Annual Report 2017
Year Ended March 31, 2017

Profile
IBIDEN was established in 1912 as an electric power company to bring growth to the regional economy. Ever since then, we at
IBIDEN have pioneered new business operations and continued to grow by fusing and combining our own innovative coretechnologies to create new technologies. At present, we are rolling out operations and steadily expanding our record of
performance on a global scale, centering on electronics and ceramics products.
To celebrate the 100th anniversary of the Company’s foundation, IBIDEN renewed its corporate philosophy, IBIDEN WAY, andbrand logo mark in November 2012. The renewed IBIDEN WAY and logo embody our commitments that; every one of our employees
will work with integrity and respects for the harmony with others. We also will practice the corporate values by courageously
meeting challenges given by the changing time, and realize the sustainable development of “IBI-TECHNO”—our unique technologies
and values into the future.
For all stakeholders, we aim to strengthen responsible corporate management and become a corporate group that enjoys
sustained growth.

Business Model
IBIDEN Group
Business Concept: As a global supplier, we expand businesses globally focused onelectronics and ceramics components by leveraging our innovative technologies and highresponse capabilities to customer needs.

The world’s highest levelof technical requests, needs,
and quality standards

Three strengths:• Technologies• Proposal capability• Response capability

Management Base: The IBIDEN Management System has been established to continuously
improve our competitiveness and customer satisfaction, into which all of our existing management
systems covering quality (ISO 9001), environment (ISO 14001), and occupational health andsafety (OHSAS 18001) have been integrated.

cSource of Technologies: IBI-TECHNO Innovation includes the methods of Genchi, Genbutsu,
and Jigakari, 5S, jikotei kanketsu activities, and cross-sectional teamwork activities.

Genchi: Actual places where issues are arising.
Genbutsu: Matters relevant to the issues. “Genchi Genbutsu” means “go to an actual placeand see actual things for yourself to make sure of the fact.”
Jigakari: In-house activities to deal with problems by yourself and find out the root cause
for the solutions.
5S:
Five S represents “Seiri (sorting), Seiton (setting in order), Seiso (cleaning),
Seiketsu (standardization), and Shitsuke (discipline).”World-leading
manufacturers of• Semiconductors• Electronics• Automobiles, etc.

Unrivaled products that
overwhelmingly stand out intechnical capabilities

Corporate culture produces a technical breakthrough through human resource development
Notes:

Clients+ Spiral of growth → True competitive advantages

Jikotei kanketsu :Consider the next process as your customer, and build up
quality of work with a sense of ownership to meet thecustomers’ needs and satisfaction.
Cross-sectional teamwork: Team work activities by the members from different sections
to achieve the same objective under common understanding
between organizations.

Contents
Business Snapshot...............................02

At a Glance...........................................12

Business Concept/Corporate Strategy....04

Review of Operations............................14

Five-Year Consolidated Financial
Summary..............................................06

Research and Development..................17

Message from the President.................08

Corporate Governance..........................19

Management Discussion and Analysis....10

Capital Expenditures.............................18

Board of Directors, Auditors andExecutive Officers.................................22
CSR Management.................................24
Financial Section..................................26
Group Companies.................................51
Corporate Information...........................52

Forward-Looking Statements
Forward-looking statements made in this annual report concerning performance or business strategies have been determined according toassumptions and beliefs based on information available at the time of publication and may contain elements of risk and uncertainty.

Other 0.0%
Europe 23.4%

North America 9.7%
Net Sales
Composition
by Region

Japan 30.9%

2017

Asia 35.9%

Global Network (Net Sales Composition by Region)

EuropeAsia

North
America

Japan

01

Other

● Electronic Substrate● Ceramic● Sales and Others

Net Sales by Region(Millions of Yen)

300,000

200,000

100,000

0

2013
JAPAN

2014
ASIA

NORTH AMERICA

2015
EUROPE

2016
OTHER

2017

Business Snapshot

IBIDEN’s Efforts to Return to a Growth Path
—Positioning for the fiscal year ending March 31, 2018
The fiscal year ending March 31, 2018 is the final year of the medium-term management plan, “Challenge IBI-TECHNO
105 plan,” and marks a significant millstone to ensure our return to growth after undergoing business structuralreform during the last fiscal year. In this business snapshot, we will introduce our Group’s efforts to return to a growth
path under the new management team from three points: “existing business,” “new products and business” and“management system.”

1. Pursuing Greater Competitiveness in Existing BusinessBusiness Snapshot❶ Electronics Operation

02❷ Ceramics Operation❸ Other Operation(Domestic Operation + ElectricPower Business)■ PKG market:■ Exhaust system market:■ Domestic:1) Expand mass production ofhigh-performance PKGs for data
centers and in-vehicle devices2) Develop fine and thin packages that can be competitive
with FO-WLP and introduce
them to the market■ Motherboard market:
Achieve a recovery in customer
orders by launching MSAP products for high-end smartphones

1) E nhance proposal-making
capabilities through synergyof DPFs, SCRs, and AFPs
2) E nsure competitive power inheavy-duty vehicles andemerging markets■ Other new market:
Expand to other automotive,
airplane, and power generation
component markets

Stably expand business in housingmaterials, green business, andfood through distinctive products■ Electric power:
Develop a stable source of
earnings mainly through hydroand solar energy

2. Improving the Management System
Following a certain prospect for recovery in earnings by implementing structural reforms
for the fiscal year ended March 31, 2017 and a clear direction in product development
for future growth, the new management regime, led by new President & CEO Takeshi
Aoki, began after the ordinary general meeting of shareholders held on June 16, 2017.
In business management, we are fully aware that with the introduction of the Japaneseversion of the stewardship code and the corporate governance code, greater emphasis
is being placed on dialogue with shareholders and the wider investor community, todeepen dialogue with institutional investors and individual investors in Japan and abroad.
We also introduced a new stock compensation plan to better clarify the linkage between
the Company's share value and remuneration of the directors. This system enhancement
enables the directors to benefit from incentives to the extent that they enhance corporate
value, focusing on the share price from a medium-term perspective with a close relationship with shareholders. Furthermore, with the aim of improving the managementtransparency and designing management institution based on global standards, we haveshifted to a Company with an Audit Committee system. Based on the situation as
described above, we are steadily promoting system enhancement to put our businessback on track for growth from the viewpoint of the management system.

Management Topics in 2017
Mar. 31

Posted a net loss (Completed
structural reforms)

Apr. 27

Returned all former directors’
bonusesJun. 16

Started a new management
regimeJun. 16

Introduced a new stockcompensation plan

Jun. 16

Shifted to a Company with an
Audit Committee system

The consolidated medium-term management plan, “Challenge IBI-TECHNO 105

3. Creating New Products and Business
Established Four R&D Centers
Focusing on R&D fields for new products to support sustainable growth in the medium andlong term, we are aiming to bring new products to market as soon as possible and achieve asales expansion.

Automotive Functional Product Development Center

Business Snapshot

1

Develop a catalyst support for the next-generation high performance
exhaust system, and ceramic heat exchanging components to achieve
higher efficiency in waste heat management.

03

2

Future Mobility Product Development Center

3

Develop battery materials
and resin glasses for nextgeneration hybrid and electricvehicles, and components
for controlling heat, vibrationand sound.

4

Advanced Ceramics Development Center

Develop next-generation jet engine
components for aircraft using hightemperature resistance and lightweight
SiC composite ceramic materials, andgas turbine components for power
generation.

A New
Medium-Term
Management Plan
Is UnderDevelopment

Biomaterial Product Development Center

Develop agricultural materials, biological fertilizers and biological agrichemicals, using fermented ingredients with our discovered bacteria, and food andcosmetic materials using functional ingredient extraction technology.

Capital and Business Alliance with DENSO Corporation
We have concluded a capital and business alliance agreement with DENSO
Corporation, a company boasting considerable expertise and a proven trackrecord in the automotive component
industry, to pursue the development ofhigh-performance yet simple and lowcost vehicle exhaust systems by creatingsynergies based on the strengths ofboth companies.

Creating Synergies by Combining Strengths of Both Companies

Strengths in high-performance ceramic materials
for exhaust systems

Plan” (April 1, 2013 to March 31, 2018)

Strengths in systems components to better control the
intake, power, and exhaust
events in the operating
cycle of gasoline anddiesel engines

We are formulating a medium-term
management plan ending March
31, 2023 under the new management team, with the aim of realizing
a return to a growth path and sustainable growth. The announcementof the plan is scheduled for around
April 2018.

Business Concept/Corporate Strategy

Corporate Philosophy: IBIDEN WAY
carries this on, transcending borders, is the “IBIDEN WAY.”

adversities with all our employees and to continue to operate,

To mark its 100th anniversary, we have revamped

and the wisdom and vitality that have achieved dramatic

our corporate philosophy, the “IBIDEN WAY,” simplifying

growth in recent years—these have persisted throughout

it to enhance its understanding by all IBIDEN GroupIBIDEN’s long history of 97 years. The systematization that

employees worldwide.

Business Concept/Corporate Strategy

The power that has enabled IBIDEN to overcome many

04

SPIRIT
We share our spirits with all staffs globally. And through accomplishing these,"Corporate Philosophy" will be realized.

Trust throughIntegrity

Gaining customer andsocietal trust through“Genchi Genbutsu*”*Genchi Genbutsu: Go and
See for yourself to thoroughly
understand the situation“Wa”
Teamwork andSynergy

Integrating knowledge
and wisdom from theemployee involvement
for greater power.

Challenge with
PassionIBI-TECHNO
Innovation

Anticipating change,
and acting boldly tocreate new value.

Evolving by
overcoming hurdles
through creativity andingenuity.

“Challenge IBI-TECHNO 105 Plan”
We reinforce our capacities for total productive management, management of technology,
management of business, and management capability in order to establish a robust corporate culture resilient to any market changes.

Today’s business environment surrounding IBIDEN Group is extremely volatile, faced by the fierce competition between companies seeking global survival.
In April 2013, we launched our consolidated medium-term management plan, “Challenge IBI-TECHNO
105 Plan,” envisioning next 100 years ahead of us. By redefining and strengthening our total productive
solidify and restructure our core business competitiveness. By emphasizing the global implementation of
TPM activities, we boost our onsite capabilities, while at the same time engaging in the creation of innovative technologies in the fields of materials, facilities, and production processes.
Also, based on our core technologies nurtured through the company’s distinguished history, we will set
up specific goals and engage ourselves in the development of new electronic and ceramic products, aswell as product development and business implementation in new business areas.
Furthermore, in our effort to successfully run our CSR management, we put our emphasis on “humanresource management” to nurture people who can thrive globally.
Through the steady implementation of the consolidated medium-term management plan, we willfurther reinforce our revenue base, and everyone in the Group will actively take up new challenges torealize a new level of growth.

Consolidated medium-term management plan

“Challenge IBI-TECHNO 105 Plan”
PeriodFY2013 to FY2017【5 year term】
Pillar of the strategy
1. Reconstruct and enhance competitiveness of core operations
2. Work on the creation of new business3. Develop and promote CSR management globally

Business Concept/Corporate Strategy

management, management of technology, management of business and management capability, we will05

Five-Year Consolidated Financial Summary

IBIDEN CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2017, 2016, 2015, 2014, and 2013
Thousands of
U.S. dollars (Note)

Millions of yen

For the year:
Net sales

2017¥

Five-Year Consolidated Financial Summary

266,460¥

2015

314,119¥2014

318,072¥

310,268

2017

2013
¥

285,947$

2,375,076

7,142

22,571

26,03923,442

5,420

63,660(Loss) profit before income taxes(60,772)

12,12929,60425,4847,356(541,688)(Loss) profit attributable to owners of parent(62,849)

7,531

19,107

17,4792,232(560,201)

Comprehensive (loss) income(65,904)(14,236)

42,042

40,72422,885(587,433)

EBITDA

40,29066,62865,46759,144

48,118359,121

Capital expenditures

20,99740,95556,35037,731

43,262

187,152

Depreciation and amortization

33,14844,05739,42835,702

42,698295,461

Research and development cost

14,112

15,204

15,512

15,031

15,125

125,786

Net cash provided by operating activities

28,81359,49961,54750,09345,101

256,826

Net cash used in investing activities(26,280)(39,439)(54,888)(38,364)(58,325)(234,249)

Net cash (used in) provided by financing
activities(5,135)(20,479)

9,835(6,935)(11,508)(45,774)

Free cash flow

2,533

20,0606,659

11,729(13,224)

22,577

Operating income

06

2016

At year-end:
Total assets¥

405,783¥

476,110¥

519,847¥

462,113¥430,040$

3,616,929

Total net assets

260,940

331,521360,092

322,562

286,705

2,325,878

Interest-bearing debt

70,06370,12875,85561,574

63,925624,501

Cash and cash equivalents

104,102

107,875

110,479

91,67982,970927,906

140,860,557

150,860,557

150,860,557

150,860,557

150,860,557

Total number of shares issued (shares)

U.S. Dollars(Note)Yen

Per share data:
Basic (loss) profit attributable to ownersof parent
Diluted (loss) profit attributable to ownersof parent
Net assets¥(472.26)

¥

55.29

¥

138.37¥126.58¥15.97(4.21)———

126.1515.86—

1,927.53

2,459.63

2,578.85

2,305.93

2,043.29

17.18%

Ratios:Equity ratio

63.21%

68.75%

68.50%

68.91%

65.61%

ROE(21.53)

2.20

5.67

5.82

0.81

ROA

(14.25)

1.51

3.89

3.92

0.52

—

24.89

14.65

16.07

91.78

Price earnings ratio (times)$

Notes: 1. U.S. dollar amounts have been converted for convenience only at the rate of ¥112.19=US$1, the rate of exchange on March 31, 2017.
2. EBITDA = Operating income + Depreciation and amortization

Net Sales

Operating Income/Operating Income Ratio(Millions of Yen)

(Millions of Yen)

(Loss) Profit Attributable to Ownersof Parent(%)

28,000300,000

20(Millions of Yen)

25,00020,00021,00015

14,000

10

7,000

5

15,000200,000
10,0005,000

100,000

0

0

13

14

15

16

0

13

17

14

15

16

Five-Year Consolidated Financial Summary

0-70,000

17

13

14

15

16

17

Operating Income Ratio

Capital Expenditures/
Depreciation and Amortization

Research and Development Cost

Free Cash Flow

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

60,00016,00007

20,00014,00050,00012,00040,00010,00010,00030,000

8,000

0

6,000

20,0004,000

10,000–10,000

2,000

0–20,000

0

13

14

15

16

13

17

14

15

16

17

13

14

15

16

17

Capital Expenditures
Depreciation and Amortization

Interest-Bearing Debt

Total Net Assets/
ROE(Millions of Yen)

(Millions of Yen)(%)

(Millions of Yen)(%)

350,000

14

500,000

10

60,000300,000

12

400,000

8

50,000250,000

10

200,000

8

300,000

6

40,000150,000

6

200,000

4

100,000

4

100,000

2

50,000

2

0

0

0

0

70,00030,00020,00010,000Total Assets/
ROA

0

13

14

15

16

–15

–22

17

13
ROE

14

15

16

17

13
ROA

14

15

16

17

Message from the President

For the Next 100 Years, IBIDEN Will Strive to
Maintain Continued Growth as a Corporation.

Takeshi Aoki
President & CEO

Message from the President

Developing “IBI-TECHNO” to Enhance Competitiveness08

Under the consolidated medium-term management plan, thePerformance Review for the Fiscal Year Ended March
31, 2017“Challenge IBI-TECHNO 105 Plan,” which covers the five-year

In the Electronics Operation, we were hit hard by a decelerat-

period starting from April 2013, the IBIDEN Group is working to

ing PC market, intensifying competition among players amid abuild a corporate structure designed to adapt to changes in theslowdown in the high-end smartphone market, as well as thebusiness environment, with a focus on developing the human

adoption of fan-out wafer-level packaging (FO-WLP) for someresources needed to sustain and grow our business over the nexthigh-end products. Faced with a drastic environmental change

100 years. Specifically, we are implementing a unique operationalin orders, we proceeded with structural reforms centered on the

improvement initiative dubbed IBI-TECHNO innovations, focusing

impairment of fixed assets, to align the value of assets with theon the “5S,” TPM, “Jikoutei kanketsu (built-in quality with owner-level of incoming orders. We will work aggressively to cultivateship) activities,” and “cross-section teamwork activities” based ona new customer base by leveraging the thin, high-density pack-“Genchi (the actual site), Genbutsu (the actual thing), and Jigakari

aging technology, quality, and development capability we have(on-site solution of problems).” We tell our employees that when-

gained in the areas of PCs and smartphones as we expand into

ever a problem arises, they should go to the site to see and solve

new fields that address Internet of things (IoT), in-car, and data

the problem themselves. In this way, they can develop problem-

center applications. In addition, we will work to boost our market

solving skills and earn a sense of achievement that will in turnshares in cutting-edge areas, in which IBIDEN has excelled tomotivate them to aim high and take on new challenges. This is thedate, all with the aim of improving our bottom line.

kind of virtuous cycle we aim to create. While developing human

The Ceramics Operation saw operating income decline

resources in this manner takes a lot of time and hard work, ourdue to the yen's appreciation against the euro, changes in theefforts have been steadily paying off. During the fiscal year under

product mix, and falling sales prices, although overall sales

review, for example, we were selected from among many suppliers

remained robust due to a booming automobile market. To turnby a certain customer in the electronics industry as the recipient ofour business around, during the fiscal year under review, we

the highest award given to companies whose performance isintegrated the DPF and SCR units into the ECP unit, underoutstanding. It was the third consecutive year for us to win thiswhich we positioned business units by product line, to allow foraward. In the medium-term management plan, we are also working

more agile and efficient operations. With this new organizational

to facilitate activities that increase the competitiveness of our busi-

structure, we will take advantage of the synergies of the DPF,

nesses, with the aim of creating a stable earnings structure

SCR, and AFP business to bolster our ability to make propos-

consisting of three business segments: the Electronics Operation,

als to customers and optimized production systems across thethe Ceramics Operation, and the Other Operation, which comprises

globe as we work to enhance our competitive edge in exhaust

domestic affiliated company businesses and power business.

system components.

In the Other Operation, we will expand operations by leveraging
the unique products of our domestic affiliates and capitalize on
steady income from our power generation business, with the aimof establishing them as long-term stable revenue sources.

around in the fiscal year ending March 31, 2018, the final year of
the current medium-term management plan.

