2016

An n ual R e p o r t
For the Year Ended March 31, 2016

Financial Highlights
Years ended March 31

Thousands of
U.S. dollars

Millions of yen
Consolidated
Net sales

2012

2013

2014

2015

2016

2016

¥350,604¥403,694¥498,895¥524,577¥532,818$4,728,595

Operating income

10,83015,88624,801

17,063

1,602

14,217

Net income (loss) attributable toowners of parent

2,566

6,212

7,449

(1,149)(103,450)(918,084)

Total assets

276,436

388,513393,137

416,769

281,616

2,499,253

Net assets

139,732

176,558

186,033

203,108

70,359624,415

Yen

U.S. dollars

Per share data:
Net income (loss) attributable toowners of parent-Basic¥9.35¥22.64¥27.14¥(4.18)¥(376.69)$(3.343)

Net assets

472.36549.42578.90623.35208.93

1.854
Thousands of
U.S. dollars

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

2012

2013

2014

2015

2016

2016

¥224,933¥233,686¥261,259¥265,840¥261,496$2,320,697

3,226

2,557

7,744

8,349

(3,248)(28,822)

Net income (loss)

2,421

3,901

2,355

9,376

(115,933)(1,028,872)

Capital stock

39,971

39,971

39,971

39,971

39,971

354,729

Total assets

226,188244,368

257,507

293,447

189,624

1,682,851

Net assets

125,273

127,428

127,812136,10918,301

162,416

Yen

U.S. dollars

Per share data:
Net income (loss)-Basic¥8.82¥14.22¥8.58¥34.15¥(422.15)$(3.746)

Cash dividends

7.00

8.00

8.00

13.00

−

−

456.27463.99465.23495.26

66.21

0.588

Net assets

The dollar amounts in this report represent translations of yen, for convenience only, at the rate of ¥112.68=US$1.00, the exchange rate
prevailing on March 31, 2016.

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

Business Review

Business Review for the Consolidated Fiscal Year 2015
Regarding the global economy in the consolidated fiscal year 2015, the US experienced an economic recovery, while a
gradual economic recovery continued in Europe, and in Asia the economy generally decelerated, centered on China. In theJapanese economy, exports weakened due to the slowing down of the Chinese economy, among other factors, and sluggish
improvements in personal consumption and capital investment kept the economy from achieving a full-fledged recovery.
Under such circumstances, the Toshiba Tec Group has been diligently working to become “a global one-stop solutions
company” under the three pillars of its business strategy, namely “growth of global retail business”, “expansion of solutions
and service business”, and “establishment of a steadily profitable organization through cost reduction and productivity
improvement”.
Net sales were ¥532,818 million (up 2% compared to the previous consolidated fiscal year), partially owing to the effect of
exchange rates. With regard to operating income/loss, owing to such factors as lower profitability in the global commerce
solutions business acquired from IBM in August 2012, increased selling, general and administrative expenses in line withadditional occurrences such as expenses for new operating systems, revaluation of hardware inventory, and revaluation ofsoftware for sale, operating income was ¥1,602 million (down 91% year-on-year). Regarding final profit and loss, in the
global commerce solutions business, in line with smaller investment at major customers and reduced projects at newcustomers, revisions were made to medium-term business plans and sales plans, leading to extraordinary losses such as an
impairment loss of ¥84,558 million on non-current assets including goodwill, and net loss attributable to owners of parentof ¥103,450 million (net loss attributable to owners of parent of ¥1,149 million during the previous consolidated fiscal
year).
In view of the above harsh conditions, regarding the distribution of surplus for the fiscal year 2015, it is with great regretthat no dividends were paid for both interim and year-end dividends. The Toshiba Tec Group asks for the understanding of
its shareholders.

Business Highlights for each Report Segment
The business highlights for each report segment in the consolidated fiscal year 2015 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 severe business environment where investment demand in the retailindustry in western countries and Japan lacks strength and competition with rivals remains intense.
In POS systems for the Japanese market, amid a severe business environment due to such factors as revisions to plans for
new store openings in the retail industry, although self-service registers and self-ordering systems were strong, sales
decreased owing in part to a drop in sales of products for shopping centers.
As for POS systems for overseas markets, although growth was limited owing partially to smaller investment at major
customers, sales increased due to factors such as exchange rates.
Sales of MFPs for the Japanese market decreased, attributable in part to a lower number of units sold.
Regarding Automatic Identification systems for the Japanese market, although sales of label printers for the medical
industry grew, due to a pullback from a concentration of large-scale projects in the previous consolidated fiscal year, sales
decreased.

2

As a result, net sales from the retail solutions business were ¥324,810 million (an increase of ¥414 million over the previous
consolidated fiscal year). Operating loss was ¥11,480 million (an operating loss of ¥420 million during the previous
consolidated fiscal year), due to factors such as a decline in profitability in the global commerce solutions business.
Printing Solutions Business
The printing solutions business, which deals with MFPs for overseas markets, Automatic Identification systems and related
products for overseas markets, and inkjets for domestic and overseas markets, focused efforts on expanding sales ofstrategic products, while pioneering vertical markets and new business fields, and expanding sales through the promotion ofan alliance strategy, against a difficult business background marked by tough competition.
Concerning MFPs for overseas markets, sales increased due to various factors, including sales promotion activities focusedon differentiating our proprietary products and utilizing our customer network, establishing sales bases in Malaysia andThailand, and the effects of exchange rates, which led to growth in the US market and the Asia market.
In Automatic Identification systems for overseas markets, sales increased due to factors including favorable sales to major
customers in the US and sales of products such as high-speed label printers in the European market, along with the effects
of exchange rates.
Sales of inkjets increased due to strong sales to customers in Japan, Europe, and Asia.
As a result, net sales from the printing solutions business were ¥220,174 million (up 3% compared to the previous
consolidated fiscal year). Operating income was ¥13,082 million (down 25% year-on-year), owing partially to the effects ofhigher selling, general and administrative expenses.
Note:	Automatic Identification (AI) system refers to systems that contain hardware and software to automatically retrieve, identify andmanage from barcodes and IC tags.

Forecasts for Fiscal Year 2016
With regard to the global economy, a gradual recovery is expected to continue in the US and Europe. Meanwhile, theeconomy in Asia is expected to generally decelerate, centered on China. In Japan, the economy is exposed to downside risk,such as the economic slowdown overseas, but a gradual recovery is expected as personal consumption and exports steadily
pick up.
Under such circumstances, the Toshiba Tec Group will unite as one, and diligently work to become “a global one-stop
solutions company” under the three pillars of its business strategy, namely “growth of global retail business”, “expansion ofsolutions and service business”, and “establishment of a steadily profitable organization through cost reduction andproductivity improvement”.
Main measures on a segment basis for fiscal year 2016 ending March 31, 2017 are as follows:3

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

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 that are major ones in overseas markets and of inkjet heads that are important
products in both domestic and overseas markets. Also, toward the provision of total solutions that capitalize on a wide rangeof products and markets, 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Consolidated Balance Sheet
March 31, 2016

Thousands of
U.S. dollars (Note 1)

Millions of yen

ASSETS

2016

2015

2016

Cash and cash equivalents¥22,661¥54,965$201,107

Notes and accounts receivable-trade76,47181,017

678,652

Inventories

46,85845,716415,853

Accounts receivable – other

20,16820,277

178,986

Deferred tax assets (Note 13)

4,914

8,398

43,608Prepaid expenses and other current assets

26,39730,617234,272

Allowance for doubtful accounts(2,775)(1,405)(24,627)

Total current assets

194,694

239,585

1,727,851

27,876

31,109247,389

Current assets

Non-current assets
Property, plant and equipment:
Buildings and structures
Machinery, equipment and vehicles

42,95745,751

381,232

Tools, furniture and fixtures

48,20449,311

427,798

Land

2,119

2,540

18,807

Lease assets

11,805

11,342

104,769

Accumulated depreciation(105,199)(109,239)(933,614)

Construction in progress

3,583

2,746

31,79831,34533,560278,179

8,634

36,912

76,621711

33,906

6,306

Intangible assets:
Goodwill
Customer relationships
Other

7,596

36,232

67,417

16,941

107,050

150,344

45

46

396

Investments and other assets:
Investment securities: (Note 17)
Unconsolidated subsidiaries and affiliates
Other
Deferred tax assets (Note 13)

4,837

4,998

42,923

17,22814,422

152,891

Asset for retirement benefits (Note 4)

1,326

3,352

11,767

Other

15,202

13,716

134,923

(61)

(63)

(545)

38,57736,471

342,355

86,863177,081

770,878

59

103

524

¥281,616¥416,769$2,499,253

Allowance for doubtful accounts

Total non-current assets
Deferred assets
Total assets

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

5

Thousands of
U.S. dollars (Note 1)

Millions of yen

LIABILITIES AND NET ASSETS

2016

2015

2016

Current liabilities
Notes and accounts payable-trade
Short-term loans payable (Note 3)
Accounts payable - other
Lease obligations (Note 3)
Income taxes payable (Note 13)
Provision for directors’ bonuses
Other (Note 13)
Total current liabilities¥71,176
3,407
29,557
4,436
3,644
57
46,327
158,604¥90,0812,028
15,501
3,358
3,598
−
50,149164,715$631,665
30,238262,31139,36732,339503
411,140
1,407,563

Non-current liabilities
Long-term loans payable (Note 3)
Lease obligations (Note 3)
Provision for directors’ retirement benefits
Liability for retirement benefits (Note 4)
Other (Note 13)
Total non-current liabilities

17
5,954
117
38,687
7,878
52,653−4,024
141
37,888
6,893
48,946

147
52,844
1,041
343,336
69,907467,275

Total liabilities

211,257

213,661

1,874,838

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

39,971

39,971

354,729

Capital surplus

52,971

52,966

470,101

Retained earnings
Treasury stock, at cost:
13,505 thousand shares in 2016
13,562 thousand shares in 2015
Total shareholders’ equity(41,007)64,365(363,923)(5,523)−
46,412−(5,542)
151,760(49,018)−
411,889

1,476
71
11,741(462)(1,857)
10,9691,514
418,015(569)
440
19,404

13,103631
104,193(4,100)(16,480)
97,347

116

116

1,031

12,862

31,828114,148

70,359203,108

624,415¥281,616¥416,769$2,499,253

Net assets

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains on hedges
Foreign currency translation adjustments
Minimum pension liability adjustments
Retirement benefit liability adjustments
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

6

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

Consolidated Statement of Income
Year ended March 31, 2016

Thousands of
U.S. dollars (Note 1)

Millions of yen

2016

2015

2016

Net sales¥532,818¥524,577$4,728,595

Cost of sales (Notes 4, 6 and 9)

315,732

301,355

2,802,026

217,086

223,222

1,926,569

215,484

206,159

1,912,352

1,602

17,063

14,217

Interest and dividends income

439

507

3,898

Gain on sales of investment securities

98

46

868

(Loss) gain on valuation of derivatives

(542)

1,993

(4,811)

Interest expenses

(963)

(588)

