Annual Report 2016

FINANCIAL HIGHLIGHTS

Thousands of
U.S. Dollars

Millions of Yen

Years ended December 31

2016

2015

2014

2013

2012

2016

¥ 59,903¥ 71,946¥ 73,621¥ 68,452¥ 64,353$550,630

2,361

4,554

6,076

5,233

5,503

21,702For the Year:

Corporate Philosophy
We at Tamron are advancing with our corporate philosophy
to guide our mission.

Net sales
Operating income

3.9%

Operating income ratio

2,855

Ordinary income

With its firm commitment to developing high-quality, innovative and tech-

Ordinary income ratio

nologically advanced products that satisfy customer needs, Tamron is

Net income attributable to equities of parent

4.8%

6.3%

8.3%

5,140

7.6%

6,200

7.1%

5,196

8.4%

7.6%

—

8.6%

26,243

5,377

—

8.4%

1,482

4,048

3,846

3,197

3,894

13,623

Total assets¥ 60,910¥ 66,035¥ 69,906¥ 64,704¥ 58,058$559,886

Net assets

47,32149,001

51,99547,08740,805434,976

Number of employees

4,728

5,829

2,694

2,545

2,295

—

Net income attributable to equities of parent¥ 57.19¥ 153.98¥ 140.14¥ 116.48¥ 141.86—

Shareholders’ equity

1,825.62

1,890.45

1,894.14

1,715.37

1,486.52

—

55.00

60.00

50.00

50.00

50.00

—

Return on assets (ROA)

4.5

7.6

9.2

8.5

9.8

—

FINANCIAL HIGHLIGHTS ………………………………………………………………… 1

Return on equity (ROE)

3.1

8.0

7.8

7.3

10.1

—

MESSAGE FROM THE PRESIDENT & CEO …………………………………………… 2

Equity ratio

77.7

74.2

74.4

72.8

70.3

—

securing a leading position in the worldwide optical industry.
Our primary objective is to sustain strong corporate growth based on ahigh level of customer satisfaction achieved by providing superior products at the right price, thus also contributing to the prosperity of ourshareholders and employees.

At Year-End:Per Share Data:

Cash dividends

TABLE OF CONTENTS

MID-TERM STRATEGY……………………………………………………………………… 3
BUSINESS SEGMENT INFORMATION ………………………………………………… 4
FINANCIAL SITUATION …………………………………………………………………… 6

Ratios (%):

Notes: 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.79=US$1.
2. ROA=Ordinary income/Total assets
3. ROE=Net income/Net assets

CORPORATE GOVERNANCE …………………………………………………………… 8
BUSINESS & OTHER RISKS ………………………………………………………………… 10
CONSOLIDATED BALANCE SHEETS …………………………………………………… 12

NET SALES(Millions of Yen)

CONSOLIDATED STATEMENTS OF INCOME/
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME……………… 14
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS ………………… 15
CONSOLIDATED STATEMENTS OF CASH FLOWS ………………………………… 17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ………………………… 18
INDEPENDENT AUDITORS’ REPORT …………………………………………………… 33
COMPANY PROFILE/STOCK OVERVIEW……………………………………………… 34

60,000OPERATING INCOME(Millions of Yen)

4,000

6,000
5,000

40,000

3,000

4,000
3,000

20,000

2,000

2,000

1,000

1,000
0

2012 2013 2014 2015 2016

0

NET INCOME
ATTRIBUTABLE TO EQUITIES OF PARENT(Millions of Yen)

2012 2013 2014 2015 201602012 2013 2014 2015 2016

Note: In the 2016 annual report, amounts of less than the unit indicated, for example, one million yen or one thousand dollars, have been omitted.

Annual Report 2016

1

MESSAGE FROM THE PRESIDENT & CEO

MID-TERM STRATEGY

Mid-Term Management Goals
Improve Profitability through Well-Balanced Business Portfolio

Mid-Term Management Goal toward FY2019

Net Sales¥76.0 billion

Operating Income¥7.0 billion(% Sales)

9.2％

ＲＯＥ

10％ or more

Assumed exchange rate: ¥105=US$1, ¥113=€1

President & CEO
Tamron Co., Ltd.

Shiro Ajisaka

Agendas for Transformation
AgendaThe overview of our consolidated operating results

pared to previous year), consolidated ordinary profit

for the 70th term (January 1, 2016 to December 31,

came to 2.855 billion yen (down by 44.4% compared2016) is as follows.

to previous year), and consolidated net profit attrib-

Business conditions for the Tamron Group weredifficult in the fiscal year under review. Compared toutable to owners of parent came to 1.482 billion yen(down 63.4% compared to previous year).

Customer
Valuesthe previous fiscal year, the yen appreciated morethan 10 yen against both the U.S. dollar and theeuro. In addition, in the digital camera market where

Business environment for the Tamron Group appears

the Tamron Group operates, both the volume andto be uncertain. In spite of that, the Group aims tovalue of digital SLR cameras and interchangeable

incrementally increase both revenue and profit

lenses shipped fell more than 10% compared to pre-through such methods as the development of exist-

vious year, reflecting adverse factors such as parting businesses with the aggressive introduction of

supply delays caused by the Kumamoto Earthquake.

new house-brand interchangeable lenses and entries

Under these conditions, the Tamron Group posted

Reinforce Sales &Marketinginto new business fields.

Globalization of Sales,
Production, & R&D

Re-Building of
R&D Process

the following operating results in the fiscal year
under review. Consolidated net sales came to 59.903
billion yen (decrease by 16.7% compared to previousyear), reflecting influences including the negative

New Business
Development

Direction
・Enhance Marketing Functions

・Enhance proposal-based sales activities

・Proposal-Based Sales
Activities

・Create pull-demands and increase repeat
customer rate

・Innovative & Exciting
Product Planning

・Reinforce functions of Product Planning
Dept. (from product planning to launch)・Establish mechanism to feed market
needs to product planning

・Re-Organize Manufacturing
Process

・Expand territories covered by US subsidiary
・Realignment of sales network in Asia
・Initiate R&D for CCTV Lens in China factory
・Optimize use of 3 factories (JPN/CHN/VNM)

・R&D Investment in Future
Business・Start full-scale operation of Opto-Science
R&D Center・Shorten R&D L/T・Increase eﬃciency in R&D process

・Operational & CapitalPartnership with External
Organization

・Build partnership with external organization
・Selection and concentration of resources
・Leverage alliances and M&A

・Re-Organize Sales Network

effect of exchange rate fluctuations of the strong yen
and the effects of poor business performance in thedigital SLR camera market. The Group worked hardto decrease expenses, but consolidated operating
profit came to 2.361 billion yen (down 48.2% com-

2

Tamron Co., Ltd.

Corporate
Management

Action Plan

・Organizational & HR System
Restructuring
・Enhance Corp. Governance・Flatter & slimmer organization structure(integration of Imaging Products Biz. Unit)
・Review HR evaluation system
・Build suitable corporate governance system
・Eﬀorts to improve productivity in each dept.

Annual Report 2016

3

BUSINESS SEGMENT INFORMATION

Main Products

Business Segment Overview

Composition of Sales

Net Sales (Millions of Yen)

The market introduction of the SP series of new products, pursuing highperformance with advanced speciﬁcations and designs, such as macro lensInterchangeable lenses for 35mm/Digital
SLR cameras

Photographic ProductsInterchangeable lenses for mirrorlessinterchangeable lens cameras

SP 90mm F/2.8 VC USD (Model F017), single-focus semi-telephoto lens SP

60,00085mm F/1.8 VC USD (Model F016) and the latest ultra-telephoto zoom
lens with substantially enhanced functions, SP 150-600mm VC USD G2(Model A022), contributed our operating performance together with thesales growth in China. However, our sales declined mainly due to thecontinued stagnation of the market for digital SLR cameras and40,00078.1%

interchangeable lenses. Revenue from OEM products also fell slightly.

20,000As a result, net sales for the Photographic Products business came to46.805 billion yen (decrease by 14.2% compared to previous ﬁscal year).

0

Operating proﬁt was negatively aﬀected by exchange rate ﬂuctuations of
the strong yen against the euro, dropping to 4.034 billion yen (decrease by

2014

2015

2016

2014

2015

2016

2014

2015

2016

26.6% compared to previous year).

Sales rose for lenses for long wavelength infrared cameras. However, forCamcorder lenses

Optical Components

Digital still camera lenses
Optical device units

8,000

compact digital camera lenses and digital video camera lenses sales fell
6,000

sharply under adverse factors, such as substantial market contraction and
the Kumamoto Earthquake.
As a result, net sales for the Optical Components business came to
2.358 billion yen (decrease by 48.4% compared to previous year).

4.0%%

4,000
2,000

Operating proﬁt dropped to 0.075 billion yen (decrease by 67.1%
compared to previous year).

0

In the Commercial/Industrial-use Optics business, sales rose sharply forlenses for automotive applications thanks to eﬀorts to boost operations in

15,000anticipation of the growth of the vehicle-mounted camera market. However,sales fell for surveillance cameras under the negative eﬀects of market share

Commercial/
Industrial-use Optics

ﬂuctuations mainly resulting from greater competition among lensLenses for CCTV cameras
Automotive lenses

manufacturers and the rise of camera manufacturers in China.
As a result, net sales for the Commercial/Industrial-use Optics businesscame to 10.739 billion yen (decrease by 16.1% compared to previous year).

10,000

17.9%

5,000

Operating proﬁt plunged to 0.733 billion yen (decrease by 48.0% compared
to previous year), reﬂecting the commitment to developing new products inthe security ﬁeld, which is predicted to continue growing stably, andburdens created by prior investment in camera modules, a new business.

4

Tamron Co., Ltd.

