Annual Report 2015

Corporate Philosophy
With its firm commitment to developing high-quality, innovative

Customers

and technologically advanced products that satisfy customer needs,
Tamron is securing a leading position in the worldwide opticalindustry.

Corporate
Philosophy

Our primary objective is to sustain strong corporate growth
based on a high level of customer satisfaction achievedby providing superior products at the right price, thus also
contributing to the prosperity of our shareholders andEmployees

employees.

TABLE OF CONTENTSMESSAGE FROM THE PRESIDENT & CEO.......................................................

1
FINANCIAL HIGHLIGHTS............................................................................... 2
BUSINESS SEGMENT INFORMATION............................................................. 3
FINANCIAL SITUATION................................................................................. 4
MID-TERM STRATEGY.................................................................................. 6
CORPORATE GOVERNANCE......................................................................... 7
BUSINESS & OTHER RISKS............................................................................ 8CONSOLIDATED BALANCE SHEETS............................................................... 10
CONSOLIDATED STATEMENTS OF INCOME/CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME.................................................................... 12

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS......................... 13

CONSOLIDATED STATEMENTS OF CASH FLOWS........................................... 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.................................... 15
INDEPENDENT AUDITORS’ REPORT.............................................................. 27

COMPANY PROFILE/STOCK OVERVIEW......................................................... 28
Note: In the 2015 annual report, amounts of less than the unit indicated, for example, one million yen or one thousand dollars, have been omitted.

Shareholders

MESSAGE FROM THE PRESIDENT & CEO

My name is Shiro
Ajisaka, and I haverecently assumed
the post of Presid e nt , CEO a n d
Representative
Director of Tamron Co., Ltd.
I am committed
to leading everyone at the company in combining all
our strengths andefforts to achieve
further growth for
the whole Tamrongroup, and I would
very much appreciate your continued support.

About business results for the term
An overview of global economic conditions during theterm shows the following results. For the U.S. economy,
moderate growth was sustained led by an increasein personal consumption and other factors, with improvements in the employment and income situation
as a backdrop, but a slowdown was seen towards theend of the year. For the European economy, despite
the relatively high levels of unemployment rates, they
showed a declining trend and the business sentiment
improved, sustaining a moderate economic recovery.
For the Chinese economy, a slowdown in production
and the investments in fixed assets and real estate led
to the lowest growth rate in 25 years, and with some
confusion observed in financial markets, a sense of
insecurity spread regarding the economy.
As for the Japanese economy, improvements in theemployment and income situation led to steady personal consumption, sustaining a moderate recovery
overall, but in the second half, a slowdown in emerging economies and other factors resulted in a gradualdecline in corporate earnings.
In the digital camera market relevant to the Tamrongroup, the number of lens-interchangeable type cameras shipped increased for mirrorless compact camerasin comparison with the previous year, but decreased
for SLR cameras, resulting in a decline on the whole
by 6% compared to the previous year. Although there
were signs in first half of the year that the decline for
digital SLR cameras was bottoming out, the decrease
compared to the same period of the previous year
continued from August onwards, and with a decline by
15% in comparison with the same period of previous
year in the 4th quarter, the market remained sluggish
in the whole second half. Affected by the slow salesof DSLR cameras and other factors, the number ofinterchangeable lenses shipped declined by 9% in the
4th quarter compared to the same period of previous
year, resulting in a 6% decline for the whole year incomparison with the previous year. For the number ofcamera-integrated type cameras shipped, a considerable decline persisted, by 25% compared to the previous year.
Amid this situation, operating results of the Tamrongroup for the term were as follows. Thanks to favorable fluctuations of exchange rates of a lower yen anda higher U.S. dollar, etc., revenue increased for our
Photographic Products and Commercial / Industrial-use
Optics business operations, but this was not enough tomake up for the decline in revenue for Optical Components business operations, and net sales came to
71.946 billion yen (decrease by 2.3% compared to previous year).
For profits, due to negative exchange rate fluctuations of a lower yen against a higher U.S. dollar and ahigher yen against a lower euro, etc., and an increasein sales and general administrative expenses, the operating profit was 4.554 billion yen (decline by 25.0%
compared to previous year), while ordinary profit came
to 5.140 billion yen (decline by 17.1% compared toprevious year). Regarding net profit for the term, thegain on negative goodwill (bargain purchase) by turning Koyu Kosan Company into Tamron’s subsidiary andother gains led to posting an extraordinary profit, which
contributed to an increase in net profit to 4.048 billion
yen (increase by 5.2% compared to previous year).
About the outlook for the new fiscal year
There is a sense of uncertainty regarding economic
trends in and outside Japan for the new fiscal year, but
for Photographic Products business operations, we will
launch a number of new products one after anotherfor interchangeable lenses under our Tamron brand,
and for Commercial / Industrial-use Optics business
operations, we will work towards increasing sales ofthe lenses for surveillance cameras and for automobile
applications.
For our consolidated performance in the new year,
our projections are 7.5 billion yen (increase by 4.2%
compared to previous year) for net sales, 5.2 billion
yen (increase by 14.2% compared to previous year) for
operating profit, 5.2 billion yen (increase by 1.2% compared to previous year), and 3.30 billion yen (decreaseby 16.8% compared to previous year) for current net
profit.
I would like to cordially ask you for your continued
kind support towards the company’s operations.
President & CEO
Shiro Ajisaka* The projected exchange rate as a premise for the outlook above are as follows: 1 U.S. dollar = 120 yen; 1 euro = 130 yen.

Tamron Co., Ltd.

1

FINANCIAL HIGHLIGHTS

Thousands of
U.S. Dollars

Millions of Yen

Years ended December 31

2015

2014

2013

2012

2011

2015

¥  71,946¥  73,621¥  68,452¥  64,353¥  58,507$594,056

4,554

6,076

5,233

5,503

5,687

37,609For the Year:Net sales
Operating income
Operating income ratio

6.3%

8.3%

5,140

Ordinary income
Ordinary income ratio

7.6%

6,200

7.1%

5,196

8.4%

7.6%

8.6%

—

9.7%

5,377

42,444

5,702

8.4%

—

9.7%

4,048

3,846

3,197

3,894

3,804

33,429Total assets¥  66,035¥  69,906¥  64,704¥  58,058¥  51,898$545,251

Net assets

49,001

51,99547,08740,80536,134

404,605

Number of employees

5,829

2,694

2,545

2,295

6,005

—

Net income¥  153.98¥  140.14¥  116.48¥  141.86¥  138.61—

Shareholders’ equity

1,890.45

1,894.14

1,715.37

1,486.52

1,316.33

—

60.00

50.00

50.00

50.00

50.00

—

Return on assets (ROA)

7.6

9.2

8.5

9.8

11.2

—

Return on equity (ROE)

8.0

7.8

7.3

10.1

10.9

—

Equity ratio

74.2

74.4

72.8

70.3

69.6

—

Net income

At Year-End:Per Share Data (in yen, dollars):

Cash dividends

Ratios (%):

Notes: 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥121.11=US$1.
2. ROA=Ordinary income/Total assets
3. ROE=Net income/Net assets

NET SALES(Millions of Yen)
64,35368,452OPERATING INCOME(Millions of Yen)
73,621 71,946

5,687

6,076
5,503

58,50711

2

NET INCOME(Millions of Yen)
3,804 3,894

5,233

13

Tamron Co., Ltd.

14

15

11

12

13

14

15

4,048

3,197

4,554

12

3,846

11

12

13

14

15

BUSINESS SEGMENT INFOR M ATION

BUSINESS SEGMENT
Our main business drivers are the following three segments, Photographic Products, Optical Components, andCommercial/Industrial-use Optics.
Business Segment

Main BusinessPhotographic ProductsInterchangeable lenses for 35mm/Digital SLR cameras
Interchangeable lenses for non-Reflex type cameras

Optical Components

Camcorder lenses
Digital still camera lenses
Optical device units

Commercial/Industrial-use Optics

Lenses for CCTV cameras
Automotive lenses

BUSINESS SEGMENT OVERVIEW
Photographic Products

NET SALES(Millions of Yen)
48,492For our Photographic Products business, the sales of interchangeable lens products under the
Tamron brand became sluggish in the second half of the year due to a continued slowdown
for the market and low sales levels during the Christmas shopping season, etc., but thanks tothe effects of the launch of new products and good sales results in Europe, among other factors, the revenue increased.
As a result, net sales came to 54.578 billion yen (increase by 1.25% compared to previousyear) for the Photographic Products business, while the operating profit was negatively affected by exchange rate fluctuations of a lower yen against a higher U.S. dollar and a higher
yen against a lower euro, etc., to drop to 5.498 billion yen (decrease by 6.1% compared toprevious year).