(8,546)Gross profit
Selling, general and administrative expenses (Notes 4, 7, 9 and 20)
Operating income
Non-operating income and expenses:

Loss on sales and retirement of non-current assets

(36)

(51)

(315)

Foreign exchange losses(837)(5,867)(7,430)−(1,105)−

Loss on settlement
Impairment loss (Note 10)(85,023)−(754,554)

Restructuring cost (Note 11)(1,440)(686)(12,780)

Loss on transfer of business (Note 12)

(325)

−

(2,885)

Other, net(2,060)(1,607)(18,283)(Loss) income before income taxes(89,087)

9,705(790,621)

Current

12,514

7,037

111,060

Deferred

966

2,999

8,567

Net loss(102,567)(331)(910,248)

883

818

7,836

¥(103,450)¥(1,149)$(918,084)

Income taxes (Note 13):

Net loss attributable to:Non-controlling interests
Owners of parent

Yen

Per share data (Note 25)
Net loss attributable to owners of parent-Basic
Cash dividends

U.S. dollars

2016

2015

2016

¥(376.69)¥(4.18)$(3.343)−¥13.00−

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

7

Consolidated Statement of Comprehensive Income
Year ended March 31, 2016

Thousands of
U.S. dollars (Note 1)

Millions of yen

2016

2015

2016

¥(102,567)¥(331)$(910,248)

Valuation difference on available-for-sale securities

(38)

528

(339)

Deferred gains on hedges

67

8

596

Foreign currency translation adjustments(7,268)15,901(64,506)

Minimum pension liability adjustments

202

(593)

1,796

Net loss
Other comprehensive income

Retirement benefit liability adjustments(2,291)

2,214(20,328)

Total other comprehensive income (Note 8)(9,328)18,058(82,781)¥(111,895)¥17,727$(993,029)(111,885)

12,471(992,943)

(10)

5,256

(86)

Comprehensive (loss) income
Comprehensive (loss) 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
Year ended March 31, 2016

Millions of yen

Shareholders’ equity

Balance at April 1, 2015
Cumulative effect of change in accounting policies(Note2)
Restated balance at April 1, 2015
Changes during the year
Cash Dividends (Note 24)
Net loss attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’ equity
Balance at March 31, 2016

Capitalstock

CapitalsurplusRetainedearnings¥39,971−
39,971¥52,966−
52,966¥64,365−−−−−¥39,971−−−5−¥52,971

Total
Treasurystock, at cost shareholders’equity64,365¥(5,542)−(5,542)¥151,760−
151,760(1,922)(103,450)−−−¥(41,007)

−
−
(18)
37
−
¥(5,523)(1,922)(103,450)(18)42−¥46,412
Millions of yen

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities

Balance at April 1, 2015
Cumulative effect of change in accounting policies(Note2)
Restated balance at April 1, 2015
Changes during the year
Cash Dividends (Note 24)
Net loss attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’ equity
Balance at March 31, 2016

Deferred gains
on hedges

Foreign currencytranslation
adjustments

Minimum
pension liability
adjustments

Retirement
benefits liability
adjustments

Total accumulated
other comprehensive
incomeSubscription
rights toshares

Noncontrollinginterests

Total net
assets¥1,514¥4¥18,015¥(569)¥440¥19,404¥116¥31,8281,514

4

18,015(569)

440

19,404116

31,828¥203,108−
203,108

−
−
−
−
(38)
¥1,476

−
−
−
−
67
¥71

−
−
−
−
(6,274)¥11,741

−
−
−
−
107
¥(462)−−−−(2,297)¥(1,857)−−−−(8,435)¥10,969

−
−
−
−
(0)
¥116

−
−
−
−
(18,966)¥12,862(1,922)(103,450)(18)42(27,401)¥70,359

Thousands of U.S. dollars

Shareholders’ equity

Balance at April 1, 2015
Cumulative effect of change in accounting policies(Note2)
Restated balance at April 1, 2015
Changes during the year
Cash Dividends (Note 24)
Net loss attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’ equity
Balance at March 31, 2016

Capitalstock

CapitalsurplusRetainedearnings

Total
Treasurystock, at cost shareholders’equity$354,729−
354,729$470,056−
470,056$571,219−
571,219$(49,186)−(49,186)$1,346,818−
1,346,818

−
−
−
−
−
$354,729

−
−
−
45
−
$470,101(17,058)(918,084)−−−$(363,923)

−
−
(162)
330
−
$(49,018)(17,058)(918,084)
(162)
375
−
$411,889
Thousands of U.S. dollars

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities

Balance at April 1, 2015
Cumulative effect of change in accounting policies(Note2)
Restated balance at April 1, 2015
Changes during the year
Cash Dividends (Note 24)
Net loss attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’ equity
Balance at March 31, 2016

Subscription
rights toshares

Noncontrollinginterests

Total net
assets$172,206−
172,206$1,033−
1,033$282,464−
282,464$1,802,521−
1,802,521−−−−(74,859)$97,347

−
−
−
−
(2)
$1,031−−−−(168,316)$114,148(17,058)(918,084)(162)
375(243,177)$624,415

Deferred gains
on hedges

Foreign currencytranslation
adjustments

Minimum
pension liability
adjustments

Retirement
benefit liability
adjustments

Total accumulated
other comprehensive
income$13,436−
13,436$35−
35$159,876−
159,876$(5,047)−(5,047)$3,906
−
3,906

−
−
−
−
(333)
$13,103

−
−
−
−
596
$631

−
−
−
−
(55,683)$104,193

−
−
−
−
947
$(4,100)−−−−(20,386)$(16,480)

9Millions of yen

Shareholders’ equity

Balance at April 1, 2014
Cumulative effect of change in accounting policies(Note2)
Restated balance at April 1, 2014
Changes during the year
Cash Dividends (Note 24)
Net loss attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’ equity
Balance at March 31, 2015

Total
Treasurystock, at cost shareholders’equityCapitalstock

CapitalsurplusRetainedearnings¥39,971−
39,971¥52,971−
52,971¥65,736
2,523
68,259¥(5,585)−(5,585)¥153,093
2,523
155,616−−−−−¥39,971

−
−
−
(5)
−
¥52,966(2,745)(1,149)−−−¥64,365

−
−
(29)
72
−
¥(5,542)(2,745)(1,149)(29)
67−¥151,760
Millions of yen

Accumulated other comprehensive income
Valuation difference
Deferredon available-for-sale gains(losses) on
securities
hedgesBalance at April 1, 2014
Cumulative effect of change in accounting policies(Note2)
Restated balance at April 1, 2014
Changes during the year
Cash Dividends (Note 24)
Net loss attributable to owners of parent
Purchase of treasury stock
Disposal of treasury stock
Net changes of items other than shareholders’ equity
Balance at March 31, 2015

Foreign currencytranslation
adjustments

Minimum
pension liability
adjustments

Retirement
benefit liability
adjustments

Total accumulated
other comprehensive
incomeSubscription
rights toshares

Noncontrollinginterests

Total net
assets¥186,033
2,567
188,600(2,745)(1,149)(29)
67
18,364¥203,108

¥988

¥(4)

¥6,626¥(55)¥(1,771)¥5,784

¥130

988

(4)

6,626

(55)

(1,771)

5,784

130

¥27,026
44
27,070−−−−526¥1,514

−
−
−
−
8
¥4

−
−
−
−
11,389¥18,015

−
−
−
−
(514)
¥(569)

−
−
−
−
2,211
¥440

−
−
−
−
13,620¥19,404

−
−
−
−
(14)
¥116

−
−
−
−
4,758
¥31,828

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Numbers of shares in issue: 288,146 thousand shares in the fiscal year ended March 31, 2016.

10

Consolidated Statement of Cash Flows
Year ended March 31, 2016

Millions of yen

Cash flows from operating activities(Loss) income before income taxes
Depreciation and amortization
Impairment loss(Note 10)
Decrease in allowance for doubtful accounts
Increase in net defined benefit liability
Interest and dividends income
Interest expenses
Loss on sales and retirement of property, plant and equipment
Gain on sales of investment securities
Restructuring cost (Note 11)
Loss on transfer of businessChanges in assets and liabilities:
Decrease in notes and accounts receivable-trade
Increase in inventories(Decrease) increase in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible assets
Proceeds from transfer of business
Proceeds from sales of intangible assets
Purchases of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation (Note 15)
Proceeds from sales of investment securities
Net decrease in short-term loans receivable
Payments of long-term loans receivableCollections of long-term loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities
Net increase in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation
Repayments of finance lease obligations
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling shareholders
Other, net
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Thousands of
U.S. dollars (Note 1)

2016

2015

2016

¥(89,087)
19,49785,023(1,807)
602
(439)
963
36
(98)
1,440
325

¥9,705
20,387
−
(58)
3,314
(507)
588
51
(46)
686
−

$(790,621)
173,027754,554(16,037)
5,344(3,898)
8,546
315
(868)
12,7802,885

1,708(2,348)(15,665)
12,335
12,485443(875)(7,485)
4,568

13,194(1,241)
6,297(22,248)
30,122501(645)(7,026)
22,952

15,161(20,840)(139,025)
109,475
110,798
3,934(7,771)(66,424)
40,537(8,724)
1,177(5,376)600−(19)(1,280)
168
3,363
(13)
16
298
(9,790)(6,803)226(14,046)
−
1,923
(14)
−
108
3,448
(13)
16
382
(14,773)(77,424)
10,442(47,712)
5,325
−
(170)
(11,358)
1,490
29,842
(116)
139
2,662
(86,880)

1,028
4
(4)
(19,121)(3,047)(18)(1,925)(900)
42(23,941)(3,141)(32,304)
54,965

1,109−−−(2,946)(29)(2,746)(496)
67(5,041)
4,522
7,660
47,305

9,128
34
(33)
(169,690)(27,038)(162)(17,086)(7,986)364(212,469)(27,878)(286,690)
487,797¥22,661¥54,965$201,107

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

11

Notes to Consolidated Financial Statements

1.	Basis of Presenting Consolidated
Financial Statements
The consolidated financial statements of TOSHIBA TECCORPORATION (the “Company”) have been prepared inaccordance with accounting principles generally accepted inJapan, which are different in certain respects as to the applicationand disclosure requirements of International Financial ReportingStandards, and are compiled from the consolidated financial
statements prepared by the Company as required by the
Financial Instruments and Exchange Law of Japan.
Certain reclassifications have been made to present theconsolidated financial statements in a format which is morefamiliar to the readers outside Japan.
Solely for the convenience of the readers, the consolidated
financial statements have been presented in U.S. dollars bytranslating Japanese yen amounts at the exchange rate of¥112.68 = US$1.00 prevailing as of March 31, 2016. 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.

