1-31-7, Taito, Taito-ku, Tokyo 110-8555, Japan
URL: http://www.sanden.co.jp/english/index.html

Notice Concerning the Transition to a
Holding Company Structure by Way of
Corporate Separation and theEstablishment of Companies in
Preparation for the Company Split
Sanden changed its name to Sanden Holdings
Corporation on April 1, 2015 and to maintain its
status as a publicly listed company under its new
holding company structure.

Printed in Japan

ANNUAL REPORT 2015
Year ended March 31, 2015

Who We Are
All of the Sanden Group’s Business Operations
Including Core Activities Put Emphasis
on Caring for the Environment.
Automotive Systems
Sanden has taken a long and careful look at the evolution of the automobile
and is pursuing the ­development of next-generation, air-conditioning­systems that are friendly to both people and the ­environment.
Sanden’s compressors for use in car air-conditioning systems have been
adopted by many automotive manufacturers around the world, and Sanden
is continuing to contribute as a leader in this field.

Compressor

Commercial Store Systems
Sanden develops, manufactures, and markets refrigerating and freezing
showcases used in convenience stores and other kinds of stores as well as
vending machines for products including beverages and foods. The
Company’s global market share in the field of vending machines is approximately 30%. We offer vending machines and refrigerating showcases that
employ environment-friendly CO2 refrigerant.
In 2011, we launched a non-freon heat pump vending machine with LED
illumination, and it is now the industry’s top product with respect to energy
conservation.
Sanden has also been an industry leader in providing equipment­maintenance and renovation services that customers require in connection
with their store network expansion and store rebuilding strategies.

Open Freezer

Eco Systems and Other Products
Sanden develops, manufactures, and markets the Eco Cute* CO2­refrigerant heat pump hot water ­supply systems as well as wireless­communication modems and other IT-related products for our services.
Since 2010, the Company has been providing the Eco Cute technologies it has accumulated in Japan, Australia, and European markets, andplans call for progressively expanding this business to encompass global
markets for hot water supply systems products.

Vending Machine* “Eco Cute” is the nickname given to CO2 natural refrigerant heat pump hot water supply systems that have been promoted by electric power companies and by companies manufacturing and marketing these units.
Heat Pump Hot
Water Supply
SystemKey Figures 2015
(Years ended March 31, 2015 and 2014)

Thousands of U.S. dollars(Note)

Millions of yen
2015

2014

2015

¥306,984
9,407
11,713
14,1306,742¥274,786
4,858
13,123
16,661
7,095$2,554,581
78,28097,470117,583
56,103299,265
75,677

277,92065,6512,490,347
629,749

For the Year:Net Sales..........................................................................................................
Operating Income.............................................................................................
Comprehensive Income....................................................................................
Capital Expenditures.........................................................................................
Research and Development Expenses.............................................................

At Year-End:Total Assets......................................................................................................
Total Net Assets...............................................................................................

Yen

U.S. dollars (Note)

Per Share:¥ 40.4010.00
510.80¥ 42.6510.00
443.68Return on Sales (%)..........................................................................................
Current Ratio (%)..............................................................................................
Fixed Ratio (%).................................................................................................
Return on Equity (%).........................................................................................

1.8
119.0
177.9
8.5

2.1
117.3
192.2
10.5

Number of Employees at Year-End......................................................

11,063

10,854Net Income.......................................................................................................
Cash Dividends Applicable to the Year.............................................................
Net Assets........................................................................................................

$0.33
0.08
4.25

Ratios:Note: U.S. dollar figures are translated, for convenience only, at the rate of ¥120.17 to US$1.00, the effective rate of exchange prevailing on March 31, 2015.

Environmental Figures

Unit

2015

2014

in metric tons CO2eq

795,438
131,788
24,866

737,424
124,051
26,713

Energy Consumption..............................................................
CO2 Emissions (total, scope 1 and 2)......................................

in MWhWaste (total)...........................................................................

in tons

Contents
Key Figures 2015...................................1

Financial Section..................................14

Interview with Sanden’s President..........2

Management’s Discussion & Analysis....14

Notes to Consolidated
Financial Statements..........................23

Corporate Philosophy.............................4

Consolidated Balance Sheets...............18

Independent Auditor’s Report...............41

Segment Review....................................5

Consolidated Statements of Income/Consolidated Statements ofComprehensive Income......................20

Board of Directors/
Auditors/Corporate Officers................42

Our Group Structure...............................8
CSR Activities.......................................10
Topics..................................................11
Corporate Governance.........................12
Summary of Selected Financial Data.....13

Sanden’s World Network......................43

Consolidated Statements of
Changes in Net Assets.......................21
Consolidated Statements ofCash Flows........................................22
Sanden Holdings Corporation

1Interview with Sanden’s President

We are driving global growththrough innovation and utilizationof group-wide strengths newly
organized on a holding company
basis for optimum scope and scale.
Kin-ei Kanda
Director & President

Q

What is your basic management
philosophy?

Our Company was established some 72 years ago and stilldraws great strength and inspiration from the words of our
founder, Kaihei Ushikubo, who notably said “Let us develop
with wisdom and prosper in harmony”, and also “The Principlethat a Company Is as Good as the People It Keeps.” I believethese clear concepts of pioneering development and teamwork have been the vital drivers for the Sanden Group until
now and will surely remain so well into the future.

Q

What key factors contributed to
Sanden recording its highest sales
figures two years in row?

Generally speaking, the global economy recorded a gradual
recovery in the fiscal year ended March 2015.
During the same period, Japan experienced a steady paceof recovery due to favorable effects of depreciation of theyen, higher stock prices stemming from monetary easing,and improvements in the employment situation, despite theadverse impact on consumer spending of an increase in the
consumption tax.
Amid this business environment, the Sanden Group
worked to boost its corporate value by focusing on several
strategic goals, namely, “Sales Growth Centered on
Environmental Technologies,” “Strengthening Business2

Annual Report 2015

Competitiveness Based on Reform of the Corporate
Structure,” and “Management Reforms Based on the Reformof Management Systems.” As a result of these initiatives, inthe fiscal year ended March 31, 2015, we increased net
sales 11.7%, to ¥306,984 million, marking a record high forthe second consecutive year. Operating income rose fully
93.6%, to ¥9,407 million, while ordinary income increasedsome 107.3%, to ¥10,314 million, both substantially above
the preceding fiscal year. Effective April 1, 2015, the Groupreorganized its business operations in accordance with aholding company structure, which will provide the scope andscale to maximize corporate value group-wide and toincrease the pace of our growth around the world.

are your thoughts about
Q What­providing returns to investors?
Without question, assuring a healthy return to all Sanden
shareholders is one of our fundamental management policies.
Our goal is to provide stable dividends on a sustainable basis,
and, after a thorough review of our consolidated performance, to aim for a consolidated payout ratio of about 30%.
For the fiscal year ended March 31, 2015, assessing our consolidated performance, financial position, and business forecast, we stayed with our original plan of an annual dividend of¥10 per share. The process of determining the annual dividend for the fiscal year ending March 31, 2016 is currently
under way.

Q

What are the core strengths of
Sanden?

Our core strengths contribute directly to our growth prospects and are focused in several critical areas, specifically,
our robust global network, our commitment to quality, andour dedication to state-of-the-art environmental technologies
and products. To cite but one example, we are achieving significant synergies in the area of newly developed non-freon
refrigerant products and services. Further, we are confident
we can put our core strengths to work to realize substantial
growth in product and service business segments competitors may see as having high barriers to entry.

Q

What are your views on good
­corporate governance?

As I mentioned, our founder’s words, “Let us develop withwisdom and prosper in harmony” are as vibrant today as
when the Company was established. In fact, our Corporate
Philosophy is built on a bedrock of general principles,shared universal values, and our basic stance on engagement with stakeholders. Both in Japan and overseas, theSanden Group is proactively working to increase its corporate value while enhancing compliance throughout its business operations and making ongoing improvements inmanagement accountability and transparency.
In line with good corporate governance practice, we haveincluded two outside Directors on our Board of Directors
and three outside Audit & Supervisory Board Members, who
are counted on to proactively voice their opinions at Boardof Directors’ meetings, Management Committee meetings,

and other important meetings. Specifically, both Outside
Directors and Audit & Supervisory Board Members can provide valuable oversight of management from an objective
and independent perspective and offer insightful suggestions based on their field of expertise. In line with Japan’s
new Corporate Governance Code, I believe Sanden’s corporate governance structure allows for “transparent, fair,timely, and decisive decision making,” while balancing theinterests of our shareholders and other stakeholders.

countries or regions do you
Q Whichbelieve will achieve significant
growth?

Generally speaking, considering continuing global economic
trends as well as the uncertainties, China and India will potentially have a notable impact due to population growth andmiddle-class demand for automobiles, lifestyle, and environmentally related products, which directly link with some of our
key business initiatives.

Q

What is your strategy for investment over the medium term?

Between 2011 and 2013, we made a number of key capital
investments, and I am happy to report that we are now seeing the fruits of those investments. At the same time, we arecontinuing to develop new technologies, products, and services that we trust will surpass our customers’ expectations.
Going forward, we will devise net investment plans that will
have the most beneficial impact on both on our productivity
and future growth potential both in Japan and overseas.

Sanden continues to create new values through
Challenge & Innovation based on the “Environment.”
Sales Growth Centeredon Environmental Technologies
Strengthening Business
Competitiveness Based on Reformof the Corporate Structure• Implement cost-cutting activities• Enact productivity reforms• Increase asset efficiency• Provide unique environmental
value by strengthening coretechnologies and the Sanden
global network

Management Reforms Basedon the Reform ofManagement Systems• Reinforce the global workforce• Build a stronger financial position• Maximize Group synergy througha holding company structure

Sanden Holdings Corporation

3

Corporate Philosophy

The Sanden Group (G-SDC) will observe the following 10 principles
in full compliance with laws, regulations, and rules.
Basic Principles

Basic Stance toward Stakeholders(Universal Values Shared by the Sanden Global Community)
1. Good Corporate Citizenship and Harmony with Society We will grow as good corporate citizens, trusted by society­ armony with the international community.
and in h
2. Respect for Human Rights We will build a corporate culture founded on respect for­individuals and human rights.
3. The Environment We will endeavor to preserve the environment in every aspectof our corporate activities to ensure that future generations
will inherit our beautiful, irreplaceable earth.
4. Corporate Ethics We will conduct our corporate activities in a spirit of sincerity
and f­airness based on a strong sense of ethics.
5. Safety and Health We will enable our employees to achieve a healthy lifestyle by­creating an environment that assures their health and safety.

6. Customers We will stand on the admired ability of engineering­development and manufacturing, and can offer products, systems, and services, based on the QUALITY FIRST, that provide constant satisfaction to our customers around the world.
7. Employees We will grow together with our employees by creating anorganizational culture that encourages free and vigorous­communication imbued with a spirit of respect for humanity inline with our corporate culture of challenge and innovation.
8. Shareholders and Investors We will respond to the trust and expectations of our­shareholders and investors by expanding the Sanden Group,
enhancing our corporate value and making our management
more transparent.
9. Communities We will respect regional customs and cultures around theworld and contribute to the social and cultural development of
the communities, which we are related with.
10. Suppliers We will grow together with our suppliers as business partners
who provide our customers with the best possible products,
systems, and services on the basis of fair and transparent
relationships.

Structure of the Corporate Principles
Aiming to Become “Global Excellent Companies”

Founding Spirit“Let Us Develop with Wisdom and Prosper in Harmony”

Founding
SpiritManagement
Principles
Corporate Philosophy
Corporate Vision
Management Policies
Mid-Term Plan, Execution Plan

STQM
STQM SANDEN WAY

4Annual Report 2015

“Let Us Develop with Wisdom and Prosper in Harmony” means that we should
use our intelligence in combining our development and pioneering abilities to win
prosperity for us all.

Management Principles• Satisfy our customers’ needs with high-quality products•C ontribute to the social and cultural improvement of the­community through business activity•B uild a company of which all are proud, through the efforts ofself-motivated employees
These principles have served as fundamental employee action guidelines since
Sanden’s founding.

Corporate Philosophy
Sanden’s Corporate Philosophy comprises a preamble that serves as the­starting point for all corporate activities of the “global excellent companies” of
the revitalized Sanden Group and designates compliance as the basis for all
operations, five universal values common to all peoples of all nations, and fivegeneral rules establishing the Company’s basic stance toward its stakeholders.

Segment Review

Our Business
Automotive
Systems Business

Automotive Systems Business

65.2%• SANDEN AUTOMOTIVE CLIMATE SYSTEMS CORPORATION• SANDEN AUTOMOTIVE COMPONENTS CORPORATION
Sanden manufactures and delivers automotive compressors and climate systems
around the world. Our state-of-the-art technology suitable for hybrid vehicles andelectric vehicles is highly evaluated by the world’s leading car manufacturers.

¥200,222
Living &Environment
Systems andOther Business(Millions of yen)

3.9%
¥11,867

Electric Motor
Driven Compressor(Millions of yen)Compressor
HVAC Unit

Commercial Store Systems Business

Net Sales¥306,984• SANDEN RETAIL SYSTEMS CORPORATION
Sanden manufactures and delivers freezing and refrigerating showcases, and­systems and services contribute to our customers’ business growth.

(Millions of yen)
Open
Showcase

30.9%

Vending Machine
Round
Showcase¥94,893(Millions of yen)

Commercial Store
Systems Business

Coffee Machine

Living & Environment Systems Business• SANDEN LIVING & ENVIRONMENTAL SYSTEMS CORPORATION
Based on our CO2 heat pump technology, Sanden provides eco-friendly products
such as home use hot water supply systems and heaters which contribute to
comfortable life.

Eco Cute

CO2 Heat
Pump Heater

Sanden Holdings Corporation

5

Performance Overview
In the fiscal year that ended in March 2015, the global

Performance by Business Segment
Automotive Systems Businesseconomy has seen a gradual recovery in the current
fiscal year with steady economic recovery in the UnitedStates and signs of improvement in Europe as a resultof monetary easing policies, etc., this despite a­slowdown in growth in China and some emerging
countries.
Meanwhile, despite a rise in the consumption tax inJapan that led to a fall in personal consumption, thecountry has seen a steady pace of economic recovery
driven by the weak yen and high stock prices resulting
from additional monetary easing, as well as improve-

Net sales in Automotive Systems increased in comparison with the previous fiscal year, driven not only by­higher vehicle sales in China and elsewhere in Asia, butalso by capturing new business in this segment by using
our original strength of environmental technologies. Profit
rose in comparison with the previous fiscal year, driven
on one hand by the Company’s active investment in thedevelopment of environmental technologies for the
future; cost reductions and productivity improvements
realized as a result of further development of overseas
production bases, in-house production of components,and structural reforms in global procurement of components; and also the impact of the weak yen. As a result,net sales increased 9.9%, to ¥200,222 million, and operating income increased 48.9%, to ¥5,602 million, compared with the previous fiscal year.

ments in the employment situation.
In this business environment, the Sanden Group is
working to create further corporate value by continuing
to concentrate on the strategic goals of “Sales GrowthCentered on Environmental Technologies,”“Strengthening Business Competitiveness Based on
Reform of the Corporate Structure,” and “Management
Reforms Based on the Reform of Management
Systems.”
As a result of these initiatives, net sales increased
11.7%, to ¥306,984 million and showing a record highfor the second year in a row. Operating income
increased 93.6%, to ¥9,407 million, and ordinary
income increased 107.3%, to ¥10,314 million, both
higher than the previous fiscal year.
Effective April 1, 2015, the Group transferred to aholding company structure to allow it to maximize­corporate value across the Group as a whole, andincrease the pace of worldwide growth.

Sales and Operating Income (Loss)(Billions of yen)

182

180
160
140

200

141

200

146

153

141

120
100
80
60
40
20
0
–20

5.8

Annual Report 2015

5.6

(2.8)
2011

2012
Sales

6

3.8

1.7
2013
Operating Income (Loss)

2014

2015

Living & Environment Systems andOther Business

Commercial Store Systems BusinessIn the retail store systems sector, business increased as
we supported customers’ growth strategies by s­ uggestingand providing comprehensive solutions in terms of products, systems, and services that reflect changes in environmental attitudes and lifestyles. The result was anincrease in sales compared with the previous fiscal year.
In the domestic market, the vending systems sector
saw an increase in sales compared with the previous­fiscal year. This was the result of our aggressive development of environment-friendly products, for example,
vending machines that use our exclusive CO2 heatpumps, as well as initiatives to expand new businessdomains, such as coffee dispensers, etc.
Profit rose in comparison with the previous fiscal year
as a result of increased sales, plus ongoing and thorough structural reforms aimed primarily at reducing costs
and improving productivity.
As a result, net sales increased 17.1%, to ¥94,893 million, and operating income increased 75.3%, to ¥6,211
million compared with the previous fiscal year.

Sales and Operating Income

Sales and Operating Income (Loss)(Billions of yen)(Billions of yen)

100

94

15

81

80

80
60

We have been concentrating on sales in Japan andother countries of Eco Cute, a heat pump hot water­supply system using a natural CO2 refrigerant. In addition, we are continuing to make substantial investments
for the development of exclusive technologies for a hotwater heating unit using heat pump technology and forother products. We are making steady progress toward
the goal of extending operations to more businessdomains.
We already started business operations in Europe andAustralia, and are currently conducting a feasibility study
in the United States, China, and other Asian countries
where we believe business operations will grow rapidly
based on growing awareness to preserve the naturalenvironment. We will completely align our business with
our Corporate Philosophy, which implies we will­endeavor to preserve the natural environment in every
aspect of our corporate activities to ensure that future
generations will inherit our beautiful, irreplaceable earth.

65

63

9

11.8

11.5

12

8.3

9.0

8.1

6
40

3

20
0

0.6

0.5

2011

2012
Sales

3.7
2013
Operating Income

3.5
2014

6.2
2015

0
–3

(1.0)

(1.9)

(1.4)

2011

2012
Sales

2013

(2.4)

(2.4)
2014

2015

Operating Income (Loss)

Sanden Holdings Corporation

7

Our Group Structure

SANDEN ADVANCEDTECHNOLOGYCORPORATION
Main business areas:
Technology Development of Automotive­Air-Conditioning, Retail System, andLiving & Environmental System Devices

The company aims to open up a futureof new possibilities by providing nextgeneration technologies and products
to our Group companies. The
Company also contributes by proposing and planning new technologies andproducts that will be needed by ourGroup companies in the future.

SANDEN AUTOMOTIVE
CLIMATE SYSTEMSCORPORATIONSANDEN AUTOMOTIVECOMPONENTSCORPORATION

Main business area:
Automotive Air-Conditioning Systems

Main business area:
Automotive Air-Conditioning Compressors

The company engages globally in the
manufacture and sales of components
for vehicle air-conditioning units. As
our customers have deep concern for
the use of environmental products, themarket expects us to deliver more ofthese products, going forward.