13

54,578

14

15

OPERATING INCOME/ OPERATING INCOME RATIO(Millions of Yen)
5,853

5,498

4,280
8.8％

13

Optical Components

53,932

10.9％

14

10.1％

15

NET SALES(Millions of Yen)
7,629

7,032
4,567

Regarding Optical Components business, a considerable contraction of the market for compact digital cameras and digital video cameras continued, leading to a decline in the numberof orders received and in revenue.
As a result, net sales for the Optical Components business came to 4.567 billion yen (decrease by 35.1% compared to previous year), with the operating profit dropping to 228 million
yen (decrease by 65.6% compared to previous year).

13

664

13

For Commercial / Industrial-use Optics business, revenue decreased for lenses for surveillancecameras due to a slowdown of the economy in the Chinese market and intensifying competition, among other factors, but rising sales in the U.S. market and other regions and good sales
results for the lenses for automotive applications, a key growth area, led to increased revenue
overall.
In the area of security applications with continued stable growth expected in the near future, we have focused on expanding our product lineup in response to expanding applications, as well as on developing strategic products matching regional characteristics and the
products with superior technological advantages, in order to increase sales.
As a result, net sales for the Commercial / Industrial-use Optics business came to 12.8 billion
yen (increase by 1.1% compared to previous year), while the effects of fierce price competitions and other factors showed for the operating profit, which declined to 1.411 billion yen(decrease by 35.6% compared to previous year).

15

938

12.3％

Commercial / Industrial-use Optics

14

OPERATING INCOME/ OPERATING INCOME RATIO(Millions of Yen)

9.4％

14

228
5.0％

15

NET SALES(Millions of Yen)
12,33012,656

12,80013

14

15

OPERATING INCOME/ OPERATING INCOME RATIO(Millions of Yen)
2,429

19.7％

2,190

17.3％

1,411
11.0％

13

14
15
Tamron Co., Ltd.

3

FINANCIAL SITUATIONFINANCIAL SUMMARY

Current assets
The balance of current assets at the end of the consolidated fiscal year stood at 44.920 billion yen, a decreaseby 2.035 billion yen compared to the level at the end of
the previous consolidated fiscal year. This was mainly
because of decreases in cash on hand and in banks by
1.723 billion yen and in notes and accounts receivable
by 2.848 billion yen, and an increase in finished goodsby 2.180 billion yen.
Fixed assets
The balance of fixed assets at the end of the consolidated fiscal year stood at 21.114 billion yen, a decreaseby 1.835 billion yen compared to the level at the end of
the previous consolidated fiscal year. This was mainly
because of a decrease in tangible fixed assets by 1.605
billion yen.
Current liabilities
The balance of current liabilities at the end of theconsolidated fiscal year stood at 14.594 billion yen,a decrease by 8 million yen compared to the level atthe end of the previous consolidated fiscal year. Thiswas mainly because, while short-term borrowings increased by 826 million yen, there were decreases in
the accounts payable by 570 million yen and in income
taxes payable by 314 million yen.
Fixed liabilities
The balance of fixed liabilities at the end of the consolidated fiscal year stood at 2.439 billion yen, a decrease by 869 million yen compared to the level at theend of the previous consolidated fiscal year. This waschiefly because of a decrease in long-term borrowings
by 889 million yen.
Net assets
The net balance of assets at the end of the consolidated fiscal year came to 49.001 billion yen, a decreaseby 2.993 billion yen compared to the level at the end of
the previous consolidated fiscal year. This was mainly
because of decreases in retained earnings by 1.422
billion yen and in foreign currency translation adjustments by 1.536 billion yen.

4

Tamron Co., Ltd.

C ASH F LOW

For the consolidated fiscal year, cash and cash equivalents at the end of the year decreased by 1.723 billion
yen compared to the level at the end of the previous
consolidated fiscal year, to 14.192 billion yen.
What follow are cash flows through different activities during the consolidated fiscal year.

Cash flows through operating activities
Net income before taxes and other adjustments stoodat 5.893 billion yen, with 3.654 billion yen for depreciation expenses and 2.264 billion yen for the decreasein notes and accounts receivable. At the same time,the increase in inventory assets stood at 2.737 billion
yen, and the income taxes, etc. paid came to 2.335
billion yen. Overall cash flows through the operating
activities resulted in an income of 6.214 billion yen(compared to an income of 6.208 billion yen for theprevious consolidated fiscal year).
Cash flows through investing activities
With expenses of 2.4 billion for the acquisition of tangible fixed assets, etc., the cash flows through investing
activities resulted in a disbursement of 2.552 billion
yen (compared to 2.351 billion yen in the previous
consolidated fiscal year).
Cash flows through financing activities
While there was a net increase of 1.132 billion yen
for short-term borrowings, disbursement through therepayment of long-term borrowings came to 1.185 billion yen, with disbursement of 3.693 billion yen for theacquisition of own shares and the dividend paymentsof 1.471 billion yen, among other items, resulting in a
disbursement of 5.219 billion yen for cash flows throughthe financing activities (compared to 3.009 billion yen
in the previous consolidated fiscal year).

Commercial / Industrial-use Optics
In the Commercial / Industrial-use Optics business,with growth of the security market and expansion of
the applications in view, we have developed wideranging new products to satisfy the needs for higher
pixel counts in various conditions, for surveillance at
day and night, the surveillance of conditions in an urban environment, traffic surveillance, and machine vision systems, among other uses. To make redoubled
efforts towards further growth, we have also developed new lenses for vehicle-mounted cameras andthe first ultra-compact camera module with opticalvibration compensation in the industry, among otherproducts. As a result, R&D expenses pertaining to theCommercial / Industrial-use Optics business totalled
1.036 billion yen.

R ESEARCH AND D EVELOPMENT

With regard to the R&D activities of the Tamron group,
the Optical Design & Engineering R&D Unit, the CoreTechnology & Engineering R&D Unit, the Integrated
Core Technology R&D Unit, and the Process Technology& Engineering Unit are responsible for the developmentof individual underlying technologies that form the basis of products, in such areas as optics, productionengineering and electronics. The Design & Engineering
Department 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 around theinterchangeable lens products for digital SLR cameras,
our main business area, as well as new lenses forsurveillance cameras and other products. With futurebusiness expansion in view, we also concentrated on
the development of lenses for far infrared cameras andfor automotive applications, among other products.
The activities led to total R&D expenses of 4.052 billion
yen for the consolidated fiscal year, with results of the
R&D activities in each segment described below.

C APITAL I NVESTMENT

To further promote the inhouse production of key components, the Tamron group made total capital investments of 2.478 billion yen (increase by 2.0% compared
to previous year), centering around the investments inmachining equipment at Tamron Optical (Foshan) Co.,
Ltd. in China and Tamron Optical (Vietnam) Co., Ltd.,and the investments in metal molds related to newmodels, etc.

Photographic Products
In Photographic Products business, we have launchedsuch products as 18-200mm VC (B018), a high-powerzoom lens achieving the world’s lightest weight in theclass, and SP 35mm F/1.8 VC USD (F012) and SP 45mm
F/1.8 VC USD (F013), the two fast-aperture fixed focal
lens products that kick off the SP series with renovated exterior design, functionality and user friendliness, among other products. As a result, R&D expenses
related to the Photographic Products business cameto 2.706 billion yen.

Photographic Products
We made capital investments of 1.927 billion yen, mainly centered around the investments in metal molds
related to new models for the interchangeable lens
products for digital SLR cameras.
Optical Components
There were capital investments of 92 million yen, mainly as investments in the metal molds concerning newmodels of the lenses for compact digital cameras, andin lens production facilities.

Optical Components
In the Optical Components business, we have developed lenses for digital cameras with high value added
and the lenses for far infrared cameras, among otherproducts. As a result, R&D expenses pertaining to the
Optical Components business came to 309 million yen.

R & D EXPENDITURE(Millions of Yen)

CAPITAL EXPENDITURE(Millions of Yen)
4,052

3,304

3,492

Commercial / Industrial-use Optics
We made capital investments of 395 million yen, mainly
as the investments in metal molds related to new models for the lens units for surveillance cameras.
NUMBER OF EMPLOYEES

6,130

3,699
6,005

3,217

5,829

4,386
3,656
2,429 2,478

11

12

13

14

15

11

12

13

14

15

2,295

11

12

2,545 2,694

13

14

15

Tamron Co., Ltd.