2.	Summary of Significant Accounting
Policies(A)	Basis of Consolidation and Accounting ofInvestments in Affiliated Companies
The consolidated financial statements include the accounts of theCompany and its subsidiaries (collectively, “Companies”). For
the years ended March 31, 2016 and 2015, the accounts of 86
subsidiaries are consolidated. All significant inter-company
transactions and accounts are eliminated in consolidation.
All assets and liabilities of the consolidated subsidiaries arerevaluated on acquisitions, if applicable. The difference between
the cost of investments in subsidiaries and the fair value of the
net assets acquired at the dates of acquisition is recognized as
goodwill in the consolidated balance sheet and principallyamortized by the straight-line method over 5 to 17 years.
The Company has no unconsolidated subsidiary to which theequity method of accounting has been applied for the years
ended March 31, 2016 and 2015.
From the perspective of immateriality, the investments in theremaining unconsolidated subsidiaries and the affiliatedcompanies are stated at cost.
Certain subsidiaries have the fiscal year end which differs fromthat of the Company. As a result, adjustments have been madefor any significant transactions as needed in consolidation thattook place during the period between the fiscal year end of thesubsidiaries and the fiscal year end of the Company.

(B) Foreign Currency Translation
Revenue and expense accounts of foreign consolidated
subsidiaries are translated into yen using the annual average rateduring each of the fiscal years. The balance sheet accounts,
except for the components of net assets, are translated at the ratein effect at each of the balance sheet dates. The components of
net assets are translated at their historical rates. Translation
adjustments are presented as a component of “Accumulated
other comprehensive income” under Net Assets in the
consolidated balance sheet.
Foreign currency transactions are measured at the applicablerates of exchange prevailing at the transaction dates, unlesshedged by forward foreign exchange contracts. Assets andliabilities denominated in foreign currencies at the balance sheet

12date are re-measured at the applicable rates of exchange
prevailing at that date, unless hedged by foreign exchange
contracts. Exchange differences are charged or credited toincome.

(C) Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments,
generally with original maturates of three months or less.

(D) Investment Securities
Marketable securities classified as “Other securities” are reported
at fair value with unrealized holding gains or losses, net of taxes,
presented as “Available-for-sale-securities” as a component of“Accumulated other comprehensive income” under Net Assets inthe consolidated balance sheets. Cost of securities sold isdetermined by the moving average method.
Non-marketable securities classified as “Other securities” arecarried at cost, which is determined by the moving averagemethod.

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

(F) Property, Plant and Equipment and Depreciation
Property, plant and equipment are depreciated by the straightline method over their estimated useful lives.
The useful lives of principal property, plant and equipment aresummarized as follows:
Buildings and structures 15 to 38 years
Machinery and equipment 5 to 13 years
Tools, furniture and fixtures 2 to 7 years(G) Intangible Assets and Amortization
Intangible assets except for software are amortized by thestraight-line method. Software intended for commercial sale isamortized at the larger amount of either an amortizable amountbased on the estimated sales revenue or an amortizable amountbased on a straight-line method over remaining valid sales
period. Software for internal use is amortized by the straight-line
method over its estimated useful life.

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

(I) Deferred Assets
Deferred organization expenses are amortized by the straightline method over a period of 5 years.

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

(K) Provision for Directors’ Retirement Benefits(Q) Research and Development Expenses

In certain domestic consolidated subsidiaries the retirement
benefits to directors are determined based on the internal ruleand accounted for as an expense of the accounting period inwhich such retirement benefits were accrued.

Research and development costs are charged to income as
incurred.

(L) Provision for Directors’ Bonuses
The bonuses to directors are determined based on the internal
rule and accounted for as an expense of the accounting period inwhich such bonuses were accrued.

(M) Retirement Benefits
The retirement benefit obligation for employees is attributed toeach period by the benefit formula method.
Prior service cost is being amortized by the straight-line method
over a certain period (mainly 10 years), which are shorter than
the average remaining years of service of the employees whenincurred.
Actuarial gain or loss is amortized from following the year inwhich the gain or loss is incurred by the straight-line method
over a certain period (mainly 10 years), which are shorter than
the average remaining years of service of the employees whenincurred.
Unrecognized actuarial gain or loss and unrecognized priorservice cost, net of tax, are recognized as “Retirement benefit
liability adjustments” in “Accumulated other comprehensive
income” of “Net assets.”
Certain consolidated subsidiaries use a simplified method for
calculating retirement benefit expenses and liabilities based on
the assumption that the benefits payable, which are calculated as
if all eligible employees voluntarily terminated their employment
at the current fiscal year end, approximate the retirement benefit
obligation at year-end.

(N) Income Taxes, Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are determined based on the
differences between financial reporting and the tax bases of theassets and liabilities, and are measured using the enacted tax
rates and laws which will be in effect when the temporary
differences are expected to reverse.
The Company and its wholly owned domestic subsidiaries filetheir consolidated tax return in Japan for the Corporation Tax
purpose.

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

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

(R) Changes in Accounting Policies
Adoption of Revised Accounting Standard for Business
Combinations, etc.
The Company and its domestic consolidated subsidiaries adopted“Revised Accounting Standard for Business Combinations”(Accounting Standards Board of Japan (ASBJ) Statement No.21
of September 13, 2013), “Revised Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No.22 ofSeptember 13, 2013), “Revised Accounting Standard forBusiness Divestitures” (ASBJ Statement No.7 of September 13,2013) and other related guidance, effective from April 1, 2015.
Under these revised accounting standards, the Company changed
its accounting policies to recognize in capital surplus thedifferences arising from the changes in the Company’sownership interest in a subsidiary when the Company retains
control over the subsidiary and to record acquisition-related
costs as expenses in the fiscal year in which the costs are
incurred. In addition, with respect to business combinations
implemented on or after April 1, 2015, the Company changed its
accounting policy for the reallocation of purchase price due tothe completion of the provisional accounting to reflect suchreallocation in the consolidated financial statements for the fiscal
year in which the business combination was implemented. The
Company also changed the presentation method of net income
and the term “Non-controlling interests” is used instead of“Minority interests.” In order to reflect these changes, certain
amounts in the prior year comparative information werereclassified to conform to such changes in the current fiscal year
presentation.
In the consolidated statement of cash flows, cash flows frompurchase or sales of shares of subsidiaries not resulting inchanges in the scope of consolidation are included in “Cashflows from financing activities” and acquisition related costs forshares of subsidiaries resulting in changes in the scope of
consolidation and cash flows related to costs associated withpurchase or sales of shares of subsidiaries not resulting inchanges in the scope of consolidation are included in “Cashflows from operating activities.”
The Company adopted the Revised Accounting Standard forBusiness Combinations, etc., prospectively from April 1, 2015
by following the transitional treatments in paragraph 58-2 (4) of
ASBJ Statement No. 21, paragraph 44-5 (4) of ASBJ Statement
No. 22 and paragraph 57-4 (4) of ASBJ Statement No. 7.
The effects of these changes on the consolidated balance sheet asof March 31, 2016, the consolidated statement of income for theyear then ended, and net assets per share and net loss per sharefor the year ended were immaterial.

(S) Accounting Standards Issued but Not Yet Adopted
Implementation Guidance on Recoverability of Deferred Tax
Assets (ASBJ Guidance No. 26 of March 28, 2016)
1. Overview“Implementation Guidance on Recoverability of Deferred Tax
Assets” prescribes the guidance in applying “AccountingStandard for Tax Effect Accounting” (issued by “BusinessAccounting Council”) regarding recoverability of deferred tax
assets after conducting a necessary review on the requirements
for classification and parts of treatment for the measurementof deferred tax assets, basically taking over the framework of
the Japanese Institute of Certified Public Accountants(“JICPA”) Audit framework of Committee Report No.66“Audit Treatment on Determining the Recoverability of13

Deferred Tax Assets,” whereby entities are categorized into
five categories and deferred tax assets are estimated based oneach of these categories, when the practical accounting
guidance and audit guidance on tax effect accounting(accounting treatment section) of the JICPA were transferredto the ASBJ.
The following treatments were changed as necessary regarding
the requirements for classification of the entity and estimationof deferred tax assets:•	Treatment for an entity that does not meet any of thecriteria in types 1 to 5;• Criteria for types 2 and 3;•	Treatment for deductible temporary differences whichcannot be scheduled in an entity that qualifies as type 2;•	Treatment for the reasonable estimable period of future preadjusted taxable income in an entity that qualifies as type 3;and•	Treatment when an entity classified as type 4 also meets thecriteria for types 2 or 3.
2. Scheduled date of adoption
The Company expects to adopt the revised implementation
guidance from the beginning of the fiscal year ending March
31, 2017.
3. Impact of adopting the implementation guidance
The Company is currently evaluating the effect of adopting theimplementation guidance on its consolidated financial
statements.

(T) Change in presentation(Consolidated Balance Sheet)
The amount of Accounts receivable – other, included andpresented in “Prepaid expenses and other current assets” under“Current assets” for the year ended March 31, 2015, exceeded
the amount of 5% of total assets, it is presented as “Accounts
receivable – other”. To reflect this change in the presentation, theprevious consolidated financial statements and related foot noteamounts have been reclassified.
As a result of this change, ¥50,895 million ($451,676 thousand)presented in “Prepaid expenses and other current assets” under“Current assets” in the previous consolidated financial statements
has been reclassified as ¥20,277 million ($179,955 thousand) in“Accounts receivable – other” and ¥30,617 million ($271,721
thousand) in “Prepaid expenses and other current assets.”(U) Additional Information

The average interest rate for short-term loans outstanding at
March 31, 2016 and 2015 is 1.26 % and 1.48 %, respectively.
The average interest rate for long-term loans outstanding at
March 31, 2016 is 2.52 % .
The average interest rate for lease obligations is omitted because
the Companies recorded the amount of lease payments inclusiveof interest in the Consolidated Balance Sheet.
The aggregate annual maturities of lease obligations (excluding
the current portion) outstanding at March 31, 2016 are as
follows:
Year ending
March 31201820192020 and thereafterThousands of
U.S. dollars¥1,4891,489
2,976¥5,954$13,211
13,211
26,422$52,844

4.	Retirement Benefits
1. Summary of Retirement Benefit Plans
The Company and its consolidated subsidiaries have either
funded or unfunded defined benefit plans and defined
contribution plans.
In defined benefit plans which are all funded, the benefits are
determined by reference to qualification and length of service
and paid on a lump-sum or annuity basis.
In defined benefit plans which are all unfunded, the benefits
are determined by reference to assessment and qualificationand paid on a lump-sum basis.
In addition, a part of subsidiaries use a simplified method forthe calculation of defined benefit liability and retirement
benefit cost of their defined benefit pension plans and lumpsum payment plans.
The Company and its certain domestic subsidiaries haveadopted defined contribution pension plans since October 1,
2015.
It replaces a part of the fund for lump-sum retirement benefit
plans to a defined contribution pension plan, under which theemployees manage the fund by themselves. The Company
pays the amount equivalent to the employer’s contributions
defined in the treatment of the defined contribution pension
plan as an advance payment of retirement benefits to theemployees who do not want to participate in the defined
contribution pension plan.
2. Defined Benefit Plans
1)	The changes in the retirement benefit obligation during theyears ended March 31, 2016 and 2015 are follows:

Not applicable

3.	Short-Term Loans Payable and LongTerm Loans Payable
The short-term loans payable and long-term debt (including
lease obligations) at March 31, 2016 and 2015, consist of thefollowing :Millions of yen

