Sanwa Holdings Corporation

Public Relations Section
Nishi-Shinjuku 2-1-1, Shinjuku-ku,
Tokyo 163-0478, Japan
Tel : +81-3-3346-3331
Fax : +81-3-3346-3177
http://www.sanwa-hldgs.co.jp
E-mail: sya01@sip.sanwa-ss.co.jp

Annual Report 2013

Sanwa Holdings Corporation

Moving Toward Leadershipas a Global Player
SANWA HOLDINGS CORPORATION

Annual Report 2013
For the year ended March 31, 2013

Printed in JapanA new vision
to realize our potential for global
industry leadership

Corporate Data
As of March 31, 2013

HEAD OFFICE:

PRINCIPAL SHAREHOLDERS:

Shinjuku Mitsui Building, 52F

Percentage of voting rights (%)

Nishi-Shinjuku 2-1-1, Shinjuku-ku,

ESTABLISHED:

April 10, 1956

CAPITAL (PAID-IN):¥38,413 million

EMPLOYEES:

Consolidated: 8,387

STOCK LISTINGS:Tokyo Stock Exchange

Japan Trustee Services Bank, Ltd. (Trust Account)
8.44
The Master Trust Bank of Japan, Ltd. (Trust Account)
7.58
Sumitomo Mitsui Banking Corporation
4.71
Japan Trustee Services Bank, Ltd. (Trust Account 9)
4.22
The Dai-ichi Life Insurance Company, Limited
3.37
Nippon Life Insurance Company
3.30
Aioi Nissay Dowa Insurance Co., Ltd.
2.95
Nisshin Steel Co., Ltd.
2.90
The Chase Manhattan Bank, N.A. London Secs Lending Omnibus Account 2.76
Mitsubishi UFJ Trust and Banking Corporation
1.93

TRANSFER AGENT:

Mitsubishi UFJ Trust and Banking Corporation

TREND OF STOCK PRICE:Tokyo, 163-0478, Japan
Telephone: +81-3-3346-3019
Facsimile: +81-3-3346-3177

ProfileCorporate Agency Department
April 1, 2005–March 31, 2006
April 1, 2006–March 31, 2007
April 1, 2007–March 31, 2008
April 1, 2008–March 31, 2009
April 1, 2009–March 31, 2010
April 1, 2010–March 31, 2011
April 1, 2011–March 31, 2012
April 1, 2012–March 31, 2013

Higashisuna 7-10-11 Koto-ku,

The Sanwa Group, headed by Sanwa Holdings Corporation, is a global
corporate group composed of 100 companies, including 79 subsidiaries

Tokyo, 137-8081, JapanCOMMON STOCK:

Authorized: 550,000,000 shares
Issued: 257,920,497 sharesand 20 affiliated companies, as of March 31, 2013. The Group has four

Number of shareholders: 11,590

major fields of business—commercial building materials, residential

High

Low

¥813
¥800
¥763
¥462
¥357
¥367
¥333
¥492

¥559
¥582
¥396
¥223
¥218
¥215
¥222
¥282

housing materials, maintenance service and home improvement, andConvenienceother businesses—and provides a wide range of steel construction
materials for commercial and residential construction, including shutters,

MONTHLY STOCK DATA:

Monthly stock price range(Yen)

Nikkei Stock Average

(Yen)

1,000

25,000800

20,000600

15,000400

10,000200

5,000

doors and other units.
In April 2013, we launched “Sanwa Global Vision 2020” andSafetySecurity

initiated a new mid-term management plan “The First Three Year Plan”(April 2013–March 2016). The aim of the new vision is to establish the
Sanwa Group as a “Global Major Player” and a leading global brandin the access systems industry. We are strengthening production andmarketing synergies across our four key markets, Japan, the UnitedStates, Europe and Asia, and venturing into new markets, such as theenvironmental field, seeking to capture new market opportunities anddrive our sustained growth.

0

Apr. ’07

Jan. ’08

Jan. ’09

Jan. ’10

Jan. ’11

Jan. ’12

Jan. ’13

Jan. ’11

Jan. ’12

Jan. ’13

Monthly trading volume(Thousands of shares)

40,000Contents

35,0002	Our Group		
18	North America

4 Consolidated Financial Highlights		
20	Europe

6 To Our Shareholders		
22 Asia

9 The First Three -Year Plan

23 CSR Activities

15 Business Overview

26 Corporate Governance		
16 Japan

29 Financial Information

30,00025,00020,00015,00010,0005,000
0Apr. ’07

Jan. ’08

Jan. ’09

Jan. ’10

57

0Our Mission
The Sanwa Group is committed to offering products and services thatprovide safety, security and convenience to further contribute to theprosperity of society.

Our ValuesTo deliver products and services to satisfy all customers.
To become a true global player and be highly valued in each market of the world.
To bring together the creativity of each individual in a team environment for theenhancement of corporate value.

01

Sanwa
GlobalVision2020
To offer products andservices that provide
safety, security andconvenience as a “Global
Major Player” in theaccess systems industry.

02

Become the definite No.1 brandin Japan,USA and Europe.

Establish a business model
for service business.

03
04

Expand shutter & door business inemerging markets, spotlighting Asia,and make them grow to be top brands.

Promote realization of global synergy
in global markets.