Efforts to Strengthen Corporate GovernanceTo respond to the globalization of corporate activities and theInitiatives Aimed at Sustainable Growth
In addition to these restructuring existing businesses and strength-pany with an audit committee system following a resolution at theening competitiveness, we launched the Automotive Functional

164th ordinary general meeting of shareholders held on June 16,

Product Development Center, Future Mobility Product Develop-

2017. The Company will improve further prompt decision-making

ment Center, Advanced Ceramics Development Center, andstructure of the board of directors and enhance the corporate

Biomaterial Product Development Center to facilitate development

governance system. We also introduced a new stock compensa-

of new products in specific areas that will support our sustainabletion plan to better clarify the linkage between the Company's

growth over the medium to long term. These new product devel-

share value and remuneration of the directors. Under our new

opment centers will enable us to quickly commercialize andmanagement team, we will start a new medium-term manage-

expand sales of new products. On April 27, 2017, IBIDEN formed

ment plan that concludes in the fiscal year ending March 31,

a capital and business alliance with Denso Corporation, a com-

2023 and put our business back on track for growth.

pany with considerable expertise and a proven track record in theautomotive component industry. The two companies will work on

Shareholder Return

joint development at the Automotive Functional Product Develop-

For the year-end dividend, we decided to pay ¥20 per share,

ment Center and the Future Mobility Product Development Center

the same amount as last year’s year-end dividend. This is

to give impetus to product development. While our operating envi-

because paying stable dividends to our shareholders is impor-ronment is expected to remain highly challenging and uncertain,

tant to us, despite the challenging business results. Combined

we will move ahead steadily to bolster the competitiveness of ourwith the interim dividend, we will pay an annual dividend of ¥35

existing business and develop new products as we continue toper share, the same amount as the annual dividend for the fiscal

focus on human resource development as a foundation-building

year ended March 31, 2016. We thank you for your continuing

initiative. All of us at IBIDEN will work together to turn our businesssupport of the Group.

PRODUCTS

Existing

New

Business Strategy Matrix Summary
Product Development

Diversification● Developing products that can be competitive with FO-WLP■ Established the Automotive Functional Product Development Center■ Established the Advanced Ceramics Development Center●● Business alliance with Denso Corporation■ Established the Biomaterial Product Development Center■ Established the Future Mobility Product Development Center

Market Penetration

Market Development● Launching MSAP products for high-end smartphones●	Integrated the DPF and SCR units into the ECP unit to leverage
the synergies of the DPF, SCR, and AFP business●	Expanding operations by leveraging the unique products of theGroup's domestic companies● Cultivating markets for IoT, in-car, and data center applications byleveraging thin, high-density packaging technology●	Expanding business to automotive, airplane, power generation,and semiconductor product segments other than exhaust systems

Existing

New

Markets● Electronics Operation ● Ceramics Operation ● Other Operation ■ New R&D Center

Message from the President

changing business environment, the Company adopted a com-09

Management Discussion and Analysis

Management Discussion and Analysis

Results for the Year Ended March 31, 201710

During the fiscal year under review, the world economy remained ona modest recovery on the whole, supported by the strong U.S. andEuropean economies. However, there was growing concern overuncertainty regarding the economic outlook for China and emerging
nations as well as economic policy in the United States and Europe.
The Japanese economy continued on a gradual recovery path ingeneral, reflecting an improvement in corporate earnings and signsof a recovery in consumer spending and exports.
In the semiconductor and the electronic components industry,smartphones experienced a modest recovery on the whole but
showed sluggish market growth in the high-end market segment.
In the PC and tablet-type device markets, sales remained below
year-on-year levels. Accordingly, the Electronics Operation continued to face an intensely challenging business environment. On
the other hand, we worked aggressively to develop and propose
new products in new growth fields that address the IoT, in-car,and data center applications.
In the automotive exhaust system components industry,sales remained brisk, as automotive worldwide sales continued
to expand steadily due to the gradual growth of European andChinese automotive markets.
Given this situation, the Group proceeded with structuralreforms centered on the impairment of fixed assets, to align thevalue of assets with the level of incoming orders. Concurrently,
we moved aggressively to expand sales in new growth fields
to recover profitability in the Electronics Operation. Under the
medium-term management plan, we are working to build a corporate structure designed to adapt to changes in the businessenvironment with a focus on developing the human resources
needed to sustain and grow our businesses over the next 100
years. Furthermore, we are enhancing activities that increase
the competitiveness of our businesses with the aim of creating astable earnings structure consisting of three business segments:
the Electronics Operation, the Ceramics Operation, and the Other
Operation, which comprises domestic affiliated company businesses and power business.

Net Sales

As a result of our activities during the fiscal year under review,
consolidated net sales amounted to ¥266,460 million, a decreaseof ¥47,660 million (15.2%). Operating income totaled ¥7,142
million, down ¥15,429 million (68.4%), while the loss attributableto owners of parent for the period stood at ¥62,849 million (compared to ¥7,531 million in income attributable to owners of parent
for the previous fiscal year).

Analysis of Our Financial Condition and Business
Performance
Analysis of Our Financial Condition(1) Assets
Total assets at the year-end amounted to ¥405,783 million, down by
14.8%, year on year. Current assets decreased by 4.4% to ¥204,170
million, and fixed assets declined by 23.2% to ¥201,613 million.
The significant contributing component in current assets wasdecreases of ¥3,200 million in short-term investments, ¥2,337
million in merchandise and finished goods and ¥2,448 million inwork in process.
The major factors in fixed assets were a decline of ¥64,775
million in property, plant and equipment.
(2) Liabilities and Net Assets
Total liabilities at the year-end amounted to ¥144,843 million,
increasing by 0.2%, year on year. Current liabilities declined by
22.2% to ¥88,549 million, and long-term liabilities increased by
82.5% to ¥56,294 million.
Major factors attributable to the decline in current liabilities
included decrease of ¥25,008 million in short-term borrowingsand current portion of long-term debt.
The increase in long-term liabilities reflected mainly rises of¥15,000 million in corporate bonds and ¥9,943 million in longterm debt.
Total net assets at the year-end amounted to ¥260,940
million, declining by 21.3%, year on year. The decrease wasmainly due to such factors as a fall in retained earnings and adecrease in translation adjustments.

Total Net Assets/
ROE(Millions of Yen)

300,000

200,000

100,000

Total Assets/
ROA(Millions of Yen)(%)

(Millions of Yen)

(%)

350,000

14

500,000

10

300,000

12

400,000

8

250,000

10

200,000

8

300,000

6

150,000

6

200,000

4

100,000

4

100,000

2

50,000

2

0

0

0

0

0

–15

–22

13

14

15

16

13

17
ROE

14

15

16

13

17
ROA

14

15

16

17

As a result of the above, the equity ratio at the year-end
decreased to 63.2% from 68.8% a year ago. Net assets per
share fell to ¥1,927.53 from ¥2,459.63.

of parent for the previous fiscal year. Basic loss attributable toowners of parent per share for this period was ¥472.26 compared to ¥55.29 in basic profit attributable to owners of parent
per share for the previous fiscal year. Return on equity (ROE)
declined by 23.7 percentage points to negative 21.5%.

Analysis of Our Business Performance(1) Net Sales and Operating Income
Please see “Review of Operations” on pages 14 through 16 forthe general status of net sales and segment income for the business segments.
Cost of sales fell by 11.6% from the same period in the previous year, to ¥210,641 million reflecting lower net sales. The costto-sales ratio decreased by 3.2 percentage points to 79.1%.

Cash Flow Conditions(1) Cash Flow from Operating Activities
Net cash provided by operating activities totaled ¥28,813
million (versus ¥59,499 million in the previous fiscal year). Thiswas mainly due to cash inflows of ¥33,148 million in depreciation and amortization and ¥59,441 million in business structurereform expenses despite cash outflows of ¥60,772 million in loss
before income taxes, a decrease of ¥4,671 million in notes andaccounts payable and ¥4,225 million in income taxes paid.

(2) Other Income (Expenses)
Other expenses increased ¥57,472 million form ¥10,442 million
reported one year earlier, to ¥67,914 million. The major factors
behind the increase were ¥1,714 million in foreign exchange
loss, and ¥61,989 million in business structure reform expenses
centered on the impairment of fixed assets in the Electronic
Operation.
As a result, loss before income taxes amounted to ¥60,772
million compared to ¥12,129 million in income before income
taxes for the previous fiscal year.

(2) Cash Flow from Investing Activities
Net cash used in investing activities totaled ¥26,280 million(versus ¥39,438 million in the previous fiscal year). This was
mainly due to payment of ¥25,558 million for purchases of property and equipment.

(3) Income Taxes and Others (Including Adjustments for
Income Tax and Others)
Income taxes decreased from ¥4,360 million in the previous fiscal
year to ¥1,846 million in the fiscal year under review.
Consequently, loss amounted to ¥62,619 million compared to¥7,769 million in profit for the previous fiscal year.

(3) Cash Flow from Financing Activities
Net cash used in financing activities totaled ¥5,135 million (versus¥20,479 million in the previous fiscal year). This was mainly due
to cash outflows of ¥4,658 million in cash dividends paid.

(4) Profit (Loss) Attributable to Non-controlling Interests
Loss attributable to non-controlling interests amounted to ¥230
million versus ¥238 million in the previous fiscal year.
(5) Profit (Loss) Attributable to Owners of Parent
Loss attributable to owners of parent for this period was ¥62,849
million compared to ¥7,531 million in profit attributable to owners

Interest-Bearing Debt

Operating Income/Operating Income Ratio

Net (loss) Income Attributable to
Owners of the Parent(Millions of Yen)

(Millions of Yen)(%)

28,00020

21,00015

14,000

10

7,000

5

70,00060,000(Millions of Yen)

25,00020,00050,00015,00040,00030,00010,0005,000

20,00010,000
0

0

13

14

15

16

17

0

13

14

15

Operating Income Ratio

16

17

0
-70,000

13

14

15

16

17

Management Discussion and Analysis

Cash and cash equivalents (hereafter “cash”) at the end of the
fiscal year under review amounted to ¥104,101 million, down
¥3,773 million over the previous fiscal year end. The following is asummary of cash flow activities.

11

At a Glance

Net Sales and Net Sales Composition

Overview

Electronics Operation¥99,225 million

At a Glance

37.2%

12

Matching today’s high speed of technical innovation, our electronics
technology continues to develop new products at the cutting edge of theworld electronics field. Our built-up substrates for high-density circuits aswell as electronic components and plastic packages for a range ofsemiconductors are the materialization of our IBI-TECHNO philosophy.

Ceramics Operation¥101,323 million

38.1%

Over the years, we have developed technologies in essential materials
such as carbide and ferrosilicon. In line with our IBI-TECHNO philosophy,
we have emerged as a leading developer of advanced ceramics including
environment-related ceramics products, (such as SiC-DPF and substrateholding mats), graphite specialty products, ceramics fibers, and hightemperature insulation wool.

Other Operation¥65,912 million

24.7%

This segment comprises the housing materials business, construction
business and other business with unique operations, respectively. In the
housing materials business, centered on the manufacture and sales of interioruse decorative laminates, we are involved in supplying residential equipment
and construction materials and developing our own planning houses. In theconstruction business, we are promoting livable urban development through abroad range of operations including slope protection construction, landscapegardening, and the installation of industrial equipment and solar power
generations. In other business, we have a range of lines of business to answer
the changing needs of society, including the development and sale of medical
software, and the power generation business.

For clients consisting of major global semiconductor
manufacturers as well as tablet PC and smartphone
manufacturers, we have been manufacturing andselling IC package substrates and printed wiringboards. In January 2015, the Electronics Operation
underwent an organizational integration, resulting
in the establishment of a stable earnings structure
supported by three pillars of PKG, CSP and PWB
as one operational headquarters.

Net Sales & Segment Income(Millions of Yen)
Segment (Loss) Income

Net Sales

200,000
150,000

40,000
153,896

159,850

150,561

147,872

30,00099,225100,000
14,168
10,66850,00011,472

10,000289

00(3,649)

13

14

15

16

(Millions of Yen)
Segment Income

120,000

30,00098,70280,00099,191

104,768

101,323

75,31140,00020,00010,000

8,418
6,348

5,914

15

16

4,322

2,168
0

In the housing materials, we strive to expand ourbusiness by leveraging products with distinguishedfeatures such as our unique component housing andantiviral melamine decorative laminates. In theconstruction business, we use our strength to expand
operations in the areas of the slope protection
construction and landscape gardening business basedon contemporary themes such as environmental
conservation and disaster prevention. We are also
redoubling efforts to comply with renewable energy
feed-in tariffs and expand related business. We
continue to solidify the position of the Other Operation
as a third source of revenue through expansion ofbusiness with distinguished products and long-term
stable earnings through the power business.

–10,000

17

Net Sales

Within our Ceramics Operation, we manufactureand sell SiC-DPF, SCR, substrate holding mats,high temperature insulation wool and graphite
specialty products for clients such as major global
automotive manufacturers and semiconductor
manufacturing equipment manufacturers. Goingforward, we will expand business within the large
vehicle market for DPF, SCR and AFP.

20,000

At a Glance

Segment Strategies

13

14

0

17

(Millions of Yen)
Segment Income

Net Sales

12,00090,00059,03160,00061,47965,912
8,000
6,538

5,393

5,156
4,000

30,000

0

13

14

15

16

17

0

Note: As the Company has changed its segment classification, no data for the years ended
March 31, 2014 and 2013 are shown.

13

Review of Operations

Electronics Operation(Free via stacked up structure)

Build up FC-CSP substrate

Review of Operations

Main Products● Package substrates (PKG, CSP)
(for computers, mobile devices and home information appliances)

Net Sales
Composition● Printed wiring boards (PWB)

37.2%

14

(for use in mobile electronic equipment/information communication
infrastructure*)*Used in servers, routers and other equipment forming high-speed digitalcommunication networks.
With the backlog of sluggish orders¥99,225 million¥(3,649) million

Net Sales
Segment Loss

resulting from continuously PC andtablet device markets and a slowdown
in smartphone markets, which saw
intensified competition among companies, coupled with adoption of fanout wafer-level packaging (FO-WLP)

Net Sales

200,000
159,850(Millions of Yen)
Segment (Loss) Income

in some high-end products, net sales

40,000at the Electronics Operation decreased

38.1%

by 32.9% from the previous fiscal year

147,872

150,000

30,00099,225100,000

Operation recorded a segment loss of
20,00014,16810,0000

0(3,649)16

24.7%¥3,649 million (compared with a segment income of ¥11,471 million in the previous fiscal year). To achieve an earnings recovery, we will actively develop new customers and11,47250,00015

and high-function package
to ¥99,225 million. The Electronics High-performance
substrate

17–10,000

new products in fields where future growth is expected, by making most of the thin,
high-density technologies, quality and development capabilities the Company has
cultivated in the PC, smartphone and tablet device markets.

Ceramics Operation

37.2%
Substrate holding mat

IBI WOOL-E

Main Products● Diesel particulate filters (DPF)● Substrate holding mats (AFP)● NOx reduction catalysts (SCR)● Graphite specialty products (FGM)

Net Sales
Composition

38.1%(for semiconductor manufacturing equipment and new energyrelated products)● High temperature insulation wool
● Fine ceramics products¥101,323 million¥4,322 million
Segment Income

Net Sales

Sales of diesel particulate filters (DPF) and substrate holding mats (AFP) decreased fromthe previous fiscal year due to changes in the product mix and impacts of a fall in sales
prices, although the volume of orders increased owing to steady growth in the automobile
market. Sales of NOx reduction catalyst (SCR) decreased from the previous fiscal year, inspite of steady sales of SCR stationary catalysts, due to the yen’s appreciation and slug-

Net Sales

24.7%

120,000
99,191

104,768(Millions of Yen)
Segment Incomegish sales of other SCR catalysts. Sales of graphite specialty products (FGM) remained at

40,000the same level as the previous fiscal year in spite of the challenging market environment,
due to our sales efforts.

101,323

90,00030,00060,00020,000As a result, net sales in the Ceramics
Operation decreased by 3.3% from theprevious fiscal year to ¥101,323 million.
The Ceramics Operation recorded a segment income of ¥4,322 million, a 26.9%

30,0000

10,000
6,348

15

5,914

16

to changes in the product mix of our main-

4,322

17

decrease from the previous fiscal year, due

0stay product, DPF, and impacts of a fall insales prices.
SiC-DPF

Review of Operations

Graphite specialty “EDX-7”

15

37.2

Review of Operations%

Other Operation

38.1%
Higashi-Yokoyama Power
Plant

The Japan’s largest water
floating solar power
generation

Local Village Ogaki

Review of Operations

Main Businesses● Melamine decorative laminates/
	Residential equipment● Slope and garden construction● Synthetic resin processing● Oil products sales

Net Sales
Composition

24.7%

16

The laminates-related department saw virtually flat sales as the previous fiscal year
despite the poor market resilience of processed doors for residential kitchen use, due to

Net Sales
Segment Income¥65,912 million¥6,538 million

our sales efforts for melamine decorative laminates for toilet booths and non-combustible
laminates. Sales of services equipment for housing decreased reflecting lower rental
housing-related sales despite an increase in the number of component housing. The
slope protection construction department experienced a rise in sales due to an increasein completed projects in the period, which is associated with downsizing of projects. The
landscape gardening department recorded higher sales due to steady growth of the(Millions of Yen)
Segment Income

Net Sales

12,00080,00065,91260,00059,031

61,4795,393

fall in sales prices. The synthetic resin processing department saw higher sales from theket, due to solid growth in some new models.
Consequently, net sales at the Other Operation

6,000

5,156

product sales department increased reflecting higher sales volume despite impacts of aprevious fiscal year despite impacts of the Kumamoto earthquakes on the automobile mar-

9,000
6,538

40,000maintenance business despite a decrease in carried-over work. Sales in the petroleum

increased by 7.2% from the previous fiscal year to¥65,912 million. The Other Operation recorded an operating profit of ¥6,538 million yen, a 26.8% increase from

3,000

20,000the previous consolidated fiscal year, partially due to anincrease in profits generated from the electric power

0

15

16

17

0

Note: As the Company has changed its segment classification,
no data for the year ended March 31, 2014 is shown.

business associated with the completion of refurbishment work at the Higashi Yokoyama Power Plant.

Retect Viruhael: high pressure
laminates with antiviral effectResearch and Development
R&D activities of the Group are implemented extensively by tech-

Ceramics Operation

nology development divisions and manufacturing technology

Our current focus for R&D for next-generation products and beyond

divisions, as well as the technology divisions for each of the busi-

is environmentally friendly products in the area of automobiles, suchnesses, and at as affiliate companies.

as diesel particulate filters (DPF), NOx reduction catalysts (SCR), andAt technology development divisions, we more deeply culti-

substrate holding mats (AFP). Furthermore, we are carrying out R&D

vating core technologies in fields related to electronics andfor specialty carbon products and fine ceramic products, targeting

ceramics, as well as product planning based on the uniquemarketing methods. We are also conducting R&D to create original new products for the next generation and beyond.
At manufacturing technology divisions, we are working

automotive, airplane, power generation, and semiconductor component segments other than exhaust systems.
R&D costs for this division amounted to ¥5,642 million in thefiscal year under review.

actively to develop new innovative methods and facilities that

Other Operation

boost our competitiveness.