14

Millions of yen

Thousands of
U.S. dollars

2016

2015

2016

Short-term loans payable
Long-term loans payable¥3,40717¥3,424¥2,028−¥2,028$30,238147$30,385

Lease obligations
Less current portion

10,3904,436¥5,9547,382
3,358¥4,024

92,21139,367$52,844

Millions of yen

Balance at the beginning of the year
Cumulative effect of changein accounting policies
Restated balance at the
beginning of the year
Service cost
Interest cost
Actuarial gain and loss
Retirement benefit paid
Other
Balance at the end of the year

Thousands of
U.S. dollars

2016

2015

2016

¥88,870¥89,846$788,690−(3,927)−

88,870
3,649
1,021
2,141
(4,084)(159)¥91,438

85,919
4,247
1,057
307
(3,667)
1,007¥88,870788,690
32,386
9,065
19,003(36,242)(1,415)$811,487

2)	The changes in plan assets during the years ended March 31,
2016 and 2015 are follows:
Millions of yen

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

Thousands of
U.S. dollars

2016

2015

2016

¥54,333
1,243(2,073)3,371(2,350)(447)¥54,077¥49,255
1,252
2,480
3,491
(2,552)407¥54,333$482,192
11,033(18,395)
29,911(20,855)(3,971)$479,9153)	The funded status of the plans and the amounts recognized in
the consolidated balance sheet as of March 31, 2016 and2015 for the Company’s and the consolidated subsidiaries’
defined benefit plans
Millions of yen

2016

Funded retirement benefit
obligation
Plan assets

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

2015

Thousands of
U.S. dollars

2015

37%
26%
25%
9%
3%
100%

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

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

2016

2015

Mainly 1.2%
Mainly 2.5%
Mainly 5.3%

Mainly 1.2%
Mainly 2.5%
Mainly 4.2%

¥53,261(54,333)¥(1,072)$493,271(479,917)$13,354¥35,856¥35,608$318,215¥37,361¥34,536$331,569¥38,687(1,326)¥37,888(3,352)$343,336(11,767)

5.	Contingent Liabilities¥37,361¥34,536$331,569

Contingent liabilities at March 31, 2016 and 2015 are as follows:

Thousands of
U.S. dollars

2016

2015

2016

¥3,6491,021(1,243)93
835¥4,355¥4,247
1,057(1,252)
235
919¥5,206$32,386
9,065(11,033)
821
7,411$38,6505)	Retirement benefit liability adjustments included in othercomprehensive income (before tax effect) for the years ended
March 31, 2016 and 2015
Millions of yen

2016

2015

2016

¥922
(4,208)¥(3,286)

¥919
2,407
¥3,326$8,176(37,342)$(29,166)

Millions of yen

3. Defined Contribution Plans
Amounts which consolidated subsidiaries contributed to theirdefined contribution plans for the years ended March 31, 2016
and 2015 were ¥1,993 million ($17,687 thousand) and ¥451
million, respectively.

Thousands of
U.S. dollars

Millions of yen

Trade notes receivablediscounted or endorsed
Guarantees on employees’
housing loans

2016

2015

2016

¥112

¥155

$995

134

193

1,192

6.	Valuation loss on Inventories
Inventories are stated at the amount after devaluation due tolowered profitability and the following amount of Valuation loss
is included in cost of sales.
Millions of yen

Valuation loss on Inventories

Thousands of
U.S. dollars

2016

2015

2016

¥3,271¥919$29,026

Thousands of
U.S. dollars6)	R etirement benefit liability adjustments included inaccumulated other comprehensive income (before tax effect)
as of March 31, 2016 and 2015

Unrecognized prior service cost
Unrecognized actuarial loss

2016

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

¥55,582(54,077)¥1,505

Millions of yen

Prior service cost
Actuarial gain (loss)

Bonds
Alternatives
StocksLife insurance company general accounts
Other
Total

2016

4)	The components of retirement benefit expense for the years
ended March 31, 2016 and 2015

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Retirement benefit expenses7)-1.	The plan assets, by major category, as a percentage of total
plan assets as of March 31, 2016 and 2015

Thousands of
U.S. dollars

2016

2015

2016

¥(329)(2,390)¥(2,719)¥1,238(1,818)¥(580)$(2,921)(21,212)$(24,133)

7.	Selling, General and Administrative
ExpensesMajor components of selling, general and administrative
expenses for the years ended at March 31, 2016 and 2015 are as
follows:
Millions of yen

Personnel expenses
Retirement benefit expenses
Research and development expenses

Thousands of
U.S. dollars

2016

2015

2016

¥95,613
4,987
24,999¥95,3113,756
22,739$848,537
44,256
221,85815

8.	Other Comprehensive Income

1. I mpairment loss of Toshiba Global Commerce Solutions
Holdings Corporation and its subsidiaries

Other comprehensive income for the years ended March 31,
2016 and 2015 are follows:
Thousands of
U.S. dollars

Millions of yen

2016

2015

Other comprehensive income
Valuation difference on available-for-sale securities
Amount incurred
¥(9)
¥751
Amount of recycling
(99)
(45)
Amount before tax effectadjustments
(108)
706
Tax effect adjustments
70(178)
Valuation difference on
available-for-salesecurities
¥(38)
¥528
Deferred gains on hedges
Amount incurred
Amount of recycling
Amount before tax effectadjustments
Tax effect adjustments
Deferred gains on hedges

(962)
623

¥97
(30)
¥67

¥12
(4)
¥8

$860
(264)
$596

¥15,901−$(64,506)−

15,901−(64,506)−¥15,901$(64,506)¥(952)
359$3,144(1,348)¥(593)$1,796¥2,173
1,153$(37,398)
8,232

3,326
(1,112)(29,166)
8,838¥2,214$(20,328)¥18,058$(82,781)¥(9,328)

9.	Research and Development Expenses
Research and development costs charged to income for the years
ended March 31, 2016 and 2015 are as follows:
Millions of yen−

Goodwill

Assets forbusiness

Buildings andstructures
Machinery,equipment andvehiclesTools, furnitureand fixtures
Construction inprogress
Customer
relationships
Other intangible
assets$(339)$913(53)

Retirement benefit liability adjustments
Amount incurred¥(4,214)Amount of recycling
928
Amount before tax effectadjustments(3,286)
Tax effect adjustments
995
Retirement benefit
liability adjustments¥(2,291)
Total other comprehensive
income

$(84)
(878)

¥12
−

Minimum pension liability adjustments
Amount incurred¥354
Tax effect adjustments(152)
Minimum pension
liability adjustments
¥202

Type

2016

¥103
(6)

Foreign currency translation adjustments
Amount incurred¥(7,268)
Amount of recycling−
Amount before tax effectadjustments(7,268)Tax effect adjustments−
Foreign currencytranslation adjustments¥(7,268)

Usage

Thousands of
U.S. dollars

2016

2015

2016

¥27,585¥25,626$244,805

Amount(Millions of yen)

¥24,489

Place

Thousands of
U.S. dollars

USA andothers$217,334

800

7,097

630

5,590

239
554

USA andothers

2,124
4,917

32,072

284,624

25,774

228,738

For Global Commerce Solution Business, the Companies
recognized impairment loss of ¥84,558 million ($750,424
thousand).
After the acquisition of Global Commerce Solution Businessin August 2012, the Companies made efforts in developmentof the business and creation of synergy, however in October
2015, it was found that an investment restraint tendency of themain customers became remarkable, and uncertainties
increased in the future of the demand. As a result of reviewing
a medium-term business plan including the setup timing andthe cost of the new operation system based on above situations
conservatively, and having carried out the impairment test, theCompanies recognized impairment loss of ¥65,781 million($583,785 thousand) in the second quarter ended September
30, 2015.
In addition, as a result of having carried out the impairment
test after having reviewed sales plan due to the reviews ofprojects for new customers, the Companies recognizedimpairment loss of ¥18,777 million ($166,639 thousand) on
non-current assets including customer related assets (customerlist) and operation system for the business in the Forth quarter
ended March 31, 2016.
The recoverable value is measured using value in use andcalculated by discounting future cash flows at 10.0%.
2. Impairment loss of Mifuku factory
Usage

Type

Assets forbusiness

Buildings andstructures

Amount(Millions of yen)

¥465

Place

Thousands of
U.S. dollars

Izunokuni,
Shizuoka$4,130As a result of appraisal Mifuku factory by an independent realestate appraiser at the time of sales and purchase agreementon the real estate, the carrying amounts of these assets werereduced to the recoverable amount, and impairment loss of¥465 million ($4,130 thousand) was recognized under “Nonoperating income and expenses.”11.	Restructuring Cost
10.	Impairment Loss
The Companies are grouping the assets by the minimum unitthat generates almost independent cash flows based on theclassification for management accounting purpose.
The Companies recognized impairment loss in an amount of¥85,023 million ($754,554 thousand) under “Non-operating
income and expenses” for the year ended March 31, 2016.
The detail is as follows.

16

The contents of Restructuring Cost for the year ended March 31,
2016 are extra retirement benefit payments and costs of disposal
and consolidation of sales bases in the overseas operating.
The contents of Restructuring Cost for the year ended March 31,
2015 are extra retirement benefit payments and costs of disposal
and consolidation of sales bases in the overseas operating.

12.	Loss on transfer of business
Loss on transfer of business for the year ended March 31, 2016
A loss on the business transfer of TEC PRECISION CO., LTD.
to Kyoden Co., Ltd.
Loss on transfer of business for the year ended March 31, 2015
Not applicable

13.	Income Taxes and Deferred Tax Assets
and Liabilities
1. Significant components of the Companies’ deferred tax assets
and liabilities for the years ended March 31, 2016 and 2015
are as follows:
Thousands of
U.S. dollars

Millions of yen

2016

Deferred tax assets:
Elimination of consolidated
unrealized gains
Intangible assets
Loss on valuation of
investment securities
Allowance for doubtful
accounts
Provision for bonuses
Net liability for retirement
benefits
Other
Total gross deferred tax assets
Valuation allowance
Total deferred tax assets

2015

2016

¥1,5304,805¥1,772
5,040

13,57742,64623,275

1,278

206,559

12,814
1,936

140
2,037

113,724
17,178

10,8893,539¥58,788

9,848
7,584
¥27,699

96,636
31,404$521,724(36,647)¥22,141(4,879)¥22,820(325,226)$196,498

Deferred tax liabilities:
Reserve for advanced
depreciation of noncurrent assets
Valuation difference on
available-for-salesecurities
Other
Total deferred tax liabilities¥(246)¥(374)$(2,184)(631)(2,970)(3,847)(703)(2,365)(3,442)(5,597)(26,362)(34,143)

Net deferred tax assets¥18,294¥19,378$162,355

Net deferred tax assets are included as below on consolidatedbalance sheet for the years ended March 31, 2016 and 2015.
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

2016

2015

2016

¥4,914¥8,398$43,608

17,22814,422

152,891

(58)

(271)

(511)

(3,790)(3,171)(33,633)

2. Difference between statutory tax rate and effective tax rate
The following table summarizes the difference between thestatutory tax rate and the effective tax rate for the years ended
March 31, 2016 and 2015.
2016

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

2015

35.6%
(18.2)
1.2
Note

(0.1)
(10.9)
59.1
18.9
17.2
0.6
103.4

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

3. Effect of a change in the corporate income tax rate
The “Act for Partial Amendment of the Income Tax Act, etc.”(Act No.15 of 2016) and the “Act for Partial Amendment of
the Local Tax Act, etc.” (Act No.13 of 2016) were enacted by
the Diet on March 29, 2016.
As a result, the effective statutory tax rate used to measure theCompany’s deferred tax assets and liabilities was changed
from 32.3% to 30.9% and 30.6% for the temporary differences
expected to be realized or settled from April 1, 2016 to March
31, 2018 and for the temporary differences expected to berealized or settled from April 1, 2018, respectively.
The effect of the reduction of the effective statutory tax rate
was to decrease deferred tax assets, after offsetting deferred
tax liabilities, by ¥3,104 million ($27,547 thousand) andincrease deferred income taxes by ¥3,067 million ($27,219
thousand), valuation difference on available-for-sale securitiesby ¥36 million ($319 thousand) for the year ended March 31,
2016.