The company manufactures and delivers compressors for air-conditioning
units in vehicles. The world’s major
automakers continue to use the­company’s compressors because theirsuperior performance and light weightcontribute to better fuel efficiency,
making these products especially suitable for environmental-friendly vehicles, such as hybrid and electricvehicles.

Major Products

Major Products

HVAC Unit

Swash Plate Type Compressor

Compact HVAC Unit

Scroll Type Compressor

Evaporator

Electric Motor Driven Compressor

SANDEN BUSINESS EXPERTCORPORATION
Main business areas:
Shared Service Center of Sanden Group,
including Administration, Accounting, andHuman Resources

The company’s role is to support theentire Sanden Group through its
Accounting, Administration, andHuman resources. The company willcontinue to pursue the maximization of
its performance to reduce costs andincrease speed with its high professional capabilities, aiming to strengthen
the competitiveness of our businessthroughout the world.

8

Annual Report 2015

SANDEN RETAIL SYSTEMSCORPORATION
Main business area:
Retail Systems

SANDEN LIVING &ENVIRONMENTAL SYSTEMSCORPORATION
Main business area:

SANDEN ENVIRONMENTAL
PRODUCTS CORPORATION
Main business area:
Natural Refrigerant Compressors

Living and Environmental Systems

The company supplies a variety ofequipment for retail store operations,
including freezing and refrigerating
showcases, vending machines, andcoffee servers. Always taking the customer’s perspective, the company
offers retail store systems and servicing
tailored to customers’ business needs.

Major Products
CO2 System
SelfContained
Open
Showcase

Horizontal
CO2 Unit
Open Freezer

The company develops environmental
products based on CO2 heat pump
(hereinafter HP) technology, mainly HP
hot water supply units and HP hot
water heaters for home use. By improving basic performance, we are increasing the energy savings offered by our
Eco Cute* units for the Japanese market year by year. Using this technology,
we have already expanded into Europe
and Australia, and we are seeking tostimulate significant growth by collaborating with local affiliates to rapidly
expand our business in the North
American and Asian markets.

Walk-in Vault

Major Products* “Eco Cute” is the nickname given to CO2 naturalrefrigerant heat pump hot water supply systems thathave been promoted by electric power companies
and by companies manufacturing and marketingthese units.

Major Products

CO2 System
Self-Contained
Round
Showcase

The company sets CO2 refrigerant as acore since it is extremely important to
our Automotive Systems business. CO2
compressors are the key product here,
and we are currently delivering our
products all over the world. The­company will continue to develop CO2
technologies and products that enable
our business divisions and customers
to generate further growth.

CO2 Piston Type Compressor

CO2 Unit

Eco Cute
Coffee Machine

CO2 Heat Pump
Heater
CO2 Scroll Type Compressor

Vending Machine for
Both Regular Useand Use after a Disaster

Coffee Vending
Machine

Hot Water Supply
System(Australian Model)

Hot Water Supply
System (EU Model)

Heat Exchanger

Sanden Holdings Corporation

9

CSR Activities

Sanden’s CSR Activities Are Putting Our Corporate Philosophy into Practice.
The slogan of the Sanden Group is “Delivering Excellence.”
Through corporate activities with the environment at thecore, this slogan also means to offer the highest-level­products, systems, and services to satisfy all stakeholders,which will lead Sanden to be a “Global Excellent Company.”

January 2015/Malaysia

As a policy for these initiatives, upon its 60th anniversary
in 2003, Sanden formulated its “Corporate Philosophy” (seep. 4). The Sanden Group believes that it is very important for
all employees to put the content of its “Corporate
Philosophy” into practice in activities every day and that
­putting ethics into practice is synonymous with its CSR.

July 2014/Poland

Donation for flood victims

Donation for intractable diseases

Donated to support flood
survivors, families, andvictims.

Donated to support
patients with intractablediseases and their families through volleyball
tournament games.
Associates in Sanden Air Conditioning(Malaysia)

November 2014/Japan

Associates in Sanden Manufacturing
PolandApril 2014/USA

Host soccer festival for children

Support for families in need

Hosted soccer festival forchildren at Sanden’s soccer park located in Japan.

Supported a food bank in
Detroit to help families inneed.

Children at Sanden Football Park

November 2014/Thailand

Support to repair school buildings
Supported the renovation of old school buildings
in Ayutthaya.

Associates in Detroit Office

April 2014/France

Offer sportswear to a children’ssoccer teamOffered sportswear to a
power wheelchair soccer
team.

Powerchair Football Team
BeforeAfter

For other CSR activities, please see the following website.

http://www.sanden.co.jp/english/environment/activity.html

10Annual Report 2015

Topics

Established “Industrial
Sightseeing Center”

8th STQM World
Convention in Shanghai

In May 2014, Sanden established the

In October 2014, Sanden held the 8th

non-profit organization “Industrial

STQM World Convention in Shanghai,

Sightseeing Center” in our training facility

China. Among 1,200 circles in 23 coun-

Communication Plaza in Saitama

tries/regions and 54 business locations,

Prefecture. The center supports the

15 winners of each district gathered.

Tomioka Silk Mill and Related Industrial

Sanden has held conventions from 2003

Heritage, which was registered as one ofin Japan, Singapore, France, and thethe World Heritage sites in 2014. The

U.S., and it was the first time to hold theCenter aims to spread understanding ofConvention in China.

values of the Tomioka Silk Mill and
Related Industrial Heritage, which werebuilt in the Meiji era. The Center alsoseeks to nurture human resources to

Selected as a Member
Company of Morningstar
Socially Responsible
Investment Index (MS-SRI)
In January 2015, Sanden was­selected as a member company ofMorningstar Socially Responsible
Investment Index (MS-SRI). MS-SRI is
the first socially responsible investment index in Japan. Morningstar
Japan K.K. selects 150 companies
from among approximately 4,000 listed companies in Japan by assessing
their social responsibility, and converts
their stock prices into the index.

make a bright future for industries of thearea through learning about the
Heritages.
SandenCommunication
Plaza

STQM World Convention in Shanghai

Declares for Promoting
Diversity in the Group
Tomioka Silk MillIn December 2014, Sanden held
“Sanden Women’s Forum” in order toOpens a New Sales Branch
Office in France

Boost Diversity in the Group at Sanden

In July 2014, Sanden opened Sanden

Yamamoto announced the declaration at

Environmental Solutions, a new sales

the Forum in front of 200 female employ-branch office in Rennes, France. The

ees at the Plaza and attendees partici-

branch aims to drive environmental busi-

pated at the conference from all parts ofness in the European market. Sanden

Japan. The Company aims to increase

will continue to expand the business,

female managers to 12% of all manag-

setting Japan and Europe as global

ers through promoting female employ-bases, through developing CO2 devices

ees’ activities.

Communication Plaza in Saitama
Prefecture. Then-President Mitsuya

Chairman of the Board Wins
“Officer” of the Legion of
Honor
In March 2015, Masayoshi Ushikubo,
Chairman of the Board, was named
the prestigious rank of “Officer” of the
Legion of Honor, following the first­recognition of “Chavalier” in 2000. This
honor serves as a sign of France’s
appreciation for his long dedicationand contribution to the strengtheningof the bilateral relationship.

and delivering modules, systems, andservices on a global basis.

French Minster of Defense, Mr. Jean-Yves Le Drian(Left) giving the Medal to Chairman of the Board,
Masayoshi Ushikubo (Right)

Associates in Sanden Environmental Solutions

Sanden Holdings Corporation

11

Corporate GovernanceFundamental Corporate Governance Policies
Sanden’s Founding Spirit, “Let Us Develop with Wisdom andProsper in Harmony,” is still alive today and is as vibrant as
when the Company was founded in 1943. In 2003, Sanden
established a new Corporate Philosophy, which includes“Basic Principles (Universal Values Shared by the Sanden
Global Community)” and a “Basic Stance toward
Stakeholders.” Both in Japan and overseas, the SandenGroup is relentlessly and proactively striving to increase
corporate value while further improving corporate governancewith a view toward further improving management efficiency
and transparency.
Sanden has a Board of Directors, a Board of Corporate
Auditors, and an Accounting Auditor. The Board of Directors
is comprised of ten members (with two outside Directors),
and the Board of Corporate Auditors is comprised of four
members (with three outside Auditors). To strengthen man-agement oversight functions, Sanden appoints fully independent outside Directors and outside Corporate Auditors.
Currently, Sanden’s five outside executives are all certified as“independent” under the Securities Listing Regulations of
the Tokyo Stock Exchange. By setting Directors’ terms to
one year, Sanden has put in place a system to ensure management transparency and one that enables quick responses to changes in the market environment. Also, by adopting
an executive officer system, the Group aims to strengthenbusiness execution functions and increase management efficiency. Moreover, the Executive Committee and Board of
Directors deliberate in a timely fashion on important mattersin compliance and risk management. Furthermore, by putting in place internal and external hot lines as an internalreporting system, Sanden is working to strengthen risk management, corporate ethics, and legal compliance.

Sanden’s Corporate Governance and Internal Control Organization Units and Their Interrelationships

General Meeting of Shareholders
Appointment/Removal

Board of Directors(Ten Directors)

Appointment/Removal

Board of Corporate Auditors(Four Corporate Auditors)

Outside Director(Two Independent Directors)

OutsideCorporate Auditors(Three Independent
Corporate Auditors)

Supervision/advice

Representative Director
PresidentInternal
Auditors

Management
Committee
Drafting Management
Strategies]

Business
Execution

Directors

Corporate Officers

Internal
Auditing

Accounting
AuditorAccounting Auditing

Auditing

The Company

Business Companies, Subsidiaries,
and Affiliated Companies
As of June 201512

Annual Report 2015

Summary of Selected Financial Data
Years ended March 31

Thousands of
U.S. dollars (Note)

Millions of yen

2015

2014

2013

2012

2011

2010

2015

Net sales................................................................ ¥306,984
Net income (loss)....................................................
5,580
Comprehensive income...........................................
11,713¥274,786
5,843
13,123¥241,780
1,084
5,331

¥214,282
1,204
57¥216,539
6,087
2,340

¥194,696
4,410—$2,554,581
46,434
97,470Total net assets....................................................... ¥ 75,677
Total assets............................................................ 299,265¥ 65,651
277,920¥ 52,961
247,387¥ 48,199
212,300¥ 49,329
207,925¥ 47,232
205,140$  629,749
2,490,347

Net assets per share (yen and U.S. dollars).............. ¥ 510.80
Net income (loss) per share (yen and U.S. dollars).....
40.40¥ 443.68
42.65¥ 364.35
7.96¥ 331.08
8.84¥ 335.11
44.66¥ 323.92
32.36$     4.25
0.33

23.6%
8.5
13.3

22.1%
10.5
10.8

20.1%
2.3
47.1

21.3%
2.7
30.6

22.0%
13.6
7.8

21.5%
10.4
10.6

Cash flows from operating activities......................... ¥ 16,223
Cash flows from investing activities.......................... (13,301)
Cash flows from financing activities..........................
(2,022)
20,588Cash and cash equivalents at end of the year...........

¥ 18,803(12,105)(8,675)
19,078¥  3,148(16,794)
17,74019,961¥   (5,227)(7,588)
9,432
14,842¥  7,820(6,038)(6,551)
18,526¥ 18,772(5,327)(11,312)
24,10011,063

10,854

10,194

8,545

8,281

7,880

Gross profit............................................................. ¥ 57,246¥ 48,101¥ 36,731¥ 35,928¥ 40,613¥ 37,201

Capital adequacy ratio (%).......................................
Return on equity (%)................................................
Price earnings ratio (%)...........................................

Number of employees.............................................

Gross profit ratio (%)...............................................
Ratio of SG&A expenses (%)....................................
Total net assets ratio (%).........................................

18.6%
15.6
23.6

17.5%
15.7
22.1

15.2%
15.6
20.1

16.8%
16.4
21.3

18.8%
16.3
22.0

$  135,000(110,684)(16,826)
171,323$  476,375

19.1%
16.4
21.5

Note: U.S. dollar figures are translated, for convenience only, at the rate of ¥120.17 to US$1.00, the effective rate of exchange prevailing on March 31, 2015.

Sanden Holdings Corporation

13

Financial Section
Management’s Discussion & Analysis
Net Sales

In the Vending Systems Sector of the Commercial Store Systems

On a consolidated basis of the Sanden Group, net sales for fiscal

Business, the Sanden Group actively developed environ-year 2015, ended March 31, 2015, reached a new record high levelment-friendly products, especially our unique vending machines

and increased by 11.7%, or ¥32.1 billion, compared with the previ-equipped with CO2 heat pumps in the domestic market, andous fiscal year, to ¥306.9 billion ($2,554.5 million).

expanded new business areas, including coffee servers. As a con-First, in the Automotive Systems Business, sales expanded duesequence, sales increased from the previous fiscal year.

to the increases in sales in China and the rest of Asia outside JapanThe segment’s operating income continues to increase due toas well as the obtaining of new business through the introduction of

the increases of sales as well as a result of the thoroughgoing

the environment-­friendly products, which are one of our strengths.

emphasis on business reforms, including the cost reduction andWhile investing in the development of environment-friendly tech-

improvements in productivity.

nology that meets the expanding needs of the environment andAs a result, segment sales were ¥94.8 billion ($789.6 million), up

energy conservation in the market, the segment’s operating income

17.1% from the previous fiscal year, and operating income wasincreased due to our sustained efforts to reduce the costs and to¥6.2 billion ($51.6 million), representing an increase of 75.3% from

improve productivity through the reform in overseas manufacturing

the previous fiscal year.

operations, which includes internalizing key ­component production

In the Eco Systems and Other Products Business, in line with ourand the successful structural reforms in global parts procurement,­medium-term strategies for “Sales Growth Centered on

and the supportive effects of yen depreciation.

Environment-Friendly Technologies”, we promoted “Eco Cute,” CO2

As a result, segment sales were ¥200.2 billion ($1,666.1 million),refrigerant heat-pump hot-­water-supply-system products, not only

up 9.9% from the previous fiscal year. Operating income was ¥5.6

in Japan, but also in European and China markets. In addition, webillion ($46.6 million), representing an increase of 48.9% from thecontinued to invest proactively in the development of our uniqueprevious fiscal year.

technologies, such as high-efficiency boilers, and steadily expanded

Second, in the Retail Store Systems Sector of the Commercial

this business to introduce new products and models to the market.

Store Systems Business, as a result of the comprehensive proposals for products, systems, and services that respond to rising envi-

Costs, Expenses, and Earnings

ronmental awareness and changes in lifestyles, the Sanden GroupNet sales increased by 11.7%, or ¥32.1 billion, to ¥306.9 billion

contributed to the growth strategies of our customers. As a conse-($2,554.5 million) as mentioned above. Cost of sales increased by

quence, we were able to expand our business activities and then

10.2%, or ¥23.0 billion, compared with the previous fiscal year, tosales expanded over the previous fiscal year.
Breakdown of Net Sales

Net Sales

Gross Profit Ratio(%)(Billions of yen)(%)

(Years ended March 31)(Years ended March 31)

350

20

3.9
300
15

250

30.9

Net Sales¥306,984

200(Millions of yen)

65.2

10
150

100

Automotive Systems Business Group

5

50

Commercial Store Systems Business GroupEco Systems and Other Business Group14

Annual Report 2015

0

10

11

12

13

14

15

0

10

11

12

13

14

15

¥249.7 billion ($2,078.2 million). Consequently, gross profit amount-

As a result of the above factors, income before income taxes anded to ¥57.2 billion ($476.3 million), up 19.0%, or ¥9.1 billion, andminority interests totaled ¥7.9 billion ($66.4 million), compared withthe gross profit ratio rose from 17.5% to 18.6%.

¥5.7 billion in the previous fiscal year. Net income amounted to¥5.5 billion ($46.4 million), compared with ¥5.8 billion in the previ-

SG&A expenses increased by 10.6%, or ¥4.5 billion, to ¥47.8 bil-ous fiscal year. Return on equity was down from 10.5% to 8.5%.

lion ($398.0 million), and the ratio of SG&A expenses to net sales
dropped 0.1 percentage point, to 15.6%, compared with the previous fiscal year. Research and development (R&D) expenses, which

Financial Position

are charged to cost of sales and SG&A expenses, decreased 5.0%,

Total assets at March 31, 2015 increased by ¥21.3 billion, toor ¥0.3 billion, to ¥6.7 billion ($56.1 million). The ratio of R&D¥299.2 billion ($2,490.3 million), mainly reflecting an increase in

expenses to net sales dropped 0.4 percentage point, to 2.2%,

trade notes and accounts receivable and other factors.
Total liabilities rose by ¥11.3 billion, to ¥223.5 billion ($1,860.5

compared with the previous fiscal year.

million) because of an increase in trade notes and accounts pay-

Although the Company invested aggressively in the development

able and other factors.

of environmental technology concerning CO2 compressors for

Total net assets increased by ¥10.0 billion, to ¥75.6 billion

future growth, the Company recorded an increase in income due tothe effects of continuous improvements in productivity and product($629.7 million), mainly as a result of an increase in the foreign cur-cost reduction, local production and self-manufacture that wererency translation adjustments. Thus, the total net assets ratio waslaunched in the previous year and the positive impact of the depre-

23.6%, compared with 22.1% at the end of the previous fiscal year.

ciation of the yen.
Liquidity

Operating income amounted to ¥9.4 billion ($78.2 million), com-

(1) Cash Flows

pared with ¥4.8 billion in the previous fiscal year.
Other income (expenses) amounted to a loss of ¥1.4 billion

Net cash provided in operating activities amounted to ¥16.2 billion($11.7 million), compared with a gain of ¥0.9 billion in the previous($135.0 million), representing a decline of ¥2.5 billion comparedfiscal year. This mainly resulted from a ¥1.9 billion decrease inwith a cash inflow of ¥18.8 billion in the previous fiscal year. This

gains, which were recorded in the previous fiscal year, due tomainly reflected cash inflows of ¥7.9 billion ($66.4 million) in income

switching the Company’s retirement benefits plan from the “Defined

before income taxes and minority interests, ¥11.6 billion ($97.3 mil-Benefit Retirement Plan” to the “Defined Contribution Pensionlion) in depreciation and amortization expenses, an increase in tradePlan.”

accounts and notes payable of ¥1.5 billion ($12.5 million), and an

Net Income

Net Income per ShareTotal Assets/Capital Adequacy Ratio(Billions of yen)

(Yen)

(Billions of yen)

(%)

300

30

250

25

200

20

150

15

100

10

50

5

(Years ended March 31)(Years ended March 31)

7(March 31)

50

6
40
5
30

4

3

20

2
10
1

0

10

11

12

13

14

15

0

10

11

12

13

14

15

0

10

11
15
12
13
14
Total Assets (left scale)
Capital Adequacy Ratio (right scale)
Sanden Holdings Corporation

015

increase in other accounts payable of ¥1.4 billion ($12.4 million). On

Funds for production facilities are obtained through long-term

the other hand, the cash outflow mainly resulted from a ¥6.1 billion

loans. As of March 31, 2015, long-term bank loans amounted to($51.4 million) increase in trade accounts and notes receivable, and¥73.7 billion ($613.4 million). A large part of the long-term bankequity in net income of unconsolidated subsidiaries and affiliates ofloans was borrowed with fixed interest rates from financial institu-¥2.5 billion ($20.9 million).

tions. It included ¥12.2 billion ($102.1 million), which was borrowed

Net cash used in investing activities amounted to ¥13.3 billion($110.6 million), up ¥1.1 billion from ¥12.1 billion in the previous fiscal year. This resulted mainly from purchases of property, plant andduring the fiscal year under review, mainly in Japan for investment
in facilities.
The Sanden Group considers interest rates, the market environ-equipment of ¥12.3 billion ($102.7 billion) overseas, which werement, the ratio of direct and indirect fund-raising, bond ratings, andmade in connection with shifts to overseas p­ roduction andthe business situation between financial institutions and the Sanden

self-manufacturing.