In the housing materials business, we are working to develop func-

Furthermore, at technology divisions within each Operation,
we are carrying out development of new technologies and prod-

tional construction materials such as antivirus materials. We are also
conducting R&D activities geared toward new fields.
Within the slope-related business, we are engaged in develop-

ucts that aim to expand on our existing business.

Major R&D activities are as follows:

the market of patented technology, the GT Frame Method, whichmakes possible both slope face disaster prevention and full-out
surface vegetation.
In landscape gardening, we are conducting R&D focused on

Electronics Operation

technologies for the vegetation of particular spaces such as wall

We have been conducting the development of element and process

surfaces and roofs.

technologies needed for next-generation and beyond semiconductor
package substrates and PWB. Furthermore, we are conducted

In the synthetic resin processing business, we are improving on
basic technologies for the development of new products.

research for in-car module substrates for applications other than PCs
and smartphones.

R&D costs for this division totaled ¥81 million in the fiscal year
under review.

During the fiscal year under review, R&D costs for this division
amounted to ¥8,387 million.

R&D Costs and Ratio of R&D Costs to Net Sales(Millions of Yen)(%)

18,0005.5

15,000

5.3

12,000

5.1

9,000

4.9

6,000

4.7

3,000

4.5

0

13
Electronics

14
Ceramics

Other

15
Ratio of R&D Costs to Net Sales

16

17

4.3

Research and Development

R&D costs of the Group during the fiscal year ended March
2017, on a consolidated basis, amounted to ¥14,112 million.

ment of construction methods and R&D of new products to expand

17Capital Expenditures
During the fiscal year under review, the IBIDEN Group invested

Major Projects Completed

a total of ¥20,997 million, primarily to establish new facilities to

IBIDENboost production capacity.
Capital expenditures in the Electronics Operation totaled¥12,220 million, which was used mainly for production facili-

Segments/bases
Electronics Operation•Ogaki Plant

Project description
Established production facilities for next-generation IC package substrates.

ties for both IC package substrates (¥5,337 million) and PWB

Subsidiaries(¥6,883 million).

Electronics Operation
Established production facilities for next-generation PWB.
•IBIDEN Electronics (Beijing) Co., Ltd.

In the Ceramics Operation, the Group spent ¥5,786 million,
primarily for production facilities related to DPF (¥4,600 million)
and substrate holding mats (AFP) (¥425 million).
The Other Operation and corporate were allocated ¥2,991
million.
Required funds were acquired through self-financing.

Ceramics Operation•IBIDEN Mexico, S.A. de C.V.

Major Projects Established/Expanded/Updated in Progress
IBIDEN
Segments/bases

During the fiscal year under review, no major sale, removal,
or loss of facilities took place that would have a noteworthy
impact on production capacity, excluding the disposal and saleof facilities for regular updating.

Established production facilities (the first line) for DPF.

Electronics Operation•Ogaki Plant

Project description
Established production facilities for next-generation IC package substrates.

Subsidiaries

Capital Expenditures

Electronics Operation•IBIDEN Electronics Malaysia Sdn. Established production facilities for next-generation PWB.
Bhd.
Established production facilities for DPF and expanded production facilities for DPF.

Ceramics Operation•IBIDEN Hungary Kft.

Established production facilities for AFP.

18

Capital Expenditures and Depreciation and Amortization(Millions of Yen)

¥20,997 million

75,000Capital expenditures by geographical areas in the fiscal
year under review are summarized as follows:

56,35050,000Electronics-related:Japan.....................................¥4,000 million
Overseas...............................¥8,200 million
Ceramics-related:Japan........................................¥800 million
Overseas...............................¥5,000 million

39,42840,95544,05733,14825,000020,99715
Capital Expenditures16
Depreciation and Amortization

17

Corporate Governance

CSR Promotion Division

In addition to the corporate governance system described above,
the Company has established a Management Council to further
Overview of Corporate Governance Structure and Reasons forstrengthen the said structure of the Group. It is composed of persons
Adopting Current Structure
responsible for management and execution of operations, such as
The Group considers corporate governance to be a key management
Representative Directors, Directors, Executive Officers, Managing
mechanism for transparent, fair, prompt and resolute decision-making,
Officers as well as full-time Directors who are Audit and Supervisory
and all Group companies are thus actively committed to improving
Committee Members. The Management Council deliberates andcorporate governance. As part of the Group’s corporate governance,
decides important matters concerning yearly and monthly budget
we are enhancing internal control by proactively undertaking activities
progress and various management issues, being endowed with functo advance compliance and risk management and we are expanding/tions to make preliminary deliberations of proposals to be submitted
strengthening the management oversight functions of our Board of
to the Board of Directors and make decisions set forth under the
Directors and the audit functions of our Audit and Supervisory
Authorization Regulations of the Company.
Committee. These steps will enable us to construct a transparent
corporate governance system worthy of the trust of shareholders andStatus of Development of System to Ensure the Appropriatenessother stakeholders and fulfill our corporate social responsibilities, andGeneral Meetings ofof
Shareholders
Business Operations at Subsidiaries
will help us improve our corporate value through sustained growth.
Appointment,
Appointment, department,
Appointment,
The
Company made the supervisory management
Followingaresolution
at
the
164th
Ordinary
GeneralMeetingofReportReportDismissal
Dismissal
Dismissal
Reportwhich is responsiblefor internal control of all subsidiaries, theShareholders held on June 16, 2017, regarding the transition to a
Proposal for Appointment/Dismissal of
Directors,
Corporate PlanningGroup, Office ofAccounting
the President,
Strategic
Report, Cooperation
Company with
Audit and SupervisoryAccounting
Committee,
the Company will
Auditors
Auditors
Board of Directors
Auditors
Corporate
Planning
Operation.
The
Company
providesguidanceandimprove further prompt decision-making structure
andanadditional
Evaluation of properness on(Board of Auditors)
Audit
Opinion, Support
Supervision
Accounting Auditin cooperation with other internal control
support to each company
layer of strength in the supervisory
functions
of
the
Board
of
Director
Assignment (Consultation)
Report, Cooperation
Report, Cooperation
promotion divisions.
through having DirectorsCommittee
who are Audit and Supervisory Committee
Policy Proposal
Compensation (Consultation)
Pursuant to the Regulations Policy
for Proposal
Internal Approvals of Group
Members possess votingCommittee
rights in the Board of Directors.
Deliberation,
Companies
and the RegulationsCompliance
for Management
Support of GroupThe Company's
Board of Directors consists of seven DirectorsRisk Management
Company-WideCompany-Wide
ReportDirection
Promotion
Committee a structure is in placePromotion
Companies,
underCommittee
which important business(excludingManagement
Directors
Councilwho are Audit and Supervisory Committee
Executive Officer
in Charge of Risk
Executive
Officer inofChargeof Complianceexecution
byManagement
directors and the
Board
Directorsof subsidiaries is
Representative
Directors(Executive Officers)
Membersandincluding
three Outside Directors) and five Directors
Executive Officer in Charge of CSR Promotion Division
Executive Officer in Charge of CSR Promotion Division
Full-time Directors (Executive Officers)
ReportreportedtotheCompanyinadvanceanddecisionmaking of the(including three
Directors) who are Audit and Supervisory
Executive Outside
Officers
Cooperation
Supervision
Company
isproperly
carriedout.
Committee
Members.
The
term
of
officeofaDirector(excludingaDeliberation,
Compliance Committee
Furthermore, the executive Reward
officerin charge
Director who is anReport
Audit and Supervisory Committee Member) is one
and Disciplinary
Committee*of the CSR& CEO (Overall
Managementwho
onPromotion Division sufficiently exchanges
Information information
Security Committee with Directors
year,President
and Execution
that
ofofaOperation)
Director
is an Audit and Supervisory Committee
Security Trade Control Committee
Reportin charge of internal control or the department.
Executive
Officeryears.
of Each Business
Memberis two
All of the six Outside
Directors are appointed as
Insider Trading Control System(Division of Executive Authorities)
Disclosure Committee
Independent Directors. The number of Directors (excluding Directors
Execution of Operation,
Development Control System
Audit Members) is
Auditlimited toDevelopment
Current Status of the Internal
andSupervision
Accounting
Audit Risk
who
are Audit and Supervisory Committee
Management
Structuresixteen, and that of Directors who are Audit
and Supervisory
Each Operation,
Administrative Division
and Group Company
Based on the belief that corporate governance is*Itashallcrucial
manageCommittee Members is limited to seven. Also, the Company has introbe held at any
time as needed
ment issue, the Group’s internal control system calls for proactive
duced an Executive Officer System in order to make speedy
implementation of measures across the Group aimed at advancing
management decisions and expedite the execution of operations.

The Corporate Governance System
General Meetings of Shareholders
Appointment/Dismissal

Appointment/
Dismissal

ReportBoard of Directors

ReportAppointment/
Dismissal

Audit and Supervisory Committee

Accounting Auditors
Cooperation
Accounting/
Audit

Nomination/Remuneration Committee

Appointment,
Dismissal/
Supervision

Risk Management Company-wide
Promotion Committee

Audit &c.

Report/ProposalCooperation

Inquiry/ReportManagement
CouncilReportAudit &c.

President & CEO
CSR Promotion Division
Direction/
Supervision

ReportCompliance Company-wide
Promotion Committee

Internal Audit

Each Operation, Administrative Division and Group Company

Corporate GovernanceCorporate Governance Structure

19Corporate Governancecompliance and risk management and further augmentation of monitoring functions. The status of actions and their development arereported regularly by Executive Officers in charge of compliance andrisk management promotion to the Board of Directors and theManagement Council, and such actions are monitored and reviewed
from time to time to make the compliance and risk management
structure fairer, stronger and more appropriate.

Corporate GovernanceStatus of Internal Audits and Audits by Audit & Supervisory
Committee Members

20

The Company has assigned five Directors who are Audit andSupervisory Committee Members, including three Outside Directors
without any interests in the Company. Two of the five Directors who
are Audit and Supervisory Committee Members are a Certified Tax
Accountant or a Certified Public Accountant, with high-level insights
in all areas of taxation, and they have considerable knowledge infinance and accounting.
Directors who are Audit and Supervisory Committee Members
attend important meetings such as the Board of Directors meetingsand Management Council meetings and conduct audits on theexecution of operations by Directors, and full-time Directors who are
Audit and Supervisory Committee Members collaborate with the CSR
Promotion Office, which is the Company’s internal audit unit, andAccounting Auditors in conducting audits of the Company and of theGroup companies in accordance with all applicable laws, regulations
and rules.
Officers and employees provide Directors who are Audit andSupervisory Committee Members with necessary reports and information, in accordance with the Audit and Supervisory Committee
Regulations, set forth by the Board of Directors, in response torequests from each Director who is an Audit and Supervisory
Committee Member.
Furthermore, the Company has established the Audit Group,
CSR Promotion Division (composed of six persons) as a unit that
conducts internal audits. Directors who are Audit and Supervisory
Committee Members and the CSR Promotion Office are working
closely with Accounting Auditors by exchanging information andopinions on a regular basis to enhance the effectiveness of theGroup’s auditing system.

Outside Directors
As stated in the preceding section, the Company has a governancestructure that includes six Outside Directors. The Company anticipates their contribution to proper and fair corporate governance andtheir valuable advice concerning the Employee’s Code of Conduct.
Although IBIDEN has no standard or policy of its own with respect tothe requirements to ensure the independence of Outside Directors,
when electing any of its Outside Directors, IBIDEN makes sure thathe or she meets the requirements of being independent and of being
unlikely to have any conflict of interest with the general shareholders
of IBIDEN.
Chiaki Yamaguchi, who serves as IBIDEN’s Outside Director, ispresident and representative director of Towa Real Estate Co., Ltd.
No special relationship exists between the said company and
IBIDEN. Toshio Mita, who serves as IBIDEN’s Outside Director, isadviser of Chubu Electric Power Co., Inc. No special relationshipexists between the said company and IBIDEN. Fumio Kato,

representative of Fumio Kato Certified Tax Accountant Office, serves
as IBIDEN’s Outside Director. No special relationship exists between
the said company and IBIDEN. Masaki Horie, representative of
Masaki Horie Certified Tax Accountant Office, serves as IBIDEN’s
Outside Director. No special relationship exists between the said
company and IBIDEN. The Outside Director, Nobuko Kawai is representative of Nobuko KAWAI Law Office. No special relationship exists
between the said company and IBIDEN.
At IBIDEN’s Board of Directors meetings, Outside Directors
express opinions based on their wealth of managerial experiences andprovide important advice to advance the IBIDEN Group’s governance.
The Company believes that the aforementioned Outside Directors, whohave demonstrated their independence, have successfully undertaken
their responsibilities expected of them by the Company.

Overview of Limited Liability Agreements
We have entered into limited liability agreements with Outside
Directors that limit their liabilities for damages, based on Paragraph 1,
Article 423 of the Company Law. Under these agreements, outside
directors are subject to the higher of either ¥20 million or theminimum limited amount as specified under Paragraph 1, Article 425of the Company Law when they have acted in good will and they
have committed no material negligence in executing their duties.

Accounting Audit
We have concluded a accounting auditing agreement with Ernst &Young ShinNihon LLC, and the certification of the audit is conductedby Certified Public Accountants Shingo Watanabe, Toshikatsu
Sekiguchi and Tomoaki Ito, who are Ernst &Young ShinNihon’s designated and engagement partners.
They are assisted by 11 certified public accountants and 16 otherstaff in the conduct of their auditing duties.

Board Policies and Procedures in Determining theCompensation of the Senior Management and Directors
The compensation for Directors who are not Audit and Supervisory
Committee Members, Executive Officers and Managing Officers
comprises monthly compensation and bonuses. The monthly
compensation for Directors who are not Audit and Supervisory
Committee Members is calculated based on their job positions, within
the limits approved by the general meeting of shareholders, and isapproved by the Board of Directors. Bonus allotments for Directors
who are not Audit and Supervisory Committee Members are based on
the degree to which each Director contributed to the Company’s
operations, within the scope of the total amount of bonuses calculated using the stipulated formula approved by the general meeting ofshareholders, and are approved by the Board of Directors.
The monthly compensation of Executive Officers and Managing
Officers is approved by the Board of Directors. In determining thecompensation, broad consideration is given to a suitable balancewith the monthly compensation for Directors who are not Audit andSupervisory Committee Members, assessments of respective
Executive Officers’ job performance, and other factors. The amountsof bonuses to be paid are approved by the Board of Directors. Bonusamounts are calculated in accordance with the degree of the
Executive Officers’ contribution to the Company’s business results
and other factors. Nomination/Remuneration Committee includingCompensation of Directors and Corporate Auditors(a) Total remuneration of Directors and Corporate Auditors for the year
ended March 31, 2017 is as follows:

Position

Total amount of
remuneration(Millions of yen)

Total amount of remuneration by type(Millions of yen)

Basic
Stock
remuneration options

Retirement
Bonuses benefits

Number ofrecipients

Directors (notincluding Outside
Directors)

¥290

¥290

—

—

—

10

Corporate auditors(not including
outside corporate
auditors)

63

63

—

—

—

3

Outside directors
and outside
corporate auditors

45

45

—

—

—

5

Notes:
1. The resolution setting the upper limit of remuneration for the directors at not morethan ¥45 million per month was approved at the 154th General Meetings ofShareholders held on June 22, 2007. Of the total, the amount for outside directors’ accounts for ¥3 million or less, with the remaining ¥42 million or less paid tothe other directors. Compensation under stock option plans is set separately.
Salary for directors as company employees is also excluded from the figures.
2. In addition to the remuneration mentioned above in 1, at the 158th General
Meetings of Shareholders held on June 22, 2011, the resolution was approved
stipulating that directors, excluding the outside directors, are to receive a bonus
equal to 0.5% of the consolidated net income for the fiscal year as well as 1.6%of the total amount of annual dividends for the applicable fiscal year. However, themaximum limit was also set at not more than ¥500 million by the resolution withamounts less than ¥1 million being rounded down.
3. Although bonuses for Directors amounted to ¥74 million based on the above
calculation, recognizing the severe operating environment and the difficulties in
the Company’s severe performance during the fiscal year under review, nobonuses for Directors were approved by the Board of Directors’ meeting held on
May 15, 2017.
4. In addition to the above payments, three subsidiaries of the Company paid a total
amount of ¥8 million as monthly remuneration to the three directors of said
subsidiaries who also served concurrently as directors of the Company.
5. The maximum limit of remuneration for corporate auditors was approved at not
more than ¥9 million per month at the 159th General Meetings of Shareholders
held on June 20, 2012.

(b) Total amount of consolidated remuneration of individual directors
and corporate auditors
Not recorded because no individual received total consolidated remuneration of ¥100 million or more.

Matters for Resolution at General Shareholders’ MeetingsThat May Be Resolved at Board of Directors’ Meetings
The Company’s Articles of Incorporation stipulate that the Company,
by a resolution of the Board of Directors, may determine the amount ofdividends to be paid from reserves and acquire its own shares throughmarket transactions and other methods unless otherwise provided,
pursuant to Paragraph 1, Article 459 of the Company Law. This allows
the Company flexibility in conducting its business.

Furthermore, as stipulated under Paragraph 5, Article 454 of theCompany Law, the Board of Directors agreed that in accordance with
the Company’s Articles of Incorporation interim dividends shall be paideach year on September 30.

Policies and Procedures for the Selection of Managers
and the Assignment of Director and Audit and Supervisory
Committee Member Candidates by the Board of Directors
Candidates for Manager and Directors who are not Audit andSupervisory Committee Members are selected/assigned from theperspective of placing the right person in the right job, with due
consideration given to the number of people that would enable precise
and prompt decision-making and to a balance of knowledge, experience and skills among the Management Team/the Board of Directors
overall. Candidates for Audit and Supervisory Committee Members arealso selected/assigned from the perspective of placing the right personin the right job, with due consideration given to a balance among
knowledge of financial, accounting and legal matters, knowledge about
the Company’s business, and other perspectives pertinent to corporate management. Given the above, assignment for Audit andSupervisory Committee Member candidates was resolved by the
Board of Directors after Audit and Supervisory Committee deliberated
and agreed on it. Assignment for Director candidates, prior to a resolution of the Board of Directors, after it has been sufficiently deliberated
by the Nomination/Remuneration Committee including Outside
Directors who are not Audit and Supervisory Committee Members andreported to President & CEO.

Resolution Requirement for Appointing Directors
The Company’s Articles of Incorporation stipulate that directors may be
appointed by a majority vote of shareholders present at a meeting,
who collectively hold not less than one-third of the voting rights of allshareholders entitled to exercise the rights.
Furthermore, the Company’s Articles of Incorporation also stipulatethat appointment of directors shall not be determined by cumulative voting.