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

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

Due within one year
Due after one year

Thousands of
U.S. dollars

2016

2015

2016

¥874
2,849
¥3,723¥705
2,246¥2,951$7,75625,282$33,03817

(C) Finance Lease as a lessor
1. Details of investment lease1) ‌Investment lease- current assets
Lease revenues receivable
Interests receivable

2) Investment lease - others
Lease revenues receivable
Interests receivable

Millions of yen

Thousands of
U.S. dollars

2016

2015

2016

¥345
(19)
¥326

¥128
(6)
¥122

$3,060(164)$2,896

¥407
(21)
¥386

¥652
(35)
¥617

$3,613(190)$3,423

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

Within one 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

2016

2015

2016

¥345
196
135
55
21
−
¥752

¥128
286
212
142
12
0
¥780

$3,060
1,738
1,203
489
184
−
$6,674(D) Operating Lease as a lessor
Future minimum lease payments for noncancelable operatingleases are summarized as follows:
Millions of yen

Due within one year
Due after one year

Thousands of
U.S. dollars

2016

2015

2016

¥668
978
¥1,646¥695
1,052¥1,747$5,9308,679$14,609(E) Other related information
Future minimum lease payments for noncancelable operating
sub-leases are summarized as follows:
Millions of yen

Investment lease
Current assets
OthersLease expenses payable
Current liabilities
Fixed liabilities

Thousands of
U.S. dollars

2016

2015

2016

¥1,3702,371¥3,741¥443
599¥1,042$12,163
21,040$33,203¥1,3702,371¥3,741¥443
599¥1,042$12,163
21,040$33,20315.	Consolidated Statement of Cash FlowsThe content of important non-cash transactions
The amount of non-cash transactions on assets and liabilities
under finance lease is ¥3,595 million ($31,903 thousand) and¥3,633 million ($32,240 thousand) for the year ended March 31,
2016 and ¥3,435 million and ¥3,696 million for the year ended
March 31, 2015, respectively.

18

Business combination through equity acquisition
Year ended March 31, 2016
The Company acquired TOSHIBA TEC MALAYSIA SDN.
BHD., Tele Dynamics Solution Sdn. Bhd., B Excelle Sdn. Bhd.
and TOSHIBA TEC (THAILAND) CO., LTD. during the year
ended March 31, 2016.
Assets and liabilities of the acquired companies and therelationship with net payments for the acquisition were as
follows:
Current assets
Non-current assets
Goodwill
Current liabilities
Non-current liabilities
Non-controlling interests
Total acquisition cost
Cash and cash equivalents
Net payments for acquisition

Millions of yen

Thousands of
U.S. dollars¥4,5283,263
279(3,296)(1,721)(1,360)¥1,693(413)¥1,280$40,180
28,9552,475(29,255)(15,270)(12,058)$15,027(3,669)$11,358

16. Financial Instruments
Overview
1. Policy for financial instruments
The Companies raise funds mainly using Toshiba Group
Finance program. Essentially the Companies use the program
for temporarily excess funds.
The Companies use derivatives for the purpose of reducing
risks (described below) and do not enter into derivatives for
speculative or trading purposes.
2. Types of financial instruments and related risks
Trade receivables (Notes and accounts receivable-trade) are
exposed to credit risk in relation to customers. In addition, theCompanies are exposed to foreign currency exchange rate
fluctuation risk arising from receivables denominated inforeign currencies. In principle, the foreign currency exchange
rate fluctuation risk deriving from the trade receivables
denominated in foreign currencies, net of trade payables
denominated in the same currencies, are hedged by forward
foreign exchange contracts.
Investment securities are exposed to market risk. These are theequity securities of certain enterprises with which theCompanies have business relationships.
Substantially all trade payables (Notes and accounts payabletrade) are due within one year. Although the Companies are
exposed to foreign currency exchange rate fluctuation risk
arising from those payables denominated in foreign currencies.
However the volume of trade payable is in the range ofaccounts receivable of the same currency.
A debt is short-term used in working capital which is mainly
raised using the Toshiba Group Finance program.
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 instrumentals, targets, policies and methods ofevaluating the effectiveness of the hedge, please refer to Note
2 Summary of Significant Accounting Policies (P) Derivative
Financial instruments.

3. Risk management for financial instruments1)	Monitoring of credit risks (the risks that related to breachof contract with client)
In accordance with the internal policies, the Credit
Managing division monitors credit worthiness of theircustomers periodically, and monitors due dates andoutstanding balances by individual customer. In addition,
the Companies are making efforts to identify and mitigate
risks of bad debts from customers who are having financial
difficulties.
2)	M onitoring of market risks (the risks arising fromfluctuations in foreign exchanges rates, interest rates andothers)For trade receivables and payables denominated in foreign
currencies, the Companies identify the foreign currency
exchange rate fluctuation risk for each currency on amonthly basis and enter into forward foreign exchange
contracts to hedge such risk.
The Financial Division manages risks on derivativetransactions, in accordance with the internal policies.
Monthly reports including actual transaction data aresubmitted to Chief Financial Officer for their review.
For marketable and investment securities, the Companies
periodically review the fair values of such financial
instruments and the financial position of the issuers. In
addition, the Companies continuously evaluate whether
securities should be maintained taking into account theirfair values and relationships with the issuers.
3)	Monitoring of liquidity risk (the risk that the Companies
may not be able to meet its obligations on scheduled due
dates)
Based on the report from each division, the Companies
prepare and update their cash flow plans on a timely basis
to manage liquidity risk.
4. ‌Supplementary explanation of the estimated fair value offinancial instruments
The fair value of financial instruments is based on their quoted
market price, if available. When there is no quoted market
price available, the fair value is determined based onreasonable estimates. Since various assumptions and factors
are reflected in estimating the fair value, different assumptions
and factors could result in different fair value. In addition, thenotional amounts of derivatives in Note 18 Derivative
Transactions are not indicative of the actual market risk
involved in derivative transactions.

Estimated Fair Value of Financial Instruments
For the year ended March 31, 2016
The carrying value of financial instruments in the consolidatedbalance sheet as of March 31, 2016, and their estimated fairvalue are as follows:(a) Cash and cash equivalents
and accounts(b) Notes
receivable-trade
Allowance for
doubtful accounts (*1)(c) Accounts receivable - otherand(d) Marketable
investment securities
and accounts(e) Notes
payable-trade(f) Short- term loans payable(g) Accounts payable - other(h) Derivative transaction (*2)

Consolidatedbalance sheet

Millions of yen
Estimated
fair value¥22,661¥22,661−

76,471−−(2,753)−−73,718
20,16873,718
20,168

−
−

3,232

3,232

−

(71,176)(71,176)−(3,407)(29,557)
330(3,407)(29,557)
330

−
−
−

Difference

Thousands of U.S. dollars
Consolidated
Estimatedbalance sheet
fair value
Difference(a) Cash and cash equivalents
and accounts(b) Notes
receivable-trade
Allowance for
doubtful accounts (*1)(c) Accounts receivable - otherand(d) Marketable
investment securities
and accounts(e) Notes
payable-trade(f) Short- term loans payable(g) Accounts payable - other(h) Derivative transaction (*2)$201,107$201,107−

678,652−−(24,432)−−

654,220
178,986

654,220
178,986−−

28,68028,680−(631,665)(631,665)−(30,238)(262,311)
2,926(30,238)(262,311)
2,926

−
−
−

(*1) Allowance for doubtful accounts provided for individual customers are deducted.
(*2) The value of assets and liabilities arising from derivatives is shown at net value.
The liability position is shown in parenthesis.
Note: 1.	Method to determine the estimated fair value of financial instruments and othermatters related to securities and derivative transactions(a)	Cash and cash equivalents, (b) Notes and accounts receivable-trade and(c) Accounts receivable - other
Since these items are settled in a short period of time, their carrying value
approximates the fair value.
(d) Marketable and investment securities
The fair value of marketable and investment securities is based on the quoted market
price. For information on securities by each holding purpose, please refer to Note 17
Securities.
(e) Notes and accounts payable-trade, (f) Short-term loans payable and(g) Accounts payable - other
Since these items are settled in a short period of time, their carrying value
approximates the fair value.
(h) Derivatives transaction
Please refer to Note 18 Derivative Transactions.
2.	Financial instruments for which it is extremely difficult to determine the fair value

Unlisted stocks

Millions of yen

Thousands of
U.S. dollars¥1,650$14,639

Because no quoted market price is available and it is extremely difficult to determine
the fair value, the above financial instruments are not included in (d) Marketable andinvestment securities in the above table.

For the year ended March 31, 2015
The carrying value of financial instruments in the consolidatedbalance sheet as of March 31, 2015, and their estimated fairvalue are as follows:(a) Cash and cash equivalents
and accounts(b) Notes
receivable-trade
Allowance for
doubtful accounts (*1)

Consolidatedbalance sheet

Millions of yen
Estimated
fair value¥54,965¥54,965−

81,017−−(1,342)−−Difference

79,67579,675−and(c) Marketable
investment securities

3,236

3,236

−

and accounts(d) Notes
payable-trade(90,081)(90,081)−(e) Short- term loans payable(f) Derivative transaction (*2)

(2,028)(1,981)(2,028)(1,981)−−(*1) Allowance for doubtful accounts provided for individual customers are deducted.
(*2) The value of assets and liabilities arising from derivatives is shown at net value.
The liability position is shown in parenthesis.
Notes: 1.	Method to determine the estimated fair value of financial instruments and othermatters related to securities and derivative transactions(a)	Cash and cash equivalents, (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 the quoted market
price. For information on securities by each holding purpose, please refer to Note 17
Securities.
(d) Notes and accounts payable-trade, (e)Short-term loans payable
Since these items are settled in a short period of time, their carrying value
approximates the fair value.
(f) Derivatives transaction
Please refer to Note 18 Derivative Transactions.