Forward-looking statements:
This annual report includes forward-looking statements pertaining to expectations, plans, strategies, management goals, future performance,
expenses, revenues, income and other forecasts formulated on past experiences. Forward-looking statements necessarily entail some degreeof uncertainty, and the content conveyed in the results as well as underlying factors identified in the report may differ materially from actual
results depending on changes in those factors.

1

Our GroupThe Sanwa Group conducts its business activities in around30 countries—in Japan, North America, Europe and Asia—and strives to build a strong presence in each area.

North America

Europe02

01

Novoferm Europe Ltd.
Established in 1955 and with the Sanwa
Group since 2003. One of Europe’s
leading suppliers of hinge doors,
garage doors and industrial products.

NF GmbH

01

Overhead Door
Corporation
Established in 1921, and with the
Sanwa Group since 1996. A leading
U.S. manufacturer of garage doors
and shutters.

Sales subsidiary locatedin Poland.

NF Vertriebs GmbHNF Hungaria Kft.

NF France S.A.S.

Producing and selling “Overhead Door” and“Wayne Dalton” branded doors.

Production and sales subsidiarylocated in France.

NF Nederland B.V.

Genie
Producing and selling operators forresidential and commercial use.

Production and sales subsidiarylocated in the Netherlands.

NF Schievano S.r.l.

Horton Automatics

Production and sales subsidiarylocated in Italy.

Producing and selling automatic doors.

NF UK Ltd.

Creative Door Services
Headquartered in Canada. Supplying
and installing sectional doors.

Production and sales subsidiarylocated in U.K.

NF Alsal S.A.

TODCO
Producing and selling truck andtrailer doors.

Production and sales subsidiarylocated in Spain.

2

NF Polska SP.z.o.o.

Production subsidiary locatedin Germany.

Sales subsidiary locatedin Germany.

Access Systems Division

02

Sales subsidiary locatedin Hungary.

NovoPort Vertr. GmbH
Sales subsidiary locatedin Austria.

NF Schweiz AG
Sales subsidiary locatedin Switzerland.

NF Balkan
Sales subsidiary locatedin Bulgaria.

NF Danmark A.P.S
Sales subsidiary locatedin Denmark.

Dong Bang NF Inc.
Production and sales subsidiarylocated in South Koria.

03

Sanwa Shutter
Corporation

04

Okinawa Sanwa
Shutter Corporation

No.1 supplier of rolling steel shuttersoverhead doors, steel hinge doors.
Maintenance and repair services
in Japan.

05

Showa Front Co., Ltd.

06

Sanwa Tajima
Corporation

07

Venix Co., Ltd.

08

Showa Kensan Co., Ltd.

No.1 supplier of shutters, doors andstore building materials in Okinawa.

07 08
03 05 06 09
10 11
04
12

13

10
11

Novoferm Shanghai
Co., Ltd.

(China)09

13

An-Ho Metal IndustrialCo., Ltd.

14

Vina-Sanwa Company
Liability Ltd.

(Taiwan)Established in 2005, this company
manufactures and sells steel doors.

12

Tajima Metal Work is a leading supplierof mailboxes for apartment complexes.
A member of the Sanwa Groupsince 2005.

A joint venture with Baosteel Development
Co., Ltd. since 2006. It manufactures andsells shutters, overhead sliders, highspeed sheet shutters and steel doors.

(China)(Hong Kong)

Manufacturing toilet stalls, aluminum
partitions and clean rooms since1957. A member of the Sanwa Groupsince 2003.

Tajima Metal Work
Co., Ltd.

Asia
Shanghai BaosteelSanwa Door Co., Ltd.

Established in 1918, with a history
dating back almost 100 years. Sanwa
Tajima manufactures and sells
stainless steel products.

Manufacturing “Million” brand automatic
doors since 1967. A member of the
Sanwa Group since 1995.

Japan

14

Pioneer in the store facade business.
Showa Front has built a reputation foradvanced technology and an extensive
product lineup.

Sanwa Shutter H.K.
Ltd.

(Vietnam)

Established in 1986, this company
manufactures and sells shutters,
overhead sliders, high-speed sheet
shutters and steel doors.

Vina-Sanwa

3

This company was established in Taipei
in 1988. It manufactures and sells steel
doors, shutters, overhead sliders andhigh-speed sheet shutters.

A joint venture launched in Hanoi in 2008
with Vinaconex Corporation. It makes
and sells shutters, overhead sliders,
sheet shutters and steel doors.

Consolidated Financial Highlights
Sanwa Holdings Corporation and Subsidiaries

Thousands of
U.S. dollars

Millions of yen

FY 20082009

FY 20092010

FY 20102011

FY 20112012

FY 20122013

FY 20122013

Net sales¥272,970¥232,029¥237,295¥248,214¥265,913$2,828,862

Cost of sales

205,426

173,108

179,400

186,684

196,632

2,091,830

Gross profit

67,54458,921

57,89561,53069,281

737,032

Selling, general and administrative expenses

59,47453,29753,33352,675

55,107586,245

Operating income

8,070

5,624

4,562

8,855

14,174

150,787

Net Income (loss) before income taxes andminority interests

6,045

(270)

(1,000)6,826

13,076

139,106

Income taxes

3,733

458

1,468

3,529

5,895

62,712

Net income (loss)

2,312

(725)

(2,443)

3,297

7,181

76,394Comprehensive income (loss)——(7,898)

1,389

13,959148,500

Depreciation and amortization

8,306

4,824

6,578

5,605

5,785

61,543

Capital expenditure

6,508

3,895

3,495

2,897

4,293

45,670Operating income on sales (%)