Special Resolution Requirement for General Meetingsof Shareholders
The Company has stipulated in the Articles of Incorporation a special
resolution requirement at General Meetings of Shareholders, in accordance with the provision of Paragraph 2, Article 309 of the Company
Law, as follows: The resolution shall be authorized by a two-thirds
majority of the voting rights held by the shareholders present at
General Meetings of Shareholders. These voting shareholders must
hold shares representing not less than one-third of the voting rights ofall shareholders entitled to exercise the rights. This enables General
Meetings of Shareholders to progress smoothly.

Overview of Shareholdings(a) Investment shares held for purposes other than pure investment
Number of issues: 53
Total recognized on the balance sheet: ¥41,464 million(b) The main purpose for holding investment shares other than pureinvestment is to strengthen a stable business relationship.
(c) Shares held purely for investment purposes: None

Corporate GovernanceOutside Directors who are not Audit and Supervisory Committee
Members, prior to a resolution of the Board of Directors, deliberates
on compensation and bonus of Directors, the Executive Officers andManaging Officers, and reports to President & CEO. Outside
Directors, being in positions independent of the execution of operations, are only paid a set basic compensation.

21

Board of Directors, Auditors and Executive Officers (As of June 17, 2017)
Directors

Board of Directors, Auditors and Executive Officers

Apr. 1973
Jun. 1997
Jun. 2001
Jun. 2005
Apr. 2007
Jan. 2015
Mar. 2016
Jun. 201722

Chairman of the Board,
Representative Director

President & CEO,
Representative Director

Hiroki TAKENAKA

Takeshi AOKI

Date of Birth: January 1, 1951

Date of Birth: February 4, 1958

Joined IBIDEN Co., Ltd.
Director
Managing Director
Director & Executive Managing Officer
Representative Director, President & CEO
In charge of R&D Operation
In charge of affiliates and subsidiaries
Representative Director, Chairman of the Board(to present)

Apr. 1981
Apr. 2006
Apr. 2008
Jun. 2013
Apr. 2014
Apr. 2014
Mar. 2016
Mar. 2016
Apr. 2017
Jun. 2017

Apr. 1980
Apr. 2008
Apr. 2011
Jun. 2013
Apr. 2014
Apr. 2014
Jan. 2015
Jan. 2015
Jan. 2015
Mar. 2016
Apr. 2017

Representative Director &Executive Vice Presidents

Representative Director &Executive Vice Presidents

Tsuyoshi NISHIDA

Kozo KODAMA

Date of Birth: July 10, 1956

Date of Birth: March 23, 1963

Joined IBIDEN Co., Ltd.
Executive
Corporate Officer
Director & Corporate Officer
Director & Managing Officer
Operation Manager of PKG Operation
Director & Executive Managing Officer
Operation Manager of Electronics Operation
Director of IBIDEN Electronics (Beijing) Co., Ltd.
Representative Director, Vice President (to present)
Corporate Executive Director of Business, In charge ofElectronics Operation (to present)

Apr. 1986
Apr. 2008
Apr. 2012
Apr. 2012
Jan. 2015
Jan. 2015
Jun. 2015
Mar. 2016
Mar. 2016
Apr. 2017

Jun. 2017

Jun. 2003
Jun. 2011
Jun. 2012
Jun. 2014
Jun. 2015
Jun. 2015

Joined IBIDEN Co., Ltd.
Executive
Corporate Officer
Director & Corporate Officer
Director & Managing Officer
Deputy Operation Manager of Ceramics Operation
Representative Director, Vice President
Operation Manager of Ceramics Operation
Administrator of Corporate Business Operation,
In charge of Ceramics Operation (to present)
Representative Director, President & CEO (to present)

Joined IBIDEN Co., Ltd.
Executive
Corporate Officer
Vice President of IBIDEN Philippines Inc.
Managing Officer
Deputy Operation Manager of Electronics Operation
Director & Managing Officer
Representative Director, Vice President (to present)
Integrated management of Quality, Engineering and
Production (to present)
President of Corporate Strategic Manufacturing
Operation, In charge of CSR Promotion Division,
In charge of Energy Control Division
In charge of CSR Promotion, in charge of Energy
Control Division (to present)

Outside Director

Outside Director

Outside Director

Chiaki YAMAGUCHI

Toshio MITA

Koichi YOSHIHISA

Date of Birth: December 25, 1949

Date of Birth: November 2, 1946

Date of Birth: November 29, 1952

Full-time Corporate Auditor of Toyota Motor Corporation
Executive Managing Director of Toyota Industries
Corporation
Representative Director & Senior Vice President of
Toyota Industries Corporation
Outside Director of IBIDEN Co., Ltd. (to present)
President & Representative Director of Towa Real
Estate Co., Ltd. (to present)
Outside Director of Nakanihon Kogyo Co., Ltd.
(to present)

Apr. 1969
Jun. 2003
Jun. 2005
Jun. 2006
Jun. 2007
Jun. 2010
Jun. 2015
Jun. 2017

Joined Chubu Electric Power Co., Inc.
Managing Officer, Tokyo Office Manager
Director, Senior Managing Executive Officer, Presidentof Sales Company
President & CEO
President &CEO, Representative Director
Chairman of the Board
Adviser (to present)
Outside Director of IBIDEN Co., Ltd. (to present)

Mar. 1981
Apr. 1982
Apr. 1984
Apr. 2000
Apr. 2003
Apr. 2013

Apr. 2015
Jun. 2017

Tokyo University PhD (Engineering)
Assistant of IIS at Tokyo University
Joined the Faculty of Science and Technology at
Meijo University
Professor at Architectural Course of Science andTechnology at Meijo University
Manager of at Architectural Course of Science andTechnology at Meijo University
Dean of Science and Technology at Meijo University,
Chair of Research Department, Councillor at Meijo
University (to present)
President of the University, Full-Time Director of Meijo
University (to present)
Outside Director of IBIDEN Co., Ltd. (to present)

Apr. 2013
Jan. 2015
Jan. 2015
Jun. 2015
Jun. 2017

Apr. 1973
Nov. 1980
Jul. 1997
Jan. 2001
Sep. 2006
Jul. 2010
Jun. 2011
Jun. 2015
Jun. 2016
Jun. 2016
Jun. 2017

Director, Audit andSupervisory Committee
Member (Full –time)

Director, Audit andSupervisory Committee
Member (Outside)

Keiichi SAKASHITA

Yoichi KUWAYAMA

Fumio KATO

Date of Birth: April 21, 1956

Date of Birth: May 30, 1958

Date of Birth: January 20, 1944

Joined IBIDEN Co., Ltd.
Director & Managing Officer
In charge of Ceramics Operation
Operation Manager of DPF Operation
Operation Manager of Strategic Manufacturing
Operation
Director & Executive Managing Officer
In charge of Audit
In charge of IMS promotion
Standing Auditor
Director who is an Audit and Supervisory Committee
Member of IBIDEN Co.,Ltd. (to present)

Apr. 1983
Apr. 2007
Apr. 2008
Apr. 2011
Apr. 2012
Jun. 2012
Apr. 2014
Apr. 2014
Mar. 2016
Jun. 2016
Jun. 2017

Joined IBIDEN Co., Ltd.
Executive
Corporate Officer
Operation Manager of DPF Operation
Managing Officer
Director & Managing Officer
Director & Executive Managing Officer
Operation Manager of Ceramics Operation
In charge of Audit
Standing Auditor
Director who is an Audit and Supervisory Committee
Member of IBIDEN Co., Ltd. (to present)

Jul. 2000
Jul. 2001
Aug. 2002

Jul. 2004
Nov. 2014
Jun. 2015
Nov. 2015
Jun. 2017

Deputy Manager of Investigation Department Nagoya
Regional Taxation Bureau
Superintendent of Showa Tax Office
Registered as certified tax accountant, Opened Fumio
Kato Certified Tax Account Office, Representative ofFumio Kato Certified Tax Account Office (to present)
Outside Corporate Auditor of Seino Holdings Co., Ltd.
(to present)
Outside Corporate Auditor of Himaraya Co., Ltd.
Outside Corporate Auditor of IBIDEN Co., Ltd.
Outside Director who is an Audit and Supervisory
Committee Member of Himaraya Co., Ltd. (to present)
Outside Director who is an Audit and Supervisory
Committee Member of IBIDEN Co., Ltd. (to present)

Director, Audit andSupervisory Committee
Member (Outside)

Director, Audit andSupervisory Committee
Member (Outside)

Substitute director, Audit &Supervisory Committee
Member (Outside)

Masaki HORIE

Nobuko KAWAI

Shogo KOMORI

Date of Birth: November 25, 1949

Date of Birth: December 5, 1961

Date of Birth: October 23, 1979

Joined PricewaterhouseCoopers Co., Ltd.
Joined Ito Accounting & Consultancy OfficeSenior Partner of Ito Accounting & Consultancy OfficeSenior Partner of Chuo-Aoyama Audit Cooperation
Senior Partner of Arata Audit Cooperation
Opened Masaki HORIE Certified Public Accountant
Office, Director of the office (to present)
Outside Corporate Auditor of Tokai Rika Co., Ltd.
Outside Corporate Auditor of Futaba Industrial Co., Ltd.
Outside Director of Futaba Industrial Co., Ltd. (to present)
Outside Corporate Auditor of IBIDEN Co., Ltd.
Outside Director who is an Audit and Supervisory
Committee Member of IBIDEN Co., Ltd. (to present)

Apr. 1992
Jan. 1995
Apr. 1998
Jan. 2004
Apr. 2009
Apr. 2012
Jun. 2017

Registered as attorney (Daiichi Tokyo Bar Association)
Switched the registration as attorney to Nagoya(currently Aichi Prefecture) Bar Association
Opened Nobuko KAWAI Law Office, Representative of
the office (to present)
Mediator for Civil Trial of Jury of Nagoya Summary
Court (Part-Time Judge)
Deputy Chairman of Aichi Bar Association
Professor at Law School of Nagoya University(Practice of Law)
Outside Director who is an Audit and Supervisory
Committee Member of IBIDEN Co., Ltd. (to present)

Oct. 2003
Oct. 2004
Mar. 2012
Apr. 2012
Jun. 2015
Jun. 2017

Registered as attorney (Daini Tokyo Bar Association)
Joined Anderson Law Office
Switched the registration as attorney to Gifu
Prefecture Bar Association Joined Mori Law OfficeOpened Shogo KOMORI Law Office, Representative of
the office (to present)
Vice-chairman of Gifu Prefecture Bar Association
Substitute Outside Corporate Auditor of IBIDEN Co., Ltd.
Substitute Outside Director who is an Audit andSupervisory Committee Member of IBIDEN Co., Ltd.
(to present)

Executive Officers
Chairman of the Board

Executive Managing Officer

Managing Officers

Hiroki Takenaka

Masahiko Ikuta

Honchin Endo

President & CEO

Senior Managing Officers

Takeshi Aoki

Sotaro Ito

Executive Vice Presidents
Tsuyoshi Nishida
Kozo Kodama

Koji Kawashima
Kazushige Ohno
Shuichi Kubo

Yasuji Hiramatsu
Hisashi Sano
Yasushi Inagaki
Kota Noda

Board of Directors, Auditors and Executive Officers

Apr. 1981
Apr. 2007
Apr. 2009
Apr. 2009
Apr. 2011

Director, Audit andSupervisory Committee
Member (Full –time)23

CSR Management

IBIDEN achieves sustainable growth by implementing CSR management
in response to globalization.
Diagram of CSR Management

CSR Policy

Employees

Customers
We aim to enhance our corporate value
Human Resource• By raising awareness of the need for IBIDEN to
Management
act responsibly and honestly in the interest of
Shareholders/Internal Control
sustainable operations
Investors• By fulfilling our responsibilities in a well-balanced
SocialEnvironmental
Contribution
Management
manner from an economic, environmental andsocial standpoint• By working in partnership with all of our stakeholders
Global environment

Suppliers

CSR Management

Building a trustworthy relationshipwith all our stakeholders.

24

External Corporate Evaluation
The Company conducts gap analyses between targets and results of external corporate evaluations such as SRI
evaluation organizations, and identifies elements that are lacking within the Company. The CSR Promotion Division
is responsible for analyses. In 2016, IBIDEN was named a constituent of the FTSE4Good Index Series, a worldleading socially responsible investment (SRI) indicator, and was awarded “Prime” status in the CSR rating of oekom
research AG, a German-based CSR rating agency (as of June 2017).
* oekom research AG, an independent CSR rating agency based in Germany, was founded in 1993, and has conducted CSR rating froman environmental and social aspect.

Publication of CSR Information
The Group’s CSR Report is disclosed on our website in accordance with the core section of
the GRI G4 Sustainability Reporting Guidelines (Version 4). We will update detailed environmental and social information on the website in an appropriate manner.
▶▶▶CSR Report
http://www.ibiden.com/csr/report/index.html

Internal Control
In establishing the Group's internal control systems, activities must be undertaken to strengthen
corporate governance and promote compliance and risk management under the instruction of
the responsible executive officers.

Local
communities

Environmental Management
Measures to Develop Clean Energy
We have been conducting hydroelectric power generation since our foundation and currently operate
three hydroelectric power plants in the upstream on the Ibi River. The generated power is supplied
to power consumers in the region. In addition, we have been are generating energy with solar power
generation and cogeneration systems.
Hydroelectric power generated in fiscal year 2016

151,452 MWh

Equivalent to the annual energy consumptionof about 42,000 households.

Higashi-Yokoyama power plant

Trends of CO2 emissions*1 [IBIDEN Group*2 ]Energy Conservation

3% (fiscal year 2017) compared to actual CO emissions for fiscal year 2012.
2

Notes:*1: CO2 emissions show figures covering production-related locations in Japan and overseas. With regard to the CO2
emission factor at the time of calculation, we used the factor provided by the “List of Calculation Methods/Emission
Factors in the Calculation, Report and Publication System” of the Ministry of the Environment and the Ministry of
Economy, Trade and Industry in Japan as well as by gas distribution companies.
*2: CO2 emissions indicate emissions from all production bases related to production in Japan and overseas.

760

753

127

134

593

633

618

15

16

17

718
600

641

124

147

400

200

494

0

14

■ Direct CO2 emissions (Scope 1) ■ Indirect CO2 emissions (Scope 2)

Human Resource Management

25

Human Resource Development
We plan to define model employees with the respective qualifications and to carry out education andtraining to enhance our strength, and thus become a company that can grow and develop on apermanent basis.

Respect for Human Rights

Educational training

The Group clearly defines its policy to respect the basic rights of workers, as internationally declared,
as well as to avoid involvement in any violation of human rights in the IBIDEN Standards for Employee
Behavior. We believe it is important to work on the issue of human rights with the entire supply chain,and thus have published the IBIDEN Group Supplier CSR guidelines. In addition, we have been
cooperating with our direct suppliers in dealing with such issues.

Occupational accident frequency rate*(IBIDEN and Domestic Group companies)

1.6

1.58

1.2
0.94

Occupational Health and Safety

0.8

We conduct health and safety activities with all relevant people, and aim to harmonize health andsafety as well as business operations with a fundamental rule of minimizing risks that may affect thelife and health of people who take part in IBIDEN’s operations.

0.4

0.31

0

0.17

* Number of occupational injuries (equal to or exceeding accidents requiring leave) for every million cumulative actual
working hours.

1.66

1.61

1.06

1.06
0.66

14

0.26

15

16
IBIDEN Domestic Plants
All Industries

Protecting the Global Environment
In fiscal year 2008, we embarked on a forest building initiative: “IBIDEN’s Forest.” This activity takes
place chiefly in Higashi-Yokoyama, where the Company operates its initial hydroelectric power
generation business. Together with local residents, employees and former employees, we aim toachieve coexistence with the global environment.

41.31 haScene of tree planting activity

This forest area is equivalent to some 58 football fields.

1.15

0.56
0.33

0.09

IBIDEN Group (Japan)
Manufacturing Industry

1.63

0.54

Social Contribution

Total area of “IBIDEN’s Forest”

CSR Management

Global target for fiscal years 2013 to 2017:

800
CO2 emissions (1,000t-CO2)

We are accelerating the improvement of energy conservation practices designed to lower the basic
unit of energy consumption in all divisions within the entire Company, striving to strengthen thecompany-wide CO2 reduction activities as well as our product-making system.

17

Consolidated Balance SheetIBIDEN CO., LTD. and Consolidated Subsidiaries
March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 3)

Millions of yen

2017

2016

2017

Cash and deposits (Notes 4 and 20).............................................................................. ¥104,182¥104,765$928,619

—

3,200

—

Trade..........................................................................................................................

56,61057,579504,586

Allowance for doubtful accounts.................................................................................

(252)

(290)

(2,247)

10,421

12,75892,887

AssetsCurrent assets:
Short-term investments (Notes 4, 5 and 20)..................................................................
Notes and accounts receivable (Note 4):

Inventories:

Consolidated Balance Sheet

Merchandise and finished goods................................................................................
Work in process.........................................................................................................

7,452

9,900

66,427

Raw materials and supplies........................................................................................

15,765

14,446

140,519

Deferred income taxes (Note 10)...................................................................................

1,918

2,211

17,099Other current assets......................................................................................................

8,074

9,043

71,975

Total current assets..........................................................................................................

204,170

213,612

1,819,865

Land (Note 15)...............................................................................................................

19,04619,144

169,766

Buildings and structures (Notes 12,13 and 14)..............................................................

183,005

183,541

1,631,204

Machinery and equipment (Notes 12,13 and 14)...........................................................

443,160

441,654

3,950,085

Leased assets...............................................................................................................

1,617

1,826

14,409Construction in progress (Notes 12 and 13)...................................................................

7,135

16,826

63,603653,963

662,991

5,829,067

Accumulated depreciation............................................................................................. (502,810)(447,063)(4,481,773)

151,153

215,928

1,347,294

26
Property, plant and equipment:

Property, plant and equipment, net...................................................................................

Investments and other assets:
Investment securities (Notes 4, 5 and 7):
Unconsolidated subsidiaries and affiliates...................................................................

891

892

7,948

Other..........................................................................................................................

43,21538,169385,195

Long-term loans receivable (Note 4)..............................................................................

30

40

270

Deferred income taxes (Note 10)...................................................................................

734

680

6,550

Other assets..................................................................................................................

5,900

7,103

52,585

Allowance for doubtful accounts....................................................................................

(310)

(314)

(2,778)

Total investments and other assets...................................................................................