19

2.	Financial instruments for which is extremely difficult to determine the fair value
Millions of yen¥1,808Unlisted stocks

Transaction outside the market
Currency-related transactions
Millions of yen

Because no quoted market price is available and it is extremely difficult to determine
the fair value, the above financial instruments are not included in (c) Marketable andinvestment securities in the above table.

17. Securities
1. ‌Information regarding marketable other securities as of March
31, 2016 and 2015 are as follows:
Millions of yen
2016
2015
Carrying Acquisition Unrealized Carrying Acquisition Unrealized
value
cost
gain (loss)
value
cost
gain (loss)

Other securities whose carrying value exceeds their acquisition cost:
Stocks¥3,117¥931 ¥2,186 ¥3,128¥977 ¥2,151
Other securities whose acquisition cost exceeds their carrying value:
Stocks
115
133
(18)
108
125
(17)
Subtotal
115
133
(18)
108
125
(17)
Total
¥3,232 ¥1,064 ¥2,168 ¥3,236 ¥1,102 ¥2,134

2016
Contract amount

Acquisition cost

Sell:
USD ¥18,167
EUR
7,676
Buy:
5,991
USD
EUR
6,960
CNY 14,356
GBP
1,620
Total
¥54,770

Unrealized gain (loss)

2. ‌The proceeds from sales of securities, except those of theaffiliated companies, for the years ended March 31, 2016 and2015 were ¥168 million ($1,490 thousand) and ¥108 million,
respectively. The realized gains on those sales for the years
ended March 31, 2016 and 2015 were ¥115 million ($1,021
thousand) and ¥46 million, respectively. The realized losseson those sales for the years ended March 31, 2016 is ¥17
million ($151 thousand).
3. ‌Information regarding non-marketable securities as of March
31, 2016 and 2015 is as follows.
2016

2015

Carrying value

Other securities
Unlisted stocks
OthersTotal¥1,650−¥1,650¥1,808−¥1,808

Thousands of
U.S. dollars

1. Summarized‌
below are the amount of contract and the estimatedfair value of the derivative instruments outstanding at March 31,
2016 and 2015, for which the hedge accounting is not applied.

20

¥355
90

¥355
90

¥15,763
7,498

¥−
−

¥(31)
426

¥(31)
426

−
−
−
−
¥−

(149)
(27)
(47)
(4)
¥218

(149)
(27)
(47)
(4)
¥218

13,310−12,198−¥48,769

−
−
−
−
¥−

1,016
−
570
−
¥1,981

1,016
−
570
−
¥1,981Thousands of U.S. dollars
2016
Contract amount

Fair value

Unrealizedgain(loss)

Maturing
after one year

Forward foreignexchange contracts

Sell:
USD
EUR
Buy:
USD
EUR
CNY
GBP
Total

$161,233
68,120$−−$3,150800$3,150800

53,171
61,765
127,402
14,375$486,066

−
−
−
−
$−

(1,319)
(239)
(418)
(38)
$1,936(1,319)
(239)
(418)
(38)
$1,936*Calculation of the fair value is based on the value from financial institutions.

2. ‌Summarized below are the amount of contract and theestimated fair value of the derivative instruments outstandingat March 31, 2016 and 2015, for which hedge accounting isapplied.

Currency-related transactions

1) Net deferred profits on hedges
Millions of yen
2016
Contract amount
Maturing Maturing
within one after one
year
year

Carrying value

18. Derivative Transactions

Unrealized
gain (loss)

Fair
value

¥−
−

2016

$14,639−$14,639

Contract amount
Maturing Maturing
within after one
one yearyear

Maturing
within one year

Other securities whose carrying value exceeds their acquisition cost:
Stocks$27,662$8,269$19,393
Other securities whose acquisition cost exceeds their carrying value:
Stocks
1,018
1,178
(160)
Subtotal
1,018
1,178
(160)
Total
$28,680$9,447$19,233

Millions of yen

Unrealizedgain(loss)

Maturing Maturing
within after one
one yearyear
Forward foreignexchange contracts

Thousands of U.S. dollars
2016
Carrying value

2015
Fair
value

Fair value

2015
Contract amount
Maturing Maturing
within one after one
year
year

Fair value

Forward foreignexchange contracts

Sell:
USD
EUR
AUD
CAD
Buy:
USD
AUD
EUR
CNY
Total

¥3,938
1,676
683
182

¥−
−
−
−

¥97
31
(8)
3

¥3,678
1,789
555
256

¥−
−
−
−

¥0
(0)
1
1

4,501
−
179
1
¥11,160

−
−
−
−
¥−

(11)
5,257
−
276
(0)
−
(0)
24
¥112 ¥11,835

−
−
−
−
¥−

(0)
(0)
−
4
¥6

Thousands of U.S. dollars
2016
Contract amount

Fair value

Maturing
within one year

Maturing
after one year

$34,951
14,874
6,058
1,619

$−
−
−
−

$858
275
(67)
30

39,942−
1,587
10$99,041

−
−
−
−
$−

(101)
−
(3)
(0)
$992

Forward foreignexchange contracts

Sell:
USD
EUR
AUD
CAD
Buy:
USD
AUD
EUR
CNY
Total

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

2) ‌Forward foreign exchange contracts, for which the deferral
hedge accounting is applied
Millions of yen
2016
Contract amount
Maturing Maturing
within one after one
year
year

Fair value

2015
Contract amount
Maturing Maturing
within one after one
year
year

¥335
394
553

¥−
−
−

¥15
(4)
14

¥3,586
1,257
983

¥−
−
−

¥0
39
19

1,196
250
¥2,728

−
−
¥−

(61)
(0)
¥(36)

1,422
−
¥7,248

−
−
¥−

2
−
¥60

Thousands of U.S. dollars
2016
Contract amount

Fair value

Maturing
within one year

Maturing
after one year

$2,974
3,494
4,911

$−
−
−

$134
(34)
125

10,6192,216$24,214

−
−
−

(543)
(0)
$(318)

Forward foreignexchange contracts

Sell:
USD
AUD
CAD
Buy:
USD
AUD
Total

2. ‌The calculation method for amounts of sales, income, assets
and other items per reportable segments
The accounting policies of the segments are substantially thesame as those described in the significant accounting policies
in Note 2 Summary of Significant Accounting Policies.
Intersegment sales and transfers are calculated at theprevailing market prices.
3. ‌Information concerning sales, profit or loss, assets and otheritems by reportable segment is as follows:
Millions of yen

Fair value

Forward foreignexchange contracts

Sell:
USD
AUD
CAD
Buy:
USD
AUD
Total

Therefore, the Companies report on “Retail Solutions
Business Group” and “Printing Solutions Business Group” asreportable segments.
“Retail Solutions Business Group” is engaged in development,
manufacturing, sales, maintenance services, etc. of POS
Systems, MFPs and Auto ID systems for domestic market and
POS Systems, printers and solution related products foroverseas market.
“Printing Solution Business Group” is engaged indevelopment, manufacturing, sales, maintenance services, etc.
of MFPs, Auto ID systems and related solution products foroverseas market.

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

19. Segment Information(A) Business Segments
1. Summary of reportable segments
The reportable segments of the Companies are components forwhich discrete financial information is available and whose
operating results are regularly reviewed by the Board of
Directors meeting to make decisions about resource allocationand to assess the performance.
Aiming to become “a global one-stop solutions company,” theCompanies create comprehensive strategies per market anddevelop business activities under a framework for business
operation by each market segment.

Thousands of
U.S. dollars

2016

2015

2016

¥322,476
2,334
324,810¥322,071
2,325
324,396$2,861,871
20,7152,882,586

210,342
9,832
220,174(12,166)¥532,818

202,506
10,599213,105(12,924)¥524,577

1,866,724
87,256
1,953,980(107,971)$4,728,595

Segment Profit (Loss)
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥(11,480)
13,082¥1,602¥(420)
17,483¥17,063$(101,882)
116,099$14,217

Segment Assets
Retail Solutions Business Group
Printing Solutions Business Group
Adjustments
Consolidated¥147,901
130,175
3,540¥281,616¥257,414
144,180
15,175¥416,769$1,312,575
1,155,264
31,414$2,499,253

Depreciation
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥7,266
8,208¥15,474¥7,566
8,133¥15,699$64,485
72,845$137,330

Amortization of goodwill
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥1,043
2,980¥4,023¥1,871
2,817¥4,688$9,25626,441$35,697

Capital Expenditures
Retail Solutions Business Group
Printing Solutions Business Group
Consolidated¥6,938
10,315¥17,253¥15,230
9,440¥24,670$61,572
91,541$153,113Net Sales
Retail Solutions Business Group
Unaffiliated customers
Intersegment
Total
Printing Solutions Business Group
Unaffiliated customers
Intersegment
Total
Adjustments
Consolidated

Notes: 1.	Adjustments of segment assets are corporate assets, and consist of cash and cash
equivalents and investment securities in the amount of ¥3,540 million ($31,416
thousand) and ¥15,175 million as of March 31, 2016 and 2015, respectively.

21

2.	Segment profit (loss) corresponds to operating income of Consolidated Statementof Income.
3. The main products of each business segment
		 Retail Solutions Business Group			 POS Systems, MFPs and Auto ID systems, in Japan and			 POS Systems, Printers and related products, abroad
		 Printing Solutions Business Group			 MFPs and Auto ID systems and related products, abroad

4. ‌Changes in reportable segment
The reportable segments in the previous fiscal year were
“System Solutions” and “Global Solutions.”
In order to lead the business markets and provide innovative
solutions to all customers, the Company has re-organized its
business structure from geographic-oriented segmentation to
product & service-oriented segmentation from the current
fiscal year. As a result, the reportable segments were changed
to “Retail Solutions” and “Printing Solutions.”
Above segment information in previous fiscal year is restatedbased on the new reportable segments after the re-organizationof the Company.

1. Products and service information
Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

¥309,978222,840¥532,818¥308,995
215,582¥524,577$2,750,957
1,977,638$4,728,595*Retail : POS systems, Auto ID systems and related products, etc.
*MFP :	Multi Function Peripherals, facsimiles, office printers, multi-function peripheraldevices, scanner function and document management to be realized in one piece

Thousands of
U.S. dollars

Millions of yen

2016

Retail Solutions Business Group
Printing Solutions Business Group
Consolidated

2015¥84,558465¥85,023

¥−
−
¥−

2016

$750,424
4,130$754,554

5. ‌Information on amortization of goodwill and unamortizedbalance by reportable segment
Thousands of
U.S. dollars

Millions of yen

2016

2015

Retail Solutions Business Group
Printing Solutions Business Group
Consolidated

¥−
8,634
¥8,634

2016
Balance at endof period¥25,014
11,898¥36,912$−76,621$76,621

For the amount of amortization of goodwill, it is omitted as it isdisclosed in “Segment Information.”
6. Information on negative goodwill by reportable segment
For the year ended March 31, 2016
Not applicable
For the year ended March 31, 2015
Not applicable2. ‌Information by geographical area
Millions of yen

Thousands of
U.S. dollars

2016

2015

2016

Net SalesJapan
The Americas
EuropeAsia and others
Total¥200,493
168,099
111,865
52,361¥532,818¥208,353
162,522106,244
47,458¥524,577$1,779,315
1,491,825
992,770
464,685$4,728,595

Property, plant and equipmentJapan
The Americas
EuropeAsia and others
Total¥14,425
3,476
8,910
4,534
¥31,345¥13,411
5,890
8,803
5,456
¥33,560$128,015
30,847
79,071
40,246$278,179

Criteria of geographical segmentation and the name of countries
or areas mainly included in each segment except for Japan are as
follows:1)	Criteria: geographical closeness2) Countries & Areas2)-1. The Americas
U.S.A., Canada, Mexico, Puerto Rico, Venezuela, Brazil,
Chile2)-2. Europe
U.K., France, Germany, Spain, Switzerland, Belgium, Italy,
Netherlands, Sweden, Norway, Denmark, Finland, Poland2)-3. Asia and others
Singapore, Malaysia, Indonesia, China, Australia, Korea,
Thailand22

4. ‌Information about impairment loss on non-current assets byreportable segment

Balance at endof period(B) Relative Information

Net sales of Retail
Net sales of MFP

3. ‌Information by major customer
There are no customers whom the Companies sell it to morethan 10% of total sales for the years ended March 31, 2016
and 2015.