3.0

2.4

1.9

3.6

5.3

Net income (loss) before income taxes andminority interests on sales (%)

2.2

(0.1)

(0.4)

2.8

4.9

Return on equity (%)

1.9

—

—

3.8

7.9

Fiscal YearFor the Years ended March 31

For the years:

Net income (loss) per share (yen and U.S. dollars)

¥

9.60

¥

(3.02)¥ (10.17)

¥

13.72

¥

29.93

$

0.32

Dividends per share (yen and U.S. dollars)

¥

10.00

¥

5.00

¥

¥

8.00

¥

10.00

$

0.11

8.00

Price-earnings ratio (times)

28.8

—

—

23.5

16.1

Return on assets (%)

0.9

—

—

1.5

3.1

¥231,054¥246,599¥218,933¥226,579¥241,771$2,572,033

Long-term debt

38,767

26,76349,79048,651

48,846519,638

Total net assets

95,365

96,11086,021

85,522

97,135

1,033,353

Stock price (yen)

276

312

280

323

483

Interest-bearing debt

54,48374,62859,892

61,60760,800646,808

Liquidity (Note 2)

87,40092,98675,66880,22788,338

939,766

0.6

0.8

0.7

0.7

0.6

At the year-end:
Total assets

Debt-equity ratio (times) (Note 3)

Note 1: U.S.dollar amounts represent arithmetical translations of the Japanese yen at the approximate exchange rate on March 31, 2013 of ¥94 = US$1.
Note 2: Liquidity = Cash and cash equivalents, Short-term investments and Notes and accounts receivables, trade.
Note 3: Debt-equity ratio = Interest-bearing debt/Total shareholders’ equity.

4Net Sales(Millions of yen)

272,970
232,029

237,295

248,214

Operating Income /Operating Income on Sales

Net Income /Net Income per Share(Millions of yen / %)(Millions of yen / Yen)

14,174

265,913

7,181

5.3
8,855

8,070
3.0

3,297

5,624

-3.02

2.4
1.9

’09

’10

’11

’12

FY ’08

’09

’10

13.72

9.60

3.6
4,562

FY ’08

29.93

2,312

-725

’11

’12

FY ’08’09-10.17-2,443

’10

’11

’12

Strong sales growth both inJapan and the United Statesbrought an increase of 7.1%
in consolidated net sales.

In addition to an increase in
net sales, group-wide costcutting initiatives helped toachieve a 60.1% Y o Y
growth in operating income.

Despite a special loss forbusiness re-organization costof the European subsidiary,
net income showed anincrease of 117.8%.

Cash Flows
from Operating Activities

Return on Equity

Dividends per Share

(%)

(Yen)

(Millions of yen)

7.9
10.0

10.0

17,87014,855

14,312

3.8

8.0

8.0

’10

’11

1.9
5.0
-0.8

5,453
3,717

-2.7

FY ’08

’09

’10

’11

’12

Due to an increase in net
income, net cash provided byoperating activities showed
two-fold increase from theprevious year’s result.

FY ’08

’09

’10

’11

’12

A positive net income result
brought improvement in
profitability, return on
equity rose to 7.9% from
3.8% in the previous year.

5

FY ’08’09’12

The dividend for the current
year was set at ¥10.0 per
share, according to theCompany’s sustainabledividend policy.

To Our Shareholders

The Sanwa Groupagain achieved yearon-year growthin both revenues and income as a resultof wide-ranging initiatives in Japan andoverseas with the aim of achieving thetargets defined in the New Three-Year Plan.
Representative Director, President CEO & COO

Toshitaka Takayama

Business Environment and Financial Resultsin the Year Ended March 2013

the United States, we developed synergies with companies thatIn the year ended March 2013, capital investment and housing

Another priority was the consistent application of flexible pricing

investment moved toward recovery with underpinning frompolicies designed to allow appropriate adaptation to fluctuations

reconstruction demand following the Great East Japanin the cost of materials. In Europe, we stepped up our marketing

Earthquake. Although there were still challenges in the businessefforts in Germany, where the economy remained relatively

environment, including the global economic slowdown, thestrong, with the aim of increasing orders and sales volumes. We

situation began to improve in the closing months of the fiscal

also reduced costs by sourcing materials from China. In

year after economic policies introduced by Japan’s new

southern Europe we implemented radical measures, including

cabinet, combined with monetary easing by the Bank of Japan,

business restructuring.

we have acquired while also expanding our service activities.

As a result of these efforts, Sanwa Shutter Corporation, ourraised expectations of an economic recovery. This led to thecorrection of the historically high value of yen and a rise incore group company in Japan, recorded substantial growth instock prices.

both revenues and income. Other group companies in Japan
also achieved generally pleasing results, and both revenues andOverseas, the fiscal cliff debate raised concerns about the
U.S. economy. However, there were signs of improvement in theincome from our domestic business activities were higher.

employment situation, and a gradual recovery emerging in the

Revenues were also higher in the United States, in part because

housing construction market. In Europe, the German economyof the contribution from a door service company acquired in theremained relatively strong, but the situation in the eurozone as aprevious fiscal year. Income increased in response to our pricewhole remained harsh, in part because of the declining

policies and cost-cutting efforts. Despite relatively firm trends inperformance of southern European economies under the impact

Germany, which is our main European market, revenues inof fiscal austerity policies.