0

Annual Report 2016

5

FINANCIAL SITUATIONFINANCIAL SUMMARY

Current assets
The balance of current assets at the end of the consolidated fiscal year under review stood at 41.590
billion yen, down 3.330 billion yen compared to thelevel of the end of the previous consolidated fiscal
year. The result primarily reflected declines in notes
and accounts receivable of 2.385 billion yen, declines
in finished goods of 1.147 billion yen and increases incash and deposits of 1.837 billion yen.
Noncurrent assets
The balance of noncurrent assets at the end of theconsolidated fiscal year stood at 19.320 billion yen, adecrease of 1.794 billion yen compared to the levelat the end of the previous fiscal year. This was
mainly because of a decline in property, plant andequipment of 1.670 billion yen.
Current liabilities
The balance of current liabilities at the end of theconsolidated fiscal year stood at 11.388 billion yen,down 3.206 billion yen compared to the level at theend of the previous consolidated fiscal year. This was
mainly because of an increase in short-term borrowingsof 0.172 billion yen, a decrease in accounts payable of
2.217 billion yen and a fall in accrued expenses of
0.931 billion yen.
Noncurrent liabilities
The balance of noncurrent liabilities at the end of theconsolidated fiscal year stood at 2.2 billion yen,down 0.238 billion yen compared to the level at theend of the previous consolidated fiscal year. This waschiefly because of a decrease in long-term borrowingsof 0.145 billion yen.
Net assets
The net balance of assets at the end of theconsolidated fiscal year came to 47.321 billion yen, adecrease of 1.680 billion yen compared to the levelat the end of the previous consolidated fiscal year.
This mainly reflected decreases in retained earningsof 0.072 billion yen and in foreign currency translation
adjustments of 1.784 billion yen.
TOTAL ASSETS/NET ASSETS(Millions of Yen)

69,906

66,03551,995

CASH FLOWSFor the consolidated fiscal year, cash and cash
equivalents at the end of the year increased by 1.837
billion yen compared to the level at the end of theprevious consolidated fiscal year, to 16.030 billion
yen.
What follow are cash flows through different
activities during the consolidated fiscal year.
Cash flows through operating activities
Income before income taxes and minority interests
stood at 2.742 billion yen, with 3.365 billion yen for
depreciation and amortization expenses. Inventories
decreased 2.263 billion yen. At the same time, thedecline in notes and accounts payable-trade stood at
1.331 billion yen, and the income taxes paid came to1.079 billion yen. Because of these and other factors,
cash flows through the operating activities resulted in
an income of 6.537 billion yen (compared to an
income of 6.214 billion yen for the previous
consolidated fiscal year).
Cash flows through investing activities
With expenses of 2.286 billion yen for property, plantand equipment, etc., cash flows through investing
activities resulted in a disbursement of 2.540 billion
yen (compared to 2.552 billion yen in the previous
consolidated fiscal year).
Cash flows through financing activities
While there was a net increase of 0.308 billion yen
for short-term borrowings and the proceeds fromlong-term borrowings came to 0.7 billion yen,
repayment of long-term borrowings of 0.977 billion
yen and the dividend payments of 1.554 billion yen,among other items resulted in a disbursement of
1.524 billion yen for cash flows through financing
activities (compared to 5.219 billion yen in theprevious consolidated fiscal year).

47,321

With regard to the R&D activities of the TamronGroup, the Opto-Science R&D Center is responsible
for research and development from a long-term
perspective. The Optical Design & Engineering R&D
Unit, the Core Technology & Engineering R&D Unit,
the Integrated Core Technology R&D Unit, and theProcess Technology & Engineering Unit are
responsible for the development of underlying
individual technologies that form the basis ofproducts, in such areas as optics, productionengineering and electronics. The technicaldepartment in each Business Unit is responsible forthe development of products.
As for R&D activities during the consolidated fiscal
year, we developed new products centering on theinterchangeable lens products for digital SLR
cameras, our main business area, as well as
surveillance camera lenses . With future businessexpansion in view, we also concentrated on thedevelopment of lenses for long wavelength infrared
cameras and lenses for automotive applications. The
activities led to total R&D expenses of 4.002 billion
yen for the consolidated fiscal year, with results of
the R&D activities in each segment described below.
Photographic Products businessIn the Photographic Products business, we havelaunched such products as the SP series of newhouse-brand interchangeable lenses pursuing highperformance with high specifications and designs,
such as macro lens SP 90mm F/2.8 VC USD (Model
F017), single-focus semi-telephoto lens SP 85mm
F/1.8 VC USD (Model F016) and latest ultra-telephotolens with substantially enhanced functions SP
150-600mm VC USD G2 (Model A022). As a result,R&D expenses related to the Photographic Products
business came to 2.653 billion yen.
Optical Components
In the Optical Components business, we havedeveloped lenses for digital cameras with high value
added and the lenses for far infrared cameras. As aresult, R&D expenses pertaining to the Optical
Components business came to 0.154 billion yen.

SHAREHOLDERS’S EQUITY RATIO/INTEREST-BEARING DEBT DEPENDENCE RATIO
(%)

77.7

60,91049,001RESEARCH AND DEVELOPMENT

74.4

6.1

6.7

2015

■ TOTAL ASSETS

6

Tamron Co., Ltd.

2016

■ NET ASSETS

2014

2015

The Tamron Group made total capital investments of
2.484 billion yen (an increase of 0.2% compared tothe previous year), centering on investments inmachining equipment at Tamron Optical (Foshan)Co., Ltd. in order to manufacture key components
internally, and the investments in metal molds related
to new models.
In the Photographic Products business, we madecapital investments of 1.840 billion yen, mainly
centered on investments in metal molds related to
new models for the interchangeable lens products
for digital SLR cameras.
In the Optical Components business, we madecapital investments of 0.091 billion yen, mainly as
investments in the metal molds concerning newmodels of the lenses for compact digital cameras
and in lens production facilities.
In the Commercial / Industrial-use Optics business,
we made capital investments of 0.526 billion yen,mainly centered on investments in metal molds
related to new models for the lens units forsurveillance cameras.
Additionally, we did not eliminate, sell orotherwise dispose of any important facility during theconsolidated fiscal year.

NUMBER OF EMPLOYEES

8,000

5,000

6,000

6,000

4,000

3,000
4,000
2,000

2016

●SHAREHOLDERS’S EQUITY RATIO●INTEREST-BEARING DEBT DEPENDENCE RATIO

0

2,000

2,000

1,000

2014

CAPITAL INVESTMENTCAPITAL INVESTMENT(Millions of Yen)

4,000

74.2
5.9

R&D EXPENSES(Millions of Yen)

Commercial/Industrial-use Optics
In the Commercial/Industrial-use Optics business,with the growth of the security market andexpansion of applications in view, we havedeveloped wide-ranging new products to satisfy
needs for higher pixel counts in various conditions,for surveillance at day and night, surveillance of
c o n d i t i o n s i n a n u r b a n e n v i r o n m e n t , t r a f fi csurveillance, machine vision systems, etc. Moreover,for sustaining further growth, we have advanced thedevelopment of products, such as vehicle-mounted
camera lenses and the first subminiature camera
module in the industry mounted with an opticalvibration-proof device. As a result, R&D expenses
pertaining to the Commercial/Industrial-use Optics
business totaled 1.194 billion yen.

2012

2013

2014 2015

2016

0

2012

2013

2014 2015

2016

0

2012

2013

2014 20152016

Annual Report 2016

7

CORPORATE GOVERNANCE(3) Nomination Committee and Compensation

execution of operations. Executive Officers carry out

We are committed to fair and transparent manage-

expert knowledge of finance, accounting and legal

ment practices as well as enhancing corporate value,affairs as well as Corporate Auditors well versed inwhich is achieved by strengthening corporate gover-Tamron’s operations work together with the External

The Company has established the Nomination Com-nance to build up trust with shareholders and inves-

Auditor and Audit & Supervision Board to carry out

mittee and Compensation Committee to enhance thetors.

rigorous audit programs. Tamron appoints 15 Direc-

independence and objectivity of the functions of the(5) Management Meeting

Committee

their duties and responsibilities following the basic
policy determined by the Board of Directors.

tors, of which 2 are Independent Directors, and 4

Board of Directors on the appointment, dismissal andWe regularly hold monthly management meetings

1. Basic Policy

Corporate Auditors, of which 3 are Independent Cor-

remuneration of directors.

(MAC) attended by all Directors, Full-Time Corporate

We at Tamron have constantly pursued fair andporate Auditors.

transparent management practices under our man-

The chairpersons of each committee are Indepen-

Auditors and Executive Officers to discuss manage-

dent Directors, and more than half of the committees

ment issues and respond to the fast-changing management environment.

agement philosophy as well as by respecting the(1) Board of Directors

are Independent Directors (Independent Directors/In-

rights and equality of our shareholders and working

Meetings of the Board of Directors are held twice a

dependent Corporate Auditors).

diligently to maintain a sound relationship with allmonth, in principle, attended by all Directors andstakeholders.

Corporate Auditors, for reviewing the execution of(4) Executive Officer System

Tamron has concluded an auditing agreement with

(6) External Auditor

duties by the Directors and deciding on important

Tamron has employed the Executive Officer System

Wako Audit Corporation and receives audit from this

2. Corporate Governance System Overview

issues as set forth in the basic policy of the Company

to ensure separation between management and thefirm in its capacity as an external auditor.

Tamron has employed the Executive Officer System

and related laws and regulations.

to speed up decision making and improve efficiencies, which has enabled it to establish a manage-(2) Audit & Supervisory Board

ment structure capable of making accurate and stra-

The Audit & Supervisory Board audits the processes

tegic decisions. Independent Directors with expertiseof decision making by the Board of Directors and thein their respective fields carefully monitor and advise

execution of duties of Directors by attending thethe Company regarding its execution of operations

Board of Director meetings and checking approval

from an independent and fair standpoint. At the

documents. The Audit & Supervisory Board meetssame time, Independent Corporate Auditors withmonthly, in principle.