Group when deciding on an appropriate long-term fund-raising plan.

Net cash used in financing activities amounted to ¥2.0 billion

The Sanden Group aims to maintain a firm financial position and($16.8 million) compared with a cash outflow of ¥8.6 billion in the

believes the net cash provided by operating activities, indirect

previous fiscal year. The principal factors were proceeds from long-

financing through loans and the issuance of bonds and directterm debt of ¥12.2 billion ($102.1 million) and a net increase infinancing through the issuance of stock provide possible sources ofshort-term debt of ¥3.8 billion ($31.7 million), which were largely

funds for future growth.

offset by repayments of long-term debt amounting to ¥15.0 billion($125.2 million).
Cash and cash equivalents at the end of the year increased byBusiness and Other Risks
The following is an overview of major business and other risks¥1.5 billion ($12.5 million) from ¥19.0 billion at the end of the previ-

faced by the Sanden Group that may significantly affect investors’

ous fiscal year to ¥20.5 billion ($171.3 million) as a result of thedecisions. The Sanden Group examines risks and takes appropri-

aforementioned activities and the impact of exchange rate fluctua-

ate measures to control risks. Please note that forward-looking

tions on the translation of cash and cash equivalents into Japanesestatements below are based on Sanden Group judgments made atyen.

the end of the fiscal year under review.

(2) Capital Demands(1) Economic Conditions

The Sanden Group requires working capital primarily for the pur-

The Sanden Group mainly sells automotive air-conditioning sys-

chase of materials and parts for products manufactured by thetems, air-­conditioner compressors, vending machines, and refriger-

Sanden Group, ­manufacturing costs, and operating expenses suchated showcases throughout the world. Demand for these products

as SG&A expenses.

is affected by economic conditions in the various countries andMoreover, funds for capital investment are mainly required forregions in which these products are sold. In particular, automotive

enhancing both local production and self-manufacture to strength-

market trends in North America, Europe, China, and elsewhere inen the global production system and developmental facilities, main-

Asia, where we operate the Automotive Systems Business maytaining and renewing facilities related to streamlining, and acquiring

affect the Sanden Group’s business results and financial position.

molds for production. In the fiscal year under review, capital investments principally comprised investments related to the Group’s(2) Fluctuations in Exchange Rates

Automotive Systems Business in Japan and overseas.

The Sanden Group’s global operations, including its Automotive
Systems Business, involve foreign currency transactions. In particu-(3) Financing

lar, exchange rate fluctuations in the Sanden Group’s major trans-With regard to financing, the Sanden Group makes decisions

action currencies, the U.S. dollar and the Euro, and currency

according to the intended use of funds as well as the timing, dura-

fluctuations in China and other parts of Asia may affect the Sandention, and the region in which the funds are required.

Group’s business results and financial position.

The Sanden Group companies principally secure the required

In addition, the currencies stated in the financial statements ofworking capital by short-term bank loans. As of March 31, 2015,

consolidated overseas subsidiaries and companies accounted for byshort-term bank loans amounted to ¥47.9 billion ($398.9 million)

the equity method have been translated into Japanese yen andand were denominated primarily in Japanese yen, the U.S. dollar,

recorded in the Company’s consolidated financial statements.

and the Euro.

Therefore, the translation rate may affect net income and stockholders’ equity as accounted for in the consolidated financial statements.

16

Annual Report 2015

(3) Changes in Raw Material and Parts Market Conditions

The Sanden Group believes that its products possess a competi-

Operations of the Automotive Systems Business and thetive advantage in terms of quality, cost, and technology. However, inCommercial Store Systems Business primarily involve the manufac-

the aforementioned difficult business environment, there is no guar-

ture and supply of products and systems. As these operations

antee of maintaining such advantages, including the supply of

involve the procurement of raw materials and parts, upswings inmaterials and parts, and this may affect the Sanden Group’s busi-

these markets resulting in higher manufacturing costs may affectness results and financial position.

the Sanden Group’s business results and financial position.
(8) Reliance on Customer Performance(4) Natural Disasters

The Sanden Group provides products to automobile and beverage

If the manufacturing and business bases of the Sanden Group suf-

manufacturers around the world. Therefore, customer performancefer serious damage as a result of a natural disaster such as anand other factors that are beyond the control of the management ofearthquake, the Sanden Group’s business results and financial

the Sanden Group may affect the Group’s business results andposition may be impacted by the halting of production activities andfinancial position.

delay in the deliveries of materials and parts.
(9) Limitations on Intellectual Property Protection(5) New Product Development

The Sanden Group has accumulated a wide range of proprietary

The operations of the Automotive Systems Business and thetechnologies, know-how, and other intellectual property through its

Commercial Store Systems Business extend throughout the world

development activities over the long period since its establishment.

and encompass the development of cutting-edge technologies andLegal restrictions in certain regions may prevent the Sanden Groupthe application of those technologies to products. At times, thefrom completely protecting its intellectual property or restrain the

Sanden Group may not be able to fully predict or respond to mar-

Sanden Group from fundamentally restricting third parties to manu-

ket trends and changes, and this may have an impact on the suc-facture imitations of the Sanden Group’s products through the use

cess of product development and market introduction. Theseof its intellectual property.

circumstances may affect the Sanden Group’s business results andfinancial position.

(10) Product Liability
The Sanden Group is continuing quality control initiatives based on(6) Potential Risks Associated with International Operations
and Entry into Overseas Markets

its Sanden Total Quality Management (STQM). However, productliability claims related to items manufactured by the Sanden GroupThe operations of the Automotive Systems Business and thein the past, at present, and into the future could affect the Sanden

Commercial Store Systems Business encompass development,Group’s business results and financial position.

manufacturing, and sales bases located in 23 countries and regionsin North America, Europe, China, and elsewhere in Asia. Business(11) Legal and Regulatory Risks

activities in these countries and regions are subject to the following

The Sanden Group is subject to various governmental regulations inrisks:

the countries and regions in which it operates, including those relat-• Changes in and revisions to laws and regulations in countries in

ed to business investment permits, export restrictions, taxation, thewhich the Sanden Group operates,

environment, and other matters. In the event that these regulations• Changes in the economic and political climate,

are changed or new regulations are introduced, this could affect the• Unstable political situations, including wars,

Sanden Group’s business results and financial position.

• Labor disputes, and• Marine transport-related strikes.
Any of the aforementioned events may affect the Sanden Group’sbusiness results and financial position.

(12) Financial Covenants of Fund Procurement
The Company has entered into syndicated loan contracts with several financial institutions for stable funding procurement, and suchcontracts included certain financial covenants. If the Sanden Group(7) Price Competition

breaches such provisions, such loans may be accelerated, which

The Sanden Group’s operating conditions are marked by increas-may, in turn, affect the Sanden Group’s financial condition. As

ingly fierce price competition in the automobile and vending

described in Note 9 to the consolidated financial statements, themachine industries, and demands from automobile and beverage

Sanden Group has not breached any of these provisions.

manufacturers to lower prices intensify every year.
Sanden Holdings Corporation

17

Consolidated Balance Sheets
Sanden Holdings Corporation and Consolidated Subsidiaries
March 31, 2015 and 2014

Thousands of
U.S. dollars (Note 1)

Millions of yen

2014

2015

¥ 19,087$  171,398

59,923
16,9163,540(948)
46,642
3,167
11,792
160,122524,240
211,358
34,858(16,152)
394,599
22,759102,762
1,445,860

13,194
12,565
62
2,191
4,823
1,828
34,666

11,957
9,430
—
2,005
4,250
1,472
29,117

109,794
104,560
515
18,23240,134
15,211
288,474

Property, plant and equipment, at cost (Note 9):Land ���������������������������������������������������������������������������������������������������������������������������������������������������
19,246
Buildings and structures �����������������������������������������������������������������������������������������������������������������������
64,096
Machinery and equipment �������������������������������������������������������������������������������������������������������������������� 111,930
Furniture and fixtures ���������������������������������������������������������������������������������������������������������������������������
37,518
Lease assets ���������������������������������������������������������������������������������������������������������������������������������������
20,140Construction in progress ����������������������������������������������������������������������������������������������������������������������
5,123  Total ����������������������������������������������������������������������������������������������������������������������������������������������� 249,054
Accumulated depreciation �������������������������������������������������������������������������������������������������������������������� (167,205)   Net property, plant and equipment ����������������������������������������������������������������������������������������������������
90,84919,15260,672
105,803
33,631
18,8698,360
246,489(157,808)
88,681

160,156
533,377
931,430
312,207
167,595
42,6312,072,513(1,391,403)
756,003

Total assets ����������������������������������������������������������������������������������������������������������������������������������������� ¥299,265¥277,920$2,490,347

ASSETS

2015

Current assets:
Cash and time deposits (Notes 6, 9 and 15) ������������������������������������������������������������������������������������������ ¥ 20,597
Receivables (Notes 6 and 9):   Trade notes and accounts ����������������������������������������������������������������������������������������������������������������
62,998   Unconsolidated subsidiaries and affiliates ������������������������������������������������������������������������������������������
25,399  Other ����������������������������������������������������������������������������������������������������������������������������������������������
4,189   Allowance for doubtful accounts �������������������������������������������������������������������������������������������������������
(1,941)Inventories (Notes 3 and 9) �������������������������������������������������������������������������������������������������������������������
47,419Deferred income taxes (Note 5) �������������������������������������������������������������������������������������������������������������
2,735
Prepaid expenses and other current assets �������������������������������������������������������������������������������������������
12,349   Total current assets �������������������������������������������������������������������������������������������������������������������������� 173,749

Investments and other assets:
Investment securities (Notes 4 and 6):   Unconsolidated subsidiaries and affiliates ������������������������������������������������������������������������������������������
  Other ����������������������������������������������������������������������������������������������������������������������������������������������
Net defined benefit asset (Note 8) ���������������������������������������������������������������������������������������������������������
Deferred income taxes (Note 5) �������������������������������������������������������������������������������������������������������������
Intangible assets ����������������������������������������������������������������������������������������������������������������������������������
Other ��������������������������������������������������������������������������������������������������������������������������������������������������
   Total investments and other assets ���������������������������������������������������������������������������������������������������

See accompanying notes.

18

Annual Report 2015

Thousands of
U.S. dollars (Note 1)

Millions of yen

2014

2015

¥ 42,953
13,527$  398,909
89,48954,028831
10,489
639
3,620
2,101
1,213
16
7,141
136,563

473,554
9,503
94,0506,890
37,521
28,36811,026—64,9491,214,304

62,962
3,657
179
2,017
4,755
4,091
77,66362,567
2,545
179
1,018
4,118
5,276
75,705523,941
30,431
1,489
16,78439,56834,043646,276

11,037
4,453
48,438

11,037
4,453
44,23991,84437,055403,078(1,190)62,739(1,178)58,553(9,902)522,085

4,625
(102)
4,934
(1,642)
7,814

2,532
(22)
807
(579)
2,738

38,487(848)
41,058(13,663)
65,024

5,123
Minority interests in consolidated subsidiaries ������������������������������������������������������������������������������������
Total net assets �������������������������������������������������������������������������������������������������������������������������������������� 75,677   Total liabilities and net assets ������������������������������������������������������������������������������������������������������������� ¥299,265

4,359
65,651¥277,920

42,631
629,749$2,490,347

LIABILITIES AND NET ASSETS

2015

Current liabilities:
Short-term bank loans (Notes 6 and 9) ���������������������������������������������������������������������������������������������������� ¥ 47,937
Long-term debt due within one year (Notes 6 and 9) �������������������������������������������������������������������������������� 10,754
Payables (Note 6):   Trade notes and accounts ������������������������������������������������������������������������������������������������������������������ 56,907   Unconsolidated subsidiaries and affiliates ��������������������������������������������������������������������������������������������
1,142  Other ������������������������������������������������������������������������������������������������������������������������������������������������ 11,302
Income taxes payable (Notes 5 and 6) �����������������������������������������������������������������������������������������������������
828
Accrued employees’ bonuses �����������������������������������������������������������������������������������������������������������������
4,509
Accrued liabilities �����������������������������������������������������������������������������������������������������������������������������������
3,409
Lease obligations due within one year (Notes 6 and 9) �����������������������������������������������������������������������������
1,325
Deferred income taxes (Note 5) ���������������������������������������������������������������������������������������������������������������
—���������������������������������������������������������������������������������������������������������������������������
Other current liabilities
7,805   Total current liabilities ������������������������������������������������������������������������������������������������������������������������ 145,923
Long-term liabilities:
Long-term debt due after one year (Notes 6 and 9) ����������������������������������������������������������������������������������
Net defined benefit liability (Note 8) ���������������������������������������������������������������������������������������������������������
Officers' retirement benefits �������������������������������������������������������������������������������������������������������������������
Deferred income taxes (Note 5) ���������������������������������������������������������������������������������������������������������������
Lease obligations due after one year (Notes 6 and 9) �������������������������������������������������������������������������������
Other noncurrent liabilities (Note 13) �������������������������������������������������������������������������������������������������������
   Total long-term liabilities ��������������������������������������������������������������������������������������������������������������������
Contingent liabilities (Note 12)
Net assets (Note 10)
Stockholders’ equity:
Common stock:
Authorized: 396,000,000 shares   Issued:
140,331,565 shares �������������������������������������������������������������������������������������������������������
Capital surplus ��������������������������������������������������������������������������������������������������������������������������������������
Retained earnings ����������������������������������������������������������������������������������������������������������������������������������
Treasury stock, at cost:   2,208,161 and 2,187,892 shares in 2015 and 2014, respectively ��������������������������������������������������������
   Total stockholders’ equity �������������������������������������������������������������������������������������������������������������������
Accumulated other comprehensive income:Net unrealized gains (losses) on securities, net of taxes ����������������������������������������������������������������������������
Unrealized gains (losses) on hedging derivatives, net of taxes �������������������������������������������������������������������
Foreign currency translation adjustments ������������������������������������������������������������������������������������������������
Remeasurements of defined benefit plans, net of taxes ����������������������������������������������������������������������������
   Total accumulated other comprehensive income ����������������������������������������������������������������������������������

See accompanying notes.

Sanden Holdings Corporation

19

Consolidated Statements of Income
Sanden Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2015 and 2014

Thousands of
U.S. dollars (Note 1)

Millions of yen

2015

Net sales (Note 19) ����������������������������������������������������������������������������������������������������������������������������������� ¥306,984
Cost of sales ������������������������������������������������������������������������������������������������������������������������������������������� 249,738
Gross profit �������������������������������������������������������������������������������������������������������������������������������������������� 57,246
Selling, general and administrative expenses (Note 20) ��������������������������������������������������������������������������� 47,838
Operating income (loss) (Note 19) ����������������������������������������������������������������������������������������������������������
9,407
Other income (expenses):
Interest and dividend income ������������������������������������������������������������������������������������������������������������������
226
Exchange gains (losses), net �������������������������������������������������������������������������������������������������������������������
1,343
Equity in net income of unconsolidated subsidiaries and affiliates �������������������������������������������������������������
2,518Interest expense ������������������������������������������������������������������������������������������������������������������������������������
(2,687)
Allowance for doubtful accounts �������������������������������������������������������������������������������������������������������������
(823)
Gain (loss) on sales and disposals of property, plant and equipment, net ���������������������������������������������������
(1,008)Gain on transfer to defined contribution pension plan (Note 8) ������������������������������������������������������������������
—Impairment loss on long-lived assets (Notes 19 and 21) ���������������������������������������������������������������������������
—Loss on antitrust law ������������������������������������������������������������������������������������������������������������������������������
(385)
Extraordinary product warranty cost ��������������������������������������������������������������������������������������������������������
(896)
Other, net ����������������������������������������������������������������������������������������������������������������������������������������������
295   Other income (expenses) ��������������������������������������������������������������������������������������������������������������������
(1,418)
Income before income taxes and minority interests ����������������������������������������������������������������������������
7,988
Income taxes (Note 5):
Current �������������������������������������������������������������������������������������������������������������������������������������������������
1,280
Deferred ������������������������������������������������������������������������������������������������������������������������������������������������
629   Total income taxes �����������������������������������������������������������������������������������������������������������������������������
1,909
6,078
Income before minority interests �����������������������������������������������������������������������������������������������������������
Minority interests �����������������������������������������������������������������������������������������������������������������������������������
498
Net income ���������������������������������������������������������������������������������������������������������������������������������������������� ¥  5,580

2014

2015

¥274,786
226,685
48,101
43,2424,858$2,554,581
2,078,205
476,375
398,086
78,280

245
(106)
1,996
(2,459)
—
(6)
1,953
(235)
—
(923)
465
928
5,787

1,880
11,175
20,953(22,359)(6,848)(8,388)——(3,203)(7,456)
2,454(11,799)
66,472

1,037
(928)
108
5,678
(165)
¥  5,843

10,651
5,234
15,88550,5784,144$   46,434

Yen

2015

Amounts per share of common stock:
Net income:  Basic ������������������������������������������������������������������������������������������������������������������������������������������������ ¥  40.40  Diluted ����������������������������������������������������������������������������������������������������������������������������������������������—Cash dividends applicable to the year ����������������������������������������������������������������������������������������������������� ¥  10.00

U.S. dollars (Note 1)

2014

2015

¥  42.65—¥  10.00$     0.33—$     0.08

See accompanying notes.