Europe were lower year on year because of the economic
downturn in France and southern Europe. Income also declined

The year ended March 2013 was the concluding year of the
Sanwa Group’s long-term plan, the 2010 Vision. In Japan, we

because of a combination of lower revenues and rising costs.

expanded our product range with the aim of increasing orders,Consolidated net sales for the year ended March 2013

while also working to improve profitability and productivity. In

amounted to ¥265,913 million, a year-on-year increase of 7.1%.

6

Although several indicators, including net sales andOperating income was 60.1% higher at ¥14,174 million, and net

operating income, fell short of the targets set down in the New

income increased by 117.8% to ¥7,181 million.

Three-Year Plan, we made considerable progress toward

Achievements under the New Three-Year Plan

globalization and the expansion of our product range, which are

We attribute the recovery of our financial results to group-wide

key group policies. We were also able to restore our operating

efforts under the New Three-Year Plan, which we launched in fiscal

income almost to the level before great recession of 2008–2009.

2010 with the aim of realizing the Sanwa 2010 Vision, toward

Challenges still remain, however, including the expansion of ourwhich the Sanwa Group has been working since fiscal 2001.

business in Asia, the global development of our service business,and the reinforcement of global synergies.

Our earnings declined rapidly in the wake of the greatrecession of 2008–2009 although revenues benefited from the
Corporation and the door company Wayne Dalton, which we had

Sanwa Global Vision 2020 and the First
Three-Year Plan

acquired in fiscal 2009. Operating income for that year, on the

Under the basic policies defined in our long-term management

other hand, was lower because of a business suspension

vision, Sanwa Vision 2010, the Sanwa Group in Japan has moved

affecting Sanwa Shutter Corporation, the payment of surcharges

away from a structure that relied mainly on shutters through theand the write-down of goodwill relating to Wayne Dalton. This

diversification of its product range to include doors, storefronts,

situation ultimately resulted in a net loss.

partitions and stainless steel products. By expanding into Europe

integration of our American subsidiaries, the Overhead Door

However, fiscal 2011 (the year ended March 2012) brought aand Asia, we also laid the foundations for a globalized structure

significant improvement in both domestic and European orders.

linking Japan, the United States, Europe and Asia.

Despite a sharp rise in the value of the yen, we achieved

We aim to build on these achievements through new

substantial growth in revenues and income. In the year ended

initiatives that we have launched under our new long-term

March 2013, which was the final year of the New Three-Year Plan,

management vision, Sanwa Global Vision 2020, which we

our domestic business operations continued to perform well, andannounced in May 2013. We will retain the basic concept underboth net sales and operating income exceeded our forecast.

Sanwa Vision 2010, which called for corporate value creation

Results of 2010 Vision and Goal of Sanwa Global Vision 202020002010 Vision

2010

Initial phase of global
management

Sanwa Global Vision 2020

Go on to the next phaseof global management

Achievements• Progress in globalization• Expansion of product offering

OutlinePromote the global management from the initial
phase to the development phase

Open issues• Expand Asian business• Develop service business globally• Enhance global synergy

Targets
1. Become the definite No.1 brand in Japan,
USA and Europe
2. Establish a business model for service business
3. Expand shutter & door business in emerging
markets, spotlighting Asia, and make themgrow to be top brands
4. Promote realization of global synergy in global
markets

7

2020

through global group management, while working toward theForecasts for the Year Ending March 2014

Sanwa Group’s evolution from the initial phase of global

Stable trends are estimated for the domestic Japanese economy.

management to a new phase of growth and success.

Exports are expected to expand in response to economic
recoveries in Japan’s trading partners and the correction of the

Our basic commitments under Sanwa Global Vision 2020
are to build a solid position as the top brand in Japan, the United

overvalued yen. In addition, a last-minute demand rush isStates and Europe, to establish a business model for the service

anticipated ahead of the consumption tax increase. In the United

segment, to expand our shutter and door business andStates, the economy is expected to recover, albeit gradually,

establishment of Sanwa as a top brand in emerging economies,

resulting in a firm trend in the number of housing construction

especially in Asia, and to pursue group synergies in global

starts. There is little hope of an economic recovery in Europe,markets. As a “Global Major Player” in the access systems

and the situation is likely to remain harsh.

industry, we also remain determined to supply our customers

The year ending March 2014 will be the first year underworldwide with products and services that enhance safety,

Sanwa Group Global Vision 2020 and our first medium-term plan,

security and convenience.

the First Three-Year Plan. We will respond to this economic
environment by implementing a range of measures with the aim of

We have also launched the First Three-Year Plan, which
covers the period from fiscal 2013 to fiscal 2015, as the firstachieving substantial growth in both revenues and income. Net

medium-term plan under the 2020 vision. Our priority goals

sales are expected to increase by 12.7% year on year to ¥299,700

under this plan are to strengthen our position as a leading

million, operating income by 16.4% to ¥16,500 million, and net

company in our core business areas in Japan, the United States

income by 14.2% to ¥8,200 million. These forecasts are based on

and Europe, to establish business models centering on services,

exchange rates of ¥95 to the U.S. dollar and ¥125 to the euro.

to build a business base for activities in Asia, to achieve strategic
expansion into the markets of emerging countries, and to realize

Distribution of Income

global synergies. The targets for the plan are net sales of ¥325

The Sanwa Group’s basic policy on income distribution calls forbillion and operating income of ¥23 billion in fiscal 2015.

the payment of dividends linked to consolidated financial
performance. Our aim is to maintain a stable payout ratio while
continuing our efforts to improve our corporate fundamentals,
strengthen our management infrastructure and implement

Operating Results and Forecast

Net Sales

FY2012 Results FY2013 Forecast

YoY¥265.9 billion+12.7%¥299.7 billion

management policies designed to increase corporate value.
Specifically, we base income distribution on a benchmark
dividend payout ratio of 30%.
As initially planned, the final dividend for the year ended
March 2013 was set at ¥5.0 per share, bringing the total

Operating Income¥14.2 billion¥16.5 billion

dividend for the year to ¥10.0. Based on our estimates for the+16.4%

coming fiscal year, we plan to increase the dividend by ¥2.0 to¥12.0, consisting of interim and final payments of ¥6.0 yen each.