50,46046,570449,770

Total assets (Note 22)....................................................................................................... ¥405,783¥476,110$3,616,929

2017

2016

2017

¥45,065$178,777

34,66916,966
145
6,436
1,303
2
3,508
77
—
5,573
113,744

260,842
92,093984
53,054
10,327
95
29,79697
114,200
49,012789,277

50,006
86
469
4,309
1,424
56,29425,063
101
465
3,751
1,465
30,845445,724
767
4,180
38,41012,693501,774

64,15264,579121,092(18,306)
231,517

64,15264,579188,599(18,302)
299,028

571,822575,625
1,079,344(163,166)
2,063,625

15,987
640
160
8,211
24,998
4,425
260,940

12,478198
160
15,46928,305
4,188
331,521

142,503
5,701
1,427
73,184
222,815
39,4382,325,878

Total liabilities and net assets............................................................................................ ¥405,783¥476,110$3,616,929

Liabilities and net assets
Current liabilities:
Short-term borrowings and current portion of long-term debt (Notes 4 and 6)............... ¥20,057
Notes and accounts payable (Notes 4 and 7):
Trade..........................................................................................................................
29,264
Other..........................................................................................................................
10,332
Lease obligations (Note 8).............................................................................................
110
Accrued expenses.........................................................................................................
5,952
1,159
Income taxes payable (Note 10).....................................................................................
Deferred income taxes (Note 10)...................................................................................
10
Accrued bonuses for employees...................................................................................
3,343
11
Accrued bonuses for directors and audit & supervisory board members........................
Provision for business restructuring...............................................................................
12,812
5,499
Other current liabilities...................................................................................................
88,549Total current liabilities........................................................................................................

Long-term liabilities:
Long-term debt (Notes 4 and 6)....................................................................................
Lease obligations (Note 8).............................................................................................
Liability for retirement benefits (Note 9)..........................................................................
Deferred income taxes (Note 10)...................................................................................
Other long-term liabilities...............................................................................................
Total long-term liabilities....................................................................................................

Net assets:
Shareholders’ equity (Note 11):
Common stock:
Authorized – 230,000,000 shares
Issued – 140,860,557 shares in 2017 and 2016......................................................
Capital surplus............................................................................................................
Retained earnings.......................................................................................................
Less treasury stock, at cost........................................................................................
Total shareholders’ equity..............................................................................................
Accumulated other comprehensive income (loss):
Net unrealized holding gain on other securities...........................................................
Deferred gain (loss) on hedges (Note 21)....................................................................
Surplus arising from land revaluation (Note 15)...........................................................
Translation adjustments..............................................................................................
Total accumulated other comprehensive income...........................................................
Non-controlling interests................................................................................................
Total net assets (Note 18).................................................................................................
See accompanying notes to consolidated financial statements.

Consolidated Balance Sheet

Thousands of
U.S. dollars(Note 3)

Millions of yen

27Consolidated Statement of Income

IBIDEN CO., LTD. and Consolidated Subsidiaries
Years ended March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 3)

Millions of yen

2017

2016

2017

Net sales (Note 22)........................................................................................................... ¥266,460¥314,119$2,375,076

Cost of sales....................................................................................................................

210,641

238,346

1,877,536

Gross profit......................................................................................................

55,81975,773

497,540

Selling, general and administrative expenses (Note 16).....................................................

48,67753,202433,880

Operating income (Note 22).............................................................................

7,142

22,571

63,660Interest and dividend income ........................................................................................

1,558

1,186

13,887

Interest expense............................................................................................................

(188)

(319)

(1,674)

Other, net (Note 17).......................................................................................................

(69,284)(11,309)(617,561)

Profit (loss) before income taxes......................................................................

(60,772)

12,129(541,688)

Current..........................................................................................................................

(2,391)(4,233)(21,315)

Deferred........................................................................................................................

544

(127)

4,855

(1,847)(4,360)(16,460)(62,619)

7,769(558,148)

(230)

(238)

(2,053)

Owners of parent (Note 18).............................................................................. ¥(62,849)¥7,531$(560,201)

Consolidated Statement of Income

Other income (expenses):

28

Income taxes (Note 10):

Profit (loss).......................................................................................................
Profit (loss) attributable to:Non-controlling interests................................................................................................

See accompanying notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income

IBIDEN CO., LTD. and Consolidated Subsidiaries
Years ended March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 3)

Millions of yen

2017Profit (loss)........................................................................................................................ ¥(62,619)

2016

2017

¥7,769$(558,148)

Net unrealized holding gain (loss) on other securities.....................................................

3,532(8,550)31,479Deferred gain on hedges...............................................................................................

442

199

3,938

Surplus arising from land revaluation..............................................................................

—

3

—

Translation adjustments.................................................................................................

(7,259)(13,657)(64,702)

Total other comprehensive income (Note 19)....................................................................

(3,285)(22,005)(29,285)

Comprehensive loss......................................................................................................... ¥(65,904)¥(14,236)$(587,433)

Owners of parent........................................................................................................... ¥(66,109)¥(14,449)$(589,261)

205

213

1,828

Comprehensive loss attributable to:Non-controlling interests................................................................................................
See accompanying notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income

Other comprehensive (loss) income:29

Consolidated Statement of Changes in Net Assets

IBIDEN CO., LTD. and Consolidated Subsidiaries
Years ended March 31, 2017 and 2016

Consolidated Statement of Changes in Net Assets

Millions of yen

30

Net
unrealized
holding gain Deferredloss (gain)on othersecurities on hedges

Surplusarising
Nonfrom land Translation controlling
revaluation adjustments interests

Number ofshares inissue(Thousands)

Commonstock

CapitalsurplusRetainedearnings

Treasurystock,
at costBalance atApril 1, 2015..............

150,861¥64,152¥68,355¥210,424¥(37,115)¥21,003

¥ (1)

¥157

¥29,126¥3,991¥360,092

Cash dividends............

—

—

—

(4,833)

—

—

—

—

—

—

(4,833)

Profit attributable toowners of parent........

—

—

—

7,531

—

—

—

—

—

—

7,531

Purchases oftreasury stock............

—

—

—

—

(9,486)

—

—

—

—

—

(9,486)Retirement oftreasury stock............

(10,000)—(3,776)(24,523)

28,299

—

—

—

—

—

—

Other changes.............

—

—

—

—

—

(8,525)199

3(13,657)

197(21,783)

Balance atApril 1, 2016..............

140,861

64,15264,579188,599(18,302)12,478198

160

15,4694,188

331,521

Cash dividends............

—

—

—

(4,658)

—

—

—

—

—

—

(4,658)Loss attributable toowners of parent........

—

—

—

(62,849)

—

—

—

—

—

—

(62,849)

Purchases oftreasury stock............

—

—

—

—

(4)

—

—

—

—

—

(4)

Retirement oftreasury stock............

—

—

—

(0)

0

—

—

—

—

—

0

Other changes.............

—

—

—

—

—

3,509

442

—

(7,258)237(3,070)

Balance at
March 31, 2017.........

140,861¥64,152¥64,579¥121,092¥(18,306)¥15,987

¥640

¥160

¥ 8,211¥4,425¥260,940

Total
net
assetsIBIDEN CO., LTD. and Consolidated Subsidiaries
Years ended March 31, 2017 and 2016
Thousands of U.S. dollars (Note 3)

Deferredgain onhedgesSurplusarisingfrom land
revaluation

Translation
adjustments

Noncontrollinginterests

Total
net
assetsCommonstock

CapitalsurplusRetainedearnings

Balance atApril 1, 2016..............

$571,822$575,625$1,681,064$(163,136)$111,219$1,763$1,427$137,886$37,326$2,954,996

Cash dividends............

——(41,517)

—

—

—

—

—

—

(41,517)

Loss attributable toowners of parent........

——(560,201)

—

—

—

—

—

—

(560,201)

Purchases oftreasury stock............

—

—

—

(34)

—

—

—

—

—

(34)

Retirement oftreasury stock............

—

—

(2)

4

—

—

—

—

—

2

Other changes.............

—

—

—

—

31,284

3,938—(64,702)

2,112(27,368)

Balance at
March 31, 2017.........

$571,822$575,625$1,079,344$(163,166)$142,503$5,701$1,427$ 73,184$39,438$2,325,878

See accompanying notes to consolidated financial statements.

Consolidated Statement of Changes in Net Assets

Net unrealized
holding gainon othersecurities

Treasurystock,
at cost31

Consolidated Statement of Cash Flows

IBIDEN CO., LTD. and Consolidated Subsidiaries
Years ended March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 3)

Millions of yen

2017

2016

2017

¥ 12,129$(541,688)

Operating activities
Profit (loss) before income taxes....................................................................................... ¥ (60,772)

Consolidated Statement of Cash Flows

Adjustments to reconcile profit before income taxes to
net cash provided by operating activities:

32

Depreciation and amortization.......................................................................................

33,14844,057295,461

Loss on impairment of fixed assets................................................................................

102

6,403

913

Reversal for accrued bonuses for employees.................................................................

(283)

(451)

(2,519)

Reversal of allowance for doubtful accounts..................................................................

(40)

(84)

(358)

Increase (decrease) in liability for retirement benefits......................................................

4

(40)

36

Interest and dividend income.........................................................................................

(1,558)(1,186)(13,887)

Interest expense............................................................................................................

188

319

1,674

Gain on sales of property and equipment......................................................................

(197)

(63)

(1,753)

Loss on disposal of property and equipment and other assets......................................

1,281

4,058

11,416

Gain on sales of investment securities...........................................................................

—(2,194)—

Loss on devaluation of investment securities.................................................................

—

3

—

Business structure reform expenses..............................................................................

59,441—

529,826

Decrease in notes and accounts receivable...................................................................

859

517

7,658

Decrease (increase) in inventories..................................................................................

2,675

(252)

23,844(Decrease) increase in notes and accounts payable.......................................................

(4,671)

2,474(41,637)

Other, net......................................................................................................................

824

2,420

7,348

Subtotal...........................................................................................................

31,001

68,110276,334

Interest and dividends received.........................................................................................

1,615

1,212

14,395Interest paid.....................................................................................................................

(188)

(319)

(1,674)

Income taxes paid............................................................................................................

(4,225)(11,892)(37,664)

Income taxes refunded.....................................................................................................

610

2,388

5,435

Net cash provided by operating activities.......................................................................... ¥ 28,813¥ 59,499$ 256,826

IBIDEN CO., LTD. and Consolidated Subsidiaries
Years ended March 31, 2017 and 2016
Thousands of
U.S. dollars(Note 3)

Millions of yen

2017

2016

2017

Purchases of property and equipment.............................................................................. ¥ (25,558)¥ (42,747)$(227,813)

Proceeds from sales of property and equipment...............................................................

182

80

1,620

Purchases of intangible assets..........................................................................................

(1,023)(329)(9,118)Purchases of investment securities...................................................................................

(38)

(166)

(338)

Proceeds from sales of investment securities....................................................................

2

2,843

15

Long-term loans receivable made.....................................................................................

(11)

(11)

(97)

Collection of long-term loans receivable............................................................................

19

2

166

Other, net.........................................................................................................................

147

889

1,316

Net cash used in investing activities..................................................................................

(26,280)(39,439)(234,249)

Financing activities
Increase (decrease) in short-term borrowings, net.............................................................

—(2,600)—

Increase in long-term debt................................................................................................

10,000—89,135

Repayment of long-term debt...........................................................................................

(10,065)(3,127)(89,716)

Proceeds from issuance of bonds....................................................................................

15,000—133,702

Redemption of bonds.......................................................................................................

(15,000)—(133,702)

Purchases of treasury stock..............................................................................................

(4)(9,483)(34)

Proceeds from sales of treasury stock..............................................................................

1

—

4

Cash dividends paid to non-controlling interests...............................................................

(15)

(15)

(136)

Cash dividends paid.........................................................................................................

(4,658)(4,833)(41,517)

Repayments of lease obligations......................................................................................

(94)

(521)

(835)

Other, net.........................................................................................................................

(300)

100

(2,675)

Net cash (used in) provided by financing activities.............................................................

(5,135)(20,479)(45,774)

Effect of exchange rate changes on cash and cash equivalents.............................

(1,171)(2,185)(10,439)

Decrease in cash and cash equivalents......................................................................

(3,773)(2,604)(33,636)

Cash and cash equivalents at beginning of year.......................................................

107,875

110,479

961,542

Cash and cash equivalents at end of year (Note 20)................................................... ¥104,102¥107,875$ 927,906

See accompanying notes to consolidated financial statements.

Consolidated Statement of Cash Flows

Investing activities

33

Notes to Consolidated Financial Statements
IBIDEN CO., LTD. and Consolidated Subsidiaries
March 31, 2017

1. Basis of Presentation
IBIDEN CO., LTD. (the “Company”) and its domestic subsidiaries maintain theirbooks of account in conformity with accounting principles generally acceptedin Japan, and its overseas subsidiaries maintain their books of account in conformity with those of their respective countries of domicile.
The accompanying consolidated financial statements have been preparedin accordance with accounting principles generally accepted in Japan, which
are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards, and have been compiled

from the consolidated financial statements prepared by the Company as
required by the Financial Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated financial statements, certain
reclassifications and rearrangements have been made to the consolidated
financial statements issued domestically for the convenience of readers outside Japan. Furthermore, the notes to the consolidated financial statements
include certain information which is not required under accounting principles
generally accepted in Japan but is presented herein as additional information.

Notes to Consolidated Financial Statements

2. Summary of Significant Accounting Policies

34(a)	Principles of consolidation and accounting for investments inunconsolidated subsidiaries and affiliates	The accompanying consolidated financial statements include the accountsof the Company and its 33 and 34 significant consolidated subsidiaries forthe years ended March 31, 2017 and 2016, respectively.
		 The principles of consolidation are to include significant subsidiaries overwhich substantial control is exerted either through majority ownership ofvoting stock and/or by other means. For the years ended March 31, 2017and 2016, there are no affiliates accounted for by the equity method.
		 All significant intercompany transactions and accounts have been eliminated in consolidation.
		 Investments in unconsolidated subsidiaries and affiliates are carried atcost or less. Where there has been a permanent decline in the value ofsuch investments, the Company has written them down.
		 The financial statements of certain overseas consolidated subsidiaries
whose fiscal year end is December 31 have been included in consolidationon the basis of a full fiscal year closing on March 31 for consolidation purposes.
(b) Foreign currency translation
	All monetary assets and liabilities denominated in foreign currencies aretranslated into yen at the rates of exchange in effect at the balance sheet
date and gain or loss on each translation is credited or charged to income.
		 Revenue and expense items arising from transactions denominated inforeign currencies are generally translated into yen at the rates of
exchange in effect at the respective transaction dates. Gain or loss resulting from foreign currency transactions is credited or charged to income inthe year in which the gain or loss is recognized for financial reporting purposes.
		 The balance sheet accounts of the overseas consolidated subsidiaries
are translated into yen at the rates of exchange in effect at the balance
sheet date except that the components of net assets excluding non-controlling interests are translated at their historical exchange rates. Revenue
and expense accounts are translated into yen at the average rates of
exchange in effect during the year. Adjustments resulting from translating
financial statements denominated in a foreign currency are not included in
the determination of profit attributable to owners of parent, but arereported as translation adjustments and non-controlling interests in net
assets in the accompanying consolidated balance sheet.
(c) Cash equivalents	For the purposes of the consolidated statement of cash flows, all highly
liquid investments with a maturity of three months or less when purchased
are considered cash equivalents.
(d) Allowance for doubtful accounts
	An allowance for doubtful accounts of the Company and its domestic consolidated subsidiaries is provided at an amount principally calculated
based on their historical experience of bad debts on ordinary receivables
plus an additional estimate of probable specific bad debts from customers
experiencing financial difficulties.
		 An allowance for doubtful accounts of the Company’s overseas consolidated subsidiaries is provided at an amount principally calculated basedon an estimate of their probable specific bad debts.
(e) Inventories
	Inventories of the Company and its domestic consolidated subsidiaries arestated principally at the lower of cost or net selling value, cost being determined primarily by the moving average method. Inventories of the overseas consolidated subsidiaries are stated principally at the lower of cost or
market, cost being determined primarily by the first-in, first-out method.

(f) Short-term investments and investment securities
	Securities are classified into three categories: trading securities, held-tomaturity debt securities or other securities. Trading securities, consisting ofdebt and marketable equity securities, are carried at fair value. Gain or
loss, both realized and unrealized, is credited or charged to income. Heldto-maturity debt securities are carried at amortized cost. Marketable securities classified as other securities are carried at fair value with any changes
in unrealized holding gain or loss, net of the applicable income taxes,
reported as a separate component of accumulated other comprehensive
income (loss). Non-marketable securities classified as other securities arecarried at cost. Cost of securities sold is determined by the moving average method.
(g)	Property, plant and equipment and depreciation (other than leased
assets)	Depreciation of property, plant and equipment of the Company and its
domestic consolidated subsidiaries is calculated principally by the declining-balance method based on the estimated useful lives of the respective
assets and the residual value determined by the Company and eachdomestic consolidated subsidiary.
		 Depreciation of property, plant and equipment of the overseas consolidated subsidiaries is calculated principally by the straight-line method
based on the estimated useful lives of the respective assets and the residual value determined by each overseas consolidated subsidiary.
		 The principal estimated useful lives are as follows:		 Buildings and structures 3 to 75 years
		 Machinery and equipment 3 to 22 years		 Significant renewals and additions are capitalized at cost. Maintenanceand repairs are charged to income as incurred.
(h)	Intangible assets included in other assets (other than leased
assets)	Amortization of intangible assets is calculated by the straight-line method.
Capitalized computer software intended for internal use is amortized overits estimated useful life of five years.
(i) Leases
	Leased assets under finance leases are depreciated to their residual valueof zero by the straight-line method using the contract term as the usefullife.
(j) Accrued bonuses for employees	Accrued bonuses for employees of the Company and its domestic consolidated subsidiaries are provided for the current portion of the estimatedamount of bonuses to be paid to the employees in the following year.
(k)	A ccrued bonuses for directors and audit & supervisory board
members	Accrued bonuses for directors and audit & supervisory board members of
the Company is provided for the current portion of the estimated amountof bonuses to be paid to the directors and audit & supervisory board
members in the following year.
(l) Provision for business structure reform expenses	Accrued expenses for business structure reform are provided for the current portion of the estimated amount to be occurred in the future.

(n) Income taxes
	Deferred tax assets and liabilities have been recognized in the accompanying consolidated financial statements with respect to the differences
between the amounts recorded for financial reporting purposes and thetax bases of the assets and liabilities, and were measured using theenacted tax rates and laws which will be in effect when the differences are
expected to reverse.
(o) Deferred assets
Bond issuance costs are charged to expense as incurred.

(q) Revenues and related costs
	Revenues and the related costs and expenses, except for those from construction contracts, are generally recognized on sales of products at thetime of shipment. The Company recognizes revenue by applying the percentage-of-completion method for the construction projects for which theoutcome of the construction activity is deemed certain at the end of thereporting period. To estimate the progress of such construction projects,
the Company measures the percentage of completion by comparing costs
incurred to date with the most recent estimate of total costs required tocomplete the project (cost to cost basis). For other construction projects
where the outcome cannot be reliably measured, the completed-contract
method is applied.
(r) Derivatives	Derivatives positions are carried at fair value with any changes in unrealized gain or loss charged or credited to income, except for those whichmeet the criteria for deferral hedge accounting under which unrealized gainor loss is deferred and reported as deferred gain or loss on hedges in a
separate component of accumulated other comprehensive income (loss).
(s) Distribution of retained earnings
	
U nder the Corporation Law of Japan (the “Law”), the distribution ofretained earnings with respect to a given fiscal year is made by resolution
at a meeting of the Board of Directors of the Company held subsequent tothe close of such fiscal year. The accounts for that fiscal year do not,therefore, reflect such distributions. (Refer to Note 23.)(p) Research and development costs
Research and development costs are charged to expense as incurred.