5

MID -TER M STR ATEGY

Mid-Term Management Goals for FY2018
NET SALESOPERATING INCOME

ROE¥92,000
Million¥8,600Million10%
or more(9.3% operating income margin)
Issues on Mid-to Long-Term Management
1.	Strengthen CSR management, internal control and corporate governance in order to enhance capital efficiency
2.	Launch new products timely with shortening the lead time from development to production
3.	Continue further efforts to expand business through global marketing activities to raise brand awarenessand reputation
4.	Clarify the role of each production facility and improve productivity with automation
5.	Establish new business with collaboration with external partners including M&A and expand the scope of“New eyes for industry”
6.	Accelerate activities of core technology development in the field of optics and enhance proactive IP strategy
Strategy Towards FY2018 by Segment
Photographic Products• Timely launches of new products with strengthening design and development organization• Enhance sales activities in emerging markets and areas whose market shares are still low• Raise brand awareness and reputation with product performance and design• Enhance OEM business with proposal-based sales approach

Interchangeable Lenses for Digital SLR
CamerasOptical Components• Focus on value-added products and secure appropriate profit• Reduce new investment to the shrinking markets• Entry to new categories with leveraging our strength and advantage of optics technology• Gain cost competitiveness of far-infrared range optical systems

Digital Still Camera Lenses

Commercial / Industrial-use Optics• Enhance sales with technology innovation of CCTV lenses and collaboration with camera
manufactures• Build development and sales structures which fit to Chinese market in order to gain market
share in China where major CCTV manufactures are located• Enhance automotive camera lenses especially for sensing application• Enhance camera module business (Compact/ultra-sensitive camera module etc.)• Establish new businesses through co-creation with external partners (including M&A)
CCTV Camera Lenses

6

Tamron Co., Ltd.

CORPOR ATE GOVERNANCE

We are committed to fair and transparent management practices as well as enhancing corporate value, whichis achieved by strengthening corporate governance to build up trust with shareholders and investors.
1. Basic Policy
We at Tamron have constantly pursued fair and transparent management practices under our management philosophy as well as by respecting the rights and equality of our shareholders and working diligently to maintaina sound relationship with all stakeholders.
2. Corporate Governance System Overview
Tamron has employed the Executive Officer System to speed up decision making and improve efficiencies,
which has enabled it to establish a management structure capable of making accurate and strategic decisions.
External Directors with expertise in their respective field carefully monitor and advise the company regarding
its execution of operations from an independent and fair standpoint. At the same time, Independent Auditorswith expert knowledge of finance, accounting and legal affairs as well as Corporate Auditors well versed in
Tamron’s operations work together with the Accounting Auditor and Internal Audit & Supervision Board tocarry out rigorous audit programs. Tamron appoints 15 Directors, of which 2 are Independent Directors, and
4 Corporate Auditors, of which 3 are Independent Corporate Auditors.
(1) Board of Directors
Meetings of the Board of Directors are held twice a month, in principle, attended by all Directors and Corporate
Auditors, for reviewing the execution of duties by the Directors and deciding on important issues as set forthin the basic policy of the company and related laws and regulations. In 2015, Board of Directors met 26 times.
(2) Audit & Supervisory Board
The Audit & Supervisory Board audits the processes of decision making by the Board of Directors and the execution of duties of Directors by attending the Board of Director meetings and checking approval documents.
The Audit & Supervisory Board meets monthly, in principle. In 2015, Audit & Supervisory Board met 15 times.
(3) Executive Officer System

General Meeting of Shareholders

Tamron has employed the Executive Officer System to ensure separation between management
and the execution of operations. Executive Officers carry out their duties and responsibilities
following the basic policy determined by theElection/Dismissal

Election/Dismissal

Audit & Supervisory Board

Election/Dismissal

Coordinate

Independent Auditor

Board of Directors.
Financial
Audit

Supervise(4) Internal Control through Committee Meetings

Coordinate

We regularly hold monthly management (MAC)
meetings attended by all Directors, full-time

Board of Directors

Coordinate

Corporate Auditors and Executive Officers to
discuss management issues and respond to the

President & CEO

fast-changing management environment.
(5) Accounting Auditor
Tamron has concluded an auditing agreement

CSR Committee

Corporate Management
Committee (MAC)

Compliance Committee

Executive Officer

Internal Audit &Supervision Board

Internal Audit

with Wako Audit Corporation and receives audit from this firm in its capacity as accounting
auditor.

Divisions and Subsidiaries

Tamron Co., Ltd.

7

BUSINESS & OTHER RISKSB USINESS & O THER R ISKS

4. Defective Products

Items listed in this annual report regarding business

All of the Company’s domestic and overseas develop-

and financial conditions that may potentially impact

ment and production facilities have obtained ISO9001

investor decisions are including but not limited to thecertification for quality management system andfollowing risk factors. Forward-looking statements con-

ISO14001 certification for environmental management

tained herein are based upon judgments made by thesystems, indicating the Company’s excellent framework

Company as of March 30, 2016.

regarding quality assurance. However, the Company
cannot fully guarantee that no product may at some

1. Reliance on a Few Selected Customers

future point be subject to a recall or product liability

A high degree of our consolidated sales depends on

case. In the event that the defective product is the

Nikon Corporation with approximately 16% of our busi-

object of a large-scale recall or product liability case,ness and a Sony group company with approximately

significant expenses could be incurred, or serious dam-

19% (in FY2015 which ended in December 2015). Con-age could be done to the Company’s credibility. In suchsequently, a change in the business strategies and di-case, the Company results may be affected. For yourrections of either of the clients, it could significantly

information, a market recall is in progress for some

impact the overall performance of our company.

customers’ products using optical components madeby our group. We may be asked to bear part of the

2. E xpanding Business Segments and Entering

expenses involved.

New Businesses
The Company plans to expand the scope of its busi-

5. Risk Surrounding Overseas Subsidiaries

ness by automotive application and Far-IR cameras.

The Company owns sales outlets in the United Sates,

Because of the anticipated growth of those business

Germany, France, and in Shanghai (China), and in Rus-

segments, several companies are expected to comesia. A distribution and sales company in Hong Kong,

into play, which will cause severe price competition as

and a production company in Foshan, China and inwell as putting continuous pressure for technological

Vietnam.

innovation, coping with rapid changes in the customers’ needs.

Following is a list of several inherent risks arisingfrom the Company’s activities in overseas markets. In
cases where such events occur, the Company results

3. Procurement of Raw and Other Materials

may be affected thereby.

While the Company has numerous sources from which(1) Unexpected changes to laws and regulations

to procure most of the necessary raw materials and(2) Unexpected and unfavorable changes in political orparts it requires, in the case of glass materials, theeconomic conditions

Company relies on a limited number of suppliers. As a(3) Unfavorable changes in tax policies or tax rates

results, if for various reasons raw materials and other(4) Terrorism, war, natural disaster, epidemics or otherparts cannot be obtained according to plans regard-

factors contributing to social upheaval

ing volume or price, the Company may have difficulty
achieving its planned production volume. In such cases,
the Company may not be able to fulfill delivery obligations to its customers, which in turn may affect results.

6. C oncentration of Domestic Production Facilities
in Aomori Prefecture
The Company’s three production facilities in Japan areconcentrated in the Tsugaru region of Aomori Prefecture. In the event of an earthquake or other natural
disaster, the Company’s production facilities could bedamaged, and production operations may be severely
impacted.

8

Tamron Co., Ltd.

7. Intellectual Property

10. Impact of Currency Exchange Fluctuation

In order to avoid difficulties surrounding intellectual

Transactions between the Company and its overseas

property, the Company conducts surveys and nego-subsidiaries and with certain domestic and overseas

tiations, and actively applies for intellectual property

customers are conducted either in full or in part in for-rights. At present, there are no instances in which theeign currencies. Fluctuations in currency exchange rates

Company is thought to be in violation of another par-affect the competitiveness of the Company’s products

ty’s intellectual property rights. However, this does notin foreign markets and the profitability of its exports.

indicate that the risk of being caught up in litigations

Accordingly, the Company’s results may be affected.

at some future point is nonexistent. In the event of
unfavorable litigation, fiscal results may be affected.

11. Research and Development Costs
The Company is investing in new technology for fur-

8. Environmental Regulations

ther expansion of our business and we will continue

The Company has implemented an environmental man-to invest in R&D. However, some R&D projects mayagement system that conforms to ISO environmental

not progress as planned, or the Company’s new tech-standards, and is working actively to implement envi-

nology may be eclipsed by some other technology

ronmental reforms.

introduced by our competitors in the market. In such

Regarding the ground contamination found during
the voluntary investigation conducted December 2003

cases, recovering the investment may pose a problem,
consequently affecting the Company results.

at the Company’s head office, the Company completed
the construction which it proposed to Saitama City in
its “Plan to Halt the Spread of Groundwater Contamination.”
The Company conducted survey at other domestic
facilities such as Hirosaki plant, Namioka plant, andOwani plant has been confirmed that all domestic facility environment is accordance with environmental
regulation levels. However, as environmental laws andregulations are revised, the Company may discoverinstances of violations under new regulations. In suchcases, Company results may be affected by related
clean-up costs.