Corporate Governance Structure

General Meeting of Shareholders

Election/Dismissal

Election/Dismissal

Election/Dismissal

Coordination

Audit & Supervisory Board

External Auditor

Management (As of December 31, 2016)
Coordination

Board of Directors

Audit & Supervisory Board Member

President & CEO
Shiro Ajisaka

Full-Time Corporate Auditors
Tsugio Tsuchiya
Takayuki Namiki2

Corporate Vice Presidents
Hiroaki Arai
Tadahiro Shimura
Shogo Sakuraba
Senior Managing Directors
Hideyo Ose
Kenichi Hamada
Masayuki Abo
Managing Directors
Takashi Ichikawa
Hiroshi Kawanabe
Koji Masunari
Directors
Yasuki Kitazume
Hiroshi Otsuka
Shenghai Zhang
Hideo Shimizu1
Mikio Yokose1

8

Tamron Co., Ltd.

Corporate Auditors
Tadahiro Tone2
Yasuhiko Nishimoto2

Michiko Chiyoda
Hans Peter Rosenthal
Makoto Otani
Hideyuki Nonaka
Tomohide Okayasu
Takao Yamamoto

Board of Directors(Directors and Independent Directors)
Nomination
Committee

Compensation
Committee

Notes: 1. Independent Director
2. Independent Corporate Auditor

Kunio Wada
Yoshinori Narita
Tsutomu Tezuka
Chaitang Ho
Jie Chen
Emiko UshidaToshikuni Tateno
Masato Naraoka
Mikio Kimura

Coordination

President & CEO

CSR Committee

Management Meeting(MAC)

Compliance Committee

Executive Officers

Internal Audit &Supervision Board

Internal Audit

Each Department/Subsidiary

Annual Report 2016

9

BUSINESS & OTHER RISKS

The following section provides an overview of the

4. Product defects

8. Effects of exchange rate fluctuations

issues related to the business results and financial

The Group has developed advanced quality assur-

The Group conducts transactions with overseas sub-position of the Group that may have a material effectance systems. In the unlikely event of the occurrence

sidiaries in foreign currencies, and some of the trans-on the decisions of investors.

of a defect in its products that may lead toactions with international and domestic business

The forward-looking statements in this text repre-

large-scale product liability, the Group may incur sig-

partners in foreign currencies. Accordingly, fluctua-

sent the judgment of management as of March 29,

nificant expense or lose public confidence, etc., anytions in exchange rates may significantly affect the2017.

of which may significantly affect its business results.

competitiveness of the Group’s products in overseas
markets, its export profit, business results, etc.

1. Dependence on specific customers

5. Intellectual property rights

Sales to Sony Corporation’s group companies and

The Group undertakes investigations, negotiations

9. Other risks

Nikon Corporation’s group companies comprise ap-

and applications, and also takes other necessary

In addition to the above, if there arise unanticipatedproximately 20% and 16% of the Group’s sales,

steps to protect its rights related to intellectual prop-

political or economic factors, changes in tax systems

respectively (both figures are for the fiscal year

erty rights and avoid any related issues. In the eventor tax rates that have adverse effects, or events ofended December 31, 2016). As a result, changes inof a dispute over intellectual properties occurring be-social turmoil, etc. due to acts of terrorism, wars, nat-

the strategies and policies and business relationships

tween the Group and a third party, the Group’s busi-ural disasters, contagious diseases or other factors inof these two companies may significantly affect theness results may be significantly affected.

the countries or regions where the Group conductsGroup’s business results.

business, this may significantly affect the Group’s
6. Laws and regulations

2. New businesses

The Group strives to comply with international and

It is the Group’s policy to foster and expand new

domestic laws and regulations, government permits,businesses. In the event that the Group decides tolicenses, regulations and so forth that are relevant toscale back or withdraw from a new business due tothe Group’s businesses. In the event of a violation of

intensifying price competition, rapid technologicallaws or regulations or the filing of a suit due to unin-

innovation, drastic changes in market needs and so

tended reasons, the Group’s business results may beforth, the Group’s business results may be significant-significantly affected.

business results.

ly affected.
7. Impairment loss
3. Dependence on specific suppliers

In cases where the market value of the Group’s

The Group procures raw materials, components, etc.

assets declines significantly or where the profitability

from numerous external suppliers. For the procure-of its business deteriorates, impairment loss will bement of glass materials, in particular, it relies on limit-

recorded according to the accounting standards fored supply sources.

impairment of assets, and this may significantly affectIf these raw materials, components, etc. are not

the Group’s business results.

available in the quantity or price that the Group hasplanned for any reason, and the Group is unable toproduce the products in the planned quantity, etc., itwill fail to carry out its responsibility of delivery tocustomers, and this may significantly affect its business results.

10 Tamron Co., Ltd.

Annual Report 2016 11

CONSOLIDATED BALANCE SHEETS

Thousands of
U.S. Dollars

Millions of Yen
As of December 31

2016

2015

2016

AssetsThousands of
U.S. Dollars

Millions of Yen

2016

2015

2016

Accounts payable–trade¥ 3,068¥ 5,285$ 28,201

Short-term loans payable

3,327

3,154

30,582

Accrued expenses

2,826

3,757

25,977

371

603

3,410

1,794

1,793

16,49011,388

14,594

104,679

736

881

6,765

1,403

1,495

12,896

60

62

552

As of December 31

Liabilities

Current assets:

Current liabilities:

Cash and deposits¥16,030¥14,192$147,348

Notes and accounts receivable–trade13,41915,804

123,348

Finished goods

7,023

8,170

64,556Work in process

2,201

3,209

20,232

Raw materials and supplies

875

1,495

8,043

Income taxes payable

Deferred income taxes

442

656

4,063

Other

1,630

1,422

14,983

(32)

(31)

(294)

41,59044,920382,296

Other
Allowance for doubtful accounts
Total current assets

Total current liabilities

Noncurrent liabilities:
Long-term loans payableNoncurrent assets:
Property, plant and equipment

Other

13,20013,529121,335

Accumulated depreciation(7,088)(6,754)(65,153)

Total noncurrent liabilities

2,200

2,439

20,222

Buildings and structures, net

6,112

6,774

56,182

Total liabilities

13,58917,033

124,910

19,19520,050176,441(13,682)(13,726)(125,765)

5,513

6,324

50,676

19,28918,806

177,305(17,056)(16,464)(156,779)

Capital stock

6,923

6,923

63,636

2,232

2,342

20,517

Capital surplus

7,432

7,432

68,315

1,012

1,057

9,302

Retained earnings

30,11430,187

276,809

668

711

6,140

(53)

(53)

(489)

15,53917,209142,835

44,41644,489408,273

787

804

7,234

Investment securities

2,303

2,330

21,169Unrealized gain on investment securities

340

445

4,578

435

3,125

498

Deferred income taxes
Other

437

406

4,017

Foreign currency translation adjustments

2,475

4,260

22,750Allowance for doubtful accounts

(88)

(72)

(809)

(69)

(194)

(634)

Total investments and other assets

2,993

3,100

27,512

Total accumulated other comprehensive income

2,905

4,512

26,703

Total noncurrent assets

19,32021,114

177,590

Total net assets

47,32149,001

434,976

Total assets¥60,910¥66,035$559,886

Total liabilities and net assets¥60,910¥66,035$559,886

Buildings and structures

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

Accumulated depreciation

Land
Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets

12 Tamron Co., Ltd.

Net assets
Shareholders’ equity:

Treasury stock
Total shareholders’ equity

Accumulated other comprehensive income:Annual Report 2016 13

CONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

Thousands of
U.S. Dollars

Millions of Yen

Years ended December 31

Net sales
Cost of sales
Selling, general and administrative expenses:
Advertising expenses
Promotion expenses
Provision of allowance for doubtful accounts
Salaries and bonuses
Technical research expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividends income
Foreign exchange gains
Rent income
Subsidy income
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on retirement of non-current assets
Loss on abandonment of inventories
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Insurance income
Gain on bargain purchaseTotal extraordinary income
Extraordinary loss:
Loss on valuation of investment securities
Impairment loss
Total extraordinary loss
Income before income taxes and minority interests
Income taxes–current
Income taxes–deferred
Total income taxes
Net income
Net income attributable to equities of parent

2016

2015

2016

¥59,903
41,001
18,901¥71,946
49,30322,642$550,630
376,882
173,738

1,174
853
29
4,261
147
3,946
6,126
16,539
2,361

1,455
962
4
4,653
136
3,986
6,887
18,087
4,554

10,791
7,841
267
39,167
1,351
36,27256,310152,027
21,702

34
61
348
20
38
206
709

32
51
387
20
103
209
804

313
561
3,199
184
349
1,894
6,517

42
88
15
69
215
2,855

45
112
38
21
218
5,140

386
809
138
634
1,976
26,243

－
－
－

99
653
753

－
－
－

77
35
113
2,742
987
273
1,260
1,482
¥1,482

—
—
—
5,893
1,926
(81)
1,845
4,048
¥4,048

708
322
1,039
25,205
9,073
2,509
11,582
13,623$13,623

Millions of Yen

2015
Stockholders’ equity

Year ended December 31

Balance of January 1, 2015
Cumulative effects of changes in accounting policies
Restated balance
Changes in the term
Dividends from surplus
Net income attributable to equities of parent
Purchase of treasury shares
Retirement of treasury shares
Net changes of items other than shareholders' equity
Total changes in the term
Balance of December 31, 2015

Retainedearnings

Treasurystock¥6,923¥7,432

¥(81)

6,923

7,432

¥31,609(13)
31,595(81)¥45,883(13)
45,869(3,985)(3,957)
3,985(1,471)
4,048(3,957)—(1,408)30,18727(53)(1,380)44,489(1,471)
4,048