Consolidated Statements of Comprehensive Income
Sanden Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2015 and 2014
Millions of yen

2015

Income before minority interests����������������������������������������������������������������������������������������������������������������� ¥ 6,078
Other comprehensive income (Note 11):
Net unrealized gains (losses) on securities, net of taxes ���������������������������������������������������������������������������������
2,085
Unrealized gains (losses) on hedging derivatives, net of taxes ������������������������������������������������������������������������
(80)
Foreign currency translation adjustments �����������������������������������������������������������������������������������������������������
3,121
Remeasurements of defined benefit plans, net of taxes ��������������������������������������������������������������������������������� (1,062)
Share of other comprehensive income of affiliates accounted for using equity method ������������������������������������
1,571
Total other comprehensive income �������������������������������������������������������������������������������������������������������������������
5,634
Comprehensive income (Note 11) ���������������������������������������������������������������������������������������������������������������� ¥11,713
Total comprehensive income attributable to (Note 11):
Owners of the parent ���������������������������������������������������������������������������������������������������������������������������������� ¥10,656
Minority interests ����������������������������������������������������������������������������������������������������������������������������������������
1,056
See accompanying notes.
20

Annual Report 2015

Thousands of
U.S. dollars (Note 1)

2014

2015

¥ 5,678$50,578

706
(135)
4,880
—
1,994
7,445
¥13,123

17,350(665)
25,971(8,837)
13,07346,883$97,470¥12,659464$88,6748,787

Consolidated Statements of Changes in Net Assets
Sanden Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2015 and 2014

Millions of yen
Stockholders’ equity

Commonstock

As of March 31, 2014
Balance at beginning of year
¥11,037
Net income ������������������������������������������������—Cash dividends paid (¥10.00 per share) ������
—Increase in net unrealized gains (losses)—
on securities, net of taxes �������������������������
Decrease due to changes in fair value—of hedging derivatives ������������������������������
Adjustments from translation offoreign currency financial statements ��������
—Remeasurements of defined benefit plans,
net of taxes ����������������������������������������������
—Increase in minority interests ����������������������
——Disposal of treasury stock ���������������������������
Acquisition of treasury stock �����������������������
—Changes due to stock exchange �����������������
—Balance at end of year ��������������������������� ¥11,037
As of March 31, 2015
Balance at beginning of year
¥11,037
Net income ������������������������������������������������—Cash dividends paid (¥10.00 per share) ������
—Increase in net unrealized gains (losses)—
on securities, net of taxes �������������������������
Decrease due to changes in fair valueof hedging derivatives ������������������������������
—Adjustments from translation offoreign currency financial statements ��������
—Remeasurements of defined benefit plans,
net of taxes ����������������������������������������������
—Increase in minority interests ����������������������
—Disposal of treasury stock ���������������������������
——Acquisition of treasury stock �����������������������
Balance at end of year ��������������������������� ¥11,037

Accumulated other comprehensive income

Total
stockholders’equityUnrealized
Net unrealized gains (losses)
gains (losses) on hedging
on securities, derivatives,
net of taxes
net of taxes

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive
incomeMinority
interests inconsolidated
subsidiaries

Total
net assets

CapitalsurplusRetainedearnings

Treasurystock,
at cost¥4,453——¥39,855
5,843(1,361)¥(2,197)——¥53,149
5,843(1,361)¥1,821
—
—

¥113
—
—

¥(5,433)
—
—

¥ —
—
—

¥(3,498)——¥3,309——¥52,961
5,843(1,361)

—

—

—

—

710

—

—

—

710

—

710

—

—

—

—

—

(135)

—

—

(135)

—

(135)

—

—

—

—

—

—

6,241

—

6,241

—

6,241

—
—
—
—
—
¥4,453

—
—
(7)
—
(89)
¥44,239

—
—
38
(11)
991
¥(1,178)

—
—
31
(11)
901
¥58,553

—
—
—
—

—
—
—
—

—
—
—
—

(579)
—
—
—

(579)
—
—
—

—
1,050
—
—

¥2,532¥ (22)¥   807¥(579)¥ 2,738¥4,359

(579)
1,050
31
(11)
901
¥65,651¥4,453——¥44,239
5,580(1,382)¥(1,178)——¥58,553
5,580(1,382)¥2,532——¥ (22)——¥  807——¥  (579)——¥2,738——¥4,359——¥65,651
5,580(1,382)

—

—

—

—

2,093

—

—

—

2,093

—

2,093

—

—

—

—

—

(80)

—

—

(80)

—

(80)

—

—

—

—

—

—

4,126

—

4,126

—

4,126

—
—
0
—
¥4,453————¥48,438——0(12)¥(1,190)

—
—
0
(12)
¥62,739————¥4,625————¥(102)————¥4,934(1,062)———¥(1,642)(1,062)
—
—
764
—
—
—
—
¥7,814 ¥5,123(1,062)764
0(12)¥75,677

Thousands of U.S. dollars (Note 1)
Stockholders’ equity

As of March 31, 2015
Balance at beginning of year
Net income ������������������������������������������������Cash dividends paid ($0.08 per share) ��������
Increase in net unrealized gains (losses)
on securities, net of taxes �������������������������
Decrease due to changes in fair valueof hedging derivatives ������������������������������
Adjustments from translation offoreign currency financial statements ��������
Remeasurements of defined benefit plans,
net of taxes ����������������������������������������������
Increase in minority interests ����������������������
Disposal of treasury stock ���������������������������
Acquisition of treasury stock �����������������������
Balance at end of year ���������������������������

Commonstock

CapitalsurplusRetainedearnings$91,844 $37,055 $368,136—— 46,434—— (11,500)

Accumulated other comprehensive income

Treasurystock,
at costTotal
stockholders’equity$(9,802) $487,251—
46,434—(11,500)

Unrealized
Net unrealized gains (losses)
gains (losses) on hedging
on securities, derivatives,
net of taxes
net of taxes

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans,
net of taxes$21,070——$(183)——$ 6,715 $ (4,818)
—
—
—
—

Total
accumulated
othercomprehensive
incomeMinority
interests inconsolidated
subsidiaries

Total
net assets$22,784 $36,273 $546,317—— 46,434—— (11,500)

—

—

—

—

—

17,416———

17,416—

17,416

—

—

—

—

—

—

(665)

—

—

(665)

—

(665)

—

—

—

—

—

—

—

34,334—34,334—34,334

—
—
—
—
0
0
(99)
(99)
$(9,902) $522,085————$38,487————$(848)

—
—
—
—
—
—
—
0
—
—
—
—
$91,844 $37,055 $403,078—(8,837)——————$41,058 $(13,663)(8,837)—(8,837)
—
6,357
6,357
—
—
0
—
—
(99)
$65,024 $42,631 $629,749

See accompanying notes.

Sanden Holdings Corporation

21

Consolidated Statements of Cash Flows
Sanden Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2015 and 2014

Millions of yen

2015

Cash flows from operating activities:
Income before income taxes and minority interests ������������������������������������������������������������������������������������� ¥ 7,988
Adjustments to reconcile net income to net cash provided by operating activities:   Depreciation and amortization ��������������������������������������������������������������������������������������������������������������� 11,694   Amortization of goodwill ������������������������������������������������������������������������������������������������������������������������
160   Equity in net income of unconsolidated subsidiaries and affiliates ������������������������������������������������������������ (2,518)   Gain (loss) on sales and disposals of property, plant and equipment, net �������������������������������������������������� 1,008   Gain on transfer to defined contribution pension plan ������������������������������������������������������������������������������
—   Impairment loss on long-lived assets �����������������������������������������������������������������������������������������������������
—   Decrease (increase) in assets:    Trade accounts and notes receivable ������������������������������������������������������������������������������������������������� (6,181)   Inventories ���������������������������������������������������������������������������������������������������������������������������������������
852
��������������������������������������������������������������������������������������������������������������
   Accounts receivable—other(1,191)    Allowance for doubtful accounts ��������������������������������������������������������������������������������������������������������
964   Other current assets ������������������������������������������������������������������������������������������������������������������������� 1,431   Increase (decrease) in liabilities:    Trade accounts and notes payable ����������������������������������������������������������������������������������������������������� 1,509    Accrued employees’ bonuses ������������������������������������������������������������������������������������������������������������
803   Accounts payable—other ����������������������������������������������������������������������������������������������������������������� 1,493    Other current liabilities and long-term liabilities ����������������������������������������������������������������������������������
(539)   Income taxes paid ��������������������������������������������������������������������������������������������������������������������������������
(896)  Other, net ���������������������������������������������������������������������������������������������������������������������������������������������
(355)    Net cash flows from operating activities ��������������������������������������������������������������������������������������������� 16,223
Cash flows from investing activities:
Purchases of property, plant and equipment ����������������������������������������������������������������������������������������������� (12,353)
Proceeds from sale of property, plant and equipment ����������������������������������������������������������������������������������
686
Purchases of intangible assets ������������������������������������������������������������������������������������������������������������������� (1,092)
Proceeds from purchase of investments in subsidiaries resulting in change in scope of consolidation ������������
—Other, net �������������������������������������������������������������������������������������������������������������������������������������������������
(542)    Net cash flows from investing activities ���������������������������������������������������������������������������������������������� (13,301)
Cash flows from financing activities:
Net increase (decrease) in short-term bank loans ��������������������������������������������������������������������������������������� 3,817
Proceeds from long-term debt ������������������������������������������������������������������������������������������������������������������� 12,274
Repayment of long-term debt �������������������������������������������������������������������������������������������������������������������� (15,050)
Repayment of lease obligations ����������������������������������������������������������������������������������������������������������������� (1,410)
Cash dividends paid ���������������������������������������������������������������������������������������������������������������������������������� (1,382)
Proceeds from stock issuance to minority shareholders �������������������������������������������������������������������������������
195
Other, net �������������������������������������������������������������������������������������������������������������������������������������������������
(466)    Net cash flows from financing activities ��������������������������������������������������������������������������������������������� (2,022)
Effect of exchange rate changes on cash and cash equivalents ���������������������������������������������������������������
610
Net increase (decrease) in cash and cash equivalents ��������������������������������������������������������������������������� 1,510
Cash and cash equivalents at beginning of year ������������������������������������������������������������������������������������� 19,078
Cash and cash equivalents at end of year (Note 15) ��������������������������������������������������������������������������������� ¥20,588
See accompanying notes.

22

Annual Report 2015

Thousands of
U.S. dollars (Note 1)

2014

2015

¥ 5,787$ 66,472

10,13454(1,996)
6(1,953)
235

97,312
1,331(20,953)
8,388——(2,928)
2,760
(811)
(194)
(482)

(51,435)
7,089(9,910)8,021
11,908

6,231
673
95
96
(2,306)3,400
18,803

12,557
6,682
12,424(4,485)(7,456)(2,954)135,000(12,838)
1,797
(609)
27
(481)
(12,105)(102,796)
5,708(9,087)—(4,510)(110,684)(13,271)
22,570(15,350)(1,283)(1,361)32(11)(8,675)
1,093(883)
19,961¥19,078

31,763102,138(125,239)(11,733)(11,500)
1,622(3,877)(16,826)
5,076
12,565
158,758$171,323

Notes to Consolidated Financial Statements
Sanden Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2015 and 2014

1. Basis of Presenting Consolidated Financial Statements
Sanden Holdings Corporation (the “Company”), a Japanese corporation, is aholding company and conducts its operations through its subsidiaries andaffiliates. The Company’s name has been changed from Sanden Corporation
along with its transition to a holding company structure through the absorption-type company split on April 1, 2015.
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Law and its related accounting regulations, andin conformity with accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects as to applicationand disclosure requirements of International Financial Reporting Standards.
The accounts of the consolidated overseas subsidiaries are prepared inaccordance with either International Financial Reporting Standards or generally accepted accounting principles in the United States, with adjustments forthe five specified items as applicable. The accompanying consolidated financial statements have been restructured and translated into English (withsome expanded descriptions) from the consolidated financial statements of
the Company prepared in accordance with Japanese GAAP and filed with theappropriate Local Finance Bureau of the Ministry of Finance as required by
the Financial Instruments and Exchange Law. Some supplementary information included in the Japanese language statutory consolidated financial­statements, but not required for fair presentation, is not presented in
the accompanying consolidated financial statements.
The consolidated financial statements are stated in Japanese yen, the­currency of the country in which the Company is incorporated and operates.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using the prevailingexchange rate at March 31, 2015, which was ¥120.17 to U.S. $1.00. The
convenience translations should not be construed as representations that theJapanese yen amounts have been, could have been, or could in the future beconverted into U.S. dollars at this or any other rate of exchange.
2. Significant Accounting Policies
Consolidation —The consolidated financial statements include the accountsof the Company and its consolidated subsidiaries (55 subsidiaries in 2015
and 52 subsidiaries in 2014). For the purposes of preparing the consolidated
financial statements, all significant intercompany balances, transactions andunrealized profits have been eliminated.
In accordance with the Accounting Principles for Consolidated Financial
Statements (the “Accounting Principles”), all companies are required to consolidate all significant investees, which are controlled through substantial
ownership of majority voting rights or the existence of certain conditions.
The changes in the scope of consolidation are as follows:
The newly established companies, Sanden Automotive Air Conditioning
Systems Company Split Preparatory Corporation (currently named as “Sanden
Automotive Climate Systems Corporation”), Sanden Automotive Device
Company Split Preparatory Corporation (currently named as “Sanden
Automotive Components Corporation”), Sanden Retail Systems Company
Split Preparatory Corporation (currently named as “Sanden Retail Systems
Corporation”), and four other companies were included in the scope of­consolidation for the year ended March 31, 2015.

Due to an absorption by Sanden International (Europe) Ltd., a consolidated
subsidiary, SandenVendo GMBH and two other companies were excluded
from the scope of consolidation for the year ended March 31, 2015. Due toan absorption by Sanden Chongqing Automotive Air Conditioning Co., Ltd., aconsolidated subsidiary, Chongqing Huaen Industry Co., Ltd. was excluded
from the scope of consolidation for the year ended March 31, 2015.
Although the financial information of Tianjin Sanden Automotive AirConditioning Co., Ltd., Sanden Shanghai Refrigeration Co., Ltd., Sanden(Suzhou) Precision Parts Co., Ltd., Kunshan Zhenhua Refrigerating MachineCo., Ltd., Sanden Chongqing Automotive Air Conditioning Co., Ltd., Sanden
Shanghai Environment Thermal Systems Corp., Sanden Mexicana, S.A. de
C.V., Consorcio Teksan, S.A. de C.V., Sanden Manufacturing Mexico S.A. de
C.V. and Sanden Recursos Mexico SRL. de C.V. for the fiscal year ended
December 31, 2014 is included for the purpose of preparing the consolidated
financial statements, significant transactions that occurred during the period
between December 31, 2014 and March 31, 2015 were reflected in the­consolidated financial statements.
Equity method— The equity method was applied to the investments in 8
affiliates in 2015 and 2014. Investments in all other unconsolidated subsidiaries and affiliated companies are stated at acquisition cost. These companies are not accounted for using the equity method, due to their immaterial
impact to the consolidated net income or loss and consolidated retained
earnings. Earnings of such companies are recorded in the Company’s books
only to the extent that cash dividends are received.
The Company has unconsolidated subsidiaries and affiliated companies,
which are not accounted for using the equity method. The principal company
is Sanpak Engineering Industries PVT. Ltd. Although we excluded the financial
information of those unconsolidated subsidiaries and affiliated companies
from the consolidated financial statements, we determined the impact was
immaterial to total assets, net profit or loss, and retained earnings.
Allowance for doubtful accounts— Under Japanese accounting standards for financial instruments, allowance for doubtful accounts provided by
the Company and its domestic subsidiaries consists of the estimated uncollectible amount with respect to identified doubtful receivables and an amountcalculated using an experienced rate with respect to the remaining receivables.
Consolidated overseas subsidiaries have provided an allowance for­doubtful accounts at the estimated amounts of possible losses.
Inventories— In the case of the Company and its consolidated domestic
subsidiaries, inventories are principally stated at the weighted-average cost,
unless the market value of inventories declines significantly and the cost is
not expected to be recovered. In such cases, cost is reduced to net realizablevalue. In the case of consolidated overseas subsidiaries, inventories are­stated at the lower of weighted-average cost or market value.
Investment securities— Investment securities held by the Company andits consolidated subsidiaries are classified as: a) equity securities issued byunconsolidated subsidiaries and affiliated companies; and b) available-forsale securities. The Company and its consolidated subsidiaries do not holdtrading securities or held-to-maturity debt securities.

Sanden Holdings Corporation

23

Equity securities issued by unconsolidated subsidiaries and affiliatedc­ ompanies that are not accounted for using the equity method are statedat acquisition cost and written down to its impaired value if an indicationof impairment is present and the fair value is less than the cost.
Available-for-sale securities for which fair value is readily determinable arestated at market value. Unrealized gains or losses, net of taxes are posted ina separate component of net assets.
Available-for-sale securities for which fair value is not readily determinable
are stated at cost determined by the moving-average cost.
Those available-for-sale securities which are significantly impaired are
written down to an estimated realizable value regardless whether the fairvalue is readily determinable or not.
Derivatives and hedges— Derivative financial instruments are stated at fairvalue and changes in the fair value are recognized as gains and losses in the
consolidated statements of income.
If derivative financial instruments are used as hedges and meet certain
hedging criteria, the gains or losses resulting from changes in the fair valueof the derivatives are recorded in accumulated comprehensive income in the
consolidated balance sheets until the related gains and losses on the hedged
items are recognized.
If interest swaps of the Company and its consolidated domestic subsidiaries are used as hedges and meet certain hedge criteria, the net settlementof interest under such interest rate swaps is reported as a component ofinterest on related hedged assets or liabilities (the “Exceptional method”).
The Company and its consolidated subsidiaries use forward exchange
contracts, currency swaps, interest swaps and commodity swaps mainly forthe purpose of mitigating (i) fluctuation risk of foreign currency exchange
rates with respect to receivables in foreign currency and future transactions
in foreign currency, (ii) fluctuation risk of interest rates with respect to longterm debt, and (iii) fluctuation risk of commodity prices of raw materials.
The Company and its consolidated subsidiaries evaluate hedge effectiveness annually by comparing the cumulative changes in cash flows from, or
the changes in fair value of, hedged items with the corresponding changes
in the hedging derivatives.
Property, plant and equipment— Property, plant and equipment are statedat cost. Depreciation is computed primarily using the straight-line method.
For the Company and its consolidated domestic subsidiaries, depreciation ofassets whose acquisition costs are between ¥100 thousand and ¥200 thousand is provided using the straight-line method over three years.
Depreciation of the following assets is calculated using the straight-line
method over the estimated useful lives:   Buildings and structures		
8 to 50 years   Machinery and equipment		
3 to 13 years
Goodwill and intangible assets— Goodwill is amortized over a period offive years using the straight-line method. Intangible assets are amortizedusing the straight-line method over the estimated useful lives.

