018
The effective date of the change in the number ofshares constituting one trading unit and share
October 1, 2018
consolidation(Plan)

6. Effect on per share information
	Per share informations on the assumption that the shareconsolidation were executed at the beginning of the previous
fiscal year are as follows:Yen

Net assets per share
Profit per share
Profit per share fully diluted

U.S. dollars

2018

2017

¥1,501.94
318.73318.38¥1,190.37
141.21141.042018$14.143.00
3.00

Supplemental schedules to the consolidated
financial statements
Supplemental schedule of bonds
Not applicable

Supplemental schedule of borrowings(¥=Million, US$=Thousand)

3. Details of the share consolidation(1) Class of shares to be consolidated
Common stock

Shares outstanding before consolidation(as of March 31, 2018)
Shares to be reduced through consolidation
Total shares outstanding after consolidation

5.	Schedule for the change in the number of shares constituting
one trading unit and share consolidation

Classification

Beginningbalance

Short-term loans
payable¥1,048($9,864)¥304($2,861)

2.0−

Lease obligations
due within one
year¥4,033($37,961)¥4,795($45,134)−−

Lease obligations
due after one year

¥5,172¥5,682($48,682) ($53,483)¥10,254¥10,782($96,517) ($101,487)−

From 2019
to 2022

−

−

Total

Endingbalance

Averageinterest rate(%)

Payment due

Note: 1.	“The average interest rate” represents the weighted-average rateapplicable to the ending balance of loans payable.
2.	The average interest rates of lease obligations are omitted as leaseobligations amount on the consolidated balance sheet is before
deducting the portion of interest equivalent amount.
3.	Payment schedule of lease obligations due after one year after the
consolidated balance sheet as of March 31, 2018 is as follows:
Millions of yen
2018
Between 1 to Between 2 to Between 3 to Between 4 to
2 years
3 years
4 years
5 years

Lease obligations¥3,273¥1,764¥550¥94

Thousands of U.S. dollars
2018
Between 1 to Between 2 to Between 3 to Between 4 to
2 years
3 years
4 years
5 years

Lease obligations$30,808$16,604$5,177$885

Supplemental schedule of asset retirement obligations

The information was omitted as the amounts of asset retirement
obligations as of the beginning and end of the fiscal year ended
March 31, 2018 were less than or equal to a hundredth of thetotal of liabilities and net assets as of the beginning and end of
the fiscal year ended March 31, 2018.

(2) Other

Quarterly information of the fiscal year ended March 31, 2018
(Millions of yen)
(Cumulative period)

Three months

Six months

Nine months

Fiscal year

115,662

243,218

371,933

513,289

Profit before income taxes

3,009

9,424

16,77023,307

Profit attributable to owners of parent

1,459

5,150

11,766

17,512

Profit per share (Yen)

5.31

18.74

42.83

63.74

Net sales(Thousands of U.S. dollars)(Cumulative period)

Three months

Six months

Nine months

Fiscal year

1,088,686

2,289,326

3,500,875

4,831,410

Profit before income taxes

28323

88,705

157,850

219,381

Profit attributable to owners of parent

13,73348,475

110,749

164,834

0.05

0.18

0.40

0.60

Net sales

Profit per share (U.S. dollars)(Yen)(Accounting period)
Profit per shareFirst quarter
5.31

Second quarter
13.43

Third quarter

Fourth quarter

24.08

20.91
(U.S. dollars)(Accounting period)
Profit per shareFirst quarter
0.05

Second quarter
0.13

Third quarter

Fourth quarter

0.23

0.20

29

30

31

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: 3,586 <Consolidated: 19,780> (as of March 31, 2018)
Common Stock: ¥39,970 million (as of March 31, 2018)
Stock Listing: Tokyo Stock Exchange (1st Section)

Board of Directors and Audit & Supervisory Board (as of June 26, 2018)
President and Chief Executive Officer◊Takayuki Ikeda
Directors

Masatsugu Sakabe
Yukio Inoue
Masami Uchiyama
Masahiro Yamada
Naohiro Yamaguchi
Hitoshi Kaneda
Naoto Hasegawa
Michio Kuwahara
Shin Nagase◊:Representative Director

Audit & Supervisory Board Members

Haruo Kawasumi
Yoshinari Sato
Hideo Tabuchi
Kyoko Okumiya

Significant Consolidated Companies (as of March 31, 2018)• TOSHIBA AMERICA BUSINESS SOLUTIONS, INC.
• TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LTD.
• TOSHIBA TEC INFORMATION SYSTEMS (SHENZHEN) CO., LTD.
• TOSHIBA TEC SOLUTION SERVICES CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS, INC.
• TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH• TOSHIBA TEC SINGAPORE PTE LTD.
• TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
• P.T. TEC INDONESIA• TOSHIBA GLOBAL COMMERCE SOLUTIONS (NETHERLANDS) B.V.
• TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
• TOSHIBA TEC U.K. IMAGING SYSTEMS LIMITED• TOSHIBA TEC MALAYSIA MANUFACTURING SDN. BHD.
• TEC INFORMATION SYSTEMS CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS MEXICO, S. DE R.L. DE C.V.
• TER CORPORATION• 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.”