9. Disposal of Inventories and Valuation Loss
The Company makes every effort to be thorough inquality control of products and parts, compliance withenvironmental standards, and inventory management.
However, changes in environmental standards, market
and technology trends, rapid transitions in productlife cycles and other factors may lead to unavoidable
variations in the valuation of products and partiallyfinished goods. As a result, the Company may needto dispose of inventories, expense valuation losses toincome, and adopt other measures. In such cases, theCompany’s results may be affected.

Tamron Co., Ltd.

9

CONSOLIDATED BALANCE SHEETS
Tamron Co., Ltd. and Consolidated Subsidiaries

Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Cash and deposits¥14,192¥15,915$117,186

Notes and accounts receivable–trade

15,804

18,653

130,498

Finished goods

8,170

5,989

67,464Work in process

3,209

2,888

26,501

Raw materials and supplies

1,495

1,658

12,346

656

481

5,418

1,422

1,412

11,749

(31)

(44)

(258)

44,92046,955

370,907

		 Buildings and structures

13,52913,513

111,713

			Accumulated depreciation(6,754)(6,396)(55,774)

			 Buildings and structures, net

6,774

7,117

55,938

		 Machinery, equipment and vehicles

20,05020,821

165,556

			Accumulated depreciation(13,726)(13,441)(113,338)

			 Machinery, equipment and vehicles, net

6,324

7,380

52,217

		 Tools, furniture and fixtures

18,806

17,764

155,281

			Accumulated depreciation(16,464)(15,394)(135,943)

			 Tools, furniture and fixtures, net

2,342

2,369

19,338

		Land

1,057

1,063

8,731

711

883

5,875

17,20918,814142,101

804

866

6,639

		 Investment securities

2,330

2,394

19,240		 Deferred income taxes

435

474

3,598

		Other

406

517

3,360

		 Allowance for doubtful accounts

(72)

(116)

(596)

			 Total investments and other assets

3,100

3,269

25,603

			 Total noncurrent assets

21,114

22,950174,344			Total assets¥66,035¥69,906$545,251

As of December 31

AssetsCurrent assets:

Deferred income taxes
Other
Allowance for doubtful accounts
		 Total current assets

Noncurrent assets:
Property, plant and equipment

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

10

Tamron Co., Ltd.

Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Accounts payable–trade¥ 5,285¥ 5,855$ 43,641

Short-term loans payable

3,154

2,327

26,044

Accrued expenses

3,757

3,497

31,028

603

918

4,983

1,793

2,004

14,808

14,594

14,602

120,506

Long-term loans payable

881

1,771

7,279

Net defined benefit liability

1,495

1,342

12,344

62

194

514

			Total noncurrent liabilities

2,439

3,308

20,139

			Total liabilities

17,033

17,911

140,646

Capital stock

6,923

6,923

57,163

Capital surplus

7,432

7,432

61,368Retained earnings

30,18731,609249,256

(53)

(81)

(442)

44,48945,883367,345

Unrealized gain on investment securities

445

466

3,681

Foreign currency translation adjustments

4,260

5,797

35,181Remeasurements of defined benefit plans

(194)

(152)

(1,602)

			 Total accumulated other comprehensive income

4,512

6,111

37,260			 Total net assets

49,001

51,995

404,605

			Total liabilities and net assets¥66,035¥69,906$545,251

As of December 31

Liabilities
Current liabilities:

Income taxes payable
Other
			Total current liabilities

Noncurrent liabilities:

Other

Net assets
Shareholders’ equity:

Treasury stock			Total shareholders’ equity

Accumulated other comprehensive income:Tamron Co., Ltd.

11

CONSOLIDATED STATEMENTS OF INCOME
Tamron Co., Ltd. and Consolidated Subsidiaries

Thousands of
U.S. Dollars

Millions of Yen

Years ended December 31

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses:
Advertising expenses
Promotion expenses
Provision of allowance for doubtful accounts
Salaries and bonuses
Retirement benefit expenses
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
Foreign exchange losses
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 disaster		 Total extraordinary loss
Income before income taxes and minority interests
Income taxes–current
Income taxes–deferred
Total income taxes
Income before minority interests
Net income

2015

2014

2015

¥71,946
49,30322,642¥73,62150,05323,568$594,056
407,100
186,955

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

1,654
1,097
11
4,459
116
3,619
6,533
17,492
6,076

12,0197,949
39
38,421
1,124
32,91856,871
149,345
37,609

32
51
387
20
103
209
804

53
42
—
23
35
179
335

268
421
3,199
166
852
1,730
6,639

45
—
112
38
21
218
5,140

64
19
106
1
19
211
6,200

373
—
931
318
180
1,804
42,444

99
653
753

—
—
—

824
5,394
6,218

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

89
89
6,110
2,163
99
2,263
3,846
¥ 3,846——
48,663
15,904(669)
15,23433,429$ 33,429

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Tamron Co., Ltd. and Consolidated Subsidiaries

Thousands of
U.S. Dollars

Millions of Yen

12Years ended December 31

2015

2014

2015

Income before minority interests
Other comprehensive income
Unrealized gain (loss) on investment securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
		 Total other comprehensive income
Comprehensive income	Comprehensive income attributable to owners ofparent¥4,048¥3,846$33,429(20)(1,536)(41)(1,598)
2,449

96
2,489
—
2,585
6,432

(169)
(12,688)(344)(13,202)
20,227

2,449

6,432

20,227

Tamron Co., Ltd.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Tamron Co., Ltd. and Consolidated Subsidiaries

Millions of Yen
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
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

Commonstock

CapitalsurplusRetainedearnings¥6,923¥7,432

6,923

7,432

¥31,609(13)
31,595

Treasury
stock

¥(81)
(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
Changes in accumulated other comprehensive income

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
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

Unrealized
gain (loss) on
investment
securities

Foreigncurrencytranslation
adjustments¥466¥5,797

466

5,797

(20)
(20)
445

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

Total
Remeasurements
accumulatedof defined benefit
other
plans
comprehensive
incomeTotal net
assets¥(152)¥6,111

(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’equityThousands of U.S. Dollars
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
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

Commonstock

CapitalsurplusRetainedearnings

Treasurystock$57,163$61,368$   (671)

57,16361,368$260,999(114)
260,885(12,150)
33,429—57,163—61,368(671)(32,907)(32,679)
32,907(11,629)
249,256228(442)$378,859(114)
378,745(12,150)
33,429(32,679)(11,400)
367,345

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

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
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

Unrealized
gain (loss) on
investment
securities

Foreigncurrencytranslation
adjustments$3,850$47,869

3,850

47,869Total
Remeasurements
accumulatedof defined benefit
other
plans
comprehensive
income$(1,257)$50,462(1,257)50,462

Total net
assets$429,322(114)
429,208(12,150)
33,429(32,679)

(169)
(169)
3,681

(12,688)(12,688)
35,181(344)(344)(1,602)(13,202)(13,202)37,260(13,202)(24,602)404,605

Tamron Co., Ltd.

13

CONSOLIDATED STATEMENTS OF CASH FLOWS
Tamron Co., Ltd. and Consolidated Subsidiaries

Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

¥ 5,893¥ 6,110$ 48,663

3,654

3,812

30,172—(1,201)—

Increase in net defined benefit liability

102

1,104

843

Interest and dividend income

(83)

(96)

(689)

Interest expense

45

64

373

Loss on retirement of property, plant and equipment

112

106

931

Proceeds from insurance income

(99)

—

(824)

Gain on bargain purchase

(653)

—

(5,394)

2,264(2,415)

18,698(2,737)

1,214(22,603)

(62)

(695)

(518)

Years ended December 31

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation and amortization
Decrease in provision for retirement benefits	Decrease (increase) in notes and accounts
receivable–trade
Increase (decrease) in inventories
	Increase (decrease) in notes and accounts payable–trade
Other–net

(23)

(25)

(190)

		
Sub total

8,412

7,979

69,462

Interest and dividend income received

83

97

689

Interest expenses paid

(46)

(65)

(382)

99

—

824

(2,335)(1,803)(19,282)

6,214

6,208

51,311(2,400)(2,250)(19,817)

(130)

(214)

(1,073)

(1)

(391)

(11)

Proceeds from redemption of investment securities

—

300

­—

Payments of loans receivable

(7)

(45)

(59)

Proceeds from insurance income
Income taxes paid
		 Net cash provided by operating activities
Cash flows from investing activities:
Purchases of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities

Collection of loans receivable

26

26

220

Other–net

(40)

223

(330)

(2,552)(2,351)(21,072)

		Net cash used in investing activities
Cash flows from financing activities:

1,132(1,203)

9,349

Proceeds from long-term loans payable

—

1,000

—

Repayment of long-term loans payable(1,185)(1,432)(9,788)Purchase of treasury shares(3,693)—(30,493)

Cash dividends paid

(1,471)(1,373)(12,150)

Net increase (decrease) in short-term loans payable

(1)

(0)

(10)

		
Net cash used in financing activities(5,219)(3,009)(43,093)

Effect of exchange rate changes on cash
and cash equivalents

(561)

771

(4,635)

Net increase (decrease) in cash and cash equivalents(2,118)

1,618(17,489)

Cash and cash equivalents at beginning of year

15,915

14,297

131,417

Other–net

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

14

Tamron Co., Ltd.