24

Annual Report 2015

Long-lived assets impairment— Long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected to result
from the continued use and eventual disposition of the asset or asset group.
The impairment loss is measured as the amount by which the carrying
amount of an asset or asset group exceeds its recoverable amount, which is
the higher of the discounted cash flows from the continued use and eventual
disposition of the asset or asset group or the net selling price at disposition.
The impairment of assets for certain overseas subsidiaries is accounted forin accordance with either International Financial Reporting Standards or generally accepted accounting principles in the United States, which requires
long-lived assets and certain identifiable intangibles to be held and usedby an entity to be reviewed for impairment whenever events of changes
in circumstances indicate that the carrying amount of an asset may not
be recoverable.
Accounting for lease transactions as lessee— For the finance leases
that do not transfer ownership, the Company and its consolidated subsidiaries account for them in the same manner as usual sales transactions.
Depreciation of leased assets is computed using the straight-line method
over the lease period with zero salvage value.
Income taxes— The provision for income taxes is computed based on pretax income included in the consolidated statements of income. Deferred tax
assets and liabilities are recognized for the expected future tax consequencesof temporary differences between the accounting and tax basis of assets andliabilities. A valuation allowance is recorded to reduce deferred tax assets
when it is more likely than not that a tax benefit will not be realized.
Retirement benefits— The Sanden Group has adopted the benefit formulabasis for calculation of projected benefit obligation occurred in the current
fiscal year. Prior service costs are recognized in the consolidated statements
of income using the straight-line method beginning from the fiscal year inwhich they are incurred, over years within average residual periods of serviceof employees. Actuarial gains and losses are recognized in the consolidated
statements of income using the straight-line method beginning from the­fiscal year after they are incurred, over years within the average residual­periods of service of employees. The Company recognizes actuarial gains
and losses in the fiscal year when they are incurred.
(Additional information for the fiscal year ended March 31, 2014)
Although the Company had adopted a defined benefit retirement plan as its
retirement benefit plan, the Company subscribed to the defined contribution
pension plan for enrollment of its employees from March 1, 2014. The
Company accounted for this change in accordance with the “Accounting
Procedures for Shifting between Different Retirement Benefit Program”(ASBJ Guidance No. 1), and the “Accounting Procedures for Shifting between
Different Retirement Benefit Program” (ASBJ PITF No. 9).
As a result, gain on transfer to defined contribution pension plan of¥1,953 million was recognized for the year ended March 31, 2014.

Foreign currency translation— Under Japanese GAAP, all receivables andpayables denominated in foreign currencies are translated at the exchange
rate prevailing at the balance sheet date, and differences arising from translation are included in the consolidated statements of income.
Translation of financial statements of foreign subsidiaries and affiliated companies— The balance sheet accounts of foreign subsidiaries andaffiliated companies are translated into Japanese yen at the year-end rates.
Annual revenue and expense accounts are accumulated amounts of quarterly
figures that are translated at the quarterly average rates of exchange.
The increase and decrease in net assets resulting from this translation
procedure were reported as foreign currency translation adjustments
in other comprehensive income.

Revenue recognition— The Company and its consolidated domestic subsidiaries generate revenue principally through the sales of finished products.
In the Automotive Systems Business and the Other Business, sales revenue isprincipally recognized when products are shipped. In the Commercial Store
Systems Business, sales revenue is principally recognized when products areshipped. However, certain products require installation by the Company andits consolidated domestic subsidiaries and, in such cases, sales revenue isrecognized when the installation is completed.
Reclassifications— Certain previous year amounts have been reclassified
to conform to the 2015 presentation effecting the changes of importance onsome accounts. This reclassification had no impact on previously reported
results of operations or retained earnings.

Unification of Accounting Policies Applied to Foreign Subsidiaries
for Consolidated Financial Statements— The Company adopted Practical
Issues Task Force No. 18, entitled the “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” (as amended on February 19, 2010, “PITF No. 18”).
PITF No. 18 provides as follows: 1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar transactions andevents under similar circumstances should, in principle, be unified for the
preparation of the consolidated financial statements; 2) financial statements
prepared by foreign subsidiaries in accordance with either International
Financial Reporting Standards or generally accepted accounting principles in
the United States tentatively may be used for the consolidation process; and3) the following items should be adjusted in the consolidation process so thatnet income is accounted for in accordance with Japanese GAAP unless they
are not material:(i)	Amortization of goodwill;(ii)	Actuarial gain and loss of defined benefit plans recognized outside profit
or loss(iii)	Capitalization of intangible assets arising from development phases(iv)	Fair value measurement of investment properties and the revaluation
model for property, plant and equipment, and intangible assets and(v)	Accounting for net income attributable to a minority interest

Change in accounting policies(New adoption of new accounting standard for retirement benefits in the­fiscal year ended March 31, 2014)
Effective from the year ended March 31, 2014, the Company and its consolidated domestic subsidiaries have applied the “Accounting Standard for
Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012 (hereinafter,“Statement No. 26”)) and the “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012 (hereinafter,“Guidance No. 25”)), with the exceptions of Article 35 of Statement No. 26
and Article 67 of Guidance No. 25, and, accordingly, actuarial gains and losses and past service costs that are yet to be recognized have been recognized
and the difference between retirement benefit obligations and plan assets
has been recognized as retirement benefit liability.
In accordance with Article 37 of Statement No. 26, the effect of thechange in accounting policies arising from initial application has been recognized in remeasurements of defined benefit plans in accumulated other comprehensive income.
As a result of the above application, net defined benefit liability in theamount of ¥2,545 million has been recognized, and accumulated other­comprehensive income has decreased by ¥579 million at March 31, 2014.
Furthermore, earnings per share decreased by ¥4.2 for the year ended
March 31, 2014.

Consolidated statements of cash flows— In preparing the consolidated
statements of cash flows, cash on hand, readily available deposits and shortterm highly liquid investments with maturities not exceeding three months at
the time of purchase are considered to be cash and cash equivalents.

3. Inventories
The following is a summary of inventories at March 31, 2015 and 2014.

Amounts per share— Basic net income per share of common stock is
computed using the weighted-average number of shares of common stock
outstanding during the year. Diluted net income per share of common stock is
computed using the weighted-average number of shares of common stock
outstanding during the year after giving effect to the dilutive potential of theshares of common stock to be issued upon the exercise of warrants. Cashdividends per share represent actual amounts declared as applicable to therespective years.

Merchandise and finished goods ��������������� ¥23,304
Work in process ��������������������������������������� 6,978
Raw materials ������������������������������������������ 13,894
Other inventories �������������������������������������� 3,241
Total �������������������������������������������������������� ¥47,419

Millions of yen
2015
2014

Thousands of
U.S. dollars(Note 1)
2015

¥22,833
7,514
12,524
3,769$193,925
58,067
115,619
26,970¥46,642$394,599

Sanden Holdings Corporation25

4. Investment in Securities
The following is a summary of the acquisition costs and book values of­available-for-sale securities with available fair values as of March 31, 2015
and 2014.

Securities with book value exceedingacquisition cost

Millions of yen
2015
Acquisition
Book
cost
value
Difference

Equity securities ��������������������������������������������� ¥4,422
Bonds ����������������������������������������������������������� 1,200
Others �����������������������������������������������������������
—Total �������������������������������������������������������������� ¥5,622
Securities with book value not exceedingacquisition cost

Acquisition
cost

Equity securities ��������������������������������������������� ¥   —
300
Bonds �����������������������������������������������������������
Others �����������������������������������������������������������
—Total �������������������������������������������������������������� ¥  300

Securities with book value exceedingacquisition cost

¥10,837
1,206—¥6,414
6—¥12,043¥6,421Book
value

Difference

¥   —
296
—

¥   —
(3)
—

¥   296¥   (3)

Millions of yen
2014
Acquisition
Book
cost
value
Difference

Equity securities ��������������������������������������������� ¥4,362
Bonds �����������������������������������������������������������
700
Others �����������������������������������������������������������
—Total �������������������������������������������������������������� ¥5,062¥7,952709—¥3,5899—¥8,661¥3,599Securities with book value not exceedingacquisition cost

Book
value

Difference¥   39498—¥   (17)(1)—¥  537¥   (18)

Acquisition
cost

Equity securities ��������������������������������������������� ¥   56Bonds �����������������������������������������������������������
500
Others �����������������������������������������������������������
—Total �������������������������������������������������������������� ¥  556

Securities with book value exceedingacquisition costThousands of U.S. dollars (Note 1)
2015
Acquisition
Book
cost
value
Difference

Equity securities ��������������������������������������� $36,797
9,985
Bonds �����������������������������������������������������
Others �����������������������������������������������������
—Total �������������������������������������������������������� $46,783
Securities with book value not exceedingacquisition cost

Acquisition
cost

Equity securities ��������������������������������������� $   —
Bonds �����������������������������������������������������
2,496
Others �����������������������������������������������������
—Total �������������������������������������������������������� $ 2,496

26

Annual Report 2015

$ 90,180
10,035—$53,374
49—$100,216$53,432

Book
value

Difference$    —
2,463
—

$   —
(24)
—

$  2,463$   (24)

The following is a summary of the book values of available-for-sale securities for which fair value was not readily determinable at March 31, 2015 and2014.
Millions of yen
2015
2014

Unlisted stock ������������������������������������������������������ ¥225

¥231

Thousands of
U.S. dollars(Note 1)2015

$1,872

Total sales of available-for-sale securities for the years ended March 31,
2015 and 2014 amounted to ¥31 million ($257 thousand) and ¥3 million,
and related gains amounted to ¥22 million ($183 thousand) and ¥2 million,
respectively.
5. Income Taxes
The Company and its consolidated domestic subsidiaries are subject to corporation, inhabitants’ and enterprise taxes, which, in the aggregate, indicate
the statutory rate in Japan of approximately 35.4% and 37.8% for the years
ended March 31, 2015 and 2014, respectively.
The following table summarizes the significant difference between thestatutory tax rate and the Sanden Group’s effective tax rate for accounting
purposes for the years ended March 31, 2015 and 2014:2015

Statutory tax rate:
35.4%
Nondeductible expense ��������������������������������������������������� 1.9
Nondeductible foreign tax credits ������������������������������������� 0.9
Different rates applied to non-Japanese taxes ������������������ (3.3)
Amortization of goodwill �������������������������������������������������� 0.5 Equity in net income of unconsolidated subsidiaries
and affiliates ���������������������������������������������������������������� (11.1)
Tax effect for unrealized profits on inventories ������������������� 0.9
Tax credit ����������������������������������������������������������������������� (1.7)
Tax breaks for investment for facilities ������������������������������ (1.3)
Effect from change in tax rates ���������������������������������������� 2.3
Valuation allowance �������������������������������������������������������� 0.2
Others ���������������������������������������������������������������������������� (0.9)
Effective tax rate ����������������������������������������������������������������� 23.9%

2014

37.8%
2.4
—
(6.1)
0.4
(13.1)
3.8(3.7)(25.1)
3.7
0.3
1.5
1.9%

Significant components of the Sanden Group’s deferred tax assets and­liabilities as of March 31, 2015 and 2014 were as follows:
Millions of yen
2015
2014

Deferred tax assets: Unrealized profits on inventories
from intercompany sales �������������������� ¥   153
 Accrued expenses ��������������������������������
404

Thousands of
U.S. dollars(Note 1)2015¥   192258$  1,273
3,361 Excess warranty liabilities
for tax purposes ��������������������������������

423

428

3,520

 Excess allowance for doubtful
accounts for tax purposes ������������������
 Doubtful accounts written off ����������������

326
705

214
728

2,712
5,866

 Loss on devaluation forslow-moving inventory �����������������������
 Excess accrued employees’
bonuses for tax purposes �������������������

501

591

4,169

1,075

956

8,945

 Unrealized profits on fixed assets
from intercompany sales ��������������������

204

260

1,697

 Excess depreciation
for tax purposes ��������������������������������
 Net defined benefit liability �������������������
 Net operating loss carryforward ������������
 Environmental liability ��������������������������
 Impairment loss on long-lived assets ����� Tax breaks for investment for facilities ��� Others �������������������������������������������������

1,092
1,733
9,871
242
404
1,243
2,138

578
2,199
11,151
207
961
1,351
2,607

9,087
14,421
82,141
2,013
3,361
10,343
17,791Gross deferred tax assets ������������������������� 20,519
Less: Valuation allowance ������������������������� (14,096)
Total deferred tax assets ��������������������������� 6,422

22,681(15,487)

170,749(117,300)

7,193

53,440

Deferred tax liabilities: Depreciation ����������������������������������������
 Net unrealized gain on securities ����������

(920)(1,807)(1,179)(1,055)(7,655)(15,037) Effect on retained earnings
of foreign affiliates �����������������������������
 Others �������������������������������������������������

(609)
(174)

(681)
(137)

(5,067)(1,447)Gross deferred tax liabilities ���������������������� (3,512)
Net deferred tax assets ���������������������������� ¥ 2,910(3,054)(29,225)¥ 4,139$ 24,215

Net deferred tax assets are included in the accompanying consolidatedbalance sheets as follows.
Millions of yen
2015
2014

Assets:Deferred income taxes ������������������������������� ¥2,735 ¥3,167
Deferred income taxes, non-current ������������ 2,191
2,005
Liabilities:
Deferred income taxes �������������������������������
—(16)
Deferred income taxes, non-current ������������ (2,017) (1,018)
Net deferred tax assets ���������������������������������� ¥2,910 ¥4,139

Thousands of
U.S. dollars(Note 1)
2015

$22,759
18,232—(16,784)$24,215

Effect on deferred tax assets and liabilities resulting from changes in tax
laws and rates:
On March 31, 2015, amendments to the Japanese tax regulations wereenacted into law. As a result of these amendments, the statutory income tax
rate for the Company and the domestic subsidiaries will be reduced from
35.4% to 32.8% for the fiscal year beginning on or after April 1, 2015, andto 32.1% for the fiscal years beginning on or after April 1, 2016. Accordingly,
net deferred tax assets decreased by ¥0 million ($0 thousand) as of March
31, 2015 and deferred income tax expense recorded for the year ended
March 31, 2015 and net unrealized gains on securities, net of taxes as ofMarch 31, 2015 increased by ¥186 million ($1,547 thousand) and ¥185 million ($1,539 thousand), respectively.
On March 31, 2014, amendments to the Japanese tax regulations wereenacted into law. As a result of these amendments, the statutory income tax
rate for the Company and the domestic subsidiaries was reduced to 35.4%
for the fiscal year beginning on or after April 1, 2014. As such, the statutory
income tax rate adopted for the measurement of deferred tax assets and liabilities expected to be settled or realized for the year ended March 31, 2015
was 35.4%. Accordingly, net deferred tax assets decreased by ¥212 million
as of March 31, 2014 and deferred income tax expense recorded for the year
ended March 31, 2014 increased by the same amount.
6. Financial Instruments
1. Qualitative information on financial instruments(1) Policies for using financial instruments
The Sanden Group raises funds according to its medium-term financial plan,and it utilizes diversified financing methods of raising funds through bankloans or issuance of bonds. If surplus funds arise, the Sanden Group uses
highly liquid instruments for the management of funds. The Sanden Groupalso enters into financial derivative transactions to hedge various risks, as
described in detail below and does not use derivatives for speculative­purposes.
(2) D etails of financial instruments used and the exposures to risk and how
they arise
Trade notes and accounts receivable are exposed to the credit risks of­customers. Receivables denominated in foreign currencies are exposed toforeign currency exchange risk. In principle, foreign exchange forward­contracts are used to hedge this risk.
Marketable and investment securities are mostly shares of our related
business partners, and are exposed to stock market fluctuation risk.
Maturities of trade notes and accounts payable are mostly within fourmonths. Payables denominated in foreign currencies are exposed to foreign
currency exchange risk. In principle, foreign exchange forward contracts areused to hedge this risk.
Principally, the purposes of long-term debt and lease obligations are forfinancing capital investment, and maturities are mostly within the next 14
years. A large part of them are borrowed or issued with fixed interest rates;
therefore, there is no interest rate risk. The Sanden Group enters into interest
swap agreements to reduce exposure to losses resulting from adverse fluctuations in interest rates on the part of obligations with floating interest rates.

Sanden Holdings Corporation

27

The Sanden Group entered into financial derivative transactions suchas forward exchange contracts, to hedge exchange rate risk associated withforeign currency denominated trade receivables and payables, interest swap
agreements to reduce exposure to losses resulting from adverse fluctuationsin interest rates on bank loans, currency and interest swap agreements
to hedge exchange rate risk and interest rate risk associated with foreign
currency denominated bank loans, and commodity derivatives to hedge
raw material price movement risk.
(3) Supplemental information on fair values
Fair values of financial instruments are measured based on the quoted market prices, if available, or reasonably assessed values if quoted market prices
are not available. Fair values of financial instruments for which quoted market
prices are not available are calculated based on certain assumptions, and thefair values might differ if different assumptions are used. In addition, the contract amount of the derivative transactions described below in “7. Derivatives”
does not represent the market risk of the derivative transactions.
2. Fair values of financial instruments (at March 31, 2015)
Book values of the financial instruments included in the consolidated balance
sheet and their fair values at March 31, 2015 are as follows.
In addition, financial instruments whose fair value cannot be reliably measured are not included. (Please see “Note 2. Financial instruments for which
the fair values cannot be reliably measured.”)Millions of yen
2015Book value
Fair value

Difference(1) Cash and time deposits ������������������������� ¥ 20,597(2) Receivables*1 ����������������������������������������� 90,646(3) Consumption taxes receivable ����������������
3,543(4) Investment securities ����������������������������� 12,340
Total assets ����������������������������������������������� ¥127,128¥ 20,597
90,646
3,543
12,340¥ ————¥127,128¥ —(1) Payables ����������������������������������������������� ¥ 69,352(2) Short-term bank loans ��������������������������� 47,937¥ 69,352
47,937¥ ——(3) L ease obligations due within
one year �����������������������������������������������
1,325(4) Income taxes payable ����������������������������
828(5) Long-term debt ������������������������������������� 73,716(6) Lease obligations due after one year ������
4,755
Total liabilities �������������������������������������������� ¥197,916

1,341
828
74,386
4,808

16
—
669
52

¥198,655¥738

Derivatives*2 ����������������������������������������������� ¥    356¥    356¥ —28

Annual Report 2015

Thousands of U.S. dollars (Note 1)
2015
Book value
Fair value
Difference(1) Cash and time deposits ������������������������ $  171,398 $  171,398 $   —(2) Receivables*1 ���������������������������������������� 754,314
754,314—(3) Consumption taxes receivable ���������������
29,48329,483—(4) Investment securities ���������������������������� 102,687
102,687—
Total assets ���������������������������������������������� $1,057,901 $1,057,901 $   —(1) Payables ���������������������������������������������� $  577,115 $  577,115 $   —(2) Short-term bank loans �������������������������� 398,909
398,909—(3) Lease obligations due within
one year ����������������������������������������������
11,026
11,159133(4) Income taxes payable ���������������������������
6,890
6,890
—
(5) Long-term debt ������������������������������������ 613,430
619,006 5,567(6) Lease obligations due after one year ������
39,56840,009432
Total liabilities ������������������������������������������� $1,646,966 $1,653,116 $6,141
Derivatives*2 ���������������������������������������������� $    2,962 $    2,962 $   —*1: Allowance for doubtful accounts associated with trade notes and accounts receivable is­deducted.
*2: Derivative assets and liabilities are disclosed on a net basis.