—
6,923

—
7,432

Total
shareholders’equityMillions of Yen

Year ended December 31

Balance of January 1, 2015
Cumulative effects of changes in accounting policies
Restated balance
Changes in the term
Dividends from surplus
Net income attributable to equities of parent
Purchase of treasury shares
Retirement of treasury shares
Net changes of items other than shareholders' equity
Total changes in the term
Balance of December 31, 2015

Total
accumulated
othercomprehensive
incomeUnrealized
gain (loss) on
investment
securities

Foreigncurrencytranslation
adjustments¥466¥5,797¥(152)

466

5,797

(152)

6,111

¥51,995(13)
51,981

(41)
(41)
(194)

—
—
—
—
(1,598)(1,598)4,512(1,471)
4,048(3,957)—(1,598)(2,979)49,001

Total
shareholders’equity

(20)
(20)
445

(1,536)(1,536)4,260

Remeasurements
plans¥6,111

Total net
assetsMillions of Yen

2016
Stockholders’ equity

Year ended December 31

Balance of January 1, 2016
Changes in the term
Dividends from surplus
Net income attributable to equities of parent
Total changes in the term
Balance of December 31, 2016

Commonstock

CapitalsurplusRetainedearnings

Treasurystock¥6,923¥7,432¥30,187

¥(53)

—
7,432

(1,555)
1,482(72)
30,114

—
6,923

—
(53)

¥44,489(1,555)1,482(72)
44,416

Millions of Yen
Changes in accumulated other comprehensive income
Thousands of
U.S. Dollars

Millions of Yen

Years ended December 31

2016

2015

2016

Income before minority interests
Other comprehensive income
Unrealized gain (loss) on investment securities
Foreign currency translation adjustments¥1,482¥4,048$13,62352(1,784)124(1,607)(125)(20)(1,536)(41)(1,598)2,449

478(16,399)
1,140(14,772)(1,149)

(125)

2,449

(1,149)14 Tamron Co., Ltd.

Capitalsurplus

Changes in accumulated other comprehensive income

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners ofparentCommonstockYear ended December 31

Balance of January 1, 2016
Changes in the term
Dividends from surplus
Net income attributable to equities of parent
Net changes of items other than shareholders' equity
Total changes in the term
Balance of December 31, 2016

Unrealized
gain (loss) on
investment
securities

Foreigncurrencytranslation
adjustments¥445¥4,26052
52
498(1,784)(1,784)2,475

Remeasurements
plans¥(194)

124
124
(69)

Total
accumulated
othercomprehensive
incomeTotal net
assets¥4,512¥49,001(1,607)(1,607)2,905(1,555)
1,482(1,607)(1,680)47,321

Annual Report 2016 15

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSCONSOLIDATED STATEMENTS OF CASH FLOWS

Thousands of
U.S. Dollars

Millions of Yen

2016

2015

2016

Income before income taxes and minority interests¥2,742¥5,893$25,205

Depreciation and amortization

3,365

3,654

30,931

95

102

873

Interest and dividend income

(96)

(83)

(882)

Interest expense

42

45

386

Loss on retirement of property, plant and equipment

88

112

809

Proceeds from insurance income

－

(99)

－

Gain on bargain purchase

－

(653)

－

Impairment loss

35

－

322

Loss on valuation of investment securities

77

－

708

Years ended December 31

Thousands of U.S. Dollars

2016
Stockholders’ equity

Year ended December 31

Balance of January 1, 2016
Changes in the term
Dividends from surplus
Net income attributable to equities of parent
Total changes in the term
Balance of December 31, 2016

Commonstock$63,636－
63,636

CapitalsurplusRetainedearnings$68,315$277,480－
68,315(14,294)
13,623(662)
276,809

Treasurystock$ (487)

(487)

Total
shareholders’equity$408,944(14,294)
13,623(662)
408,273

Thousands of U.S. Dollars
Changes in accumulated other comprehensive income

Year ended December 31

Balance of January 1, 2016
Changes in the term
Dividends from surplus
Net income attributable to equities of parent
Net changes of items other than shareholders' equity
Total changes in the term
Balance of December 31, 2016

Unrealized
gain (loss) on
investment
securities

Foreigncurrencytranslation
adjustments$4,090$39,158

478
478
4,578

(16,399)(16,399)
22,750Remeasurements
plans$(1,783)

1,140
1,140
(634)

Total
accumulated
othercomprehensive
income$41,474(14,772)(14,772)
26,703

Total net
assets$450,418(14,294)
13,623(14,772)(15,443)434,976

Decrease in notes and accounts
receivable–trade

1,260

2,264

11,582

Increase (decrease) in inventories

2,263(2,737)20,802

Decrease in accounts payable–trade(1,331)(62)(12,235)

(787)

440

(7,234)

Increase (decrease) in accrued expenses
Other–net

(193)

(463)

(1,774)

Sub total

7,564

8,412

69,528

96

83

882

Interest expenses paid

(43)

(46)

(395)

Proceeds from insurance income

—

99

—
(9,918)Interest and dividend income received(1,079)(2,335)

Net cash provided by operating activities

6,537

6,214

60,088Purchases of property, plant and equipment(2,286)(2,400)(21,013)

Income taxes paid

(204)

(130)

(1,875)Purchase of investment securities

(1)

(1)

(9)

Payments of loans receivable

(10)

(7)

(92)

Collection of loans receivable

13

26

119

Other–net

(49)

(40)

(450)

(2,540)(2,552)(23,348)

Purchase of intangible assets

Net cash used in investing activities
Net increase (decrease) in short-term loans payable

308

1,132

2,831

Proceeds from long-term loans payable

700

—

6,434

Repayment of long-term loans payable(977)(1,185)(8,981)—(3,693)－(1,554)(1,471)(14,284)

(1)

(1)

(9)

(1,524)(5,219)(14,009)

(635)

(561)

(5,837)Purchase of treasury shares
Cash dividends paid
Other–net
Net cash used in
Effect of exchange rate changes on cash
and cash equivalents
Net increase (decrease) in cash and cash equivalents

1,837(2,118)16,886

Cash and cash equivalents at beginning of year

14,192

15,915130,453

Increase (decrease) in cash and cash equivalents resulting
from merger of a subsidiary
Cash and cash equivalents at the end of year

16 Tamron Co., Ltd.

—

394

－

¥16,030¥14,192$147,348

Annual Report 2016 17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTING CONSOLIDATED FINANCIAL

method would not give significant influences on theb. Intangible assets (excluding leased assets)charged to income. Relevant assets and liabilities

STATEMENTS

Company’s consolidated financial statements, as a

Depreciation of intangible assets is computed by theheld by subsidiaries are translated into Japanese yen

Tamron Co., Ltd. (the “Company”) maintain its books

whole.

straight-line method. In-house use software is amortizedusing exchange rates prevailing on the balance sheetover a five-year period based on the assumed usefuldate; and revenues and expenses are translated

life.

using the average exchange rates during the term.

of account in conformity with accounting principles
generally accepted in Japan, and its overseas

3. Fiscal Termconsolidated subsidiaries maintain their books of

The fiscal year end of TAMRON INDIA PRIVATE

account in conformity with those of their respective

LIMITED is March 31, and those of other consolidatedc. Leased assets

assets under “Foreign currency translation

countries of domicile.

subsidiaries are the same as the fiscal year end of the

The Company uses the straight-line method over the

adjustments.”

Gains and losses on translation are charged to net

T h e a c c o m p a n y i n g c o n s o l i d a t e d fi n a n c i a lCompany. I n t h e p r e p a r a t i o n o f c o n s o l i d a t e dterms of their respective leases with a zero residualstatements are prepared on the basis of accounting

fi n a n c i a l s t a t e m e n t s , fi n a n c i a l s t a t e m e n t s o fvalue. Finance lease transactions not involving t and(6) Hedging

principles generally accepted in Japan, which are

TAMRON INDIA PRIVATE LIMITED as of the said datetransfer of ownership commencing on or before

a. Hedge accounting

different in certain respects as to the application andwas used, and with respects to significant transaction

December 31, 2008 are accounted for based on

Derivative financial instruments are stated at fairdisclosure requirements of International Financial

that occurred between the said date and themethods applicable to ordinary rental transactions.

value and changes in the fair value are recognized

Reporting Standards, and have been compiled fromconsolidated book-closing, adjustments necessary forthe consolidated financial statements prepared byconsolidation are made.

as gains or losses, unless derivative financial(3) Reserves

instruments are used for hedging purposes. If

Reserves for doubtful accounts

derivative financial instruments are used as hedges

4. Accounting Policies

Reserves for doubtful accounts are generally

and meet certain hedging criteria, the Company(1) Methods for valuation of significant assets

provided based on actual collection losses incurreddefers recognition of gains or losses, resulting fromamounts have been made to the consolidateda. Investments in securities

in the past. Additionally, for accounts receivablec h a n g e s i n f a i r v a l u e o f d e r i v a t i v e fi n a n c i a lfinancial statements for fiscal 2015 to conform themWith market quotations: stated at fair market value.

considered at risk (bankruptcy, companies under

instruments, until the related losses or gains on theto 2016 presentation. Such reclassifications had no

Unrealized gains and losses on these securities are

rehabilitation plan), an allowance is provided based

effect on consolidated net income or net assets.

reported, net of applicable income taxes, as aon an estimation of the uncollectible amount, on acase-by-case basis.

the Company as required by the Financial Instruments
and Exchange Law of Japan.
Certain reclassifications of previously reported

hedged items are recognized.
b. Hedge instruments and assets and liabilities being

Amounts in U.S. dollars are included solely for the

separate component of the net assets. Realized gains

convenience of the reader. The rate of ¥108.79 =and losses on the sale of such securities are

US$1 prevailing on December 31, 2016 has been

computed using the moving-average cost. Without(4) Employee Retirement and Severance Benefits

contracts and foreign currency option contracts.

used in translating the consolidated financial

market quotations: stated at cost using the mov-a. Imputation method for retirement bene t estimates

Assets and liabilities being hedged are foreignstatements expressed in Japanese yen into U.S.

ing-average method.