394

—

3,259

¥14,192¥15,915$117,186

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Tamron Co., Ltd. and Consolidated Subsidiaries

BASIS OF PRESENTING CONSOLIDATEDFINANCIAL STATEMENTS

The financial statements of Tamron Co., Ltd. (the “Company”) and its consolidated subsidiaries have been preparedin accordance with the provisions set forth in the Financial
Instruments and Exchange Law and Corporate Law and in
conformity with accounting principles generally accepted inJapan. Therefore, application and disclosure requirements aredifferent from International Financial Reporting Standards incertain respects.
Amounts in U.S. dollars are included solely for the convenience of the reader. The rate of ¥121.11 = US$1 prevailing on December 31, 2015 has been used in translating theconsolidated financial statements expressed in Japanese yen
into U.S. dollars. Such translations should not be construed
as representations that the Japanese yen amounts could bereadily converted, realized or settled in U.S. dollars at this rate.
1. Scope of Consolidation
All subsidiaries are consolidated.
Number of consolidated subsidiaries: 9
TAMRON USA, Inc.
TAMRON Europe GmbH.
TAMRON France EURL.
Tamron (Russia) LLC.
TAMRON OPTICAL (VIETNAM) CO., LTD.
TAMRON INDIA PRIVATE LIMITED
TAMRON INDUSTRIES (HONG KONG) LIMITED
TAMRON OPTICAL (FOSHAN) CO., LTD.
TAMRON OPTICAL (SHANGHAI) CO., LTD.
2. Application of the Equity Method
Investment in an affiliated company KOEISHA Corporation isstated at cost, due to immateriality in terms of net income
and retained earnings, and accounting for above affiliatedcompany under equity method would not give significant
influences on the Company’s consolidated financial statements, as a whole.
3. Fiscal Term
The fiscal year end of TAMRON INDIA PRIVATE LIMITED is
March 31, and those of other consolidated subsidiaries are thesame as the fiscal year end of the Company. In the preparation of consolidated financial statements, financial statementsof TAMRON INDIA PRIVATE LIMITED as of the said date wasused, and with respects to significant transaction that occurred between the said date and the consolidated bookclosing, adjustments necessary for consolidation are made.
4. Accounting Policies(1) Methods for valuation of significant assets
a. Investments in securities
With market quotations: stated at fair market value. Unrealized gains and losses on these securities are reported, netof applicable income taxes, as a separate component of the
net assets. Realized gains and losses on the sale of suchsecurities are computed using the moving-average cost.
Without market quotations: stated at cost using the moving-average method.
b. Derivatives
Derivatives financial positions are stated at fair value.
c. Inventories
Inventories of the Company and its consolidated subsidiaries are valued at cost, as determined mainly by themonthly moving-average method, with balance sheet inventory amounts calculated using lowered book values,
reflecting a potential decline in profitability.

(2) Depreciation of fixed assets
a. Tangible assets (excluding leased assets)
The Company: depreciation of depreciable assets other thanbuildings (excluding facilities attached) is principally computed
using the declining-balance method, while the straight-line
method is applied for buildings (excluding facilities attached)acquired on or after April 1, 1998.
The estimated useful lives are as follows:
Buildings and structures
10 to 40 years
Machinery and equipment
5 to 10 years
b. Intangible assets (excluding leased assets)
Depreciation of intangible assets is computed by thestraight-line method. In-house use software is amortizedover a five-year period based on the assumed useful life.
c. Leased assets
The company uses the straight-line method over the termsof their respective leases with a zero residual value.
Finance lease transactions not involving transfer of ownership commencing on or before December 31, 2008 are
accounted for based on methods applicable to ordinary
rental transactions.
(3) Reserves
Reserves for doubtful accounts
Reserves for doubtful accounts are generally provided
based on actual collection losses incurred in the past.
Additionally, for accounts receivable considered at risk(bankruptcy, companies under rehabilitation plan), an allowance is provided based on an estimation of the uncollectible amount, on a case-by-case basis.
(4) Employee Retirement and Severance Benefits
a. Imputation method for retirement benefit estimates
The attribution of expected benefits to periods up to thefiscal year under review, upon calculating retirement benefit
obligations, is done on the benefits formula basis.
b. Method for the recognition of a portion of its actuarial
gains and losses as income or expense
The actuarial gains (losses) will be recognized in expenses(income), in equal amounts, over a five-year period, which isshorter than the average remaining service years of eligible
employees, commencing with the next year of the accrual.
c. Accounting treatment for unrecognized actuarial gains
and losses
Unrecognized actuarial gains and losses are recognized inremeasurements of defined benefit plans in accumulated
other comprehensive income under the net assets section,
net of deferred taxes.
(5) F oreign currency translation of significant assets
and liabilities
Foreign currency-denominated assets and liabilities heldby the Company are translated into Japanese yen using
exchange rates prevailing on the balance sheet date; andgains and losses on translation are charged to income.
Relevant assets and liabilities held by subsidiaries are translated into Japanese yen using exchange rates prevailing on
the balance sheet date; and revenues and expenses aretranslated using the average exchange rates during theterm. Gains and losses on translation are charged to net
assets under “Foreign currency translation adjustments.”

Tamron Co., Ltd.

15

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS

(6) Hedging
a. Hedge accounting
Derivative financial instruments are stated at fair value andchanges in the fair value are recognized as gains or losses,
unless derivative financial instruments are used for hedging
purposes. If derivative financial instruments are used ashedges and meet certain hedging criteria, the Company
defers recognition of gains or losses, resulting from changes
in fair value of derivative financial instruments, until the
related losses or gains on the hedged items are recognized.
b. Hedge instruments and assets and liabilities being hedged
Hedge instruments are foreign exchange forward contracts
and foreign currency option contracts. Assets and liabilities
being hedged are foreign currency receivables and payables
and future foreign currency transactions.
c. Hedge transaction policies
The Company engages in derivative transactions with theaim of hedging risk on foreign exchange fluctuations inaccordance with in-house regulations.
d. Assessment of effectiveness of hedging
The Company has realized a high correlation coefficient
between market fluctuations and cash flows (assets andliabilities being hedged) and hedge instruments: it thereby
highly evaluates the effectiveness of the derivatives transactions in question.
(7) S cope of cash and cash equivalents in thestatement of cash flows
In preparing the consolidated statements of cash flows, cashon hand, available deposits and short-term highly liquid investments, with readily maturity not exceeding three months
at the time of purchase, are considered to be cash and cash
equivalents.
(8) O ther significant accounting policies for preparing
consolidated financial statements
Consumption tax: Consumption tax is not included.
[Changes in Accounting Policies](Application of Accounting Standard for Retirement
Benefits, etc.)
With respect to the “Accounting Standard for Retirement
Benefits” (the Accounting Standards Board of Japan (ASBJ)
Statement No. 26, May 17, 2012, which will be hereinafterreferred to as the “Statement No. 26”) and the “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ Guidance
No. 25, March 26, 2015, which will be hereinafter referred
to as the “Guidance No. 25”), the provisions shown in the
text of paragraph 35 of the Statement No. 26 and the textof paragraph 67 of the Guidance No. 25 have been applied
from the consolidated fiscal year under review.
Consequently, the Company has revised its method for
calculating its retirement benefit liability and service costs.
In addition, the method for attributing projected retirement
benefits to each period has been changed from a straight-line
basis to a benefit formula basis. In tandem, the methodology
for deciding the discount rate has also been changed, froma discount rate based on the average remaining period ofservice to a method that employs a single weighted average
discount rate that reflects the approximate number of yearsof payment and its amount of each year.
As to the application of the Statement No. 26, the amountof the impact of a change in the method of calculating retirement benefit liabilities and service costs was added to,or deducted from, retained earnings at the beginning of theconsolidated fiscal year under review in accordance with
16