20. Stock Option Plan
The stock options outstanding as of March 31, 2016 are as
follows:
1. ‌The amount and the accounting subject in relation to the stock
options existing for the year ended March 31, 2016.
Selling, general and administrative expenses for the years
ended March 31, 2016 and 2015 are ¥42 million ($369
thousand) and ¥52 million, respectively.
2. ‌The size of stock option and its circumstances1)	General information
The fourth new share subscription rights
as share-reward type stock option
Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note1)

128,000 shares of Common stock

Date of issuanceAugust 2 , 2011

Condition of exercising(Note 2)

Vesting period

No conditional period required

Subscription rights exercise period

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

Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note1)

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 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

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

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note1)

89,000 shares of Common stock

Date of issuance

July 31, 2013

End of the preceding term

−

−

−

Condition of exercising(Note 2)

Offered−−−

Vesting period

No conditional period required

Cancelled−−−

Subscription rights exercise period

From August 1, 2013 to July 31, 2043

Vested−−−Outstanding

−

−

−

30,00052,00058,000

−

−

−

6,000

23,00020,000

Before the resolution

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

After the resolution
End of the preceding term

Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note1)

79,000 shares of Common stock

Exercised

Date of issuance

July 31, 2014

Cancelled

Condition of exercising(Note 2)

Outstanding

Vesting period

No conditional period required

Subscription rights exercise period

From August 1, 2014 to July 31, 2044

Vested−−−24,00029,00038,000The seventh new The eighth new
share
share
subscription
subscription
rightsrightsas share-reward as share-reward
type stock option type stock option

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

Qualified beneficiaries

17 of the Company directors and corporate
officers

Type of shares for which new
subscription rights offered (Note1)

End of the preceding term−−

69,000 shares of Common stock

Offered−69,000Date of issuance

July 29, 2015

Cancelled−−

Condition of exercising(Note 2)

Vested−69,000

Vesting period

No conditional period required

Outstanding−−

Subscription rights exercise period

From July 30, 2015 to July 29, 2045

After 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.

2)	The size of stock option and movement
	Addressed is the amount of stock options existing as ofMarch 31, 2016.
	As for the number of stock options, it is converted into thenumber of shares.

End of the preceding term

79,000−−69,000Exercised

18,0005,000

Cancelled−−

61,00064,000

VestedOutstanding2)-2.	Per share data2)-1.	The number of stock options
The first new The second new The third new
share
share
share
subscription
subscription
subscription
rightsrightsrightsas share-reward as share-reward as share-reward
type stock option type stock option type stock option
Before the resolution
End of the preceding term

−

−

−

Offered−−−Cancelled−−−

Vested−−−Outstanding

−

−

−

4,000

8,000

6,000

−

−

−

Exercised

4,000

8,000

6,000

Cancelled−−−

Outstanding

−

−

−

After the resolution
End of the preceding term
VestedExercised price
The average priceat the time of exercising
Official price at the dateof offered

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

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

The first new The second new The third new
share
share
share
subscription
subscription
subscription
rights as
rights as
rights as
share-reward
share-reward
share-reward
type stock option type stock option type stock option¥1¥1¥1($0.009)($0.009)($0.009)
¥626
¥626
¥626
($5.556)($5.556)($5.556)
¥560
¥393
¥307
($4.970)($3.488)($2.725)
The fourth new
The fifth new
The sixth new
share
share
share
subscription
subscription
subscription
rights as
rights as
rights as
share-reward
share-reward
share-reward
type stock option type stock option type stock option¥1¥1¥1($0.009)($0.009)($0.009)
¥626
¥551
¥571
($5.556)($4.890)($5.067)
¥316
¥291
¥550
($2.804)($2.583)($4.881)
The seventh new The eighth new
share
share
subscription
subscription
rights as
rights as
share-reward
share-reward
type stock option type stock option¥1¥1($0.009)($0.009)¥575¥436($5.103)($3.869)¥667¥602($5.919)($5.343)

23

(3) Matters to be disclosed in case of additional share acquisition
Acquisition cost and breakdown	Consideration for acquisition: Cash
Acquisition cost: $160.5 million (¥19,121 million)

3. ‌The evaluation of fair price of stock option1)	The evaluation method used: Black–Scholes model2)	General information and the method of estimation
The eighth new share subscription rights
as share-reward type stock option
Stock market volatility (Note 1)

30.8%

Estimated residual period (Note 2)

1.5 years

Estimated dividends (Note 3)¥13 ($0.115) per share

Risk-free rate (Note 4)

0.01%

Note: 1	The figure is calculated based on actual share data from January 20, 2014 up to theweek of offered.
2	The calculation is based on the condition that the Company’s directors or corporate
officers are resigned and the option was exercised exactly after the day of resignation.
		For tenure of directors and executive officers, the Company has calculated the average
tenure remaining term at the date of grant based on the average tenure.
3	The estimated figure is based on the actual dividend amount for the year ended March
31, 2015.
4	Estimated capitalization cycle 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.

21. Business Combination
Transaction under common control
Additional share acquisition of Toshiba Global Commerce
Solutions Holdings Corporation
At the Board of Directors meeting held on January 28, 2016, theCompany made a resolution about the stock transfer contract(hereinafter the “Contract”) to acquire shares equivalent to19.9% of outstanding shares of Toshiba Global Commerce
Solutions Holdings Corporation from IBM Corporation that theCompany had planned to acquire after a certain period of time
had elapsed since the transfer of retail store solution business of
IBM Corporation executed on August 1, 2012, and concluded
the Contract on the same day.
Toshiba Global Commerce Solutions Holdings and its
subsidiaries became wholly-owned subsidiaries of the Company
as a result of the execution of the Contract on January 29, 2016.
(1) Overview of the transaction1)	Name and business description of the company involvedin the business combination	Name of the acquired company: Toshiba Global
Commerce Solutions Holdings and its subsidiaries
	Business description: Hardware (system and technology),
software, service and consulting through IT and
integration solution
2) Date of business combination: January 29, 20163)	Legal form of the business combination: Share acquisition
by TOSHIBA TEC CORPORATION from a noncontrolling shareholder4)	Name of the companies subsequent to the combination:
No change(2) Overview of accounting treatments	In accordance with “Revised Accounting Standard forBusiness Combinations”(ASBJ Statement No.21, September
13, 2013) and “Revised Guidance on Accounting Standard
for Business Combinations and Accounting Standard forBusiness Divestitures (ASBJ Guidance No. 10, September
13, 2013), this transaction was accounted for as a transaction
with a non-controlling shareholder.

24

Business combination by acquisition
Share acquisition of Tele Dynamics Sdn. Bhd. by TOSHIBATEC SINGAPORE PTE. LTD.
(1) Overview of the business combination
	TOSHIBA TEC SINGAPORE PTE. LTD. (“TSE”), which isa subsidiary of the Company, acquired the shares of Tele
Dynamics Sdn. Bhd. on April 1, 2015. Consequently, Tele
Dynamics Sdn. Bhd. with its 3 subsidiaries (Tele Dynamics
Solution Sdn. Bhd., B Excelle Sdn. Bhd., Thaicom Network
Co., Ltd.) became subsidiaries of TSE and TSE started
business in Malaysia and Thailand.
	In addition, regarding the ownership ratios, TSE owns 51.0%
and Questland Development Sdn. Bhd. owns 49.0%, howeverafter a certain period of time elapsed, TSE is going to have
100% ownership interests in Tele Dynamics Sdn. Bhd.
1)	Name and business description of the acquired company
	Name of the acquired company: Tele Dynamics Sdn. Bhd.
and its 3 subsidiaries (Tele Dynamics Solution Sdn. Bhd.,
B Excelle Sdn. Bhd., Thaicom Network Co., Ltd.)	Business description: Sales and maintenance of MFP,
POS and BCS, IT business and solution development in
Malaysia and Thailand
2) Main reason for the business combination
	The Company aims at its business expansion in theprinting solution market by acquiring sales companies in
Malaysia and Thailand as subsidiaries.
3)	Date of business combination: April 1, 20154)	Legal form of the business combination: Share acquisition5)	Name of the companies subsequent to the combination:
	TOSHIBA TEC MALAYSIA SDN. BHD., Tele Dynamics
Solution Sdn. Bhd., B Excelle Sdn. Bhd. and TOSHIBATEC (THAILAND) CO., LTD.
(2)	Accounting period for which operating results of the acquiredcompanies were included in the consolidated statements ofincome: From April 1, 2015 to March 31, 2016
(3) Acquisition cost and breakdown
Consideration for acquisition: Cash
Acquisition cost: ¥1,693 million ($15,027 thousand)(4) Main acquisition-related cost and amount
Advisory fees: ¥23 million ($205 thousand)(5)	Amount of goodwill incurred, reason for its recognition,amortization method, and amortization period
1) Amount of goodwill incurred	Amount of goodwill incurred: ¥279 million ($2,475
thousand)	In addition, in the first quarter ended June 30, 2015, theamount of goodwill of ¥776 million ($6,884 thousand)was recognized as a result of provisional allocation of
acquisition costs. However in the forth quarter ended
March 31, 2016, the Company reconsidered allocation of
the said acquisition costs in the course of scrutinizing thedetails and the Company eventually transferred a certain
amount of goodwill to other intangible assets at March
31, 2016.
2)	Reason for recognition of goodwill: Because the fairvalue of net assets was less than the acquisition cost, thedifference was recognized as goodwill.