Note 1: Fair value measurement of financial instruments
Assets1. (1) Cash and time deposits, (2) receivables and (3) consumption taxes
receivable
The book value of these assets approximates fair value because of theshort maturity of these instruments.
2. (4) Investment securities
The fair value of equity securities equals quoted market price, if available.
The fair value of debt securities equals the quoted market price or priceprovided by financial institutions. Investment securities for long-term
investment purposes are described in “4. Investment in Securities.”
Liabilities
1. (1) Payables, (2) short-term bank loans and (4) income taxes payable
The book value of these liabilities approximates fair value because of theshort maturity of these instruments.
2. (3) Lease obligations due within one year, (5) long-term debt and (6) leaseobligations due after one year
Fair value equals to the present value of future cash flows discounted
using the current interest rate for similar debt and lease contracts of­comparable maturities and contract conditions.

Note 2: F inancial instruments for which the fair values cannot be reliably
measured are as follows:
Millions of yen
2015

Thousands of
U.S. dollars(Note 1)
2015

Investment securities:
Unlisted ��������������������������������������������������������������� ¥   225Unconsolidated subsidiaries and affiliates �������������� 13,194$  1,872
109,794

The above are not included in “(4) investment securities” because theseinvestment securities do not have a quoted price in an active market andwhose fair value cannot otherwise be reliably measured.
Note 3: The redemption schedule for money claims and investment securities
with maturities at March 31, 2015 was as follows:
Millions of yen
2015
WithinMore than
1 year
1 yearCash and time deposits ���������� ¥ 20,597
Receivables ��������������������������� 90,646
Consumption taxes
receivable ����������������������������
3,543
Investment securities
with maturities(1) Bonds ��������������������������
500(2) Others ��������������������������
—Total �������������������������������������� ¥115,287

Thousands of
U.S. dollars (Note 1)
2015
WithinMore than
1 year
1 year¥   ——$171,398
754,314

$   —
—

—

29,483

—

1,000
—

4,160
—

8,321
—

¥1,000$959,365$8,321

3. Fair values of financial instruments (at March 31, 2014)
Book values of the financial instruments included in the consolidated balance
sheet and their fair values at March 31, 2014 are as follows.
In addition, financial instruments whose fair value cannot be reliably measured are not included. (Please see “Note 2. Financial instruments for which
the fair values cannot be reliably measured.”)Millions of yen
2014Book value
Fair value

Difference(1) Cash and time deposits ������������������������� ¥ 19,087(2) Receivables*1 ����������������������������������������� 79,431(3) Consumption taxes receivable ����������������
4,260(4) Investment securities �����������������������������
9,199
Total assets ����������������������������������������������� ¥111,978¥ 19,087
79,431
4,260
9,199

¥—
—
—
—

¥111,978¥—(1) Payables ����������������������������������������������� ¥ 65,349(2) Short-term bank loans ��������������������������� 42,953¥ 65,349
42,953¥——(3) L ease obligations due within
one year �����������������������������������������������
1,213(4) Income taxes payable ����������������������������
639(5) Long-term debt ������������������������������������� 76,094(6) Lease obligations due after one year ������
4,118
Total liabilities �������������������������������������������� ¥190,369

1,235
639
76,033
4,210

22
—
(60)
91

¥190,422¥53

Derivatives*2 ����������������������������������������������� ¥     73¥     73¥—

Note 1: Fair value measurement of financial instruments
Assets1. (1) Cash and time deposits, (2) receivables and (3) consumption taxes
receivable
The book value of these assets approximates fair value because of theshort maturity of these instruments.
2. (4) Investment securities
The fair value of equity securities equals quoted market price, if available.
The fair value of debt securities equals the quoted market price or provided
price by financial institutions. Investment securities for long-term investment purposes are described in “4. Investment in Securities”.
Liabilities
1. (1) Payables, (2) short-term bank loans and (4) income taxes payable
The book value of these liabilities approximates fair value because of theshort maturity of these instruments.
2. (3) Lease obligations due within one year, (5) long-term debt and (6) leaseobligations due after one year
Fair value equals to the present value of future cash flows discounted
using the current interest rate for similar debt and lease contracts of­comparable maturities and contract conditions.
Note 2: Financial instruments for which the fair values cannot be reliably
measured are as follows:
Millions of yen
2014

Investment securities:
Unlisted ������������������������������������������������������������������������������������� ¥   231Unconsolidated subsidiaries and affiliates ������������������������������������ 11,957

The above are not included in “(4) investment securities” because theseinvestment securities do not have a quoted price in an active market andwhose fair value cannot otherwise be reliably measured.
Note 3: The redemption schedule for money claims and investment securities
with maturities at March 31, 2014 was as follows:
Millions of yen
2014
WithinMore than
1 year
1 yearCash and time deposits ��������������������������������������������������� ¥ 19,087
Receivables �������������������������������������������������������������������� 79,431
Consumption taxes receivable ������������������������������������������ 4,260
Investment securities with maturities ��������������������������������
(1) Bonds �������������������������������������������������������������������
—(2) Others �������������������������������������������������������������������
—

¥   —
—
—

Total ������������������������������������������������������������������������������� ¥102,779¥1,2001,200—*1: Allowance for doubtful accounts associated with trade notes and accounts receivable isd­ educted.
*2: Derivative assets and liabilities are disclosed on a net basis.
Sanden Holdings Corporation29

7. Derivatives
1. Forward exchange contracts and currency swaps, which are stated at fair value and to which hedge accounting is not applied, at March 31,
2015 and 2014:(Forward exchange contracts and currency swaps)
Millions of yen
2015

2014

Thousands of U.S. dollars (Note 1)
2015
Unrealized
Contract
More than
Fair
gains
amount1 yearvalue(losses)

Contract
amountMore than
1 yearFair
value

Unrealized
gains(losses)

Contract
amountMore than
1 yearFair
value

Unrealized
gains(losses)

Forward exchange
contracts ������������������������ ¥ 9,799
Currency swaps ����������������
403
Total ��������������������������������� ¥10,201

¥ —
230

¥102
113

¥102
113

¥8,149
494

¥—
—

¥ 8
87

¥ 8
87

$81,542
3,353

$   —
1,913

$  848940$  848
940

¥230

¥216

¥216

¥8,643

¥—

¥96

¥96

$84,888$1,913$1,797$1,797

Transaction

Interest swaps, which are stated at fair value and to which hedge accounting is not applied, at March 31, 2015 and 2014 were as follows:(Interest swaps)
Millions of yen
2015

Transaction

Receiving floating rate
and paying fixed rate �������
Total ���������������������������������

2014

Thousands of U.S. dollars (Note 1)
2015
Unrealized
Contract
More than
Fair
gains
amount1 yearvalue(losses)

Contract
amountMore than
1 yearFair
value

Unrealized
gains(losses)

Contract
amountMore than
1 yearFair
value

Unrealized
gains(losses)

¥84

¥43

¥(0)

¥(0)

¥113

¥72

¥(1)

¥(1)

$699

$357

$(0)

$(0)

¥84

¥43

¥(0)

¥(0)

¥113

¥72

¥(1)

¥(1)

$699

$357

$(0)

$(0)

2. Derivative transactions to which hedging accounting was applied at March 31, 2015 and 2014:(Forward exchange contracts)

Hedging accounting method

Transaction

Millions of yen
Contract amountMore than 1 year

Hedged items

2015
Deferral hedge accounting
Forward exchange contracts
Accounts payable ������������������������������������������������������ ¥2
Total ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ¥2

Hedging accounting method

Transaction

Hedged items

Transaction

Hedged items

¥—

¥0

¥—

¥0

Thousands of U.S. dollars (Note 1)
Contract amountMore than 1 year Fair value

2015
Deferral hedge accounting
Forward exchange contracts
Accounts payable ����������������������������������������������������� $16
Total ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ $16

Hedging accounting method

Fair value

$—

$0

$—

$0

Millions of yen
Contract amountMore than 1 year

2014
Deferral hedge accounting
Forward exchange contracts
Accounts payable �������������������������������������������������� ¥19
Total ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ¥19

Fair value

¥—

¥(0)

¥—

¥(0)

(Interest swaps)

Hedging accounting method

Transaction

Hedged items

Millions of yen
Contract amountMore than 1 year

2015
Exceptional method
Receiving floating rate and paying fixed rate Long-term debt ������������������������������������������������ ¥29,687
Deferral hedge accounting
Receiving floating rate and paying fixed rate Long-term debt ������������������������������������������������
6,346
Total ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ¥36,033

30

Annual Report 2015

Fair value¥28,435
6,046¥ — *1
120¥34,481¥120

Hedging accounting method

Transaction

Hedged items

Thousands of U.S. dollars (Note 1)
Contract amountMore than 1 year
Fair value

2015
Exceptional method
Receiving floating rate and paying fixed rate Long-term debt ���������������������������������������������� $247,041
Deferral hedge accounting
Receiving floating rate and paying fixed rate Long-term debt ����������������������������������������������
52,808��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Total$299,850$236,623
50,312$ — *1
998$286,935$998*1: F or certain long-term debt for which interest swaps under the Exceptional method are used to reduce exposure to losses resulting from adverse fluctuations in interest rates, the fair value of such swaps
were included in the fair value of such long-term debt, which is the hedged item.

Hedging accounting method

Transaction

Hedged items

Millions of yen
Contract amountMore than 1 year

2014
Exceptional method
Receiving floating rate and paying fixed rate Long-term debt ������������������������������������������������ ¥32,789
Deferral hedge accounting
Receiving floating rate and paying fixed rate Long-term debt ������������������������������������������������
5,807
Total ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ¥38,596

Fair value¥28,337
5,481¥ — *1(27)¥33,818¥(27)*1: F or certain long-term debt for which interest swaps under the Exceptional method are used to reduce exposure to losses resulting from adverse fluctuations in interest rates, the fair value of such swaps
were included in the fair value of such long-term debt, which is the hedged item.

(Commodity swaps)
Hedging accounting method

Transaction

Hedged items

Millions of yen
Contract amountMore than 1 year

2015
Deferral hedge accounting
Receiving floating rate and paying fixed rate Forecasted transaction ��������������������������������������������� ¥223
Total ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ ¥223

Hedging accounting method

Transaction

Hedged items

Transaction

Hedged items

¥17

¥—

¥17

$—

$141

$—

$141

Millions of yen
Contract amountMore than 1 year

2014
Deferral hedge accounting
Receiving floating rate and paying fixed rate Forecasted transaction ��������������������������������������������� ¥225
Total ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ ¥225

8. Retirement Benefits
1. Outline of the retirement benefit plans
The Company has adopted the defined contribution pension plan for enrolled
employees since March 1, 2014. Retirement benefit liability is recorded
based on the estimated amount of retirement benefit obligations and plan
assets at the end of the fiscal year for the pensioners. Expected plan assets
exceed retirement benefit obligations at March 31, 2015, and therefore theexcess is recorded in net defined benefit asset.
The post-retirement pension fund is scheduled to be transferred oncea year (in April) over four years.

¥—

Thousands of U.S. dollars (Note 1)
Contract amountMore than 1 year Fair value

2015
Deferral hedge accounting
Receiving floating rate and paying fixed rate Forecasted transaction ������������������������������������������ $1,855
���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
Total$1,855

Hedging accounting method

Fair value

Fair value

¥—

¥5

¥—

¥5

Consolidated domestic subsidiaries also have their own retirement benefit
plans for employees terminating their employment. Certain consolidated
domestic subsidiaries have funded defined benefit plans or utilize the governmental mutual aid institution to cover a portion of the benefits. The remaining
portion is unfunded and covered by severance payments by those consolidated domestic subsidiaries.
Consolidated overseas subsidiaries have various retirement and post-­
retirement benefit plans. Such plans consist of defined benefit severance
payment or pension plans, defined contribution pension plans, post-­
retirement medical plans and defined contribution plans based on government regulations. Some of these plans adopted by the consolidated overseas
subsidiaries are funded.

Sanden Holdings Corporation31

2. Defined benefit plans, including plans to which the simplified
method is applied(1) Movement in retirement benefit obligations
Millions of yen
2015
2014

Balance at beginning of year ��������������������������� ¥6,452 ¥12,175
187
517
Service cost ����������������������������������������������

(4) Retirement benefit costs

Thousands of
U.S. dollars(Note 1)
2015

$53,6901,556

204Interest cost ����������������������������������������������
Actuarial losses (gains) ������������������������������� 1,214

288

1,697

(225)

10,102

(311)

(613)

(2,588)(66)(6,102)

(549)

413

411

3,436

Balance at end of year ����������������������������������� ¥8,095 ¥ 6,452$67,362

Benefits paid ���������������������������������������������
Termination of the defined benefit 
retirement plan ����������������������������������������
Exchange differences ���������������������������������

(2) Movements in plan assets
Millions of yen
2015
2014

Thousands of
U.S. dollars(Note 1)
2015

Balance at beginning of year ��������������������������� ¥3,907
120
Expected return on plan assets �������������������

¥9,351
256$32,512
998

57

858

474

Actuarial gains (losses) �������������������������������
Contributions paid by the employers �����������

147

88

1,223

Benefits paid ���������������������������������������������

(245)

(86)

(2,038) Termination of the defined benefit
retirement plan ����������������������������������������
Exchange differences ���������������������������������

—(6,777)

—

513

217

4,268

Balance at end of year ����������������������������������� ¥4,500¥3,907$37,446(3) Reconciliation from retirement benefit obligations and plan assets to net
defined benefit liability (asset)
Millions of yen
2015
2014

Funded retirement benefit obligations �������������� ¥6,799 ¥5,108
Plan assets ������������������������������������������������ (4,500) (3,907)

Thousands of
U.S. dollars(Note 1)
2015

$56,578(37,446)

2,298

1,200

19,122

Unfunded retirement benefit obligations ���������� 1,295

1,344

10,776 Net defined benefit liability (asset)
at end of year ������������������������������������������ 3,594

2,545

29,9072,545

30,431—(515)¥2,545$29,907

Net defined benefit liability ������������������������� 3,657
Net defined benefit asset ����������������������������
(62) Net defined benefit liability (asset)
at end of year ������������������������������������������ ¥3,594

Millions of yen
2015
2014

Service cost ��������������������������������������������������������� ¥187 ¥517
Interest cost �������������������������������������������������������� 204
288
Expected return on plan assets ����������������������������� (120) (256)12Amortization of actuarial losses (gains) ������������������ (137)
Others ����������������������������������������������������������������� (10) 202 Total retirement benefit costs
for the fiscal year ������������������������������������������� ¥123 ¥765

Thousands of
U.S. dollars(Note 1)2015

$1,556
1,697(998)(1,140)(83)$1,023(5) Remeasurements of defined benefit plans, before tax
Millions of yen
2015
2014

Actuarial gains (losses) ����������������������������������� ¥(1,074)
Total balance at end of year ���������������������������� ¥(1,074)¥—¥—

Thousands of
U.S. dollars(Note 1)
2015$(8,937)$(8,937)(6) Accumulated remeasurements of defined benefit plans, before tax
Millions of yen
2015
2014

Actuarial gains and losses that are yet
to be recognized ������������������������������������������ ¥(1,679)
Total balance at end of year ���������������������������� ¥(1,679)¥(573)¥(573)

Thousands of
U.S. dollars(Note 1)
2015$(13,971)$(13,971)(7) Plan assets
1. Plan assets comprise:
2015

2014

53%
41
4
2

34%
35
29
2

Total ����������������������������������������������������������������������������������� 100%100%

Bonds ��������������������������������������������������������������������������������
Equity securities ������������������������������������������������������������������Cash and cash equivalents ��������������������������������������������������
Others ��������������������������������������������������������������������������������

2. Long-term expected rate of return
Current and target asset allocations and current and long-term expected
returns on various categories of plan assets have been considered in­determining the long-term expected rate of return.
(8) Actuarial assumptions
The principal actuarial assumptions at March 31, 2015 and 2014:
2015

Discount rate �������������������������������������������������������������� 0.3–6.3%
Long-term expected rate of return ������������������������������� 0.3–7.5%

2014

0.3–4.5%
0.3–7.5%

3. Defined contribution plans
Contributions to defined contribution plans of the Company and its consolidated subsidiaries, were ¥2,521 million ($20,978 thousand) and ¥2,189 million for the fiscal years ended March 31, 2015 and 2014, respectively.

32

Annual Report 2015

4. Assets not transferred to the defined contribution pension plan
Assets of ¥2,835 million ($23,591 thousand) and ¥4,486 million, which were
not transferred to the defined contribution pension plan at March 31, 2015
and 2014, respectively, were recorded in other accounts payable (current­liabilities) and long-term other accounts payable (long-term liabilities).
Gain on transfer to defined contribution pension plan of ¥1,953 million
was recognized for the year ended March 31, 2014.
9. Short-Term Borrowings, Long-Term Debt and Lease Obligations
Short-term bank loans bore weighted-average interest rates of 1.95% and2.17% at March 31, 2015 and 2014, respectively.
Long-term debt at March 31, 2015 and 2014 consisted of the following:
Millions of yen
2015
2014

Loans from banks, insurance companiesand agricultural cooperatives, bearing
weighted-average rates of 1.89%
and 1.96% at March 31, 2015
and 2014, respectively ���������������������������� ¥73,716 ¥76,094
73,716
Less: Amount due within one year �������������� 10,754
Amount due after one year ������������������������ ¥62,962

Thousands of
U.S. dollars(Note 1)
2015

Millions of yen
2015
2014

Inventories and other �������������������������������������� ¥ 3,672 ¥ 5,268
Land and buildings and structures,
machinery and equipment, etc., net �������������� 7,573
4,839
Total �������������������������������������������������������������� ¥11,245 ¥10,108$613,430

76,094
13,527

613,430
89,489¥62,567$523,941

Millions of yen

Thousands of
U.S. dollars(Note 1)2016 ���������������������������������������������������������������������� ¥10,754
2017 ���������������������������������������������������������������������� 19,910
2018 ���������������������������������������������������������������������� 29,168
2019 ����������������������������������������������������������������������
7,421
5,094
2020 ����������������������������������������������������������������������
2021 and thereafter �������������������������������������������������
1,367$ 89,489
165,681242,72261,75442,38911,375The Company has entered into syndicated-loan contracts with several
financial institutions. Financial covenants included in the contracts are as­follows:
Contracts at September 16, 2011 (¥10.0 billion of long-term debt)(1) The amount of total net assets (excluding foreign currency translation
adjustments) on the consolidated balance sheet at the end of each fiscal
year and the interim period shall be over ¥39.5 billion and 70% comparedwith the latest period; and(2) Ordinary losses on the consolidated statements of income for each fiscal
year (after the fiscal year ended March 31, 2012) shall not be recorded
for three consecutive years.
The Sanden Group was in compliance with these provisions at March 31,
2015 and 2014.