Tamron Co., Ltd.

the transitional treatment provided in paragraph 37 of theStatement No. 26. As a result, net defined benefit liability asof the beginning of the consolidated fiscal year under review
increased by 21 million yen and retained earnings declinedby 13 million yen. The effect of adopting above Statement
and Guidance did not have a material effect on the consolidated statement of income for fiscal year 2015. The effectsof this adoption on net assets and net income per share areinsignificant.
[New accounting standards and related guidance not
yet adopted](Accounting Standards for Business Combinations)
On September 13, 2013, the ASBJ issued “Revised AccountingStandard for Business Combinations” (ASBJ Statement No.
21), “Revised Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22), “Revised AccountingStandard for Business Divestitures” (ASBJ Statement No. 7),“Revised Accounting Standard for Earnings Per Share” (ASBJ
Statement No. 2), “Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures” (ASBJ Guidance No. 10), and “Revised
Guidance on Accounting Standard for Earnings Per Share”(ASBJ Guidance No. 4).
(2) Scheduled Date of Adoption
The Company expects to adopt these revised accounting
standards and guidance from the beginning of the year ending December 31, 2016.
(3) Impact of Adopting Revised Accounting Standards
and Guidance
The impact of adopting the revised accounting standards andguidance on consolidated financial statements is currently
under evaluation.
[“Revised Guidance on Recoverability of deferred tax
assets”] (ASBJ Guidance No. 26, December 28, 2015)(1) Overview
The Guidance No. 26 has basically followed the guidanceon the “Audit Treatment of Judgments with Regard to Recoverability of Deferred Tax Assets” (Report No. 66, the audit
committee of the Japanese Institute of Certified Public Accountants). Based on the Audit Treatment, the judgment of
the recoverability of deferred tax assets has been estimatedby grouping conditions of each entities taxable income underfive categories which reflects the level of historical taxable
income and projections for future taxable income. After anecessary review for above five categories of taxable incomein the Audit Treatment, a new guidance for above five categories has been introduced into the Guidance No. 26.
(2) Scheduled Date of Adoption
The Company expects to adopt the Revised Guidance No.
26 from 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 under evaluation.
[Additional information]
For your information, a market recall is in progress for somecustomers’ products using optical components made by ourgroup. We may be asked to bear part of the expenses involved.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(CONSOLIDATED BALANCE SHEETS)Assets pledged as collateral as of December 31, 2015
(1) Property, plant and equipment

Millions of Yen
2015

2014

¥  583¥  639Machinery, equipment and vehicles

640

592

Tools, furniture and fixtures

220

245

Land

69

96

¥1,540¥1,573

Buildings and structures

Total(2) Other

Millions of Yen
2015

2014

Buildings and structures¥2,977

Total¥2,93096

96¥3,073¥3,026Land(3) Loans secured by the above assets

Millions of Yen
2015

2014

¥1,664

Short-term loans payable¥  832Long-term loans payable (including loans due within one year)

2,029

1,276

¥2,861¥2,941

Total(CONSOLIDATED STATEMENTS OF INCOME)

1. Research and development expenses included in selling, general and administrative expenses and manufacturing costs totaled¥3,699 million.
Millions of Yen
2015

2014

¥3,699¥4,052

2. The ending inventory balance represents after write-down of book value when their carrying amounts become unrecoverable. The inventory gains of ¥55 million, net of reversal of the balance of reserve at end of fiscal 2013.
Millions of Yen
2015

2014

¥14

¥(55)

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

Millions of Yen

2014

2015

¥  148¥   (65)

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

148

(65)

  Tax effect

(52)

44

  Net

96

(20)

2,489

(1,536)

Unrecognized actuarial loss arising during the year

—

(118)

Reclassification adjustments—

68

Amount before income tax effect

—

(49)

Income tax effect—8

Reclassification adjustments for retirement benefit obligations

—

(41)

¥2,585¥(1,598)

Foreign currency translation adjustments
Translation adjustments arising during the year
Adjustments for retirement benefit obligations

Total other comprehensive income

Tamron Co., Ltd.

17

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS

(CONSOLIDATED STATEMENTS OF CASH FLOWS)
Year ended December 31, 2015

Millions of Yen
2014

2015

Cash and deposits¥15,915¥14,192

Cash and cash equivalents

15,915

14,192(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).
Regarding finance lease that do not transfer ownership, for which the starting date for the lease transaction is prior to December 31, 2008, lease payments are recognized as expenses. Details are as follows.

(1) Acquisition cost, accumulated depreciation and net book value of lease assets
Millions of Yen
Accumulated depreciation

Netbook value

¥17

¥16

¥0

¥17

¥16

¥0

Acquisition cost

Machinery, equipment and vehicles
Total(2) Obligation under finance leases
Millions of Yen

Due within one year
Total

¥1
¥1

(3) Lease expenses, depreciation and interest expenses
Millions of Yen

Lease expenses¥2

Depreciation cost equivalent¥1

Interest expenses equivalent¥0(4) Method of calculating depreciation
Depreciation expense on leased assets is calculated by using the straight-line method, over the lease period and has aresidual value of zero.
(5) Method of calculating interest expense
The difference between total lease expense and acquisition cost of leased assets, is considered as the interest portion, andthe allocation of this interest is calculated by the interest method.

(FINANCIAL INSTRUMENTS)

Year ended December 31, 2015
1. Overview of financial instruments(1) Policy on the handling of financial instruments
In principle, the Company obtain funds from banks for thecapital 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) 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 monitoringof, due dates and remaining balance of note and accountreceivable–trade and of credit condition, by each customer.
Receivables denominated in foreign currencies, which arise
18

Tamron Co., Ltd.

in the process of business activities undertaken overseas, areexposed 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 issuingentities.
Accounts payable–trade is all due within one year. Someare denominated in foreign currencies and are therefore exposed to risks arising from changes in foreign currency exchange rates. The Company manages these risks by entering
into foreign exchange forward contracts.
The Company execute and manage derivative transactions which are foreign currency forward exchange contracts

used to reduce risk exposure arising from which changes
in exchange rates applied to foreign-currency-denominatedreceivables and payables. Accounting policies for hedges,
specifically hedge accounting, hedge instruments and assets
and liabilities being hedged, hedge transaction policies, assessment of effectiveness of hedging, are described in thesection “4. Accounting Policies (6) Hedging.”
In the execution and monitoring of derivative transactions,the Company is guided by internal rules. In derivative transactions, the Company 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.

2. Fair Value of Financial Instruments
Fair value and variances with carrying amounts as of December 31, 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)
Millions of Yen(1) Cash and time deposits(2) Notes and accounts receivable

Carrying amounts

Fair value

Difference¥14,192¥14,192¥—

15,80415,804—(3) Investment securities:
2,117

2,117

—

Total assets¥32,114¥32,114¥—(1) Accounts payable¥ 5,285¥ 5,285

¥—

3,154

3,154

—

(3) Income taxes payable

603

603

—

(4) Long-term loans payable

881

881

—

¥ 9,924¥ 9,924

¥—

—

—

—

  Other securities(2) Short-term loans payable

Total liabilities
Derivative instruments

Note 1: Method for calculating the fair value of financial instruments and information about investments in securities andderivative 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
Market prices on stock exchanges are used to determine the fair value of these securities. Prices quoted by financial institutions 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 payable
The fair value of long-term loans payable in estimated by discounting future cash flows using rates currently available forloans similar terms and remain maturities.
Derivative instruments
Please refer to (DERIVATIVE TRANSACTIONS) below
Note 2: Carrying amount of financial instruments those fair values cannot be reliably determined.

Millions of Yen
As of December 31, 2015

¥212

Unlisted stocks

Note: U nlisted stocks are not included in investment securities (Note 1-(3) above), because its extremely difficult to estimates those fair values, both, due to their markets prices are not available and to the difficulty in estimating future
cash flows relating to the stocks.
Note 3: The following schedule shows the maturities of financial instruments (assets) as of December 31, 2015
Millions of Yen

Up to 1 year

Cash and deposits
Notes and accounts receivable

More than 1 year
and up to 5 years¥14,192¥ —15,804—

Investment securities:   Securities with maturity in other investment securities account
Total

—

300

¥29,997¥300
Tamron Co., Ltd.