3. U.S. Dollar Amounts
The U.S. dollar amounts in the accompanying consolidated financial statements have been translated from yen, solely for convenience and as a matterof arithmetic computation only, at ¥112.19 = U.S.$1.00, the rate of exchange

prevailing on March 31, 2017. This translation should not be construed as arepresentation that the yen amounts have been, could have been, or could in
the future be, converted into U.S. dollars at the above or any other rate.

4. Financial Instruments
Status of financial instruments
The Company and its consolidated subsidiaries (collectively, the “Group”) raise
funds principally through the issuance of bonds and loans from banks in consideration of plans for capital expenditures. The Group manages temporary
cash surpluses through highly liquid financial assets. Furthermore, the Group
raises short-term capital through loans from banks. The Group utilizes derivative financial instruments for the purpose of reducing the risk mentioned below
and does not enter into derivative transactions for speculative purposes.
Notes and accounts receivable, trade, are exposed to credit risk in relation
to customers. In addition, the Group is exposed to foreign currency exchange
risk arising from trade receivables denominated in foreign currencies. Shortterm investments and investment securities are exposed to market risk. Those
securities mainly consist of the shares of other companies with which theGroup has business relationships and debt securities through which the Groupmanages temporary cash surpluses.
Substantially all notes and accounts payable have payment due dates
within one year. In addition, the Group is exposed to foreign currency
exchange risk arising from those trade payables denominated in foreign currencies.
The Group conducts varied financing activities to acquire necessary funding for working capital investments in property, plant and equipment, and soforth. Borrowings and bonds with floating interest as a part of such financing
are exposed to the risk of interest rate fluctuation.
Regarding derivative transactions, the Group enters into forward foreignexchange contracts to reduce the foreign currency exchange risk arising fromthe receivables and payables denominated in foreign currencies.
In accordance with the internal policies of the Group for managing credit
risk (risk of non-performance by any of the counterparties) arising from tradereceivables, the Group periodically monitors credit worthiness of customers
and takes prompt action on outstanding balances in order to mitigate thecredit risks. In addition, the Group only acquires held-to-maturity debt securities with high credit ratings.
For trade receivables and payables denominated in foreign currencies, theCompany identifies the foreign currency exchange risk for each currency on amonthly basis and enters into forward foreign exchange contracts to hedge
such risk.
In order to mitigate the unfavorable impact caused by foreign currency
exchange fluctuations on accounts receivable deriving from forecasted export
sales transactions, the Company also enters into forward foreign exchange
contracts to the extent it is probable that those forecasted export sales takeplace.
For short-term investments and investment securities, the Group periodically reviews market prices and the financial position of the issuers who arebusiness counterparties of the Group. In addition, the Group continuously
evaluates whether securities other than those classified as held-to-maturity
debt securities should be maintained taking into account their fair values andrelationships with the counterparty companies.
Derivative transactions are entered into by the division in charge of derivative transactions with the approval from authorized officers in accordance with
the internal policies, which set forth delegation of authority and maximum
upper limit on positions.
In order to manage liquidity risk (the risk that the Group may not be able tomeet its obligations on scheduled due dates) responsible division prepares andupdates its cash flow plans on a timely basis based on reports from each division.
The fair value of financial instruments is based on their quoted market
price, if available. When there is no quoted market price available, fair value isreasonably estimated. Since various assumptions and factors are reflected inestimating the fair value, different assumptions and factors could result in different fair value. In addition, the notional amounts of derivatives in Note 21,“Derivatives” are not necessarily indicative of the actual market risk involved in
the derivative transactions.
Estimated Fair Value of Financial Instruments
Carrying value of financial instruments on the consolidated balance sheet andestimated fair value at March 31, 2017 and 2016 are summarized as follows.
Financial instruments for which it is extremely difficult to determine the fairvalue are not included in the following table.

Notes to Consolidated Financial Statements(m) Retirement benefits for employees
	Liability for retirement benefits for employees of certain consolidated subsidiaries is provided principally at an amount calculated based on theretirement benefit obligation.
		 The retirement benefit obligation of certain consolidated subsidiaries is
attributed to each year by the straight-line basis over the estimatedremaining years of service of the eligible employees. Prior service cost andactuarial gain or loss incurred at certain consolidated subsidiaries are credited or charged to income in the year in which the gain or loss is recognized.
		 Certain consolidated subsidiaries have adopted a simplified method forthe retirement benefits calculation. Under this simplified method, liability for
retirement benefits is stated at the amount which would be required to be
paid if all eligible employees voluntarily terminated their employment at thebalance sheet date.

35

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (continued)

36

Carrying
value

2017
Estimated
fair value(Millions of yen)

Assets:Cash and deposits...........................................................................................................................
Notes and accounts receivable, trade..............................................................................................
Short-term investments and investment securities............................................................................
Long-term loans receivable..............................................................................................................
Total assets.........................................................................................................................................

¥104,182
56,61042,45430¥203,276¥104,182
56,61042,45430¥203,276

¥—
—
—
—
¥—

Liabilities:
Short-term borrowings.....................................................................................................................
Notes and accounts payable, trade..................................................................................................
Notes and accounts payable, other..................................................................................................
Long-term debt, including current portion of long-term debt............................................................
Total liabilities.......................................................................................................................................
Derivative transactions (*).....................................................................................................................

¥ 20,000
29,264
10,33250,063
109,659¥ 1,557¥ 20,000
29,264
10,33250,120109,716¥ 1,557

¥—
—
—
57
57
¥—

Carrying
value

2016
Estimated
fair value(Millions of yen)

Assets:Cash and deposits...........................................................................................................................
Notes and accounts receivable, trade..............................................................................................
Short-term investments and investment securities............................................................................
Long-term loans receivable..............................................................................................................
Total assets.........................................................................................................................................

¥104,765
57,57940,61140¥202,995¥104,765
57,57940,611
38¥202,993

¥—
—
—
(2)
¥(2)

Liabilities:
Short-term borrowings.....................................................................................................................
Notes and accounts payable, trade..................................................................................................
Notes and accounts payable, other..................................................................................................
Long-term debt, including current portion of long-term debt............................................................
Total liabilities.......................................................................................................................................
Derivative transactions (*).....................................................................................................................

¥20,000
34,66916,96650,128
121,763¥811¥20,000
34,66916,96650,299
121,934
¥811

¥—
—
—
171
171
¥—

Carrying
value

2017
Estimated
fair value(Thousands of U.S. dollars)

Difference

Difference

Difference

Assets:Cash and deposits........................................................................................................................... $928,619
Notes and accounts receivable, trade..............................................................................................
504,586
Short-term investments and investment securities............................................................................
378,420
Long-term loans receivable..............................................................................................................
270
Total assets......................................................................................................................................... $1,811,895$928,619
504,586
378,420267$1,811,892

$—
—
—
(3)
$(3)

Liabilities:
Short-term borrowings..................................................................................................................... $178,269
Notes and accounts payable, trade..................................................................................................
260,842
Notes and accounts payable, other..................................................................................................
92,093Long-term debt, including current portion of long-term loans debt...................................................
446,232
Total liabilities.......................................................................................................................................
977,436
Derivative transactions (*)..................................................................................................................... $13,880$178,269
260,842
92,093446,743
977,947$13,880

$—
—
—
511
511
$—

* Assets and liabilities arising from derivatives are presented at net value. The amount in parentheses represents a net liability position.

Methods to determine the estimated fair value of financial instruments are as follows:
Carrying value of cash and deposits, notes and accounts receivable, trade,approximates fair value because these items are settled in a short period oftime.
Regarding short-term investments and investment securities, the fair valueof shares is based on quoted market prices. The fair value of debt securities isbased on either quoted market prices or prices provided by financial institutions.
For information on securities classified by holding purpose, please refer toNote 6, “Short-Term Investments and Investment Securities.”
Fair value of long-term loans receivable, classified by the maturity and current credit risk of each loan, is based on the present value of the total of principal and interest discounted by the interest rate determined taking into accountthat of Japanese government bonds and the credit spreads of each loan. The
fair value in the table above includes the current portion of long-term loans
receivable.
Carrying value of short-term borrowings and notes and accounts payable,
trade and other approximates fair value because these items are settled in ashort period of time.
The fair value of long-term debt is based on the present value of the total ofprincipal and interest discounted by the interest rate to be applied if similar
new borrowings were entered into. The fair value in the table above includes
the current portion of long-term loans debt.
Regarding fair value of derivatives, please refer to Note 21, “Derivatives.”

2017

2016

Thousands of
U.S. dollars
2017¥1,652¥1,649$14,724

Over 5 years
within 10 years

Over 10 years

Millions of yen

Unlisted equity securities......................................................................................................................
Redemption schedules for monetary assets at March 31, 2017 and 2016 were as follows:

2017

Within 1 year

Over 1 year
within 5 years(Millions of yen)

Cash and deposits.............................................................................................
Notes and accounts receivable, trade.................................................................
Long-term loans receivable.................................................................................
Total...................................................................................................................

¥104,182
56,610—¥160,792

¥—
—
21
¥21

Within 1 year

Over 1 year
within 5 years

¥—
—
9
¥9

¥—
—
—
¥—

2016

Over 5 years
within 10 years

37
Over 10 years(Millions of yen)

Cash and deposits.............................................................................................
Notes and accounts receivable, trade.................................................................
Long-term loans receivable.................................................................................
Total...................................................................................................................

¥104,765
57,579—¥162,344

¥—
—
29
¥29

Within 1 year

Over 1 year
within 5 years

¥—
—
11
¥11

¥—
—
—
¥—

Over 5 years
within 10 years

Over 10 years

2017(Thousands of U.S. dollars)

Cash and deposits.............................................................................................
Notes and accounts receivable, trade.................................................................
Long-term loans receivable.................................................................................
Total...................................................................................................................

$928,619
504,586
22$1,433,227

$—
—
187
$187

$—
—
83
$83

$—
—
—
$—

5. Short-Term Investments and Investment Securities(a) Marketable securities classified as other securities at March 31, 2017 and 2016 are summarized as follows:

Acquisition cost

Securities whose market value reflected in the balance sheet
exceeds their acquisition cost:
Equity securities...............................................................................................................................
Other...............................................................................................................................................
Subtotal....................................................................................................................................
Securities whose market value reflected in the balance sheet
does not exceed their acquisition cost:
Equity securities...............................................................................................................................
Other...............................................................................................................................................
Subtotal....................................................................................................................................
Total....................................................................................................................................................

2017Market value
reflected in thebalance sheet(Millions of yen)

Notes to Consolidated Financial Statements

Carrying value of financial instruments for which it is extremely difficult to determine the fair value at March 31, 2017 and 2016 was as follows:

Difference¥18,746—
18,746¥41,232—
41,232¥22,486—
22,486

1,333
—
1,333
¥20,079

1,222
—
1,222
¥42,454

(111)
—
(111)
¥22,375

Notes to Consolidated Financial Statements (continued)

Acquisition cost

Notes to Consolidated Financial Statements

Securities whose market value reflected in the balance sheet
exceeds their acquisition cost:
Equity securities...............................................................................................................................
Other...............................................................................................................................................
Subtotal....................................................................................................................................
Securities whose market value reflected in the balance sheet
does not exceed their acquisition cost:
Equity securities...............................................................................................................................
Other...............................................................................................................................................
Subtotal....................................................................................................................................
Total....................................................................................................................................................

38

Unlisted equity securities (recorded in the accompanying consolidated balance
sheet in the amounts of ¥1,652 million ($14,724 thousand) and ¥1,649 million
at March 31, 2017 and 2016, respectively) are not included in the table above
because there were no quoted market prices available and it is extremely difficult to determine the fair value.
The Company and certain domestic consolidated subsidiaries have recognized losses on devaluation of investment securities classified as othersecurities of ¥3 million for the year ended March 31, 2016.

Difference¥18,629—
18,629¥36,090—
36,090¥17,461—
17,461

1,403
3,200
4,603
¥23,232

1,321
3,200
4,521
¥40,611

(82)
—
(82)
¥17,379

Acquisition cost

Securities whose market value reflected in the balance sheet
exceeds their acquisition cost:
Equity securities...............................................................................................................................
Other...............................................................................................................................................
Subtotal....................................................................................................................................
Securities whose market value reflected in the balance sheet
does not exceed their acquisition cost:
Equity securities...............................................................................................................................
Other...............................................................................................................................................
Subtotal....................................................................................................................................
Total....................................................................................................................................................

2016Market value
reflected in thebalance sheet(Millions of yen)

2017
Market value
reflected in thebalance sheet(Thousands of U.S. dollars)

Difference$167,087—
167,087$367,523—
367,523$200,436—
200,436

11,889—11,889$178,976

10,896—
10,896$378,419

(993)
—
(993)
$199,443

Loss on devaluation of investment securities are recorded for the securities
whose market value represents a substantial decline of 50% or more and for
those which have declined within a range of 30% or more, but less than 50% if
the decline is deemed to be irrecoverable.

(b) The proceeds from sales of, and gross realized gain and loss on, other securities for the years ended March 31, 2017 and 2016 are summarized as follows:

Proceeds

Equity securities..................................................................................................................................
Other...................................................................................................................................................
Total....................................................................................................................................................

¥2
—
¥2

Proceeds

Equity securities..................................................................................................................................
Other...................................................................................................................................................
Total....................................................................................................................................................

¥ 649
4,001
¥4,650

Proceeds

Equity securities..................................................................................................................................
Other...................................................................................................................................................
Total....................................................................................................................................................

$15
—
$15

2017
Gross realized
gain(Millions of yen)

¥—
—
¥—
2016
Gross realized
gain(Millions of yen)

¥2,194—¥2,1942017
Gross realized
gain(Thousands of U.S. dollars)

$—
—
$—

Gross realized
loss

¥(1)
—
¥(1)
Gross realized
loss

¥—
—
¥—
Gross realized
loss

$(10)
—
$(10)

6. Short-Term Borrowings and Long-Term Debt
Short-term borrowings and the current portion of long-term debt at March 31, 2017 and 2016 consisted of the following:

2017

2016

Thousands of
U.S. dollars
2017¥20,000
57¥20,057¥20,000
25,065¥45,065$178,269
508$178,777

Millions of yen

Short-term borrowings........................................................................................................................
Current portion of long-term debt........................................................................................................

The weighted-average annual interest rates applicable to short-term borrowings outstanding at March 31, 2017 and 2016 were 0.12% and 0.22%, respectively.

2017

2016

Thousands of
U.S. dollars
2017¥10,063—
25,00015,000¥50,063(57)¥50,006¥10,128
15,00025,000—¥50,128(25,065)¥25,063$ 89,694—
222,836
133,702$446,232(508)$445,724

Millions of yen

Debt without collateral:
Loans from banks due April 2017 through October 2020, at average interest rates
of 0.20% and 0.30% per annum at March 31, 2017 and 2016, respectively....................................
Bonds in yen due September 2016 at rate of 0.495%......................................................................
Bonds in yen due April 2019 at rate of 0.294%................................................................................
Bonds in yen due August 2021 at rate of 0.120%............................................................................
Subtotal...........................................................................................................................................
Less current portion.............................................................................................................................

The aggregate annual maturities of long-term debt subsequent to March 31, 2017 are summarized as follows:Year ending March 31,
2018.........................................................................................................................................................................
2019.........................................................................................................................................................................
2020.........................................................................................................................................................................
2021.........................................................................................................................................................................
2022 and thereafter...................................................................................................................................................

Millions of yen¥

57
625,00010,00015,000¥50,063

Thousands of
U.S. dollars

$

508
51
222,836
89,135
133,702$446,232

7. Assets Pledged as Collateral
Assets pledged as collateral for accounts payable and other current liabilities of ¥53 million ($468 thousand) at March 31, 2017 were as follows:
Millions of yen

Investment securities....................................................................................................................................................

¥14

Thousands of
U.S. dollars$121

8. Lease Obligations
The aggregate annual maturities of lease obligations subsequent to March 31, 2017 are summarized as follows:Year ending March 31,
2018.........................................................................................................................................................................
2019.........................................................................................................................................................................
2020.........................................................................................................................................................................
2021.........................................................................................................................................................................
2022 and thereafter...................................................................................................................................................

Millions of yen

¥110
59
16
7
4
¥196

Thousands of
U.S. dollars

$ 984
530
138
67
32
$1,751

Notes to Consolidated Financial Statements

Long-term debt at March 31, 2017 and 2016 consisted of the following:39

Notes to Consolidated Financial Statements (continued)

9. Retirement Benefits
The Company and certain domestic consolidated subsidiaries have defined
contribution plans for retirement benefits. Other domestic consolidated subsidiaries have defined benefit plans, including lump-sum payment plans, covering

substantially all employees who are entitled to lump-sum or annuity payments,
the amounts of which are determined by reference to their basic rates of pay,
length of service, and the conditions under which termination occurs.

Certain consolidated subsidiaries calculate the liability for retirement benefits based on the simplified method.
The changes in the retirement benefit obligation for the years ended March 31, 2017 and 2016 are summarized as follows (excluding retirement benefit obligations
based on the simplified method):
Millions of yen

Notes to Consolidated Financial Statements

2017

40

Retirement benefit obligation at the beginning of the year....................................................................
Service cost.........................................................................................................................................
Interest cost........................................................................................................................................
Foreign currency translation difference.................................................................................................
Others.................................................................................................................................................
Retirement benefit obligation at the end of the year.............................................................................

2016

¥457
22
9
(26)
(2)
¥460

Thousands of
U.S. dollars
2017$4,073
200
77
(228)
(19)
$4,103

¥495
26
9
(9)
(64)
¥457

The changes in the retirement benefit obligation under the simplified method for the years ended March 31, 2017 and 2016 are summarized as follows:
Millions of yen
2017

Retirement benefit obligation at the beginning of the year....................................................................
Service cost.........................................................................................................................................
Benefit paid.........................................................................................................................................
Retirement benefit obligation at the end of the year.............................................................................

2016

¥8
1
(0)
¥9

Thousands of
U.S. dollars
2017

$71
9
(3)
$77

¥9
4
(5)
¥8

The balance of retirement benefit obligation and plan assets at fair value at March 31, 2017 and 2016 and liabilities recognized in the consolidated balance sheet atMarch 31, 2017 and 2016 are summarized as follows:
Millions of yen
2017

Unfunded retirement benefit obligation*...............................................................................................
Net amount of liabilities and assets recognized in consolidated balance sheet.....................................
Liability for retirement benefits..............................................................................................................
Asset for retirement benefits................................................................................................................
Net amount of liabilities and assets recognized in consolidated balance sheet.....................................