3)	Amortization method, and amortization period: Straightline method over 8 years(6)	Assets acquired and liabilities assumed at the date of businesscombination
Current assets:
Non-current assets:
Total assets:
Current liabilities:
Non-current liabilities:
Total liabilities:¥4,528 million ($40,180 thousand)¥3,263 million ($28,955 thousand)¥7,791 million ($69,135 thousand)¥3,296 million ($29,255 thousand)¥1,721 million ($15,270 thousand)¥5,017 million ($44,525 thousand)(7)	Amount of acquisition cost which was allocated to intangible
assets other than goodwill and amortization period
Customer related assets
Amount: ¥782 million ($6,936 thousand)Amortization period: Straight-line method over 11 years

Note:	Concerning deposits of funds, it’s difficult to figure out transaction amount because fundsettlement is performed whenever needed.
Therefore, only balance at fiscal year end is stated.
Policy for determining trade terms and conditions and other related matters
Depositing funds are determined from market rates and offers from third party interest rates.
(¥=Million, US$=Thousand, S$=Thousand )StatusName

Address

CapitalBusiness

Percentage of voting
rights held (%)

Subsidiaryof the parent
company

Toshiba Asia
Pacific Pte.,
Ltd.

Singapore

S$6,784

The regional
representative
company inAsia and Pacific

None

Relationship
Dispatch of
Business
executive
relationshipofficers, etc.

Transaction

Transaction
amountAccount item

Balance at
fiscal year end

Deposits offunds

Deposits offundsInterest
incomeCash and cash
equivalents¥5,365None(Note)¥3

With regard to the amounts above, transaction amount and balance at fiscal year end don’t
include consumption taxes.

22. Asset Retirement Obligation

Note:	Concerning deposits of funds, it’s difficult to figure out transaction amount because fundsettlement is performed whenever needed.
Therefore, only balance at fiscal year end is stated.

Omitted as immaterial in amount.

Policy for determining trade terms and conditions and other related matters
Depositing funds are determined from market rates and offers from third party interest rates.
(¥=Million, US$=Thousand, GBP=Thousand)

23. Transactions with Related Parties
1. Transactions with Related Parties(A)	Transactions with related parties for the year
ended March 31, 2016.
(¥=Million, US$=Thousand)StatusName

Address

CapitalBusiness

Percentage of voting
rights held (%)

Toshiba
Corporation

Minato-ku,
Tokyo¥439,901($3,903,985)

Manufacturing andsales of digitalproducts andDirect: 52.7%
electronic devices Indirect: 0.1%
and homeappliances

Relationship
Dispatch of
Business
executive
relationshipofficers, etc.

Transaction

Transaction
amountAccount item

Deposits offunds andInterlocking of Borrowing offunds,
directors
Concurrent
directors

Deposits offunds andBorrowing offundsInterest
expenses

Parentcompany

short-termloan payable¥1,475($13,090)¥23($205)(¥=Million)

Toshiba
Corporation

Minato-ku,
Tokyo

Percentage of voting
rights held (%)

Subsidiary of
the parent
company

Toshiba ofEurope, Ltd.

London, UK

GBP 13,522

The regional
representative
company inEurope , Middle
East and Africa

None

Relationship
Dispatch of
Business
executive
relationshipofficers, etc.

Transaction

Transaction
amountAccount item

Balance at
fiscal year end

Deposits offunds

Deposits offundsInterest
incomeCash and cash
equivalents¥7,939None

Transaction

Deposits offunds,
Concurrent
directors

Deposits offundsInterest
income(Note)¥5

Capital¥439,901

Business

Percentage of voting
rights held (%)

Manufacturing andsales of digitalproducts andDirect: 52.7%
electronic devices Indirect: 0.1%
and homeappliances(¥=Million, US$=Thousand)StatusName

Address

CapitalBusiness

Percentage of voting
rights held (%)

Subsidiary of
the parent
company

Toshiba
America, Ltd.

New York,
USA$1,002,550

The regional
representative
company inAmericas

None

Relationship
Dispatch of
Business
executive
relationshipofficers, etc.

Transaction

Transaction
amountAccount item

Balance at
fiscal year end

Deposits offunds

Deposits offundsInterest
incomeCash and cash
equivalents¥7,511

None

Transaction
amount(Note)¥10

Balance at
Account item
fiscal year end
Cash and cash
equivalents
Accruedinterest¥12,339(Note)¥0With regard to the amounts above, transaction amount and balance at fiscal year end don’t
include consumption taxes.
Note:	Concerning deposits of funds, it’s difficult to figure out transaction amount because fundsettlement is performed whenever needed.
Therefore, only balance at fiscal year end is stated.
Policy for determining trade terms and conditions and other related matters
Depositing funds are determined from market rates and offers from third party interest rates.
(¥=Million, US$=Thousand, CNY=Thousand)StatusRelationship
Dispatch of
Business
executive
relationshipofficers, etc.
Interlocking of
directors

Business

Policy for determining trade terms and conditions and other related matters
Depositing funds are determined from market rates and offers from third party interest rates.
(Note)(B)	Transactions with related parties for the year
ended March 31, 2015.

Parentcompany

CapitalNote:	Concerning deposits of funds, it’s difficult to figure out transaction amount because fundsettlement is performed whenever needed.
Therefore, only balance at fiscal year end is stated.

Policy for determining trade terms and conditions and other related matters
Depositing funds are determined from market rates and offers from third party interest rates.

Address

Address

Balance at
fiscal year end

Note:	Concerning deposits of funds, it’s difficult to figure out transaction amount because fundsettlement is performed whenever needed.
Therefore, only balance at fiscal year end is stated.

Name

Name

With regard to the amounts above, transaction amount and balance at fiscal year end don’t
include consumption taxes.

With regard to the amounts above, transaction amount and balance at fiscal year end don’t
include consumption taxes.

StatusStatusName

Subsidiary ofToshiba China
the parent
Co., Ltd.
company

Address
Beijing,
China

CapitalBusiness

Percentage of voting
rights held (%)

CNY249,362

The regional
representative
company in
China

None

¥0

With regard to the amounts above, transaction amount and balance at fiscal year end don’t
include consumption taxes.

25

Relationship
Dispatch of
Business
executive
relationshipofficers, etc.

Transaction

Deposits offunds

Deposits offundsInterest
incomeNone

Transaction
amountAccount item

(Note)
Other¥3,485¥41

With regard to the amounts above, transaction amount and balance at fiscal year end don’t
include consumption taxes.
Note:	Concerning deposits of funds, it’s difficult to figure out transaction amount because fundsettlement is performed whenever needed.
Therefore, only balance at fiscal year end is stated.
Policy for determining trade terms and conditions and other related matters
Depositing funds are determined from market rates and offers from third party interest rates.

24. Cash Dividends(A)	Cash dividends for the year ended March 31, 20161. ‌Cash dividends paid
Type ofshares(Resolution)
Board of Directors
held on June 16,
2015

Commonstock(Resolution)

Type ofsharesBoard of Directors
held on June 16,
2015

Commonstock

Total amountof dividends

Dividends
per share(Millions of yen)

(Yen)

¥1,922
Total amountof dividends(Thousands of
US dollars)

Record date

Effective date

¥7.0

March 31,2015

June 29, 2015

Dividends
per share

Record date

Effective date

March 31,2015

June 29, 2015

$17,058$0.062

2. ‌Year end dividends of the following fiscal year
There is no applicable matter because of non-dividend paying(B)	Cash dividends for the year ended March 31, 2015
1. ‌Cash dividends paid
Total amountof dividends

Dividends
per share(Millions of yen)

(Yen)

Commonstock¥1,097

Commonstock¥1,647

Type ofshares(Resolution)
Board of Directors
held on April 28,
2014
Board of Directors
held on October 29,
2014

Record date

Effective date

¥4.0

March 31,2014

June 2, 2014

¥6.0

September 30,
2014

December 1,2014

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

Type ofsharesBoard ofDirectors held Common
stockon June 16,
2015

Total amountof dividends(Millions of yen)

¥1,922

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

Retainedearnings¥7.0

March 31,2015

June 29, 201525. Per Share Information
Per share information at March 31, 2016 and 2015 is as follows:Yen

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

U.S. dollars

2016

2015

2016

¥208.93(376.69)−¥623.35(4.18)−$1.854(3.343)−* ‌For the years ended March 31 2016 and 2015, although there were dilutive potential
common shares, net income per share fully diluted were not presented due to therecording of a net loss.
* ‌Net loss per share and net income per share fully diluted were calculated on the basis of
the following data.

26

2016

Net loss per share
Net loss attributable toowners of parent
Amounts not attributable tocommon stock
Net loss attributable tocommon stock
shareholders of parent
Average number of sharesof common stock during
the period (thousand
shares)Outline of the residual securities
excluded from the calculationof the fully diluted net income
per share because they have no
dilutive effects.

2015

2016

¥(103,450)¥(1,149)$(918,084)

−

−

−

(103,450)(1,149)(918,084)

274,625

274,563−−−

Note:	As noted in Note 2 (s), “Changes in Accounting Policies,” the Company adopted the
Revised Accounting Standard for Business Combinations, etc. and followed thetransitional treatments prescribed in these accounting standards. The effects of the
adoption on net assets per share as of March 31, 2016 and net loss per share for the year
then ended were immaterial.

26. Subsequent Event(US dollars)

Thousands of
U.S. dollars

Millions of yen

Balance at
fiscal year end

Not applicable27

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: 3,477 <Consolidated: 21,102> (as of March 31, 2016)
Common Stock: ¥39,971 million (as of March 31, 2016)
Stock Listing: Tokyo Stock Exchange (1st Section)

Board of Directors and Audit & Supervisory Board (as of August 24,2016)
President and Chief Executive Officer◊Takayuki Ikeda
Directors

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

Audit & Supervisory Board Members

Haruo Kawasumi
Takehiko Ouchi
Hideo Tabuchi

Main Consolidated Companies (as of March 31, 2016)• TOSHIBA AMERICA BUSINESS SOLUTIONS, INC.
• TOSHIBA TEC INFORMATION SYSTEMS (SHENZHEN) CO., LTD.
• TOSHIBA TEC (H.K.) LOGISTICS & PROCUREMENT LTD.
• TOSHIBA TEC SOLUTION SERVICES CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS, INC.
• TOSHIBA TEC GERMANY IMAGING SYSTEMS GmbH• TOSHIBA TEC SINGAPORE PTE LTD.
• P.T. TEC INDONESIA• TOSHIBA TEC FRANCE IMAGING SYSTEMS S.A.
• TOSHIBA TEC EUROPE RETAIL INFORMATION SYSTEMS S.A.
• TOSHIBA TEC U.K. IMAGING SYSTEMS LIMITED• TOSEI CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS MEXICO, S. DE R.L. DE C.V.
• TEC INFORMATION SYSTEMS CORPORATION• POS PERAKENDE OTOMASYON SISTEMLERI TICARET VE SANAYI A.S.
• TOSHIBA GLOBAL COMMERCE SOLUTIONS (CANADA) LTD.
• TOSHIBA GLOBAL COMMERCE SOLUTIONS (U.K.) LIMITED• TEC PRECISION CO., LTD.
• TOSHIBA TEC MALAYSIA MANUFACTURING SDN. BHD.
• TER CORPORATION• KOKUSAI CHART CORPORATION• TOSHIBA GLOBAL COMMERCE SOLUTIONS (NETHERLANDS) B.V.
• TOSHIBA GLOBAL COMMERCE SOLUTIONS FOR RETAIL (BRAZIL), LTD.
• 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.”