Operating Income ratio

5.3%

5.5%

+0.2 point

Retained earnings will be used mainly for strategic
investment, including mergers and acquisitions, capital

Net income¥7.2 billion¥8.2 billion

investment, and the reduction of interest-bearing debt.

+14.2%The Sanwa Group is determined to achieve further growthand improvement in shareholder value. We look forward to the

Return on Equity

7.9%

8.2%

Debt/Equity Ratio

0.63

0.66

continuing support of our shareholders.

Toshitaka Takayama
Representative Director, President CEO & COO

8

Outline ofFirst Three Year Plan
(2013-2015)
Consolidated Results and Forecast■ Overseas Sales● Operating Income

Net Sales(Millions of yen)

400,000

SecondThree-year Plan

350,000■ Domestic Sales● Net Income

Third
Three-year Plan

Income(Millions of yen)2020 VisionFirst Three-Year Plan

New
Three-year Plan

35,00030,000300,000

25,000250,000

20,000200,000

15,000150,000

10,000100,000

5,000

50,0000

0

FY 2004 FY 2005 FY 2006 FY 2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014(Forecast)(Forecast)Target for-5,000FY2015

Target Figures for First Three Year Plan (2013-2015)
vs. FY2012

Targets for FY2015

Results for FY2012

Net Sales¥325.0 billion¥265.9 billion+22.2%

Operating Income¥23.0 billion¥14.2 billion+62.3%

Operating Income Ratio

7.1%

5.3%

+1.8 point

Return on Equity

11.7%

7.9%

Debt/Equity Ratio

0.61

0.63

Priority Policy for First Three Year Plan (2013-2015)
1

Enhancement of leading positions in the core businesses of Japan, USA and Europe

2

Establishment of a service oriented business model

3

Establishment of business foundations for Asian business

4

Strategic business expansion into emerging markets

5

Realization of global synergy effects
9

Feature

Strategy of “First Three Year Plan”:

To Be a “Global Major Player”
in the Industry
1. Strengthening leading positions in core business regionsJapan

We will enhance our capacity to deal with an uncertain market environment
by utilizing the total power of Japanese group companies.
In terms of product strategies, we will build on the successWithin Japan, we worked under our 2010 Vision and the previous
three-year plan (April 2010–March 2013) to reduce our relianceof our production range diversification efforts by further

on shutters through a business restructuring process designed

strengthening our product ranges with the aim of achieving further

to expand our range of products in such areas as doors,

growth in sales of partitions, stainless steel products, exterior

storefronts, partitions and stainless steel products. Other priorities

products and other items. We will also continue to develop andfor all group companies in Japan included the implementation

introduce high-added-value items, such as environment-friendlyof comprehensive cost management measures, and the

products. In addition, we will step up our after-market sales efforts

restructuring of marketing organizations. These initiatives yielded

through increased marketing targeted toward project owners. We

tangible benefits, including the development of a robust businesswill also focus on the training of installers.

base for group companies in Japan. Under the First Three-Year

Another priority will be the development of our supply andPlan, we aim to establish positions of leadership for our brands inconstruction capacity for heavy-duty doors, condominium doors

the Japanese market by building on these achievements.

and other items to meet demand generated by future growth in
the number of housing and non-housing construction starts andFrom a marketing perspective, we aim to expand our share of
regional demand by strengthening our marketing organizations in

the expansion of business capital investment in Japan. We will

each regional block in Japan, and by winning increased orders withalso improve efficiency by enhancing our facilities and strengthen

installation work. At the same time, we will target demand for post-

our income structure by increasing in-house production.

earthquake reconstruction work, especially in the Tohoku region.

1. Keeping up with demand of core products suchas shutters and hinge doors, and promoting
product diversification.

• By enhancing area management and increasing orders withinstallation services to expand local market share.
• Wider product range focus. (partitions, stainless products,
shutter-related products, exterior products, etc…)• Develop and launch high-value added products.
• Restoration from disaster (3.11).
• Enhance after-market business through marketing to owners.

2.	Investment for sustainable growth in the future.

• Consolidate the system of door supply (heavy-weight doors,
steel doors for apartments).
• Increment and upskilling of installation workers.

3. Enhancement of production technologies
capability to ensure profit level.

• Facility investment to improve production efficiency.
• Increase in-house manufacture of partitions.

10

Increase
Sales

ExpandProfitNorthAmerica

We will steadily strengthen core businesses and meet challenges to growth byleveraging the recovery of the U.S. economy.