2016

¥469
469
469
—
¥469

¥465
465
465
—
¥465

Thousands of
U.S. dollars
2017$4,180
4,180
4,180
—
$4,180* Certain domestic consolidated subsidiaries have calculated their retirement benefit obligation based on the simplified method.

The components of retirement benefit expenses for the years ended March 31, 2017 and 2016 are summarized as follows:
Millions of yen
2017Service cost.........................................................................................................................................
Interest cost........................................................................................................................................
Amortization of actuarial loss...............................................................................................................
Retirement benefit expenses................................................................................................................

2016

¥23
9
(2)
¥30

Thousands of
U.S. dollars
2017

$210
77
(19)
$268

¥30
9
(26)
¥13

The actuarial assumption used in accounting for the above plans was as follows:
2017

Discount rates..........................................................................................................................................................

1.9-2.1%

2016

1.9%

The required contributions to defined contribution plans of the Company and certain consolidated subsidiaries were ¥1,534 million ($13,675 thousand) and ¥1,581
million for the years ended March 31, 2017 and 2016, respectively.

10. Income Taxes
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries consist of corporation tax, inhabitants’ taxes and enterprisetaxes, which, in the aggregate, resulted in statutory tax rates of approximately

32.3% for the year ended March 31, 2016. Income taxes of the overseas consolidated subsidiaries are based generally on the tax rate applicable in theirrespective countries of incorporation.

The effective tax rates for the year ended March 31 2016 differed from the statutory tax rates for the following reasons:
2017

2016

—%

32.3%

—
—
—
—
—

27.6
2.3
(2.6)
(18.6)
4.3

—
—
—
—
—
—%

(17.1)(12.8)(27.3)
43.8
4.1
36.0%

Due to loss before income tax for the year ended March 31 2017, Note of effect of income tax is omit.
The significant components of deferred tax assets and liabilities at March 31, 2017 and 2016 were as follows:

2017

2016

Thousands of
U.S. dollars
2017¥4,600
606
1,012
572
646
23,565
349
843
153
876
33,222(27,138)6,084¥3,508
719
1,101
576
638
701
458
305
100
542
8,648
(2,978)5,670$41,004
5,401
9,021
5,101
5,758
210,045
3,113
7,512
1,365
7,805
296,125(241,891)
54,234(6,148)(4,584)(54,801)

(741)
(40)
(754)
(68)
(7,751)¥(1,667)

(741)
(42)
(1,097)(68)(6,532)¥(862)(6,605)(354)(6,721)(609)(69,090)$(14,856)

Millions of yen

Deferred tax assets:
Depreciation.....................................................................................................................................
Tax loss carryforwards......................................................................................................................
Accrued bonuses.............................................................................................................................
Intercompany profit on sales of property, plant and equipment.........................................................
Loss on devaluation of investment securities....................................................................................
Loss on valuation of shares of subsidiaries.......................................................................................
Loss on devaluation of inventories....................................................................................................
Loss on impairment of fixed assets..................................................................................................
Provision for doubtful accounts........................................................................................................
Other...............................................................................................................................................
Gross deferred tax assets....................................................................................................................
Less: valuation allowance..........................................................................................................
Total deferred tax assets......................................................................................................................
Deferred tax liabilities:
Net unrealized holding gain on other securities.................................................................................
Net unrealized gain on land revaluation resulting from inclusion of
a subsidiary in consolidation............................................................................................................
Reserve for depreciation for tax purposes........................................................................................
Tax effect of retained earnings in overseas consolidated subsidiaries................................................
Surplus arising from land revaluation................................................................................................
Total deferred tax liabilities...................................................................................................................
Net deferred tax liabilities.....................................................................................................................

Notes to Consolidated Financial Statements

Statutory tax rates....................................................................................................................................................
Effect of:
Elimination of dividend income received from overseas
consolidated subsidiaries.....................................................................................................................................
Permanently non-deductible expenses..................................................................................................................
Tax effect of retained earnings in overseas consolidated subsidiaries.....................................................................
Income taxes refunded..........................................................................................................................................
Change in statutory income tax rate......................................................................................................................
Difference between statutory tax rate in Japan and income tax rates
applied at overseas consolidated subsidiaries......................................................................................................
Tax credits.............................................................................................................................................................
Permanently non-taxable dividends received.........................................................................................................
Valuation allowance...............................................................................................................................................
Other, net..............................................................................................................................................................
Effective tax rates.....................................................................................................................................................

41

Notes to Consolidated Financial Statements (continued)

11. Shareholders’ Equity
March 31, 2017 and 2016 amounted to ¥3,548 million ($31,630 thousand)and ¥3,548 million, respectively.
The Law further provides that, in general, an amount equal to the entire
amount of the paid-in capital for new share issuances be transferred to thecommon stock account; however, an amount equal to or less than 50% of theentire amount may be transferred to the capital surplus account.

The Law provides that an amount equal to 10% of the amount to be disbursed
as distributions of capital surplus (other than the capital reserve) and retained
earnings (other than the legal reserve) be transferred to the capital reserve andthe legal reserve, respectively, until the sum of the capital reserve and the legal
reserve equals 25% of the capital stock account. Such distributions can bemade at any time by resolution of the shareholders, or by the Board of
Directors if certain conditions are met.
Retained earnings include the legal reserve provided in accordance with
the Law. The legal reserve of the Company included in retained earnings at

Treasury stock
Movements in treasury stock during the years ended March 31, 2017 and 2016 are summarized as follows:
Number of shares
2017

Notes to Consolidated Financial Statements

March 31, 2016

42

Treasury stock:
Common stock.............................................................................

7,778,279

Increase

Decrease

2,620

204

March 31, 2017
7,780,695

Number of shares
2016

Treasury stock:
Common stock.............................................................................

March 31, 2015

Increase

Decrease

March 31, 2016

12,775,618

5,002,661

10,000,000

7,778,279

12. Loss on Impairment of Fixed Assets
and the carrying values of the idle assets which are not anticipated to be utilized in the future due to reconsideration of production system have been
reduced to their respective recoverable amounts.

Fixed assets are grouped based on business segments. The production facilities which cannot contribute to the revenue initially expected due toreconsideration of production system and restructuring of business structure

Losses on impairment of fixed assets for the years ended March 31, 2017 and 2016 are summarized as follows:
2017

Location
Ogaki City,
Gifu Prefecture
Ogaki City,
Gifu Prefecture
Godo Town,
Gifu Prefecture
Ibigawa Town,
Gifu Prefecture
Batangas, Republicof Philippines
Batangas, Republicof Philippines
Batangas, Republicof Philippines
Courtenay,
FrancePenang,Malaysia
Penang,Malaysia
Penang,Malaysia
Penang,Malaysia
Pohang,South Korea

Millions of yen

Thousands of
U.S. dollars

Idle¥ 3,480$ 31,019

Idle

¥

434

$

3,866

Idle

¥

517

$

4,606

Idle

¥

4

$

36

Idle

¥ 2,563$ 22,846

Idle

¥

611

$

5,450

Others

Idle

¥

58

$

519

Machinery andequipment
Buildings andstructures
Machinery andequipment
Construction in
Progress

Production
Facilities
Production
Facilities
Production
Facilities
Production
Facilities
Production
Facilities

Classification
Buildings andstructures
Construction in
Progress
Buildings andstructures
Buildings andstructures
Machinery andequipment
Construction in
Progress

Description

OthersConstruction in
ProgressIdle¥ 1,253$ 11,172¥ 7,758$ 69,148¥21,555$192,127¥ 8,266$ 73,680

¥

530

$

4,720

¥

102

$

913

2016

Classification
Buildings andstructures
Construction in
Progress
Buildings andstructures
Land
Construction in
Progress
Machinery andequipment
Machinery andequipment
Construction in
Progress
OthersDescription

Millions of yen

Thousands of U.S. dollars

Idle

¥

79

$

705

Idle

¥

14

$

122

Idle

¥

37

$

324

Idle

¥

10

$

92

Idle

¥ 654

$ 5,804

Idle

¥

$

Idle

¥ 237

$ 2,106

Idle¥5,297$47,038

Idle

¥

$

The recoverable amounts were measured at estimated net selling value. The
carrying values of production facilities and idle assets have been reduced to ¥1($0.01) for the years ended March 31, 2017 and 2016, respectively.
The decrease amount of ¥47,131 million ($420,102 thousand) for the year
ended March 31, 2017 was recorded as impairment loss ¥102 million ($913

72

3

642

23

thousand) and business structure reform expenses ¥47,029 million ($419,189
thousand).

13. Business Structure Reform Expenses
The detail of business structure reform expenses for the years ended March 31, 2017 were as follows;
Item

Impairment loss on fixed assets for electric business reform.........................................................................................
Impairment loss on fixed assets for ceramic business reform........................................................................................
Impairment loss on unutilized assets in corporate assets .............................................................................................
Evaluation loss on inventories.......................................................................................................................................
Reconciliation expense.................................................................................................................................................

Millions of yen

Thousands of
U.S. dollars¥38,108
1,254
7,667
2,548
12,412$339,676
11,172
68,341
22,710110,637

14. Temporarily Unutilized Property and Equipment
The following property and equipment included in property, plant and equipment in the accompanying consolidated balance sheet are temporarily unutilized at
March 31, 2017 and 2016.
Millions of yen
2017

Buildings and structures......................................................................................................................
Machinery and equipment...................................................................................................................
Other...................................................................................................................................................

¥82
5
0

2016

¥19,634
25,538372

Thousands of
U.S. dollars
2017

$730
49
0

15. Land Revaluation
A consolidated subsidiary revalued its land held for business use in accordance with the “Land Revaluation Law” and the amended “Land Revaluation
Law” at March 31, 2002. As a result, the consolidated subsidiary recognized again on land revaluation and recorded a deferred tax liability related to thisgain. The resulting gain, net of the relevant tax effect, has been accounted forunder accumulated other comprehensive income (loss) as surplus arising fromland revaluation. The method followed for this land revaluation was determinedin accordance with the “Land Valuation Tax Law” as stipulated in the“Enforcement Act Concerning Land Revaluation” and other regulations.
As of March 31, 2017 the fair value of this land was ¥288 million ($2,567
thousand) less than its carrying value after revaluation.

Notes to Consolidated Financial Statements

Location
Ogaki City,
Gifu Prefecture
Ogaki City,
Gifu Prefecture
Thessaloniki,Hellenic Republic
Thessaloniki,Hellenic Republic
Batangas, Republicof Philippines
Courtenay,
FrancePenang,Malaysia
Penang,Malaysia
Penang,Malaysia

43Notes to Consolidated Financial Statements (continued)

16. Selling, General and Administrative Expenses
The components of selling, general and administrative expenses for the years ended March 31, 2017 and 2016 were as follows:

2017

2016

Thousands of
U.S. dollars
2017¥11,208
1,055—
192
14,112
22,110¥48,677¥11,780
1,151
69
221
15,204
24,777¥53,202$ 99,902
9,406
—
1,708
125,786
197,078$433,880

2017

2016

Thousands of
U.S. dollars
2017

¥(1)
—
(294)
(102)
(1,714)(4,533)—(61,989)(651)¥(69,284)¥2,194(3)(3,923)(6,403)
1,099(4,065)(6)—(202)¥(11,309)$(10)—(2,621)(913)(15,276)(40,401)—(552,536)(5,804)$(617,561)

2016

U.S. dollars
2017

Millions of yen

Salaries...............................................................................................................................................
Provision for employees’ bonuses.......................................................................................................
Provision for directors’ and audit & supervisory board members’ bonuses...........................................
Provision for employees’ retirement benefit expenses..........................................................................
Research and development costs........................................................................................................
Other...................................................................................................................................................
Total....................................................................................................................................................

17. Other Income (Expenses)

Notes to Consolidated Financial Statements

The components of “Other, net” in “Other income (expenses)” for the years ended March 31, 2017 and 2016 were as follows:

44

Millions of yen(Loss) gain on sales of investment securities........................................................................................
Loss on devaluation of investment securities.......................................................................................
Loss on sales and disposal of property, plant and equipment, net.......................................................
Loss on impairment of fixed assets......................................................................................................
Foreign exchange (loss) gain, net.........................................................................................................
Depreciation of inactive fixed assets....................................................................................................
Loss on liquidation of subsidiaries and affiliates...................................................................................
Business structure reform expenses....................................................................................................
Other, net............................................................................................................................................
Total....................................................................................................................................................

18. Amounts per Share
Yen
2017

Basic profit (loss) attributable to owners of parent................................................................................
Net assets...........................................................................................................................................
Cash dividends applicable to the year..................................................................................................
Basic profit (loss) attributable to owners of parent per share for the years
ended March 3 1, 2 0 1 7 and 2 0 1 6 has been computed based on the profit(loss) attributable to the shareholders of common stock and the weightedaverage number of shares of common stock outstanding during the year.
Amounts per share of net assets have been computed based on the numberof shares of common stock outstanding at the year end.

¥(472.26)
1,927.53
35.00

¥

55.29
2,459.63
35.00$(4.21)
17.18
0.31

Cash dividends per share represent the cash dividends approved by the
Board of Directors as applicable to the respective years together with theinterim cash dividends paid.

Financial data for the computation of basic profit (loss) attributable to owners of parent per share for the years ended March 31, 2017 and 2016 in the table above
is summarized as follows:

2017

2016

Thousands of
U.S. dollars
2017¥(62,849)¥7,531$(560,201)

Millions of yen

Profit (loss) attributable to owners of parent.........................................................................................

Thousands of shares

Weighted-average number of shares of common stock outstanding during the year............................

2017

2016

133,081

136,209

Financial data for the computation of net assets per share at March 31, 2017 and 2016 in the above table is summarized as follows:

2017

2016

Thousands of
U.S. dollars
2017¥260,940¥331,521$2,325,878(4,425)¥256,515(4,188)¥327,333(39,438)$2,286,440

Millions of yen

Total net assets...................................................................................................................................
Deductions from total net assets:
Non-controlling interests..................................................................................................................
Total net assets attributable to common stockholders.........................................................................

Thousands of shares

Number of shares of common stock used in the calculation of net assets per share............................

2017

2016

133,079

133,08219. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects for other comprehensive income (loss) for the years ended March 31, 2017 and 2016:

Net unrealized holding gain (loss) on securities:
Amount arising during the year.........................................................................................................
Reclassification adjustments for loss (gain) realized in the statement of income................................
Before tax effect...............................................................................................................................
Tax effect.........................................................................................................................................
Net unrealized holding gain (loss) on securities....................................................................................
Deferred gain on hedges:
Amount arising during the year.........................................................................................................
Reclassification adjustments for (gain) loss realized in the statement of income................................
Before tax effect...............................................................................................................................
Tax effect.........................................................................................................................................
Deferred gain on hedges.....................................................................................................................
Surplus arising from land revaluation:
Tax effect.........................................................................................................................................
Surplus arising from land revaluation:
Translation adjustments:
Amount arising during the year.........................................................................................................
Reclassification adjustments for (gain) realized in the statement of income.......................................
Translation adjustments.......................................................................................................................
Total....................................................................................................................................................

2017

2016

¥4,995
1
4,996(1,464)
3,532¥(10,526)(2,193)(12,719)
4,169(8,550)$44,525
10
44,535(13,056)
31,479

915
(283)
632
(190)
442

283
2
285
(86)
199

8,156
(2,522)
5,634(1,696)
3,938

—
—

3
3

—
—

(7,259)—(7,259)¥(3,285)(12,673)(984)(13,657)¥(22,005)(64,702)—(64,702)$(29,285)

20. Supplementary Cash Flow Information
A reconciliation of cash and cash equivalents in the accompanying consolidated statement of cash flows and cash and deposits in the accompanying consolidatedbalance sheet is presented as follows:

2017

2016

Thousands of
U.S. dollars
2017¥104,182—(80)¥104,102¥104,765
3,200(90)¥107,875$928,619—(713)$927,906

Millions of yen

Cash and deposits..............................................................................................................................
Short-term investments.......................................................................................................................
Time deposits with maturities in excess of three months......................................................................
Cash and cash equivalents..................................................................................................................

21. Derivatives
Derivative financial instruments such as forward foreign exchange contracts
are utilized by the Company principally in order to manage the risk arising fromadverse fluctuation in foreign currency exchange rates. The Company has
established a control environment which includes policies and procedures forrisk assessment, including an assessment of the effectiveness of hedging, andfor the approval, reporting and monitoring of transactions involving derivatives.
The Company does not hold or issue derivatives for speculative purposes.
The Company is exposed to certain market risk arising from forward foreign exchange contracts. The Company is also exposed to the risk of credit

loss in the event of non-performance by any of the counterparties to forward
foreign exchange contracts; however, the Company does not anticipate nonperformance by any of these counterparties, all of whom are financial institutions with high credit ratings.
Summarized below are the notional amounts and estimated fair value ofthe derivatives positions outstanding at March 31, 2017 and 2016, for which
hedge accounting has not been applied. There were no derivatives with maturities over one year at March 31, 2017 and 2016.

Notional
amountForward foreign exchange contracts:
Sell:
U.S. dollars...................................................................................................................................
Euros............................................................................................................................................
Total....................................................................................................................................................

¥13,800
4,287¥18,087

Notional
amountForward foreign exchange contracts:
Sell:
U.S. dollars...................................................................................................................................
Euros............................................................................................................................................
Total....................................................................................................................................................

¥3,8784,369¥8,2472017
Estimated
fair value(Millions of yen)

¥546
96
¥642
2016
Estimated
fair value(Millions of yen)

¥276
252
¥528

Unrealized
gain

¥546
96
¥642

Unrealized
gain

¥276
252
¥528

Notes to Consolidated Financial Statements

Thousands of
U.S. dollars
2017

Millions of yen

45Notes to Consolidated Financial Statements (continued)

Forward foreign exchange contracts:
Sell:
U.S. dollars...................................................................................................................................
Euros............................................................................................................................................
Total.................................................................................

Notional
amount2017
Estimated
fair value(Thousands of U.S. dollars)$123,006
32,903$155,909$4,870854$5,724

Unrealized
gain$4,870854$5,724

Summarized below are the notional amounts and estimated fair value of the derivatives positions outstanding at March 31, 2017 for which hedge accounting has
been applied.

Notes to Consolidated Financial Statements

Method ofhedge
accounting

Deferral hedge
accounting

2017

Transaction

Hedged item

Forward foreignexchange contracts:
Sell:
U.S. dollars
Euros

Accounts
receivable

Notional amount(Millions of yen)

Estimated
fair value¥19,882¥ 7,731¥747¥168

There were no derivatives with maturities over one year at March 31, 2017.
Method ofhedge
accounting

46
Deferral hedge
accounting

2017

Transaction

Hedged item

Forward foreignexchange contracts:
Sell:
U.S. dollars
Euros

Accounts
receivable

Estimated
Notional amountfair value(Thousands of U.S. dollars)$177,215$ 68,913$6,656$1,500Estimated fair value is based on the prices obtained from financial institutions.