Thousands of
U.S. dollars(Note 1)
2015

$30,556
63,019$93,575

The aggregate annual maturities of lease obligations at March 31, 2015
were as follows:Year ending March 31,

The aggregate annual maturities of long-term debt at March 31, 2015
were as follows:Year ending March 31,

The following assets were pledged as collateral for short-term bank loansof ¥1,729 million ($14,387 thousand) and long-term debt of ¥3,727 million($31,014 thousand) at March 31, 2015 and short-term bank loans of¥1,722 million and long-term debt of ¥3,839 million at March 31, 2014.

2016 ����������������������������������������������������������������������
2017 ����������������������������������������������������������������������
2018 ����������������������������������������������������������������������
2019 ����������������������������������������������������������������������
2020 ����������������������������������������������������������������������
2021 and thereafter �������������������������������������������������

Millions of yen

Thousands of
U.S. dollars(Note 1)

¥1,325
1,457
1,142
872
583
699

$11,026
12,124
9,503
7,256
4,851
5,816

10. Net Assets
Under the Japanese Corporate Law (the “Law”), the entire amount paid
for new shares is required to be designated as common stock. However, acompany may, by a resolution of the Board of Directors, designate an amountnot exceeding one-half of the amount paid of the new shares as additional
paid-in capital, which is included in capital surplus.
The Law provides that a 10% dividend shall be appropriated as additional
paid-in capital or legal earnings reserve until the aggregate amount of additional paid-in capital and the legal earnings reserve equals 25% of common
stock. The legal earnings reserve is included in retained earnings in theaccompanying consolidated balance sheets. Under the Law, the legal earnings reserve and additional paid-in capital could be used to eliminate or
reduce a deficit by a resolution at the stockholders’ meeting. Additional paidin capital and the legal earnings reserve may not be distributed as dividends.
However, all additional paid-in capital and the entire legal earnings reserve
may be transferred to other capital surplus and retained earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is
calculated based on the non-consolidated financial statements of theCompany in accordance with the Law. At the annual stockholders’ meeting
held on June 19, 2015, the stockholders approved the distribution of dividends amounting to ¥1,387 million ($11,541 thousand). Such appropriations
have not been accrued in the consolidated financial statements as of March
31, 2015. Such appropriations are recognized in the period in which they areapproved by the stockholders.

Sanden Holdings Corporation

33

11. Comprehensive Income
Amounts reclassified to net income in the current year that were recognizedin other comprehensive income for the years ended March 31, 2015 and2014 and tax effects for each component of other comprehensive income areas follows:
Millions of yen
2015
2014

Net unrealized gains (losses) on securities,
net of taxes:
Increase (decrease) during the year ������������ ¥2,836
Reclassification adjustments �����������������������
1

Thousands of
U.S. dollars(Note 1)
2015¥  983(0)$23,599
8

2,837
(751)

983
(276)

23,608(6,249)

2,085

706

17,350

Unrealized gains (losses) on hedging
derivatives, net of taxes:
Increase (decrease) during the year ������������
Reclassification adjustments �����������������������
Sub-total, before tax ����������������������������������Tax (expense) or benefit ������������������������������

82
(199)

(579)
437

682
(1,655)

(116)
36

(141)
5

(965)
299

Total, net of tax ������������������������������������������

(80)

(135)

(665)

Foreign currency translation adjustments:
Increase (decrease) during the year ������������

3,121

4,880

25,971

Sub-total, before tax ����������������������������������Tax (expense) or benefit ������������������������������
Total, net of tax ������������������������������������������

——(9,628)682——(8,937)
91

Total, net of tax ������������������������������������������ (1,062)—(8,837)

1,571

1,994

13,073

Total other comprehensive income ������������������ ¥5,634¥7,445$46,883

12. Contingent Liabilities
At March 31, 2015 and 2014, the Company and its consolidated subsidiaries
had the following contingent liabilities:
Millions of yen
2015
2014

Discounted notes ������������������������������������������ ¥    4Guarantees or reservation of guarantees for loans of affiliated companies
from banks and other lenders ���������������������� ¥1,092

34Annual Report 2015

14. Leases
The Company and its consolidated subsidiaries account for finance leases
that do not transfer ownership in the same manner as usual sales transactions.
The leased assets consist of structures, machinery and equipment andfurniture and fixtures. Leased software is included as part of “intangible
assets.” These leased assets are mainly for the Automotive Systems Businessand the Commercial Store Systems Business.
15. Cash Flow Information
Cash and cash equivalents at March 31, 2015 and 2014 consisted of the­following:
Millions of yen
2015
2014

Remeasurements of defined benefit plans,
net of taxes:
Increase (decrease) during the year ������������ (1,157)
Reclassification adjustments �����������������������
82����������������������������������
Sub-total, before tax(1,074)Tax (expense) or benefit ������������������������������
11

Share of other comprehensive income ofaffiliates accounted for using equity method:
Increase (decrease) during the year ������������

13. Environmental Matters
The Vendo Company, a consolidated subsidiary located in the United States ofAmerica, was notified of the contamination of groundwater discovered inareas close to its manufacturing facility by the California State Regional Water
Quality Control Board. The Vendo Company entered into an agreement tocompensate to the cost for remedial activities. It also entered into a settlement agreement with neighboring landowners to pay a part of the remediation costs related to the contamination described above.
The Vendo Company provided for the liability based on the estimated obligation relating to the costs for the remediation, which amounted to ¥505 million ($4,202 thousand) and ¥518 million at March 31, 2015 and 2014,
respectively, and were included in other non-current liabilities.

Thousands of
U.S. dollars(Note 1)
2015

¥   —

$   33¥949$9,087

Cash and time deposits ����������������������������� ¥20,597 ¥19,087
Less: Time deposits over three months �������
(9)(9)
Cash and cash equivalents ������������������������ ¥20,588 ¥19,078

Thousands of
U.S. dollars(Note 1)
2015

$171,398(74)$171,323

On October 24, 2013, the Company acquired 51% of shares of Chongqing
Huaen Industry Co., Ltd. The assets transferred and liabilities assumed of theconsolidated subsidiary at the acquisition date in connection with the acquisition cost and net of cash and cash equivalents acquired were as follows:
Millions of yen

Current assets ���������������������������������������������������������
Noncurrent assets ����������������������������������������������������
Goodwill ������������������������������������������������������������������
Current liabilities ������������������������������������������������������
Minority interests �����������������������������������������������������
Foreign currency translation adjustments ������������������

¥3,319180
221(1,578)(941)(4)

Acquisition cost �������������������������������������������������������Cash and cash equivalents included
in assets acquired ��������������������������������������������������Net of cash and cash equivalents acquired ����������������

1,196
1,223
¥   27

16. Earnings per Share
Basic and diluted net income per share of common stock for the years ended
March 31, 2015 and 2014 have been computed based on the following:
Number of shares
2015
2014

Weighted-average number of sharesof common stock ���������������������������������������������� 138,132,950

137,020,313

Millions of yen
2015
2014

Thousands of
U.S. dollars(Note 1)
2015

Net income��������������������������������������������������� ¥5,580
Net income relating to common stock������������ 5,580¥5,843
5,843$46,434
46,4342015

2014

U.S. dollars(Note 1)
2015

Basic net income per share ofcommon stock�������������������������������������������� ¥40.40¥42.65$0.33

Yen

There was no diluted net income per common share for the years ended
March 31, 2015 and 2014 as the Company did not have common stock withpotential dilutive effect.
17. Business Combination
For the year ended March 31, 2015
There was no significant business combination.
For the year ended March 2014
Transactions under common control
1. Acquisition of 100% ownership of Sanwa Corporation (“SNW”),
one of the consolidated subsidiaries, through share exchange(1)	Name and main business of the companies under the business­combinationa) Acquirer(the wholly owning parent company in share exchange)
Name:
Sanden Corporation
Main business:	Automotive Systems Business and Commercial Store
Systems Businessb) Acquiree(the wholly owned subsidiary company in share exchange)
Name:
Sanwa Corporation
Main business: Automotive Parts Production Business(2) Legal method used for business combination
	Share exchange with the Company as a wholly owning parent company
and SNW as a wholly owned subsidiary.
(3) Name of company after business combination
Unchanged(4) Details of business combination
	The Company resolved at the Board of Directors meeting held on
September 24, 2013 to conduct a share exchange (the “Share
Exchange”) between the Company as a wholly owning parent company
and SNW as a wholly owned subsidiary, and concluded a share exchange
agreement with SNW on September 25, 2013.
	  In accordance with the share exchange agreement, the Company­carried out the Share Exchange effective November 1, 2013. As a resultof the Share Exchange, SNW became a wholly owned subsidiary of
the Company.
2. Outline of business combination
The Company conducted the Share Exchange between the Company, as
a wholly owning parent company, and SNW, as a wholly owned subsidiary.
The Share Exchange was based on Article 796, Paragraph 3 of the Law,and stockholders’ approval was not required in connection therewith.
3. Date of business combination
November 1, 2013
4. Exchange ratio by class of shares and number of shares delivered(1) Exchange ratio by class of shares	The Company allotted and delivered 206.11 common shares of theCompany for one common share of SNW. However, no shares were­allotted for 9,900 common shares of SNW owned by the Company.
(2) Number of shares delivered	2,081,711 common shares (including 2,081,711 shares allotted anddelivered for treasury stock)
5. Calculation method of share exchange ratio
The Company engaged Daiwa Institute of Research Ltd. (“Daiwa”) as an­independent third-party, to evaluate the stock for calculations of the shareexchange ratio. To calculate the share exchange ratio, Daiwa evaluated thestock of the Company based on market stock price and the stock of SNW
based on the net asset approach and comparable peer companies’ analysis
taking private company into consideration.
The Company and SNW negotiated and agreed with each other that theshare exchange ratio was appropriate.
6. Outline of accounting policy applied
The Company accounted for the Share Exchange as a transaction undercommon control based on the “Accounting Standard for Business
Combinations” (ASBJ Statement No. 21, December 26, 2008) and the“Revised Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures” (ASBJ Guidance No. 10,
December 26, 2008).

Sanden Holdings Corporation

35

7. Information on acquisition of additional shares of the subsidiary(1) Acquisition cost and its breakdown
Millions of yen

Consideration for acquisition(Common stock of the Company) ����������������������������
Expenditures directly required for acquisition(advisory fees, etc.) ������������������������������������������������
Total acquisition cost ������������������������������������������������

¥1,0383¥1,042(2) Exchange ratio by class of shares	The Company allotted and delivered 206.11 common shares of theCompany for one common share of SNW. However, no shares were­allotted for the common shares of SNW held by the Company.
(3) Amount of goodwill recognized and reason for recognitiona) Amount of goodwill recognized
¥57 millionb) Reason for recognition
Goodwill was attributable to minority interests which increased as aresult of the Share Exchange falling below the acquisition cost of theadditional subsidiary’s shares acquired.
Business combination through acquisition
1. Outline of the business combination(1) Name of acquiree and description of its business
Name of acquiree:
Chongqing Huaen Industry Co., Ltd.
Description of its business: Automotive Systems Business(2) Main reason for undertaking business combination
	In order to respond to the market expansion of the air conditioning business in China and to strengthen the manufacturing system of Sanden
Chongqing Automotive Air Conditioning Co., Ltd., a consolidated subsid­
iary of the Company established in Chongqing, the Company acquired
the equity interest in Chongqing Huaen Industry Co., Ltd. with business
partners who also intended to achieve further business expansion
in the Chinese market.
(3) Date of business combination
October 24, 2013(4) Legal structure of business combination
Acquisition of interest by cash(5) Name of entity after business combination
Chongqing Huaen Industry Co., Ltd.
(6) Ratio of acquired voting rights
51.0%(7) Main reason for deciding to acquire the company
	Acquisition by cash of interests in Chongqing Huaen Industry Co., Ltd.
by the Company

36

Annual Report 2015

2. Period of operating result of the acquiree included in the consolidated
financial statements
The deemed acquisition date was September 30, 2013 and the fiscal yearend date of the acquiree was December 31, 2013. As such, the operating
result of the acquiree for the period from October 1, 2013 to December 31,
2013 has been included in the consolidated financial statements of income.
3. Details of acquisition cost
Millions of yen

Purchase price ���������������������������������������������������������
Acquisition cost �������������������������������������������������������

¥1,196¥1,196

4. Amount of goodwill, cause of goodwill, amortization method and­amortization period(1) Amount of goodwill: ¥221 million(2)	Cause of goodwill: As the acquisition cost exceeded the net amount­allocated to the assets and liabilities received, the excess amount is­recognized as goodwill in the consolidated financial statements.
(3)	Amortization method and amortization period: Straight-line method for 5years
5. Total assets acquired and liabilities assumed on the date of business­combination and the main components thereofMillions of yen

Current assets ���������������������������������������������������������
Fixed assets ������������������������������������������������������������
Total assets �������������������������������������������������������������

¥3,319180

Current liabilities ������������������������������������������������������
Total liabilities ����������������������������������������������������������

¥1,578¥3,499¥1,578

6. E stimated impact on the consolidated statements of income for the­fiscal year ended March 31, 2014 if the business combination had been
completed as of the beginning of the fiscal year ended March, 2014
Millions of yen

Net sales �����������������������������������������������������������������
Operating income ����������������������������������������������������

¥3,073

Income before income taxes and minority interests ����

458

441

(Estimate methodology and main assumptions)
The estimated impact on sales and income is the difference between thesales and income of the acquiree and those in the Company’s consolidated
statements of income assuming the business combination had been­completed as of the beginning of the fiscal year ended March 31, 2014.
This note has not been audited.

18. Related Party Transactions
Major transactions between the Company and the Company’s directors, certain companies owned by the Company’s directors or affiliates are as follows:

Company Name or Name of director

Type of business or Occupation

Sanden Kankyo Mirai Zaidan (Sanden *1
Environmental Future Foundation)

Ownership of
the Company (%)—

Millions of yen
2015
2014

Nature of transaction

Donation

Thousands of
U.S. dollars
2015¥    15¥   —$    124

102

Masayoshi Ushikubo

Representative director
and chairperson of the Company(owned by)
0.8

Tomoaki Ushikubo

Chairperson emeritus of the Company(owned by)
2.0

Exchange of shares �������������������������

—
—

586

—
—

Seinosuke Amada

Special adviser of the Company(owned by)
1.3

Exchange of shares �������������������������

—

102

—

Sanden Al Salam LLC.

Sales of automotive air-conditioning

Sales ���������������������������������������������� 13,613

8,352

113,281

43.0

Exchange of shares �������������������������

Donation—Donation contributed to the foundation is determined based on approval of the board of directors.
Exchange of shares—For the purpose of acquisition of shares in Sanwa Co., Ltd., the transactions are based on the share exchange ratio determined on thebasis of the analysis performed by a third party.
Sales—The terms and conditions applicable to the above material transactions have been determined on an arm’s length basis and by reference to the normal
market price.
*1 The objective of Zaidan’s activities are to develop the people’s consciousness and to create the new idea for the environment.

The summaries of financial statements of the two significant affiliates for the fiscal years ended March 31, 2015 and 2014 are as follows:
Millions of yen
2015
2014
Shanghai Sanden
Shanghai Sanden
Behr Automotive
Behr Automotive
Air Conditioning
Sanden Al
Air Conditioning
Sanden Al
Co., Ltd.
Salam LLC.
Co., Ltd.
Salam LLC.

Thousands of U.S. dollars (Note 1)
2015
Shanghai Sanden
Behr Automotive
Air Conditioning
Sanden Al
Co., Ltd.
Salam LLC.

Total current assets ������������������������������������������������������������������������������������
Total non-current assets �����������������������������������������������������������������������������

¥43,223
17,429¥40,297734¥35,660
13,074¥26,545734$359,682
145,036$335,333
6,108

Total current liabilities ���������������������������������������������������������������������������������
Total long-term liabilities �����������������������������������������������������������������������������
Total net assets ������������������������������������������������������������������������������������������

33,441806

36,386263

26,181
1,624

21,690189

278,280
6,707

302,787
2,188

26,404

4,381

20,928

5,398

219,722

36,456

Sales ���������������������������������������������������������������������������������������������������������
Income before income taxes and minority interests ��������������������������������������

76,81326,05065,99914,239639,202

216,776

6,563

(131)

5,464

163

54,614(1,090)Net income ������������������������������������������������������������������������������������������������

¥ 5,627¥  (142)¥ 4,612¥   154$ 46,825$ (1,181)

19. Segment Information
1. Summary of reporting segment(1) Reporting segments
Our reporting segments are constituent units whose segregated financial information is available and reviewed by the Board of Directors for making decisions in
the allocation of operating resources and evaluating the operating performance regularly.
The Company plans the comprehensive strategies and extends business activities for each product, system and service globally.
Therefore, the Company has designated these reporting segments: the “Automotive Systems Business”; and the “Commercial Store Systems Business.”
Segment division
Automotive Systems Business
Commercial Store Systems Business

Main product, system, service
Automotive air-conditioning systems and air-conditioner compressors
Automatic vending machines, commercial freezers and refrigerated showcases(2) Method of measurement of sales, profit (loss), assets, and other items for each reporting segment
The accounting policies of the reportable segment are consistent with the description of the accounting policies.

Sanden Holdings Corporation

37

Information by reporting segment for the years ended March 31, 2015 and 2014 is summarized as follows:
Millions of yen
2015
Automotive
Systems BusinessNet sales:
Outside customers ��������������������������������������������������������������������������������������� ¥200,222
Operating income (loss) �������������������������������������������������������������������������������� ¥  5,602
Identifiable assets ���������������������������������������������������������������������������������������� ¥209,211
Depreciation and amortization �����������������������������������������������������������������������
9,687
Amortization of goodwill �������������������������������������������������������������������������������
69
Equity in earnings of affiliates �����������������������������������������������������������������������
2,150
Investments in equity-method companies ������������������������������������������������������
8,911
10,672
Increase in property, plant and equipment and intangible assets ���������������������

Reporting segment
Commercial Store
Systems Business

Total¥94,893¥ 6,211¥71,258
1,662
90
367
4,062
2,558

OthersTotal
consolidated¥295,116¥11,867¥306,984¥ 11,814¥ (2,406)¥  9,407¥280,470
11,349160
2,518
12,973
13,230¥18,794
344
—
—
—
899

¥299,265
11,694160
2,518
12,973
14,130

OthersTotal
consolidated¥274,786

Millions of yen
2014
Automotive
Systems BusinessNet sales:
Outside customers ��������������������������������������������������������������������������������������� ¥182,207
Operating income (loss) �������������������������������������������������������������������������������� ¥  3,762
Identifiable assets ���������������������������������������������������������������������������������������� ¥191,219
Depreciation and amortization �����������������������������������������������������������������������
8,415
Amortization of goodwill �������������������������������������������������������������������������������
29
1,716
Equity in earnings of affiliates �����������������������������������������������������������������������
Investments in equity-method companies ������������������������������������������������������
8,497
13,563
Increase in property, plant and equipment and intangible assets ���������������������

Reporting segment
Commercial Store
Systems Business

Total¥81,070¥263,278¥11,508¥ 3,542¥  7,305¥ (2,446)¥  4,858¥70,587
1,407
43
280
3,287
1,238

¥261,807
9,823
73
1,996
11,78514,801¥16,113
310
—
—
—
1,859

¥277,920
10,13473
1,996
11,785
16,661OthersTotal
consolidated$2,554,581

Note: “Other” includes household equipment, car sales and bicycle accessories, etc.