The attribution of expected benefits to periods up to

currency receivables and payables and future

dollars. Such translations should not be construed asb. Derivatives

the fiscal year under review, upon calculating

foreign currency transactions.

representations that the Japanese yen amounts could

Derivatives financial positions are stated at fair value.

retirement benefit obligations, is done on thebe readily converted, realized or settled in U.S.

c. Inventories

benefits formula basis.

The Company engages in derivative transactions

dollars at this rate.

Inventories of the Company and its consolidatedb. Method for the recognition of a portion of its

with the aim of hedging risk on foreign exchange

subsidiaries are valued at cost, as determined mainly

actuarial gains and losses as income or expense

fl u c t u a t i o n s i n a c c o r d a n c e w i t h i n - h o u s e

1. Scope of Consolidationby the monthly moving-average method, with

The actuarial gains (losses) will be recognized in

All subsidiaries are consolidated.

balance sheet inventory amounts calculated using

expenses (income), in equal amounts, over a

Number of consolidated subsidiaries: 9lowered book values, reflecting a potential decline in

five-year period, which is shorter than the average

The Company has realized a high correlation

TAMRON USA, Inc.

profitability.

remaining service years of eligible employees,

coefficient between market fluctuations and cash

TAMRON Europe GmbH.

hedgedHedge instruments are foreign exchange forward

c. Hedge transaction policies

regulations.
d. Assessment of effectiveness of hedging

commencing with the next year of the accrual.

flows (assets and liabilities being hedged) and

TAMRON France EURL.

(2) Depreciation of fixed assetsc. Accounting treatment for unrecognized actuarialhedge instruments: it thereby highly evaluates the

Tamron (Russia) LLC.

a. Tangible assets (excluding leased assets)

gains and losses

effectiveness of the derivatives transactions in

TAMRON OPTICAL (VIETNAM) CO., LTD.

The Company: depreciation of depreciable assets

Unrecognized actuarial gains and losses arequestion.

TAMRON INDIA PRIVATE LIMITED

other than buildings (excluding facilities attached) is

recognized in remeasurements of defined benefit

principally computed using the declining-balanceplans in accumulated other comprehensive income

TAMRON OPTICAL (FOSHAN) CO., LTD.

method, while the straight-line method is applied forunder the net assets section, net of deferred taxes.

TAMRON OPTICAL (SHANGHAI) CO., LTD.

buildings (excluding facilities attached) acquired on

TAMRON INDUSTRIES (HONG KONG) LIMITEDor after April 1, 1998 and facilities attached to
2. Application of the Equity Methodbuildings and structures acquired on or after April 1,

I n v e s t m e n t i n a n a f fi l i a t e d c o m p a n y K O E I S H A

2016.

Corporation is stated at cost, due to immateriality in(5) Foreign currency translation of significant assets
and liabilities
Foreign currency-denominated assets and liabilities

The estimated useful lives are as follows:

held by the Company are translated into Japaneseterms of net income and retained earnings, andBuildings and structures

10 to 40 years

yen using exchange rates prevailing on the balanceaccounting for above affiliated company under equity

Machinery and equipment

5 to 10 years

sheet date; and gains and losses on translation are

18 Tamron Co., Ltd.

(7) Scope of cash and cash equivalents in thestatement of cash flows
In preparing the consolidated statements of cashflows,
cash on hand, available deposits and short-term
highly liquid investments, with readily maturity notexceeding three months at the time of purchase, areconsidered to be cash and cash equivalents.

Annual Report 2016 19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS( 8 ) O t h e r s i g n i fi c a n t a c c o u n t i n g p o l i c i e s f o r
preparing consolidated financial statements
Consumption tax: Consumption tax is not included.
[Changes in Accounting Policies]
The application of the Accounting Standard forBusiness Combinations, etc.
Standards such as the Accounting Standard forBusiness Combinations (ASBJ Statement No.21), the
Accounting Standard for Consolidated Financial
Statement No.7) have been applied from theconsolidated fiscal year under review. The purpose
for applying these standards was to change themethod for recording the difference from changes in
the Company's equity in its subsidiaries that remain
controlled by the Company as capital surplus and as
an expense in the consolidated fiscal year in which
expenses related to acquisition are incurred. For
business combinations implemented after the
beginning of the consolidated fiscal year underreview, the method will be changed to one thatreflects the revision of distributed amounts ofacquisition costs by determining provisional
accounting treatment in the consolidated financial
statements for the consolidated accounting period towhich the date of business combination belongs. In
addition, the Company has changed the presentationof net profit and other items and the presentation ofminority interests to non-controlling interests. To
reflect this change, the Company reclassified its
consolidated financial statements for the previous
fiscal year. The application of the AccountingStandard for Business Combinations and the otherstandards follows the transitional treatment specified
in Article 58-2 (4) of the Accounting Standard forBusiness Combinations, Article 44-5 (4) of the
Accounting Standard for Consolidated Financial
Statement, and Article 57-4 (4) of the AccountingStandard for Business Divestiture. The application ofthese standards has been under way since thebeginning of the consolidated fiscal year underreview, and will continue to be applied going
forward.
These adoptions did not have material effects on
the Company's consolidated financial statements.
The application of the Practical Solution on a change
in depreciation method due to Tax Reform 2016.
In association with the revision of the Corporation
Tax Act, the Company has applied the “Practical
Solution on a change in depreciation method due to
Tax Reform 2016” (ASBJ Practical Issues Task Force

20 Tamron Co., Ltd.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(PITF) No.32) from this fiscal year, and changed thedepreciation method for facilities attached tobuildings and structures that were acquired on orafter April 1, 2016 from the declining-balancemethod to the straight-line method. The effect of thischange on the Company's consolidated financial
statements is immaterial.

(CONSOLIDATED BALANCE SHEETS)Assets pledged as collateral as of December 31, 2016 and 2015
(1) Property, plant and equipment
Millions of Yen

Buildings and structures

¥639

¥618

Machinery, equipment and vehicles

592

620

245

171

Land

[Unapplied Accounting Standards](“Guidance on Recoverability of deferred tax assets”)(ASBJ Guidance No.26, December 28, 2015)(1) Overview
On December 28, 2015, the ASBJ issued ASBJ
Guidance No.26, “Guidance on Recoverability ofDeferred Tax Assets,” which included certain
revisions of the previous accounting and auditing
guidance issued by the Japanese Institute of Certified
Public Accountants. While the new guidancecontinues to follow the basic framework of theprevious guidance, it provides new guidance for theapplication of judgment in assessing therecoverability of deferred tax assets. The previous
guidance provided a basic framework which included
certain specific restrictions on recognizing deferred
tax assets depending on the Company's classificationin respect of its profitability, taxable profit andtemporary differences, etc. The new guidance does
not change such basic framework but, in limited
cases, allows companies to recognize deferred tax
assets even for a deductible temporary difference forwhich it was specifically prohibited to recognize adeferred tax asset under the previous guidance, if theCompany can justify, with reasonable grounds, that itis probable that the deductible temporary difference
will be utilized against future taxable profit in somefuture period.
(2) Scheduled Date of Adoption
The Company expects to adopt the revised guidancefrom the beginning of the year ending December 31,
2017.
(3) Impact of Adopting Revised Guidance
The impact of adopting the revised guidance on
consolidated financial statements is currently underevaluation.

2016

2015

Total

96

96

¥1,573¥1,507(2) Other

Millions of Yen
2016

2015

Buildings and structures¥2,930Total¥2,75396

96¥3,026¥2,849Land(3) Loans secured by the above assets

Millions of Yen
2016

2015

Short-term loans payable¥1,664Long-term loans payable (including loans due within one year)

1,276

1,104

¥2,941¥2,736

Total¥1,632(CONSOLIDATED STATEMENTS OF INCOME)

1. Research and development expenses included in selling, general and administrative expenses and manufacturing costs for fiscal
2016 and 2015 are as follows:
Millions of Yen
2016

2015

¥4,052¥4,002

2. The ending inventory balance represents after write-down of book value when their carrying amounts become unrecoverable.
The inventory write-down of book value, net of reversal of the balance of reserve at end of previous year for fiscal 2016 and2015 is as follows:
Millions of Yen
2016

2015

¥36

¥14

3. Impairment loss
The Company and its consolidated subsidiaries (The Companies) recorded an impairment loss of 35 million of yen for the idle
land located at Noda–city, Chiba prefecture. The Company categorize assets for business mainly based on business segments,
however, idle assets are grouped on an individual basis. Above impairment loss was recorded because they did not expect touse in future and above loss was recorded as an extraordinary loss by reducing the net book value to the recoverable value ofthe idle land. The recoverable amount of idle land was measured at the net selling price, estimated based on appraisal value.

(CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME)(Changes in reclassification adjustments and those tax effects for the year ended December 31, 2016 and 2015)
Millions of Yen
2016

2015

Unrealized gain (loss) on available securities
Gain (loss) arising during the year
Amount before income tax

¥(65)

¥53

—

—

(65)

53

Tax effect

44

—

Net

(20)

52

Translation adjustments arising during the year

(1,536)(1,784)

Unrecognized actuarial loss arising during the year

(118)

98

Foreign currency translation adjustments

Amount before income tax effect
Income tax effectTotal other comprehensive income

68

88

(49)

186

8

(62)

(41)

124

¥(1,598)¥(1,607)

Annual Report 2016 21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY)
1. Type and number of shares outstanding and of treasury stock

1. Type and number of shares outstanding and of treasury stock
2015

Number of shares at the
beginning of the period

Increase during
the period

2016
Decrease during
the period

Number of shares at theend of the period

Shares outstanding

Number of shares at the
beginning of the period

Increase during
the period

Decrease during
the period

Number of shares at theend of the period

Shares outstanding

Common stock

27,500,000—

1,550,000

25,950,000

Common stock

25,950,000——

25,950,000

Total

27,500,000—

1,550,000

25,950,000

Total

25,950,000——

25,950,000

Treasury stock

Treasury stock
Common stock

49,364

1,529,880

1,550,000

29,244

Common stock

29,244——29,244

Total

49,364

1,529,880

1,550,000

29,244

Total

29,244——29,244

Notes:
1. The decrease of 1,550,000 shares in common stock represents cancellation of treasury stock.
2. The increase of 1,529,880 shares in treasury stock (shares of common stock) consists of a increase of 1,529,826 sharesfrom the making Kouyukosan Co., Ltd. a wholly-owned subsidiary and 54 shares from the purchase demands for less than
one unit.
2. Dividends(1) Dividends paid

2. Dividends(1) Dividends paid
2015
Total amount of dividends(millions of yen)

Resolution

Type of shares

General meeting of shareholders
held on March 27, 2015

Common stock823

The board of directors’ meeting
held on August 4, 2015

Common stock

648

2016

Dividend per share(yen)

Total amount of dividends(millions of yen)

Record date

Effective date

Resolution

Type of shares

30

December 31,
2014

March 30,
2015

General meeting of shareholders
held on March 30, 2016

Common stock

907

25

June 30,2015

September 8,
2015

The board of directors’ meeting
held on August 4, 2016

Common stock

648(2) Of dividends recorded in the current fiscal year, dividends effective in the following fiscal year

Dividend per share(yen)

Resolution

Type of shares

General meeting of shareholders
held on March 30, 2016

Common stock

22 Tamron Co., Ltd.

907

Effective date

35

December 31,
2015

March 31,2016

25

June 30,2016

September 8,
2016

Record date

Effective date

December 31,
2016

March 29,2017(2) Of dividends recorded in the current fiscal year, dividends effective in the following fiscal year
2016

2015
Total amount ofdividends(millions of yen)

Record date

Source ofdividends

Dividend pershare (yen)Record date

Effective date

Resolution

Type of shares

Retainedearnings

35

December 31,
2015

March 31,2016

General meeting of shareholders
held on March 29, 2017

Common stock

Total amount ofdividends(millions of yen)
777

Source ofdividends
Retainedearnings

Dividend pershare (yen)30

Annual Report 2016 23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(CONSOLIDATED STATEMENTS OF CASH FLOWS)
Year ended December 31, 2016 and 2015

Millions of Yen
2015

2016

Cash and deposits¥14,192¥16,030

Cash and cash equivalents

14,192

16,030(LEASES)

Finance lease that do not transfer ownership
1. Leased assets
Mainly a lens production facility
2. Depreciation method for leased assets
It is described in “Basis of Presenting Consolidated Financial Statements” (4. Accounting Policies, (2) Depreciation of fixed assets,c. Leased assets).

The Company execute and manage derivative transactions which are foreign currency forward exchange contracts used to reducerisk exposure arising from which changes in exchange rates applied to foreign-currency-denominated receivables and payables.
Accounting policies for hedges, specifically hedge accounting, hedge instruments and assets and liabilities being hedged, hedgetransaction policies, assessment of effectiveness of hedging, are described in the section “4. Accounting Policies (6) Hedging.”
In the execution and monitoring of derivative transactions, the Company is guided by internal rules. In derivative transactions, theCompany only enter into transactions with financial institutions having high credit ratings, thereby significantly mitigating potential
losses arising from credit risk.
Accounts payable–trade and loans payable are exposed to liquidity risks. The Company and each of its consolidated subsidiaries,
prepares a cash flow plan and keeps its in financially sound conditions.
(3) Additional information for fair values of financial instruments
Fair values of financial instruments are based on fair markets value. If the fair markets value is not available, other rational valuation
methods are used instead. These estimates include variable factors, and are subject to fluctuations due to changes in the underlying
assumptions.

(FINANCIAL INSTRUMENTS)

Year ended December 31, 2016 and 2015
1. Overview of financial instruments(1) Policy on the handling of financial instruments
In principle, the Company obtain funds from banks for the capital needed to execute operations. Any temporary surplus is invested
in highly secured bank deposits. The Company adheres to a policy under which derivatives are used to avert the risks outlined
below and not for speculative purposes.

2. Fair Value of Financial Instruments
Fair value and variances with carrying amounts as of December 31, 2016 and 2015 are as follows:
Investment securities those fair values can not be measured reliably, are not included in the following table. (Refer to Note 2 below)

Carrying amounts

Fair value

Difference

Carrying amounts

Fair value

Difference(2) Financial instruments and inherent risks and its management
Notes and accounts receivable–trade are exposed to customers’ credit risks. To reduce customers’ credit risks, the Company has
established credit policies under which monitoring of, due dates and remaining balance of note and account receivable–trade andof credit condition, by each customer.
Receivables denominated in foreign currencies, which arise in the process of business activities undertaken overseas, are exposed
to market risks arising from fluctuations in foreign currency exchange rates. The Company manages these risks by entering into
foreign currency exchange forward contracts.
Investments in securities consist mainly of the equity securities of corporations with which the Company has business relations,are exposed to the risk of fluctuations in market prices. The Company manages this risk by periodically examining market prices
and the financial condition of the issuing entities.
Accounts payable–trade is all due within one year. Some are denominated in foreign currencies and are therefore exposed torisks arising from changes in foreign currency exchange rates. The Company manages these risks by entering into foreign exchange
forward contracts.

(1) Cash and time deposits¥14,192¥14,192¥ —¥16,030¥16,030¥ —(2) Notes and accounts receivable

15,80415,804—

13,41913,419—Millions of Yen
2016

2015

(3) Investment securities:
Other securities

2,117

2,117

—

2,172

2,172

—

Total assets¥32,114¥32,114¥ —¥31,622¥31,622¥ —(1) Accounts payable¥5,285¥5,285¥ —¥3,068¥3,068¥ —(2) Short-term loans payable

3,154

3,154

—

3,327

3,327

—

(3) Income taxes payable

603

603

—

371

371

—

(4) Long-term loans payable

881

881

0

736

736

0

¥9,924¥9,924¥0¥7,503¥7,503

¥0

—

—

—

—

—

—

Total liabilities
Derivative instruments

derivative transactions
Assets(1) Cash and time deposits; (2) Notes and accounts receivable
The carrying amounts approximate fair value because of the short maturity of these instruments.
(3) Investments in securities
tions are used to determine the fair value of bonds.

-

Liabilities(1) Accounts payable; (2)Short-term loans payable; (3) Income taxes payable
The carrying amounts approximate fair value because of the short maturity of these instruments.
(4) Long-term loans payableloans similar terms and remain maturities.

24 Tamron Co., Ltd.

Annual Report 2016 25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivative instruments
Please refer to (DERIVATIVE TRANSACTIONS) below
Note 1:as of December 31, 2016
and 2015

Millions of Yen
2016

2015

Unlisted stocks(DERIVATIVE TR ANSACTIONS)
Derivative transactions with the hedge accounting is applied
Currency-related transactions
Year ended December 31, 2016 and 2015
Millions of Yen

¥131

¥212

estimates
cash flows
Note 2: The following schedule shows the maturities of financial instruments (assets) as of December 31, 2016 and 2015

2015
Hedge accounting method

Designation method

Millions of Yen

Forward foreign exchange
contracts
Sell

2016

2015

Type of transactions

Up to 1 year

More than 1 year
and up to 5 years

Up to 1 year

More than 1 year
and up to 5 years

Cash and deposits¥14,192¥ —¥16,030¥ —Notes and accounts receivable

15,804—

13,419

—

—

300

—

300

¥29,997¥300¥29,449¥300

U.S. dollar

Primary hedged
items

Contract
amount, etc.

Accounts
receivable

Euro
Buy

Ruble

Securities with maturity in other investment securities account
Total

Note:

Fair value¥1,041—(See Note)

1,612

—

(See Note)

98—(See Note)

¥ 602

—

(See Note)

Accounts payable

U.S. dollar

Investment securities:

Portion withmaturity over
one yearas hedged items are considered as a pair of transaction and if hedge accounting such as the designation method is

Note 3: The aggregate annual maturities of short and long-term loans payable, lease obligations as of December 31, 2016 and 2015
Please refer to (Schedule of borrowings)

Millions of Yen
2016

Millions of Yen
2015

Type of transactions

Up to 1 year

More than 2 year
and up to 3 years

More than 3 year
and up to 4 years

Short-term loans payable¥2,264

¥ —

¥ —

¥ —

Long-term loans payable

889

605

241

35

—

Forward foreign exchange
contracts

1

1

1

0

—

Sell

¥3,155

¥606

¥242

¥35

Lease obligations
Total

More than 4 year
and up to 5 years

Hedge accounting method

More than 1 year
and up to 2 years

¥

¥

—

Designation method

Millions of Yen

Buy

2016
Up to 1 year

More than 1 year
and up to 2 years

More than 2 year
and up to 3 years

More than 3 year
and up to 4 years

More than 4 year
and up to 5 years

Short-term loans payable¥2,582

¥ —

¥ —

¥ —

¥ —

Long-term loans payable

745

381

175

140

40

Lease obligations
Total

1

1

0

—

—

¥3,328

¥382

¥175

¥140

¥40

Contract
amount, etc.