We expanded our business operations in North America throughachievements by continuing to strengthen our core activities.

the acquisition of the garage door business, Wayne Dalton, theWe also aim to accelerate growth in the installation, repair

door maintenance service company, Creative Door Services,and maintenance areas by enhancing the forward integrationand the automatic door distributor, Advanced Door Automation,

strategy. We will also expand in Central and South America.

by Overhead Door Corporation. We will build on these

1. Expand market share of Residential products.

• Launch new garage doors and operators to meet market needs.
• Enhance retail sales channel.

2. Further reinforcement of foundation ofCommercial door business.

• Launch new door and operator products.
• Train installers at pro-channel (distributors).
• Enhance sales and marketing to architects.

3. Expand profit by enhancing forward
integration strategy.

• Grow service business of garage doors in Canada and USA.
• Expand sales of automatic door business.

4. Expand sales other than in N. America.

• Expand sales in Central and South American market, such as in
Brazil and Mexico.

5.	Improve business process and productivity.

• Enhance competitiveness and reduce cost by introducing ERP.
• Optimize manufacturing network.

EuropeIncrease
Sales

ExpandProfitWe will pursue structural reforms and cost reductions while promoting growth bydeveloping new products and markets in a post-EU economic crisis economy.

We will work through the sales network of our European groupstrengthening our energy conservation and solutions businesscompany, Novoferm, to establish a presence and accelerate

and evolving from a manufacturer into a provider of solutions

our business expansion in new markets. We will also step up

to customers.

our efforts to build our service business in Europe, while also

1. Make inroads into new market. Expand sales inareas that NF has small market share.

• Open up branch and/or enter into local market.
>> Scandinavia, Russia, Eastern Europe

2. Expand Industrial door business.

• Enhance energy saving and solution business by launching
high-speed, heat insulation products.

3. Promote European service business strategy.

• Expand European service business supported by the newly
established international central spare part center, which
provides quick spare part deliveries.

4. Enhance profitable base in major markets.

• Cost reduction by business integration by product category.
>> Germany, France, Italy, Spain, UK, Benelux

5. Improve profitability of Door & Frame business.

• Hinge door business restructuring in Germany and in France.

11

Increase
Sales

ExpandProfit2. Establishing a service-oriented business model
We will promote our business models and pursue growth as a provider ofcustomer solutions.
One of the goals under the Sanwa Group’s First Three-Yearmodels that combine traditional business processes consisting

Plan under Sanwa Global Vision 2020 is to establish a globalof product development, procurement, manufacturing andservice business structure. Our core companies in Japan,

sales, with installation and maintenance service businesses. Our

the United States and Europe will pursue their own service

aim is to establish a position for the Sanwa Group as a global

business strategies based on local market characteristics,

solutions provider.

product structures and other factors. They will create business

A Business Model Incorporating Service Business
R&D

MAINTENANCE / SERVICEPROCUREMENTINSTALLATIONMANUFACTURING

Enhanceinstallation andmaintenance/service
business process.

SALES

Focus by Area
Japan

North
America

EuropeStrengthen foundation as
directly-managed, communitybased, local No.1 sales andservice office.

Expand growing domain withforward integration strategy.

Transformation frommanufacturer to customer
solution providing company.

Evolve business model toward company
offering detailed service with high-levelof expertise.

• Growth of CDS in Canada.

• Enhance sales and marketing to building owners.

• Growth of automatic door service businessof Horton.

• Improve service level to offer, such as level ofmaintenance service.

• Integrate installation & maintenance service
sales centers into CDS business.

12

Promote service business strategy
in Europe.
• Growth of service business by regional
expansion supported by short-time deliveriesof spare parts from the new established central
spare part center.

3. Building our Asian businesses foundations
We will establish business models for local markets along priority goals for eacharea, such as winning orders from both local and Japanese companies in the region.
A key priority for our Asian businesses that carries over fromprofitable operation and income growth. We will also identify thethe previous three-year plan is to enhance our ability to adapt

most important priorities in each market and build marketing

our marketing activities to current trends and environmental

infrastructure through the efficient investment of managementchanges in local markets. Under the First Three-Year Plan,

resources, so that we can develop optimized business models

we will strengthen the management organizations of ourfor local markets.

Asian companies and build structures to support a shift to

Results and Forecasts of Major Asian Companies

Major Asian Companies(Unit: Billions of yen)

Sales

FY2010FY2011FY2012FY2013(Forecast)

FY2015(Target)

3.1

3.4

4.2

5.6

8.2

Baosteel-Sanwa

Novoferm Shanghai
An-Ho Metal

Operatingincome

0.03

-0.19

-0.12

0.22

Sanwa Shutter H.K.

0.55

Vina-Sanwa* As Asian Group companies are equity method affiliates, their targets are not included in
the consolidated performance plan for FY2015.

Asian Company Initiatives
Priority issue

Baosteel-Sanwa

Novoferm Shanghai

Vina-Sanwa (Vietnam)

An-Ho Metal (Taiwan)

Sanwa Shutter H.K.

Subject to tackle

To increase local market share by sales
expansion of heavy-weight shutters.

• Develop and manufacture economical shutter.
• Enhance design and installation structure.

To expand and enhance door products orderintake in commercial and residential markets.

• Enhance sales capabilities and production capacity,
improve productivity, wider product range.

To increase sales of steel doors forapartments in local market.

• Develop suitable product.
• Establish system of production and sales for the
local market.

To increase profit by expanding sales ofvalue-added fire doors.

• Cost reduction by means of specification review andmethod improvement, improve productivity and quality.