Automotive
Systems BusinessNet sales:
Outside customers ������������������������������������������������������������������������������� $1,666,156
Operating income (loss) ������������������������������������������������������������������������ $   46,617
Identifiable assets �������������������������������������������������������������������������������� $1,740,958
Depreciation and amortization ���������������������������������������������������������������
80,610
Amortization of goodwill �����������������������������������������������������������������������
574
Equity in earnings of affiliates ���������������������������������������������������������������
17,891
Investments in equity-method companies ����������������������������������������������
74,153
Increase in property, plant and equipment and intangible assets �������������
88,807

Thousands of U.S. dollars (Note 1)
2015
Reporting segment
Commercial Store
Systems Business
Total$789,656$2,455,820$ 98,751$ 51,685$   98,310$ (20,021)$   78,280$592,976
13,830748
3,054
33,802
21,286$2,333,943
94,441
1,331
20,953
107,955
110,094$156,395
2,862
—
—
—
7,481

$2,490,347
97,312
1,331
20,953
107,955
117,583

2. Geographic information
Information about geographical areas for the year ended March 31, 2015
(1) Sales
Millions of yen
2015

Japan

Asia
including
China

EuropeNorth
America

Total
consolidated

Net sales:
Outside customers ������������ ¥111,810 ¥88,811 ¥39,022 ¥68,565 ¥37,796 ¥306,984

38

Annual Report 2015

Japan

Thousands of U.S. dollars (Note 1)
2015
Asia
including
North
China
EuropeAmerica

Total
consolidated$930,431 $739,044 $324,723 $570,566 $314,521 $2,554,581

(2) Property, plant and equipment
Millions of yen
2015
Asia
Europeincludingincluding North
Total
China
Poland America consolidated

Japan

Property, plant andequipment ���������� ¥41,783 ¥19,660 ¥10,455 ¥19,908 ¥10,508 ¥9,496 ¥90,849

Japan

Thousands of U.S. dollars (Note 1)
2015
Asia
Europeincludingincluding
China
PolandNorth
Total
America consolidated$347,699 $163,601 $87,001 $165,665 $87,442 $79,021 $756,003

Information about geographical areas for the year ended March 31, 2014
(1) Sales
Millions of yen
2014
Asia
including
China

Japan

EuropeNorth
America

Total
consolidated

Net sales:
Outside customers ������������ ¥98,787 ¥72,720 ¥29,807 ¥69,691 ¥33,587 ¥274,786(2) Property, plant and equipment

Japan

Asia

Millions of yen
2014
Europeincluding
PolandNorth
America

Total
consolidated

Property, plant		and equipment ��������������� ¥43,498 ¥16,809 ¥20,329 ¥10,899 ¥8,043 ¥88,681

3. Information about segmental impairment loss on long-lived assets
For the fiscal year ended March 31, 2015
No impairment loss was recognized.
For the fiscal year ended March 31, 2014
Purpose of use

Impairment loss on long-lived assets

Millions of yen

Automotive Systems Business ������������������������������������������������������������������

¥ 35

Other ������������������������������������������������������������������������������������������������������

¥200

Sanden Holdings Corporation

39

20. Supplementary Information
The main items of selling, general and administrative expenses for the years
ended March 31, 2015 and 2014 in the accompanying consolidated statements of income were as follows:
Millions of yen
2015
2014

Employees’ salaries and bonuses �������������� ¥16,586
Freight ���������������������������������������������������� 4,585
Depreciation �������������������������������������������� 2,299

Thousands of
U.S. dollars(Note 1)
2015

¥15,296
3,850
2,018

$138,021
38,154
19,131

1,488
792
850

15,694
6,515
5,558

Provision for:
Employees’ bonuses ���������������������������� 1,886
Warranty liabilities ��������������������������������
783
Retirement benefits ����������������������������������
668
Miscellaneous, which consists mainly of legal welfare expenses, advertising,rentals and traveling ������������������������������ 21,028

18,944

174,985¥47,838¥43,242$398,086

Research and development expenses are recognized as incurred.
Research and development expenses charged to the cost of selling, generaland administrative expenses for the years ended March 31, 2015 and 2014
were ¥6,742 million ($56,103 thousand) and ¥7,095 million, respectively.
21. Impairment Loss on Long-Lived Assets
The Company and its consolidated subsidiaries classify property, plant andequipment and intangible assets into groups based on the components
whose operating results are regularly reviewed by management to makeinvestment decisions and assess its performance. The real estate for rental
use and idle properties are each considered to constitute an individual group.
The headquarters and welfare facilities are classified as corporate assets
because they do not generate cash flows independently.
During the year ended March 31, 2015, no impairment loss was recognized.
During the year ended March 31, 2014, impairment losses for the following asset groups were recognized.
Location

Purpose of use

Type of assets

Maebashi-shi,
Gunma, Japan

Assets used
for Other Business

Buildings and structures
and Machinery, etc.

Isesaki-shi,
Gunma, Japan

Assets used for Automotive
Systems Business

Machinery, etc.

The carrying amount of the fixed assets for business use are reduced to its
recoverable amount because (i) the performance of those assets was worse
than expected, (ii) the assets became idle due to the decrease in productionor (iii) the recoverable amount of the assets was less than the carrying
amount.

40

Annual Report 2015

The impairment loss by each category of long-lived assets was as follows:
Millions of yen

Buildings and structures �������������������������������������������
Machinery and equipment ����������������������������������������
Furniture and fixtures �����������������������������������������������
Lease assets �����������������������������������������������������������
Software ������������������������������������������������������������������
Total ������������������������������������������������������������������������

¥ 99
77
45
6
6
¥235

22. Subsequent event
Based on the approval of the Company’s Annual Shareholders’ Meeting heldon June 20, 2014, the Company has made up the transition to a holding
company structure through the absorption-type company split and changed
its name to Sanden Holdings Corporation as of April 1, 2015.

Independent Auditor’s Report

Sanden Holdings Corporation

41

Board of Directors/Auditors/Corporate Officers

BOARD OF DIRECTORSCORPORATE OFFICERS

Masayoshi Ushikubo

Shinji Ichikawa

Yoshimasa Hayakawa

Robert Kheng

Kin-ei Kanda

Katsumi Yamanaka

Mitsugi Takahashi

Masuya Mori

Tsutomu Sakakibara

Hiroshi Takahashi

Mark Ulfig

Tadashi Yoshida

Katsuya Nishi

Kenichi Yamamoto

Takao Kaihatsu

Takashi Shimomura

Hideto Ozaki

Toshio Yokomuro

Hideo Hohgi

Koichi Fukuda

Director & Chairman

Director & Vice Chairman
Director & President

Director & Executive Corporate Officer
Director & Executive Corporate Officer
Director & Executive Corporate Officer
Director & Senior Corporate Officer
Director & Senior Corporate Officer
Director (Outside)
Director (Outside)

Senior Corporate Officer
Senior Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer

Yoshihiro Saito
Corporate Officer

AUDITORS

Takashi Oya

Corporate Auditor

Takuji Tsuchikane

Corporate Auditor (Outside)

Yoshiaki Sugita

Corporate Auditor (Outside)

Kimihide Emae

Corporate Auditor (Outside)

42

Annual Report 2015

As of June 19, 2015

Sanden’s World Network(As of April 1, 2015)

Sanden Holdings Corporation
Name

Address

Tel

Sanden Holdings Corporation

20 Kotobuki-cho, Isesaki-shi, Gunma 372-8502, Japan+81-(0)270-24-1211

Sanden Automotive Climate Systems Corporation

1-31-7, Taito, Taito-ku, Tokyo 110-8555, Japan+81-(0)3-3835-3119

Sanden Automotive Components Corporation

1-31-7, Taito, Taito-ku, Tokyo 110-8555, Japan+81-(0)3-3835-1324

Sanden Retail Systems Corporation

1-31-7, Taito, Taito-ku, Tokyo 110-8555, Japan+81(0)3-3833-8358

Sanden Living & Environmental Systems Corporation

1-31-7, Taito, Taito-ku, Tokyo 110-8555, Japan+81-(0)3-3833-1225

Sanden Environmental Products Corporation

1-31-7, Taito, Taito-ku, Tokyo 110-8555, Japan+81-(0)3-3833-1526

Sanden Advanced Technology Corporation

SGCT Center, 20 Kotobuki-cho, Isesaki-shi, Gunma 372-8502, Japan+81-(0)270-24-1212

Sanden Business Expert Corporation

1-31-7, Taito, Taito-ku, Tokyo 110-8555, Japan+81-(0)3-3833-1218

Branches
Location
Hokkaido, Iwate, Miyagi, Niigata, Gunma, Nagano, Chiba, Saitama, Tokyo, Kanagawa, Shizuoka, Ishikawa, Aichi, Osaka, Kagawa, Hiroshima, Fukuoka, Kumamoto

Affiliated Companies
Consolidated Subsidiaries
Location

Capital or
Investment

Business Activities

Percentage of Voting Rights
or Shareholding

Gunma¥10 million

Manufacture of automobile components

100% (100.0%)

Sanwa Precision Co., Ltd.

Gunma

¥10 million

Manufacture of automobile components

100%

Sanwa Altech Co., Ltd.*2

Gunma¥480 million

Manufacture of automobile components

100% (68.8%)

Sanwa Co., Ltd.

Gunma

¥10 million

Manufacture of automobile components

100%

Sanwa Fabtech Co., Ltd.

Gunma

¥10 million

Manufacture of Commercial Store Systems
Business equipment components

100%

SD Maintenance Co., Ltd.

Tokyo¥100 million

Installation and maintenance of Commercial
Store Systems Business equipment

100%

Sanwa Thermotech Co., Ltd.

Gunma

¥30 million

Manufacture of Commercial Store Systems
Business equipment components, etc.

100%

Mitsukura Tex Co., Ltd.

Gunma

¥10 million

Manufacture of automobile components
Manufacture of Commercial Store Systems Businessequipment components

100%

Sanden Denso Co., Ltd.

Gunma

¥200 million

Marketing of dynamo bicycle lamps and manufactureof Commercial Store Systems Business equipment
components and automobile component parts

100%

Sanden System Engineering Co., Ltd.

Gunma

¥30 million

Development and operation of computer s­ ystems

100%

Sanden Logistics Co., Ltd.

Gunma

¥10 million

Warehousing and shipping100%

Sanden Facility Co., Ltd.

Gunma

¥10 million

Administration of plant facilities, supply of energy,
and operation of welfare and training facilities

100%

Name

Japan
Sanwa Tech Co., Ltd.*1*2*1

Sanden Fudosan Co., Ltd.

Gunma

¥50 million

Real estate business

100%

Honda Cars Takasaki Co., Ltd.*2

Gunma¥60 million

Marketing of automobiles

100% (66.7%)

Sankyo Kosan Co., Ltd.

Gunma

¥20 million

Provision of agency services for real estate insurance,
automobile insurance, etc.

100%

Sanden Manufacturing Europe
S.A.S.*1*2

Tinteniac, France

33,184,000

Manufacture and marketing of automobile components

100% (100.0%)

Sanden Manufacturing Poland
Sp.z.o.o.*1*2

Polkowice, Poland

zl152,000,000

Manufacture and marketing of automobile components

100% (100.0%)

Sanden International (Europe) Ltd.*1*4

Basingstoke, Hants,
U.K.

26,285,000

Manufacture and marketing of automobile components

100%

SandenVendo Europe S.p.A.*2

Casale Monferrato, Italy

1,449,000

Provision of management administration and fundp­ rocurement and management services to subsidiaries
of Vendo (Europe) Inc. and manufacturing and marketingof Commercial Store Systems Business equipment

100% (100.0%)

EuropeSanden Holdings Corporation

43

Name

Capital or
Investment

Location

Percentage of Voting Rights
or Shareholding

Business Activities

North America
Sanden International (U.S.A.) Inc.*1*2

Wylie, Texas, U.S.A.

$18,000,000

Manufacturing and marketing of automobile components

100% (100.0%)

Sanden Mexicana, S.A. de C.V.*2

Saltillo Coahuila, Mexico

MP 107,111,000

Manufacturing and marketing of automobile components

100% (96.8%)

SANDEN MANUFACTURING MEXICO
S.A DE C.V.*1*2

Saltillo Coahuila, Mexico$14,000,000

Manufacturing and marketing of automotive components

100% (1.0%)

SandenVendo America Inc.

Dallas, Texas, U.S.A.

$10,000,000

Manufacturing and marketing of Commercial Store
Systems Business equipment

100%

The Vendo Company *1*2

Fresno, California, U.S.A.

$3,445,000

Manufacturing and marketing of Commercial Store
Systems Business equipment

100% (100.0%)

Vendo (Europe) Inc.*1*2

Dover, Delaware, U.S.A.

$10,010,000

Provision of management administration and fundp­ rocurement and management services to Europe-based
Commercial Store Systems Business subsidiariesof the Company

100% (100.0%)

Sanden of America Inc.*1

Wylie, Texas, U.S.A.

$78,000,000

Provision of management administration and fundp­ rocurement and management services to U.S.-based­subsidiaries of the Company

100%

Asia and Oceania
Sanden Vikas (India) Ltd.*2 *3

Haryana State, India

R296,250,000

Manufacture and marketing of automobile ­components

50.0% (46.7%)

Sanden International (Singapore)
Pte. Ltd.

Singapore

S$6,000,000

Manufacturing and marketing of automobile components

100%

Sanden Air Conditioning (Malaysia)
Sdn. Bhd.*2

Shah Alam, Selangor Darul
Ehsan, Malaysia

MYR5,600,000

Manufacture of automobile components

100% (58.5%)

Tianjin Sanden Automotive
Air-Conditioning Co., Ltd.*1

Tianjin, People’s
Republic of China

CYN143,629,000

Manufacture and marketing of automobile components

51.5%

Sanden (Suzhou) Precision Parts
Co., Ltd.*1

Suzhou, People’s
Republic of China

CYN74,942,000

Manufacture of automobile components

65.0%

Sanden Chongqing Automotive Air
Conditioning Co., Ltd.

Chongqing, People’s
Republic of China

CYN65,132,000

Manufacture of automobile components

51.0%

Sanden International Taiwan
Corporation*1

Taipei, Taiwan

NT$275,000,000

Marketing of automobile and Commercial Store Systems
Business equipment components

100%

Sanden International (Malaysia)
Sdn. Bhd.*2

Pasir Gudang, Johore,
Malaysia

MYR2,500,000

Manufacture and marketing of automobile components

100% (60.0%)

Automotive Air-conditioning
Technology Philippines Inc.*2

Calamba Laguna,Philippines

US$3,138,000

Manufacture and marketing of automobile components

99.4% (99.4%)

P.T. Sanden Indonesia*2

Jakarta, Indonesia

Rp5,094,000,000

Manufacture and marketing of automobile components

100% (100.0%)

Sanden International (Australia)
Pty. Ltd.

Condell Park, NSW,
Australia

A$1,500,000

Marketing of automobile components

100%

Sanden (Thailand) Co., Ltd.*2

Ayutthaya, Thailand

B60,500,000

Manufacture and marketing of automobile
and Commercial Store Systems Business equipment
components

95.0% (38.0%)

Sanden Shanghai Refrigeration
Co., Ltd.

Shanghai, People’s
Republic of China

CNY72,600,000

Manufacture and marketing of Commercial Store Systems 51.0%
Business equipment components

Sanden Shanghai Thermal
Environmental System Co., Ltd.*1

Shanghai, People’s
Republic of China$13,800,000

Manufacture of Commercial Store Systems
Business equipment components

82.2%

Other consolidated subsidiaries­(fifteen companies)

—

—

—

—

Principal Profitability Figures, Etc. (millions of yen)

Sanden International (Europe) Ltd.

Net Sales

Ordinary Income

Net Income

Net Assets

Total Assets

69,150710

591

10,52446,049Notes:
1. Specified subsidiaries
2. Consolidated subsidiaries in which Sanden’s shareholding is less than 50% of outstanding shares but with respect to which Sanden has effective control
3. “Percentage of Voting Rights or Shareholding” figures in parentheses show the percentage of voting rights or shareholdings held indirectly (through other affiliated companies).
4. The following company accounts for more than 10% of the Company’s consolidated net sales (excluding transactions among consolidated Group ­companies).

44

Annual Report 2015

Consolidated Subsidiaries Accounted for by the Equity Method
Percentage of Voting Rights
or Shareholding

Location

Capital or
Investment

Asahi Sangyo Co., Ltd.*1

Saitama¥96 million

Manufacture and marketing of automobile ­components
and parts

30.3% [0.8%]

Sanwa Coatex Co., Ltd.*1

Gunma¥12 million

Manufacture and coating of Commercial Store
Systems Business equipment components
and automobile ­components

31.7% [1.3%]

Marketing of automobile components

Name

Business Activities

Japan

Asia
Sanden Al Salam LLC.*2

Dubai, UAE

US$1,000,000

Iranian Sanden Industries*2

Ghazvin Industrial City, Iran

R$169,004,160,000 Manufacture and marketing of automobile ­components

Sanden Intercool (Thailand) PublicCo., Ltd.

Singburi, Thailand

B100,000,000

Manufacture and marketing of Commercial Store Systems 49.0%
Business equipment

Shenyang Sanden Automotive
Air-Conditioning Co., Ltd.

Shenyang, People’s
Republic of China

CNY82,766,000

Manufacture and marketing of automobile ­components

47.5%

Shanghai Sanden Behr Automotive
Air Conditioning Co., Ltd.

Shanghai, People’s
Republic of China

CNY206,671,000

Manufacture and marketing of automobile ­components

35.0%

Sanden (Shanghai) Automotive
Air-Conditioning Co., Ltd.

Shanghai, People’s
Republic of China

CNY82,793,000

Manufacture and marketing of automobile ­components

25.0%

43.0% (43.0%)
43.0% (43.0%)

Notes:
1. The voting rights percentage in brackets, [ ], is the percentage of votes held by close associates and those shareholders in agreement with the Company’s proposals and is not included in the voting rights
percentage shown.
2. The voting rights percentage in parentheses, ( ), is the percentage of rights held indirectly by the Company and is included in the voting rights percentage.

Sanden Holdings Corporation

45