22. Segment Information
Overview of reportable segments
The reportable segments of the Group are components for which discrete
financial information is available and whose operating results are regularly
reviewed by the Company’s Board of Directors to make decisions about
resource allocation and to assess the business performances of those segments.
The Group classifies the Company and its subsidiaries identified by therespective products and services they provide. Each company plans comprehensive domestic and overseas strategies for its products and conducts
related business activities.
Based on the Group’s primary business activities, the reportable segments
include “Electronics” and “Ceramics.” The main products or services of thosesegments are as follows:
Electronics segment:		This reportable segment includes the business of manufacturing andsales of printed wiring boards and package substrates.

Ceramics segment:		This reportable segment includes the business of manufacturing andsales of environment-related ceramics products, graphite specialty products, fine ceramics products and ceramics fiber.
Method of calculating sales, income (loss), assets and other items for thereportable segments
The method of accounting for reportable segments is the same as describedin Note 2. “Summary of Significant Accounting Policies.” The income of reportable segments is calculated on the basis of operating income in the consolidated statement of income. Intersegment sales are basically recorded at same
prices used in transactions with third parties.

A summary of net sales, income (loss), assets and other items by reportable segment for the years ended March 31, 2017 and 2016 is as follows:
Millions of yen
2017
Reportable Segments

Sales to third parties.................................................
Inter-segment sales and transfers.............................
Net sales..................................................................
Segment income (loss).............................................
Segment assets........................................................
Depreciation and amortization..................................
Increase in property,
plant and equipment and intangible assets..............

Electronics

Ceramics

Total

Other

Total

Adjustment

Consolidated
Financial
Statements¥99,225
5¥99,230¥(3,649)
85,295
19,643¥101,323
123¥101,446¥ 4,322
94,5799,920¥200,548
128¥200,676¥
673
179,874
29,563¥65,912
5,069¥70,981¥ 6,538
65,472
2,947¥266,460
5,197¥271,657¥ 7,211245,346
32,510¥—(5,197)¥(5,197)¥(69)
160,437
638¥266,460—¥266,460¥ 7,142405,783
33,14812,867

6,467

19,3342,024

21,358669

22,027

Millions of yen
2016
Reportable Segments

Sales to third parties.................................................
Inter-segment sales and transfers.............................
Net sales..................................................................
Segment income......................................................
Segment assets........................................................
Depreciation and amortization..................................
Increase in property,
plant and equipment and intangible assets..............

Electronics

Ceramics

Total

Other

Total

Adjustment

Consolidated
Financial
Statements¥147,872
23¥147,895¥11,472
121,260
31,332¥104,768
148¥104,916¥5,914103,558
9,501¥252,640
171¥252,811¥ 17,386
224,818
40,833¥61,479
8,654¥70,133¥5,156
67,0261,830¥314,1198,825¥322,944¥22,542
291,844
42,663¥—(8,825)¥(8,825)¥29
184,266
1,394¥314,119—¥314,119¥22,571
476,11044,057

21,384

14,58735,971

7,124

43,095448

43,543

Reportable Segments

Sales to third parties.................................................
Inter-segment sales and transfers.............................
Net sales..................................................................
Segment income (loss).............................................
Segment assets........................................................
Depreciation and amortization..................................
Increase in property,
plant and equipment and intangible assets..............

Electronics

Ceramics

Total

Other

Total

Adjustment

Consolidated
Financial
Statements$884,436
42$884,478$(32,525)
760,272
175,089$903,137
1,094$904,231$ 38,523
843,022
88,418$1,787,573
1,136$1,788,709$5,998
1,603,294
263,507$587,503
45,182$632,685$ 58,274
583,584
26,266$2,375,076
46,318$2,421,394$64,272
2,186,878
289,773$—(46,318)$(46,318)$(612)
1,430,051
5,688$2,375,076—$2,375,076$63,660
3,616,929
295,461

114,687

57,649172,336

18,036

190,372

5,964

196,336

Other in the above table includes housing materials, construction, the manufacturing of foamed-resin products, processing of agricultural and marine products,
operations of gas stations, software development and network design that are not included in a reportable segment.
The adjustments of segment income (loss) in the amount of ¥69 million ($612 thousand) and ¥ 29 million for the years ended March 31, 2017 and 2016,
respectively, are elimination of intersegment transactions.
Segment income corresponds to operating income in the consolidated statement of income.
Related information
Geographical information
Net sales to third parties by countries or areas grouped according to geographical classification for the years ended March 31, 2017 and 2016 are summarized as follows:

2017

2016

Thousands of
U.S. dollars
2017¥ 82,414
95,722
25,74762,453124¥266,460¥ 85,160
146,330
16,75365,875
1¥314,119$ 734,593
853,212229,493556,668
1,110$2,375,076

2017

2016

Thousands of
U.S. dollars
2017¥ 64,340
47,083
9,936
29,794¥151,153¥ 74,867
96,958
7,813
36,290¥215,928$ 573,490
419,673
88,564
265,567$1,347,294

Millions of yen

Japan..................................................................................................................................................
Asia (excluding Japan).........................................................................................................................
North America.....................................................................................................................................
Europe................................................................................................................................................
Other...................................................................................................................................................
Consolidated.......................................................................................................................................

Property, plant and equipment by countries or geographical areas at March 31, 2017 and 2016 are summarized as follows:
Millions of yen

Japan..................................................................................................................................................
Asia (excluding Japan).........................................................................................................................
North America.....................................................................................................................................
Europe................................................................................................................................................
Consolidated.......................................................................................................................................
Major customer information
Sales to a major customer for the years ended March 31, 2017 and 2016 are as follows:

Customer Name

2017

2016

Thousands of
U.S. dollars
2017Intel Corp............................................................................................................................................

¥52,508¥65,738$468,029

Millions of yen

Notes to Consolidated Financial Statements

Thousands of U.S. dollars
2017

47

Notes to Consolidated Financial Statements (continued)

Loss on impairment of fixed assets
Loss on impairment of fixed assets by reportable segment for the years ended March 31, 2017 and 2016 are summarized as follows:
Millions of yen
2017
Reportable Segments
Electronics

Loss on impairment of fixed assets........

¥38,108

Ceramics¥1,254

Total

Other

¥39,362¥—

Total¥39,362

Corporate andElimination

Consolidated
Financial
Statements¥7,769¥47,131

Corporate andElimination

Consolidated
Financial
Statements¥6,403¥6,403

Corporate andElimination

Consolidated
Financial
Statements$69,254$420,102

Millions of yen
2016
Reportable Segments
Electronics

Notes to Consolidated Financial Statements

Loss on impairment of fixed assets........

¥—

Ceramics

Total

¥—

Other

¥—

Total

¥—

¥—

Thousands of U.S. dollars
2017
Reportable Segments
Electronics

Loss on impairment of fixed assets........

$339,676

Ceramics$11,172

Total

Other

$350,848

$—

Total

$350,848

Amortization amount and remaining balance of goodwill
Amortization amount and remaining balances of goodwill by reportable segment for the years ended and as of March 31, 2017 and 2016 are summarized as follows:
Millions of yen
2017
Reportable Segments

48
Electronics

Goodwill:
Amortization amount..........................
Remaining balance.............................

¥——

Ceramics

¥905
229

Total

Other

¥905
229

¥—
—

Total

¥905
229

Corporate andElimination

Consolidated
Financial
Statements

¥—
—

¥905
229

Corporate andElimination

Consolidated
Financial
Statements¥——¥1,011
1,216

Corporate andElimination

Consolidated
Financial
Statements$——$8,0682,038

Millions of yen
2016
Reportable Segments
Electronics

Goodwill:
Amortization amount..........................
Remaining balance.............................

¥——

Ceramics¥1,011
1,216

Total

Other

¥1,011
1,216

¥—
—

Total

¥1,011
1,216

Thousands of U.S. dollars
2017
Reportable Segments
Electronics

Goodwill:
Amortization amount..........................
Remaining balance.............................

$——

Ceramics$8,068
2,038

Total

$8,068
2,038

Other

$—
—

Total

$8,0682,038

23. Subsequent Event
Cash dividends
The following distribution of retained earnings of the Company, which has not been reflected in the accompanying consolidated financial statements for the year
ended March 31, 2017, was approved at a meeting of the Board of Directors held on May 15, 2017:

Year-end cash dividends(¥20 = ($0.18) per share)...........................................................................................................................................

Thousands of
U.S. dollars¥2,662$23,724(3) Outline of capital alliance	The Company disposed of 6,825,900 treasury stocks (the proportion of
voting rights after this treasury stock disposition: 4.88%, the proportion of
total number of outstanding stocks: 4.85% (as of March 31, 2017)) andallot them to DENSO.
Disposition of treasury Stock(1) Due date of disposition: May 17, 2017
(2) The number of common shares to be disposed: 6,825,900 shares(3) Amount to be paid for the treasury stock: ¥1,758 per share(4) Total amount to be paid: ¥11,999,932,200(5) Offering method: Third-party allotment(6) Allottee: DENSO(7) Others: Each of the above items is effective based on the securities registration statement under Financial Statement and Exchange Act

Notes to Consolidated Financial Statements

Capital and business alliance with Denso Corporation
The company passed resolutions at a meeting of the Board of Directors heldon April 27, 2017 to enter into a capital and business alliance with DENSOCORPORATION (“DENSO”) and dispose of treasury stock through a thirdparty allotment and made a capital and business alliance contract with DENSO
on the same day. In addition, the company has disposed of treasury stock on
May 17, 2017.
(1) Purpose and reasons for the Alliance	Under the business alliance between the company and DENSO, the company decided the company and DENSO unite the technologies of eachgroup, create advanced, new technologies and know-how in response tofurther strengthened environmental regulation in automobile sector and“functional vehicle products”, “future mobility products” and “other newgeneration products” which are preparing for new-generation automobile
and provide innovation and creation of new values and agreed with thebusiness alliance.
		 Furthermore, in the process of discussion on business alliance, eachcompany decided it is important that DENSO holds the stock of the company and each company build up the long-term partnership in order tomaximize the effect of business alliance, each company decided to implement capital alliance at the same time as business alliance.
(2) Outline of business alliance	The outline of business alliance which the company agreed on with
DENSO as of April 27, 2017 is follows;		➀ Collaborative research and development of functional vehicle products		➁ Collaborative research and development of future mobility products		➂ Collaborative research and development of new-generation products

Millions of yen

49

Report of Independent Auditors

Report of Independent Auditors

50

Group Companies

Domestic Base

Global BaseIBIDEN Greentec Co., Ltd.
3-55, Gama-cho, Ogaki, Gifu 503-0021, Japan
Tel: 0584-81-6111

NORTH AMERICAASIAIBIDEN U.S.A. Corp. (Head Office)3900 Freedom Circle #130 Santa Clara,
CA 95054, U.S.A.
Tel: +1-408-991-9801

IBIDEN Electronics (Beijing) Co., Ltd.
15#, Rongchang East Street, BDA, Beijing 100176, P.R.C.
Tel: +86-10-6788-2288

IBIKEN Co., Ltd.
1-60, Gama-cho, Ogaki, Gifu 503-8561, Japan
Tel: 0584-74-3355
IBIDEN Graphite Co., Ltd.
300, Aoyanagi-cho, Ogaki, Gifu 503-8503, Japan
Tel: 0584-89-6425
IBIDEN Industries Co., Ltd.
1-197, Uchiwara, Ogaki, Gifu 503-0936, Japan
Tel: 0584-89-0777
TAK Co., Ltd.
4-35-12, Kono, Ogaki, Gifu 503-0803, Japan
Tel: 0584-75-6501
IBIDEN Jushi Co., Ltd.
360, Shirotori, lkeda-cho, lbi-gun, Gifu 503-2413, Japan
Tel: 0585-45-2405
IBIDEN Bussan Co., Ltd.
339, Arisato, Motosu, Gifu 501-0415, Japan
Tel: 058-324-1151
IBIDEN Engineering Co., Ltd.
1122, Kido-cho, Ogaki, Gifu 503-0973, Japan
Tel: 0584-75-2301
IBIDEN CAREER TECHNO Corp.
300, Aoyanagi-cho, Ogaki, Gifu 503-8503, Japan
Tel: 0584-89-7435

Micro Mech, lnc.
33 Turnpike Road, Ipswich, MA 01938, U.S.A.
Tel: +1-978-356-2966

IBIDEN Electronics (Shanghai) Co., Ltd.
1/FA, Building 73, No. 17 Hancheng Road,
China (Shanghai) Pilot Free Trade Zone, Pudong,Shanghai, P.R.C.
Tel: +86-21-5046-5200

IBIDEN México, S.A. de C.V.
Av. América 100 Parque Industrial, Desarrollo
Logistik II Laguna de San Vicente Villa de Reyes,
San Luis Potos C.P. 79526
Tel: +52-444-834-8430

IBIDEN Asia Holdings Pte., Ltd.
31 Kaki Bukit Road 3 #06-22 Techlink Singapore 417818
Tel: +65-6296-0096

EUROPEIBIDEN Europe B.V. (Head office)Polarisavenue 85f 2132 JH Hoofddorp,
The Netherlands
Tel: +31-23-554-3180
IBIDEN Hungary Kft.
2336 Dunavarsany, Ipari Park, Neumann
Janos u.1, Hungary
Tel: +36-24-501-300
IBIDEN DPF France S.A.S.
24, Route de Joigny 45320 Courtenay, France
Tel: +33-2-3897-2650
IBIDEN Porzellanfabrik Frauenthal GmbH.
Gamserstrase 38, 8523 Frauental, Austria
Tel: +43-3462-2000

IBIDEN Singapore Pte. Ltd.
31 Kaki Bukit Road 3 #06-22 Techlink Singapore 417818
Tel: +65-6296-0096
IBIDEN Taiwan Co., Ltd.
8F-5, No. 366 Bóai 2nd Rd., Zuoying Dist., Kaohsiung City
81358, Taiwan
Tel: +886-7-550-8599
IBIDEN Graphite Korea Co., Ltd.
41, 75 South Road Yeongil Industrial Complex,
Heunghae-eup, Buk-gu, Pohang-si, Gyeongsangbuk-do,
37948, Korea
Tel: +82-54-271-3000
IBIDEN Korea Co., Ltd.
#1314, Hi Brand Bldg, 13F, 215, Yangiae-Dong,
Seoch-gu, Seoul, 137-924, Korea
Tel: +82-2-2155-3400
IBIDEN Philippines, Inc.
First Philippine Industrial Park Brgy.
Sta. Anastacia, Sto. Tomas, Batangas, Philippines
Tel: +63-43-405-5250
IBIDEN Electronics Malaysia Sdn. Bhd.
No. 1049, Jalan Perindustrian Bukit Minyak 8,
Kawasan Perindustrian Bukit Minyak
14100 Simpang Ampat, Penang, Malaysia
Tel: +60-4-504-9999

Group Companies

IBIDEN Chemical Co., Ltd.
300, Aoyanagi-cho, Ogaki, Gifu 503-8503, Japan
Tel: 0584-89-7491

51

Corporate Information (As of March 31, 2017)

Corporate Data

Stock Information

Trade nameIBIDEN CO., LTD.

Fiscal year-end

Established

November 25, 1912

Annual meeting of shareholders

June

Capital¥64,152 million

Independent Auditors

KPMG AZSA LLC

Number of employees

Consolidated: 13,961

Domestic stock exchange listings

Tokyo, Nagoya

Non-consolidated: 3,544

Date of record for dividend payout

PlantsInterim dividend: 		September 30

	Head office	2-1, Kanda-cho, Ogaki City,
Gifu 503-8604, Japan

Year-end dividend:
March 31

	Tokyo branch	Marunouchi Bldg. 29F,
2-4-1, Marunouchi, Chiyoda-ku,
Tokyo 100-6329, Japan
	Plants
Gifu Prefecture: Ogaki, Ogaki Central, 					
Aoyanagi, Gama,			
Ogaki-Kita, Godo

March 31

Authorized shares

230,000,000

Shares issued and outstanding

140,860,557 (including
7,780,695 shares oftreasury stock)

Number of shareholders

27,770

Corporate Information

		 Aichi Prefecture: Kinuura
Number of subsidiaries	Consolidated subsidiaries: 33(14 in Japan, 19 overseas)

52

Disclosure of Financial Information
IBIDEN takes steps to disclose information at appropriate times toshareholders and investors in a fair, accurate, and easy-to-understandmanner. Pursuant to the Timely Disclosure Rule of the Tokyo Stock

Website for shareholders and investors

http://www.ibiden.com/ir/index.html

Exchange, our information disclosure standards require the disclosureof information relevant to our operations, scope of business, andassets that could significantly affect investment judgments, as well as
any changes or suspension of important corporate information that has
already been published. Our policy is to disclose such information
proactively and fairly. We will also disclose corporate information that
could significantly influence investment judgments even if the Timely
Disclosure Rule does not apply, as accurately, promptly and appropriately as possible.

Top page of IR website

Principal Shareholders
Name of Shareholder
NORTHERN TRUST CO. (AVFC) RE SILCHESTER INTERNATIONALINVESTORS INTERNATIONAL VALUE EQUITY TRUSTJapan Trustee Services Bank, Ltd. (Trust Account)

Number of Shares (thousands)

Percentage

9,137

6.87

6,531

4.91

The Master Trust Bank of Japan, Ltd. (Trust Account)

6,296

4.73

Toyota Industries Corporation
NORTHERN TRUST CO. (AVFC) RE U.S. TAX EXEMPTEDPENSION FUNDSThe Juroku Bank, Ltd.

6,221

4.68

5,593

4.20

4,130

3.10

The Ogaki Kyoritsu Bank, Ltd.

4,120

3.10

IBIDEN Business Partners’ Shareholding Association

3,558

2.67

NORTHERN TRUST CO. (AVFC) SUB A/C NON TREATY

3,262

2.45

IBIDEN Employees’ Shareholding Association

2,804

2.11

Note: The Company holds 7,780,695 shares of treasury stock, which is excluded from the major shareholders listed above.

Breakdown by Type of Shareholder
Foreign corporations
34.5%

100–999 3.5%

–99 0.1%

1,000–9,999 7.2%

1,000,000–
61.6%

Other domestic
corporations
11.5%

10,000–99,999
6.4%

Individuals andothers17.4%

100,000–999,999
21.2%

Corporate Information

Japanese brokerage firms
1.3%
Treasury stock
5.5%

Breakdown by Size of Holding

53

Japanese financial
institutions
29.8%

Stock Price Range and Trading Volume (Common Stock)
Stock Price

Nikkei Stock Average (closing)

(¥)

(¥)

3,000

21,0002,000

14,000

1,000

7,000
Trading
Volume(Millions ofshares)

0

4
5
2015

6

7

8

9

10

11

12

1
2
2016

3

4

5

6

7

8

9

10

11

12

1
2
2017

3

50
40
30
20
10
0

www.ibiden.com