To secure profit by gaining market share.

• Work actively toward large-scale projects, such asredevelopment project.

13

4. Strategic business expansion into emerging markets
We will explore future growth avenues based on entry into new markets
beyond Japan, North America and Europe.
Under the previous three-year plan, we achieved significant

leverage our global organization to accelerate our growth,

progress toward the globalization of the Sanwa Group. Under

especially in emerging countries, and to build a businessthe Sanwa Global Vision 2020 First Three-Year Plan, we willorganization to support our future role as a global major.

•	In consideration ofgeographical, culturallinks, rules andregulations, and etc.,
most suitable businesscompany should makeinroads to the respective
markets.

Russia,Eastern Europe
EuropeNorth
America
Asia

Japan
Latin America•	Leverage advantageof global operationalpresence in Asia.

5. Realizing global synergy effects
We will expand joint development of strategic products, joint material purchases,
complementary supply of products, etc., to maximize synergy as a global company.
We will pursue synergy benefits based on our role as a global

including the collaborative development of strategic products

company by fully leveraging the potential of our group networkand the collaborative procurement of materials, as well as

spanning Japan, the North America and Europe and Asia,

complementation in the supply of products.

Achieving Global Synergy

Results and Target

1.	Launch strategic products onto
global market.

• Operator Project• Global No.1 of shutter business

FY2012¥ 600 million

2.	Increase procurement fromlow-cost countries.

• Japanese group companies, ODC and
NF expand procurement from low-cost
countries including China.

FY2013(Forecast)¥ 800 million

3. Expand complementary supply of
products among group companies.

• Import/export products of one area from/to another in accordance with local
market needs.

FY2015(Target)¥ 2,400 million

14

Business Overview—At a GlanceJapan

Net Sales

Firm trends in construction demand and investment werereflected in strong sales of lightweight shutters, heavy-duty
shutters and doors for commercial buildings and condominiums.
Net sales increased by 10.3% year on year to ¥161,536 million.
In addition to this growth in sales revenues, income also
benefited from improved profit margins and lower steel prices.
Segment income was 90.5% above the previous year’s level at¥11,688 million.

Operating Income(Millions of yen)

(Millions of yen)

200,000

12,00010,000150,000
8,000
100,000

6,000
4,000

50,0002,000
0FY 2009

North America

2010

0
FY 2009

2012

2011

Net Sales

The housing construction market continued its gradual recovery.
Demand for commercial and residential doors remained strong,
and revenues from contribution of acquired door service company
were also higher. These factors helped to boost net sales by 8.6%
year on year (8.0% in local currency terms) to ¥69,391 million.
Segment income was 21.6% higher at ¥3,486 million. In addition
to higher revenues, this growth also resulted from improved
profitability and in-depth cost control measures.

(Millions of yen)(Thousand of U.S. dollars)

1,000,000

60,000750,000

40,000500,000

20,000250,000

2010

2012

2011

2012

2011

Operating Income

80,0000
FY 20092010

0(Millions of yen)(Thousand of U.S. dollars)

5,000

50,0004,000

40,0003,000

30,0002,000

20,0001,000

10,0000
FY 2009

2010

2012

2011

0

n Segment figures (left scale) n Figures of ODC (right scale)

EuropeNet Sales

Despite the generally stagnant state of European markets, demandfor industrial doors and non-residential hinged doors remained
comparatively strong. However, garage door sales were lower due
to the contraction of housing markets in Germany, neighboring
western European countries and southern Europe. Net sales were
7.7% lower year on year (0.6% lower in local currency terms) at¥34,884 million. In addition to lower sales, income was also affectedby increases in labor costs and other cost items, with the result thatsegment income declined by 38.7% year on year to ¥705 million.

(Millions of yen)

Operating Income(Thousand of Euro)(Millions of yen)(Thousand of Euro)

500,000

1,200

12,00040,000400,000

1,000

10,00030,000300,000

800

8,000

600

6,000

50,00020,000200,000

400

4,000

10,000100,000

200

2,000

0

0
FY 20090
FY 2009

2010

2011

2012

2010

2011

n Segment figures (left scale) n Figures of NF (right scale)

Asia
In China, Shanghai Baosteel-Sanwa recorded higher sales but lower income compared with the previous
year’s results. The financial results for Novoferm Shanghai were also lower year on year because of thecontinuing stagnation of the housing market due to monetary tightening and other factors. In Vietnam,
Vina-Sanwa recorded year-on-year growth in both sales and income and achieved a positive income
result for the first time. The Taiwanese company An-Ho Metal Industrial achieved year-on-year increases
in both sales and income despite the postponement of major projects and other factors linked to an
economic slowdown. In Hong Kong, Sanwa Shutter H.K. recorded higher sales than in the previous year,
but its income was lower.

15

2012

0

Business Overview
Built-in solar-powered shutter
gate “Sangate Solar”

Japan“Sangate Solar” is a shutter gate powered bysolar panels attached to the top of the gate. The
stored electricity is used as emergency power.

Solar-powered window
shutter “Madomore Screen
S solar type”“Madomore Screen S solar type” requires noexternal power, since electricity to open andclose the shutter is supplied by a built-in solar
panel attached to the shutter case. House wiring
is unnecessary, making it the optimal window
shutter for remodeling.