Accounts
receivable

Fair value¥3,504—(See Note)

574—(See Note)

Ruble

45

—

(See Note)——(See Note)

Accounts payable

U.S. dollar

Note:

Portion withmaturity over
one yearEuro

U.S. dollar—

Primary hedged
items

as hedged items are considered as a pair of transaction and if hedge accounting such as the designation method is(RETIREMENT BENEFITS)(INVESTMENTS IN SECURITIES)Millions of Yen
2015

Type of securities

Securities whose carrying amounts
on consolidated balance sheets
exceed their acquisition costs
Securities whose carrying amounts
on consolidated balance sheets
does not exceed their acquisition
costs(1) Stocks(2) Debt securities

Carrying amount

Acquisition costs

Difference¥1,852¥1,161

¥691

—

—

—

—

—

—

1,852

1,161

691

(1) Stocks

—

—

—

264

300

(35)

Cumulative effects of changes in accounting policies

—

—

—

Restated balance(2) Debt securities(3) Others
Total

26 Tamron Co., Ltd.

2016

¥2,961¥3,126

21

—

2,982

3,126
201

264

300

(35)

Service cost

196

¥1,461¥656Interest cost

25

26

Actuarial gain

69

(30)

(142)

(181)

2016
Carrying amount

Acquisition costs

Difference¥1,915¥1,162¥752(2) Debt securities

—

—

—

(3) Others

—

—

—

Total

1,915

1,162

752

(1) Stocks

Millions of Yen
2015¥2,117

Millions of Yen

Total

2. Defined benefit plans(1) Reconciliation of beginning and ending balances of the benefit obligations

Total

Type of securities

Securities whose carrying amounts
on consolidated balance sheets
does not exceed their acquisition
costs

sum payments at retirement.

(3) Others

Total

Securities whose carrying amounts
on consolidated balance sheets
exceed their acquisition costs—

Year ended December 31, 2016 and 2015
1. Outline of retirement and severance benefit plans adopted(1) Stocks

—

—

—

(2) Debt securities

257

300

(42)

(3) Others

—

—

—

Total

257

300

(42)

¥2,172¥1,462

¥709

Other

(4)

0

¥3,126¥3,142

Annual Report 2016 27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(2) Reconciliation of beginning and ending balances of the plan assets
Millions of Yen
2016

2015

Plan assets at beginning of year

¥1,618¥1,63129

29

Actual return on plan assets
Actuarial (loss) gain

(48)

67

Plan participants’ contribution

116

118

(84)

(108)

¥1,631¥1,738Plan assets at end of year(3)

balance sheet
Millions of Yen
2016

2015

¥3,104¥3,117

Plan assets(1,631)

1,738

Net of above

1,472

1,379

Net amount of liabilities and assets recognized in the consolidated balance sheet

2016

Deferred Tax Assets
¥62

¥48

501

437

Provision for product warranties

29

10Long-term accounts payable

460

Denial of patentability

54

36

Accrued expenses, currently not deductible

Excess of depreciation

60

41

Unrealized gain

418

292

Other

206

218

¥1,379¥1,196

Loss carried forward
Total of deferred tax assets

－

109

24

¥1,495¥1,403¥1,495¥1,403

Deferred Tax Liabilities¥1,495¥1,403

Reserve for deduction entries

¥(36)

¥(32)

Unrealized gain on investments in securities

(221)

(223)

Undistributed retained earnings of foreign subsidiaries

(29)

(215)

Total of deferred tax liabilities

(287)

(472)

¥1,092

¥724

2016

2015

Service cost

¥196

Interest cost

25

26

Expected return on plan assets

(29)

(29)

Recognized actuarial differences

¥201

68

88

¥259

¥286

Note:
Millions of Yen
2016

2015

¥(49)

¥186

(6) Remeasurements recognized in accumulated other comprehensive income before deduction of tax effect at end of year
Millions of Yen
2016

2015

Unrecognized actuarial loss

Millions of Yen
2015

22

Millions of Yen

Actuarial loss

(ACCOUNTING FOR DEFERRED INCOME TA XES)Year ended December 31, 2016 and 2015
1. Breakdown of the major components for deferred tax assets and liabilities

¥285

¥99

(7) Information relating to plan assets
The percentage that each major category constitutes of the total plan assets at end of year.
2016

2015

Asset category

Millions of Yen
2016

2015

Net of deferred tax assets and liabilities

Note: Net of deferred tax assets and liabilities as of December 31, 2016 are reflected in the following accounts in the
consolidated balance sheets.
Millions of Yen
2016

2015

Current assets – deferred income taxes¥656

Noncurrent assets – deferred income taxes

435

340

Current liabilities – other

—

¥58

35.4%

32.8%

Entertainment expense and others that are not deductible permanently

0.6

1.3

Exclusion of loss related to a donation

0.1

0.1

Inhabitant tax on per capita basis

0.3

0.7

Provision for directors’ bonuses

1.1

2.2

Tax credits

(4.0)

—

Differences of tax rates for overseas consolidated subsidiaries(4.7)(10.3)

Dividend income and others that are not taxable permanently(12.6)(31.0)

Effect of dividend income eliminated for consolidation

12.5

30.9

¥442

2. Reconciliation of the statutory tax rate and the effective tax rate
Effective statutory tax rate
(Adjustments)

Debt securities

64%

64%

Special tax rate on retained earnings of family corporation

1.1

1.4

Stocks23%

24%

International withholding income tax

3.1

9.9

Cash and deposits

12%

11%

Retained profits of dividends from subsidiary companies

—

6.4

Other

1%

1%

Gain on negative goodwill

(3.9)

—

100%

100%

Effect of changes in the rate of corporation tax

1.2

1.1

Total plan assets

Note:
The method for estimation of the expected long–term rate of return.
The expected return on assets has been estimated based on the anticipated allocation to each asset class and the expectedlong-term returns on assets held in each category.
(8) Main actuarial assumptions used at end of the year
2015

2016

Discount rate

0.846%

0.846%

Expected long–term rate of return

2.00%

2.00%

Others1.1

0.4

Actual tax rate

31.3%

46.0%

3. Revisions to deferred tax assets and liabilities following corporate tax rate changes
The “Act to partially revise the Income Tax Act and Others” and the “Act to partially revise the Local Tax Act and Others”
were enacted on March 29, 2016. As a result, the effective statutory tax rate used to measure the Company’s deferred tax
assets and liabilities was changed from 32.06% to 29.97% for the temporary differences expected to be realized or settled
in the period from January 1, 2017 to December 31, 2018 and 29.74% for the temporary differences expected to be realized
or settled on or after April 1, 2019. The effect of these tax–rate changes had no effect on the deferred tax assets and liabilities and the temporary differences.

3. The contributions for defined contribution plans.
The contributions for defined contribution plans of the Company and its subsidiaries were ¥173 million and ¥171 million for fiscal
2016 and 2015, respectively.

28 Tamron Co., Ltd.

Annual Report 2016 29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATIONRELATED INFORMATION

1. Outline of reporting segments

Year ended December 31, 2016 and 2015

reviewed by the Board of Directors to determine resource allocation and evaluate business performance. The Company
for its products and operates its business activities.
Accordingly, Tamron has the following three reportable segments based on these business divisions that are categorizedaccording to products: Photographic Products, Optical Components and Commercial/Industrial-use Optics. The “Photographic Products” manufactures and sells Interchangeable lenses for SLR cameras. The “Optical Components” manufacturesand sells Camcorder lenses, Digital still camera lenses, and Optical device units. The “Commercial/Industrial-use Optics”
manufactures and sells Lenses for CCTV cameras and Automotive lenses.
2. Calculating reporting segment sales, income, assets and other items

1. Information by geographical area
(1) Sales

Millions of Yen

Japan

North America

Europe

Asia

Other

Total

2015

¥16,642¥9,725¥16,455¥26,656¥2,466¥71,946

2016¥16,152¥7,759¥14,194¥20,301¥1,495¥59,903

Note: Sales are grouped by country or region, based on customer location.
(2) Property and equipment

Millions of Yen

Japan

3. Information on sales, income, assets, liabilities and other items by reporting segment for fiscal 2016 and 2015

North America

Europe

Asia

Total

2015

¥7,355¥285¥307¥9,261¥17,2092016¥7,172¥260¥277¥7,829¥15,539

Millions of Yen

2. Information by major customer

2015
Photographic
products

Opticalcomponents

Commercial/
Industrial-use
opticsEliminations
and/orcorporate

Total

Consolidated

Sales to external customers¥54,578¥4,567¥12,800¥71,946¥ —¥71,946

—

—

—

—

—

—

Total

¥54,578¥4,567¥12,800¥71,946¥ —¥71,946

Operating income¥5,498¥228¥1,411¥7,139¥(2,584)¥4,554

Assets44,228

2,825

10,12757,181

8,854

66,035

Depreciation expenses

2,653

168

568

3,390

263

3,654

Capital expenditures

1,927

92

395

2,415

62

2,478

Millions of Yen
Commercial/
Industrial-use
optics

Total

Consolidated¥2,358¥10,739¥59,903¥ －¥59,903¥46,805¥2,358¥10,739¥59,903¥ －¥59,903

Operating income¥4,034¥75¥733¥4,843¥(2,482)¥2,361

Assets39,567

1,944

8,600

50,112

10,79760,910Depreciation expenses

2,497

167

470

3,135

229

3,365

Opticalcomponents¥46,805

Total

Net sales:
Sales to external customers
Intersegment sales

Accumulated Impairment loss
Capital expenditures

－

－

1,840

－

－

91

－

－

526

－

－

2,458

－

35
25

¥11,859¥9,585

7,289

7,439

Photographic Products
Photographic Products
Optical Components
Commercial / Industrial-use Optics

Year ended December 31, 2016 and 2015
1. Transactions between the Company and related parties.

Millions of Yen
2015
Paid in capital

Transaction

Amount per year

Year end balance

JPY

Sale of DSC lenses¥7,289¥1,989Sony Digital Products (Wuxi) Co., Ltd.

485,584 thousand RMB

Sale of DSC lenses

3,198

355

Shanghai Suoguang Electronics Co., Ltd.

118,696 thousand RMB

Sale of DSC lenses

1,621

463

Sony Technology (Thailand) Co., Ltd.