19

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS

Note 4: The aggregate annual maturities of long-term borrowings, lease obligations and other interest-bearing debt at
December 31, 2015.
Please refer to (Schedule of borrowings)
Up to 1 year

More than 1 year
and up to 2 years

Millions of Yen
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¥2,264

¥   —

¥   —

¥   —

¥—

Long-term loans payable

889

605

241

35

—

1

1

1

0

—

¥3,155

¥606

¥242

¥35

¥—

Lease obligations
Total(INVESTMENTS IN SECURITIES)Millions of Yen
As of December 31, 2015

Type of securities

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

Carrying amount

Acquisition costs

Difference¥1,852¥1,161¥691(2) Debt securities

—

—

—

(3) Others

—

—

—

   Total

1,852

1,161

691

(1) Stocks

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

—

—

—

264

300

(35)

(3) Others

—

—

—

   Total

264

300

(35)

¥2,117¥1,461

¥656

Total

(DERIVATIVE TR ANSACTIONS)
Derivative transactions with the hedge accounting is applied
Currency-related transactions
Year ended December 31, 2015
Hedge accounting method

Designation method

Type of transactions

Forward foreign exchange
contracts
Sell  U.S. dollar

Primary hedged
items

Millions of Yen
Contract
amount, etc.

Accounts
receivable  Euro  RubleBuy  U.S. dollar

Accounts payable

Portion withmaturity over
one year

Fair value¥1,041—(See Note)

1,612

—

(See Note)

98—(See Note)¥  602—(See Note)

Note: Under Japanese GAAP, forward foreign exchange contracts as a derivative financial instrument and accounts receivableas hedged items are considered as a pair of transaction and if hedge accounting such as the designation method isapplied to derivative financial instruments, fair valuation of such derivative financial instruments itself, is not required.

(RETIREMENT BENEFITS)

Year ended December 31, 2015
1. Outline of retirement and severance benefit plans adopted
The Company and certain consolidated subsidiaries have defined benefit pension plans and lump-sum payment plans aswell as defined contribution pension plans. There are occasions where officers other than directors receive special lump–sum payments at retirement.
2. Defined benefit plans(1) Reconciliation of beginning and ending balances of the benefit obligations
Benefit obligations at beginning of year
Cumulative effects of changes in accounting policies
Restated balance¥2,96121
2,982

Service cost

196

Interest cost

25

Actuarial loss

69

Benefits paid

(142)

Other
Benefit obligations at end of year
20

Millions of Yen

Tamron Co., Ltd.

(4)
¥3,126

(2) Reconciliation of beginning and ending balances of the plan assets

Millions of Yen¥1,618Plan assets at beginning of year
Actual return on plan assets

29

Actuarial loss

(48)

Plan participants’ contribution

116
(84)

Benefits paid

¥1,631

Plan assets at end of year(3) Reconciliation of year–end balance of benefit obligations and plan assets to net benefit obligation in the consolidatedbalance sheet.
Millions of Yen

Benefit obligations on the funded defined benefit plan

¥3,104

Plan assets(1,631)

Net of above

1,472
22

Unfunded defined benefit obligations
Net benefit obligation in the consolidated balance sheet¥1,495

Liability for retirement benefits¥1,495

Net amount of liabilities and assets recognized in the consolidated balance sheet¥1,495(4) Components of net periodic benefits expenses

Millions of Yen¥196

Service cost
Interest cost

25

Expected return on plan assets(29)

Recognized actuarial differences68

Net periodic benefits expenses¥259(Note) Benefits expenses of consolidated subsidiaries which adopt simplified method are included in the service cost.
(5) Reclassification adjustments (before deduction of tax effect) recognized in other comprehensive income
Actuarial loss

Millions of Yen¥49(6) Remeasurements recognized in accumulated other comprehensive income before deduction of tax effect at end of year.

Millions of Yen

Unrecognized actuarial loss

¥285(7) Information relating to plan assets
aThe percentage that each major category constitutes of the total plan assets at end of year.
Asset category
Debt securities

64%

Stocks23%

Cash and deposits

12%
1%

Other
Total plan assets

100%(Note) Above total plan assets includes 9% of pension trust fund for the defined benefit plans.
bThe 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
Discount rate

0.846%

Expected long–term rate of return

2.00%(Note) Projected salary increase rate is based on the projected salary increase index as of July 1, 2015 that is a base date.
3. The contributions for defined contribution plans.
The contributions for defined contribution plans of the company and its subsidiaries were ¥171 million for fiscal 2015.

Tamron Co., Ltd.

21

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS

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

Millions of Yen

Deferred Tax Assets
Accrued expenses, currently not deductible¥   62

Net defined benefit liability

501

Provision for product warranties

29

Long-term accounts payable

46

Denial of patentability

54

Excess of depreciation

60

Unrealized gain

418
226

Other
Total of deferred tax assets¥1,379Millions of Yen

Deferred Tax Liabilities
Reserve for deduction entries¥  (36)(221)

Unrealized gain on investments in securities
Other

(29)

Total of deferred tax liabilities(287)

Net of deferred tax assets and liabilities¥1,092

Note: Net of deferred tax assets and liabilities as of December 31, 2015 are reflected in the following accounts in the consolidated balance sheets.
Millions of Yen
2015

Current assets – deferred income taxes
Noncurrent assets – deferred income taxes

¥656
435

2. Reconciliation of the statutory tax rate and the effective tax rate
Effective statutory tax rate

35.4%

(Adjustments)
Entertainment expense and others that are not deductible permanently

0.6

Exclusion of loss related to a donation

0.1

Inhabitant tax on per capita basis

0.3

Provision for directors’ bonuses

1.1

Tax credits(4.0)

Differences of tax rates for overseas consolidated subsidiaries(4.7)

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

Effect of dividend income eliminated for consolidation

12.5

Special tax rate on retained earnings of family corporation

1.1

International withholding income tax

3.1

Gain on negative goodwill(3.9)

Effect of changes in the rate of corporation tax

1.2

Others1.1

Actual tax rate

31.3%

3. Revision of the amount of deferred tax assets and liabilities due to a change in the rate of corporation tax, etc.
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 9 of 2015) and the “Act for Partial Amendment of
the Local Tax, etc.” (Act No. 2 of 2015) were promulgated on March 31, 2015. As a result, the effective statutory tax rateused to measure the Company’s deferred tax assets and liabilities was changed from 35.38% to 32.83% and 32.06% for the
temporary differences expected to be realized or settled from fiscal year beginning on or after January 1, 2016 and for the
temporary differences expected to be realized or settled after January 1, 2017, respectively. The effect of this change will
be negligible.

22

Tamron Co., Ltd.

BUSINESS COMBINATIONS
1. Business combination by acquisition(1) Outline of the Business Combinationa. Name of acquired company and its business lines
Name of acquired company
Kouyu Kosan Co., Ltd.
Business lines of acquired company
S elling/buying ofvaluable securities
b. Background of the business combination
The founder’s family offering to sell the stocks in possession by Kouyu Kosan. The number of stocks retained as ofFebruary 27, 2015 stands at 1,529,826, representing 5.56%of the total number of shares issued by Tamron Co., Ltd.:e.g. 27,500,000.
In view of the situation, Tamron took a proactive stanceto identify an equitable option with its financial position
carefully taken into account in order to mitigate potential
downfall of the stock value when such substantial numberof stocks were put into market in case Tamron were to
decline to take the offer, causing an undesirable negative
impact to the benefit of the company’s shareholders.
After thorough assessment and deliberation, Tamron hasreached to a conclusion that it would be best served toacquire stocks of Kouyu Kosan and made Kouyu Kosan
a 100% owned subsidiary, following a resolution at theBoard of Directors meeting and at the 68th ordinary General
Shareholders Meeting.
c. Date of the business combination
March 31, 2015
d. Legal form of the business combination
Acquisition of shares with cash as consideratione. Names of the company after the acquisition
No changef. The acquired voting rights ratio
100%
g. Grounds for determining acquiring company
We acquired stocks of Kouyu Kosan to value with cash(2) T he period for financial results of the acquiredcompany that are included in consolidated
statements of income of the year under review.
From April 1, 2015 to May 31, 2015(3) C ost of the acquisition of the acquired company
and the breakdown
Compensation for
Ordinary stocks of 3,686 million yen
the acquisition of
Kouyu Kosan
the stocks
Direct costs of theAdvisory fee
6 million yen
acquisition of stocks
The acquisition cost
3,692 million yen

2. B usiness combination of an entity under common
control
Merger of a consolidated subsidiary(1) Summary of the transaction
a. The name and its business lines of the acquired company
Company nameKouyu Kosan Co., Ltd.
Business lines of acquired company	Selling/buying ofvaluable securi ties
b. Date of the business combination
June 1, 2015c. Legal form of the business combination
The Company absorbed Kouyu Kosan Co., Ltd. and became
the surviving company; Kouyu Kosan Co., Ltd. was subsequently dissolved.
d. Name of the company after the merger
Tamron Co., Ltd.
e. Other matters of business combinations
Kouyu Kosan is an asset managing company owned by thefamily of the founder of our company with the vast majorityof its assets being comprised of our company stock. Its
main business is holding company stock, and it does notsubstantively engage in any other business. Considering
these facts, our company decided to merge Kouyu Kosanand make our company the surviving company, acquiring
all of our company stock that Kouyu Kosan owns.
With respect to disposition of the stocks currently owned
by Kouyu Kosan, it is planned to merge Kouyu Kosan with
Tamron Co., Ltd., making Tamron as the surviving company after completing acquisition of Kouyu Kosan, thensubsequently acquire those for the company own stocks.
This is in consideration of the fact that Kouyu Kosan is anasset managing company of the founder’s family and its
primary business is holding the stocks at this time, although
it engaged in commercial activities such as leasing andrenting real estate several years ago. Please be advisedthat the action plan stated herein is not a final decision at
the moment, and a formal announcement shall be madeimmediately after the determination becomes firm.
(2) T he accounting principles applied for abovebusiness combination
The Accounting Standard for Business Combinations (ASBJ
Accounting Standard No. 21, December 26, 2008) and Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures (ASBJ GuidanceNo. 10, December 26, 2008) have been applied for accounting
process relating to the business combination under common
control.