570,880 thousand THB

Sale of DSC lenses

877

100

million

35
2,484

179
Millions of Yen－

Notes:
1. Adjustments (eliminations and/or corporate) are as follows:(1) Adjustment of segment profit totaled ¥(2,482) million is due to unallocated operating expenses consisted principally of expenses
related to general affairs and accounting departments of the Company.
(2) Total assets included in adjustments of segment assets mainly represent cash and deposits, long-term investments funds (investments in securities), and assets related to the administration department.
2. Segment profit is adjusted to operating profit of consolidated statements of income.

30 Tamron Co., Ltd.

2016

RELATED PARTY TRANSACTIONSSony Global Manufacturing & Operations Corporation

Eliminations
and/orcorporate

Photographic
products

2015

Sony Global Manufacturing & Operations Corporation

Name of company

2016

Relevant segments

Net sales

Nikon Corporation

Net sales:Intersegment sales

Millions of Yen

Name of company

2016
Name of company

Paid in capital

Transaction

Amount per year

Year end balance

JPY

Sale of DSC lenses¥7,439¥1,562

Sony Digital Products (Wuxi) Co., Ltd.

485,584 thousand RMB

Sale of DSC lenses

1,545

441

Shanghai Suoguang Electronics Co., Ltd.

118,696 thousand RMB

Sale of DSC lenses

1,676

545

Sale of DSC lenses

975

147

Sony Global Manufacturing & Operations Corporation

Sony Technology (Thailand) Co., Ltd.

100

million570,880 thousand THB

Notes: 1. Sales prices are based on the arms’ length transaction basis.
2. Consumption tax is not included in the amount of transaction but included in the amount of year-end balance.

Annual Report 2016 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’REPORTTo the Board of Directors of Tamron Co., Ltd.

PER SHARE INFORMATION

Year ended December 31, 2016 and 2015
2015

2016

Net assets per share

1,890.45 Yen

1,825.62 Yen

Net income per share

153.98 Yen

57.19 Yen

We have audited the accompanying consolidated financial statements of Tamron Co., Ltd. and its subsidiaries,
which comprise the consolidated balance sheet as at December 31, 2016, and the consolidated statement ofincome, comprehensive income, changes in net assets and cash flows for the year then ended, and a summaryof significant accounting policies and other explanatory information, all presented in Japanese yen.

Information for diluted net income per share is omitted because potentially dilutive securities are not issued.
Note: The basis for calculating net income per share is as follows:
Net income (Millions of Yen)

2015

2016

¥4,048¥1,482——

Amount not belong to ordinary shareholders (Millions of Yen)
Net income for ordinary shares (Millions of Yen)
Average number of shares outstanding during the term (Shares)

4,048

1,482

26,293,826

25,920,756

Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statementsthat are free from material misstatement, whether due to fraud or error.

CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(Schedule of borrowings)
Year ended December 31, 2016
Category

Short-term borrowings
Current portion of long-term borrowings

Millions of yen
Balance at end ofprior year

Balance at end ofcurrent year

2,264

2,582

1.4

889

745

0.8

1

1

6.0

881

736

0.7

2018 to 2021

3

1

6.0

2019 to 2020

—

—

—

—

4,040

4,066

—

Current portion of lease obligations
Long-term borrowings (excluding current portion)
Lease obligations (excluding current portion)
Debt with interest
Total

Average interest rate (%)

Maturity

Notes:
1. The average interest rate represents the weighted-average rate applicable to the year-end balance.
2. The following table shows the aggregate annual maturities of long-term borrowings (excluding the current portion)and lease obligations (excluding the current portion) for 5 years subsequent to December 31, 2017.
Millions of yen
Category

Long-term borrowings
Lease obligations

Due within

Due within

Due within

Due withinfiscal 2020

381

175

140

40

1

0

—

—

(Other)Quarterly financial information for the year ended December 31, 2016
Millions of yen, excluding earnings per share

Net sales

For the year ended
December 31, 2016

1Q

2Q

3Q

¥13,806¥30,499¥43,876¥59,903

47

1,409

1,756

2,742

Net income

(152)

934

1,139

1,482

Earnings per share(5.88)

36.04

43.97

57.19

Income before income taxes and minority interests

Note: Amount per each quarter is accumulated amount.

Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Tamron Co., and its consolidated subsidiaries as at December 31, 2016, and their financial performanceand cash flows for the year then ended in accordance with accounting principles generally accepted in Japan.
Convenience Translation
The United States dollar amounts shown in the consolidated financial statements have been translated solely
for convenience. We have reviewed this translation and, in our opinion, the consolidated financial statements
expressed in Japanese yen have been translated into United States dollars on the basis described in the prefaceat BASIS OF PRESENTING FINANCIAL STATEMENTS.

Yen

Earnings per share

1Q

2Q

3Q

4Q

¥(5.88)¥41.93¥7.92¥13.22

Tokyo, Japan March 29, 2017

Wako Audit Corporation

32 Tamron Co., Ltd.

Annual Report 2016 33

COMPANY PROFILE(As of December 31, 2016)

Tel:+81-48-684-9111
Fax:+81-48-683-8289
http://www.tamron.co.jp

Overview
Company Name:
Tamron Co., Ltd.

Capital:¥6,923 million

Established:
November 1, 1950
Incorporated:
October 27, 1952
Headquarters:
1385, Hasunuma, Minuma-ku, Saitama-shi, Saitama 337-8556
JAPAN

STOCK OVERVIEWGROUP NETWORK(As of December 31, 2016)

Production Facilities
Number of shares issued:
25,950,000 shares

Top10 Shareholders

Number of shares per unit:
100 shares

No

1

New Well Co., Ltd.

4,898

18.87

Number of shareholders:
5,862 shareholders

2Sony Corporation

3,129

12.06

3

BNP PARIBAS SEC SERVICES LUXEMBOURG/JASDEC/ ABERDEEN GLOBAL CLIENT ASSETS

1,139

4.38

4

Saitama Resona Bank Limited.

1,122

4.32

5

NORTHERN TRUST CO. (AVFC) RE NVI01
THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD HONG KONG PRIVATE BANKING DIVISION-CLIENT ACCOUNT

1,088

4.19

986

3.80

Balance date:
December 31

Name

Number of Shares(Thousands)%

Scheduled Annual Shareholders Meeting:
March

6

Eligibility date for year-end dividend payments:
December 31

7

Japan Trustee Services Bank, Ltd. (trust account)

922

3.55

8

Nippon Life Insurance Company

580

2.23

9

Japan Trustee Services Bank, Ltd. (trust account 9)

Eligibility date for interim dividend payments:
June 30

10 The Master Trust Bank of Japan ,Ltd. (trust account)
Total

Transfer Agent:
Sumitomo Mitsui Trust Bank, Limited

Note: Excluding odd lot.

■ Individuals and Others■ Financial Institution■ Foreign Shareholders■ Securities Firm

25.01%

34.75%

0.86%■ Other Corporation

23.30 %

34 Tamron Co., Ltd.

2.12
1.40

14,78256.96

Note: The 3,129 thousand shares owned by Sony Corporation are fiduciary assets trusted to Mizuho Trust& Banking Co., Ltd. In regard to the execution of voting rights and jus disposition of the shares, Sony
Corporation reserves the right to instruct pursuant to the provisions of the trust contract between thetwo parties.

Composition of Shareholders

16.08%

550
364

Hirosaki Plant
3-2, Shimizu 3-chome, Hirosaki-shi, Aomori
036-8254
JAPAN
Tel:+81-172-34-1144
Fax:+81-172-33-2340

Namioka Plant
64-1, Shimoshimada, Kitanakano, Namioka,
Aomori-shi, Aomori 038-1325
JAPAN
Tel:+81-172-62-9555
Fax:+81-172-62-9302

TAMRON OPTICAL (FOSHAN) CO., LTD.
No. 76 West of Langbao Road, Changcheng
District, Foshan, Guangdong,
CHINA
Tel:+86-757-82982222
Fax:+86-757-82203443

TAMRON OPTICAL (VIETNAM) CO., LTD.
Plot No. 69B&70A, Noi Bai Industrial
Zone, Mai Dinh Commune, Soc Son
District, Hanoi,
VIETNAM
Tel:+84-43762-1759
Fax:+84-43762-1758

Owani Plant
31-1, Maeda, Hachimandate, Owani-machi,
Minamitsugaru-gun, Aomori 038-0243
JAPAN
Tel:+81-172-47-6713
Fax:+81-172-47-6715

Subsidiaries Overseas
TAMRON USA, INC.
10 Austin Boulevard, Commack, NY 11725
USA
Tel:+1-631-858-8400
Fax:+1-631-543-3963

TAMRON Europe GmbH.
Robert Bosch-Str. 9, 50769 Cologne,
GERMANY
Tel:+49-221-970325-0
Fax:+49-221-970325-4

TAMRON France EURL.
5, avenue Georges Bataille, F-60330
Le Plessis-Belleville,
FRANCE
Tel:+33-3-44-60-73-00
Fax:+33-3-44-60-23-34

TAMRON INDUSTRIES(HONG KONG) LIMITED
Unit 908, 9/F, Elite Center, 22 Hung To
Road, Kwun Tong, Kowloon,
HONG KONG
Tel:+852-2721-7797
Fax:+852-2620-1631

TAMRON OPTICAL (SHANGHAI) CO., LTD.
Room 1707, Ruijin Building, No. 205,
Maoming South Road, Shanghai 200020,
CHINA
Tel:+86-21-5102-8880
Fax:+86-21-5466-0229

Tamron (Russia) LLC.
Unikon Business Center 5F No. 9,
Plekhanova Street 4a, Moscow, 111123,
RUSSIAN FEDERATION
Tel:+7-495-970-0112
Fax:+7-495-970-0112

TAMRON INDIA PRIVATE LIMITED
801, 8th Floor, Time Tower, M.G Road,
Sector-28, Gurgaon-122002, Haryana,
INDIA
Tel:+91-124-41-168-12
Fax:+91-124-40-822-72