(4) T he amount and source of gain on the bargain
purchasea. The amount of gain on the bargain purchase
653 million yen
b. The source of gain on the bargain purchase
The fair market value of net assets acquired exceeds its
acquisition cost.

Tamron Co., Ltd.

23

NOTES TO CONSOLIDATED FINANCIAL STATEM ENTS

SEGMENT INFORMATION

1. Outline of reporting segments
The Company’s reporting segments are business units for which abstracted financial data is available and periodicallyreviewed by the Board of Directors to determine resource allocation and evaluate business performance. The Company
has its business units identified by products. Each business unit plans its comprehensive domestic and overseas strategy
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
Accounting policies used to financial results of reporting segments are the same as those used for the preparation of theCompany’s consolidated financial statements. Reporting segment income corresponds to operating income.
3. Information on sales, income, assets, liabilities and other items by reporting segment
Millions of Yen
2015
Photographic
products

Opticalcomponents

Commercial/
Industrial-use
opticsEliminations
and/orcorporate

Consolidated¥54,578¥4,567¥12,800———¥71,946—¥71,946——

		Total¥54,578¥4,567—¥12,800¥71,946—¥71,946

Operating income

Total

Net sales:
Sales to external customers
Intersegment sales¥ 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

Notes:
1. Adjustments (eliminations and/or corporate) are as follows.
(1) A djustment of segment profit totaled ¥(2,584) million is due to unallocated operating expenses consisted principally of
expenses related to general affairs, accounting and other 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.

RELATED INFORMATION
Year ended December 31, 2015

1. Information by geographical area
(1) Sales

Millions of Yen

Japan

North America

Europe

Asia

Other

Total

2014

¥15,761¥8,526¥15,597¥32,140¥1,594¥73,6212015¥16,642¥9,725¥16,455¥26,656¥2,466¥71,946

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

Millions of Yen

Japan

North America

Europe

Asia

Total

2014

¥7,592¥285¥346¥10,590¥18,8142015¥7,355¥285¥307¥9,261¥17,209

2. Information by major customer

Millions of Yen

Name of company

Nikon Corporation
Sony EMCS Corporation

24

Tamron Co., Ltd.

Relevant segments

Net sales
2014

2015

¥15,340¥11,859—

7,289

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

RELATED PARTY TRANSACTIONSYear ended December 31, 2015
1. Transactions between the Company and related parties.
Name of company

Millions of Yen

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

179

Sony EMCS Corporation

100

millionNotes: 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.

PER SHARE INFORMATION
Year ended December 31, 2015

2014

2015

Net assets per share

1,894.14 Yen

1,890.45 Yen

Net income per share

140.14 Yen

153.98 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.
2015

2014

Net income (Millions of Yen)

¥4,048¥3,846
—

—

3,846

4,048

27,450,636

26,293,826

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)

CONSOLIDATED FINANCIAL STATEMENT SCHEDULES(Schedule of borrowings)

Year ended December 31, 2015

Millions of yen
Balance at end ofprior year

Balance at end ofcurrent year

Average interest rate (%)

Maturity

Short-term borrowings

1,132

2,264

0.9

—

Current portion of long-term borrowings

1,195

889

1.2

—

0

1

6.0

—

1,771

881

0.8

2017 to 2021

0

3

6.0

2017 to 2019

4,100

4,040

—

—

Category

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

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) andlease obligations (excluding the current portion) for 5 years subsequent to December 31, 2016.
Millions of yen
Category

Long-term borrowings
Lease obligations

Due withinfiscal 2016

Due withinfiscal 2017

Due withinfiscal 2018

Due withinfiscal 2019

605

241

35

—

1

1

0

—

Tamron Co., Ltd.

25

(Other)

Quarterly financial information for the year ended December 31, 2015
Millions of yen, excluding earnings per share

1Q

2Q

3Q

For the year ended
December 31, 2015

Net sales

16,81835,23552,80571,946

Income before income taxes and minority interests

2,401

3,572

1,301

5,893

Net income

1,856

2,678

3,575

4,048

Earnings per share

67.67

100.40135.33153.98

Note: Amount per each quarter is accumulated amount.
Yen

Earnings per share

26

Tamron Co., Ltd.

1Q

2Q

3Q

4Q

67.67

31.69

34.61

18.26

INDEPENDENT AUDITORS’ REPORTTo the Board of Directors of Tamron Co., Ltd.
Based on the provision of Article 193-2(1) of Financial Instruments and exchange Law, we have audited theaccompanying consolidated financial statements of Tamron Co., Ltd. and its subsidiaries, which comprisethe consolidated balance sheet as at December 31, 2015, and the consolidated statement of income,comprehensive income, changes in net assets and cash flows for the year then ended, and a summary ofsignificant accounting policies, other explanatory notes and financial statement schedules.
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.
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 subsidiaries as at December 31, 2015, and their financial performance andcash flows for the year then ended in accordance with accounting principles generally accepted in Japan.
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 describedin the preface at BASIS OF PRESENTING FINANCIAL STATEMENTS.
Tokyo, Japan March 25, 2016

Wako Audit Corporation

Tamron Co., Ltd.

27

COMPANY PROFILE
Overview (As of December 31, 2015)
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
JAPANManagement (As of March 30, 2016)

Board of Directors

Audit and Supervisory Board Member

Executive Officers

President and CEO
Shiro AjisakaStanding Corporate Auditors
Tsugio Tsuchiya
Takayuki Namiki2

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

Corporate Vice Presidents
Hiroaki Arai
Tadahiro Shimura
Shogo Sakuraba
Senior Managing Directors
Hideyo Ose
Kenichi Hamada
Masayuki Abo

Corporate Auditors
Tadahiro Tone2
Yasuhiko Nishimoto2
Notes: 1
 . Independent director
2. Independent corporate auditor

Managing Directors
Takashi Ichikawa
Hiroshi Kawanabe
Koji Masunari
Directors
Yasuki Kitazume
Hiroshi Otsuka
Shenghai Zhang
Hideo Shimizu1
Mikio Yokose1

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

STOCK OVERVIEW
Corporate Stock Summary (As of December 31, 2015)

28

Number of shares issued:
25,950,000 shares

Principal Shareholders (As of December 31, 2015)

Number of shares per unit:
100 shares

Shareholders

Number of
Shares Held
Percentage of(Thousands of Shares) Shares Held1

New Well Co., Ltd.

4,898

18.87%

Number of shareholders:
5,664 shareholders

2

3,129

12.06%

1,839

7.08%

Balance date:
December 31

4Sony Corporation
BNP PARIBAS SEC SERVICES LUXEMBOURG/JASDEC/ ABERDEEN GLOBAL CLIENT ASSETS
Saitama Resona Bank Limited.

1,122

4.32%

5

JP MORGAN CHASE BANK 385174

908

3.49%

Scheduled Annual Shareholders Meeting:
March

6

Japan Trustee Services Bank, Ltd. (trust account)

602

2.32%

7

Nippon Life Insurance Company

580

2.23%

Eligibility date for year-end dividend payments:
December 31

8

NORTHERN TRUST CO. (AVFC) RE NVI01

558

2.15%

9

STATE STREET BANK AND TRUST COMPANY 505223

377

1.45%

Eligibility date for interim dividend payments:
June 30

10 Sompo Japan Nipponkoa Insurance Inc.

Transfer Agent:
Sumitomo Mitsui Trust Bank, Limited

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
the two parties.

Tamron Co., Ltd.

3

Total

329

1.27%

14,34655.28%

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

Production Facilities
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

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