Sales by product in Japan
17%

Main Products■ Building & condominium doors■ Lightweight shutters■ Heavy-duty shutters■ Storefronts■ Stainless steel products■ Partitions■ Window shutters■ others

4%4%

Aluminum partition “AP–2”

29%

A new product, “AP–2” has been released in
Sanwa’s aluminum commercial partition series.
“AP–2” can shorten the on-site installation timeby about 15% due to its exceptional ease of set
up while realizing an outstanding appearance.

FY2012

Total
6% ¥161,536 million
8%

16%
16%

All Sanwa Group companies in Japan, led by Sanwa Shutter

is also strengthening its product ranges in other areas, including

Corporation, continued their efforts to expand orders anddoors, storefronts, partitions and stainless steel products.

strengthen profitability by diversifying product ranges andIn the year ended March 2013, the Japanese economy was

improving productivity. The result was a major contribution

underpinned by reconstruction demand following the Great East

to the Sanwa Group’s financial performance, including

Japan Earthquake, and both capital investment and housing

substantial increases in revenues and income. The fullinvestment rallied, but economic conditions remained difficult

strength of the Sanwa Group in Japan was focused on the

because of the global economic slowdown and other factors.

diversification of product ranges and the expansion of

However, expectations of economic recovery rose in response tobusiness models, especially in the area of services. Anotherthe economic policies introduced by Japan’s new cabinet andpriority was reinforcement of the Group’s ability to cope withbold monetary easing by the Bank of Japan. These factors,

an uncertain market environment.

together with the correction of the historically high value of the
yen and a major uptrend in stock prices, were reflected in

Overview of Operations and Financial Resultsin the Year Ended March 2013

improving economic confidence.

The Sanwa Group in Japan, including Sanwa ShutterGroup companies in Japan was to expand orders. Group

Corporation and domestic subsidiaries, is developing businesscompanies also worked to diversify their product ranges andactivities in the areas of construction materials for commercial

build closer collaboration within the group through businessbuildings, residential construction materials and maintenancerestructuring measures that included the integration of the sales

and renovation services. In the shutter category, the Groupdivisions of domestic subsidiaries.

In this business environment, the first priority for Sanwa

manufactures and sells heavy-duty and lightweight shutters andSanwa Shutter Corporation is the core company in the Sanwa

other items. In addition to its shutter business, the Sanwa Group

Group. Its sales of lightweight shutters increased by 9.4% over the16

In the half-century since its establishment, Sanwa Shutter Corporation has worked
consistently to build a position for itself as the leading manufacturer of construction
materials in each region by building close relationships with customers as a supplier ofshutters, doors,stainless steel, partitions and other products. We have further improved
customer satisfaction by strengthening our full-time service organization to ensure atimely response to urgent repair needs and maintenance requirements.
We will continue to fulfill our mission by supporting efforts to bring about an earlyrecovery in areas affected by the Great East Japan Earthquake and by developing andsupplying eco-friendly products under our environmental policy. We remain totallycommitted to our unchanging goal of making a significant contribution to society byhelping to improve the quality of life for people everywhere.
Sanwa Shutter Corporation President & CEO

Kazuhiko Kinoshita

Sanwa Global Vision 2020, which was launched in fiscal 2013.

previous year’s total, while sales of heavy-duty shutters were 8.8%

The markets for heavy-duty shutters and doors for commercial

higher, reflecting strong investment in the construction of officebuildings, warehouses and other facilities. Sales of doors for officebuildings and condominiums are expected to remain strong. Thisbuildings and condominiums were substantially higher year on year

is reflected in a forecast of 4.7% year-on-year sales growth forwith a 17.3% increase driven by the construction of office buildings,

Sanwa Shutter Corporation. Marginal sales growth of 0.2% year

condominiums and medical facilities. Sales of maintenance services

on year is predicted for other group companies in Japan.

were lower because of the effect of earthquake-related demand in
the previous year. However, overall results were underpinned by

Strategies and Initiatives

trends in other segments, with the result that the net sales of Sanwa

The year ending March 2014 is the first business year of the First

Shutter Corporation increased by 11.0% year on year.

Three-Year Plan. We will focus our energies on the reinforcement of

Other group companies in Japan also achieved significant

the structures needed to ensure the achievement of our goals.

growth. A recovery in the retail store market helped Showa Front

Within Japan, we will step up our restructuring efforts with the aim of

to record a 10.4% year-on-year increase in sales. A recovery

creating a business model that will reduce our reliance on shutters.

trend also allowed Okinawa Sanwa Shutter to increase its sales

In June 2012, Sanwa Shutter Corporation launched theby 9.4% year on year, while Sanwa Tajima achieved 12.0%

Candy II range of domestic garage doors. The result of a productgrowth thanks to the completion of projects in progress.

development initiative made possible by global synergies

There was strong growth in income. The income of Sanwa

between Japan and the United States, these doors have strong

Shutter Corporation was dramatically higher with a 111.5%

American design elements and feature Wayne Dalton brandyear-on-year increment. There was also conspicuous

panels supplied by ODC, a U.S. member of the Sanwa Group.

improvement in the income of other group companies in Japan.

The Sanwa continued to expand its range of environment-

As a result, net sales increased by 10.3% over the previous

friendly residential products. In August 2012, we introduced theyear’s level to ¥161,536 million, while segment income was

Coffret Garden, a rooftop greening system for “Caporage”

90.5% higher at ¥11,688 million.

detached garages. The rooftop planting reduces the build-up ofsummer heat inside the garage and adds a pleasant touch ofTrends in the Japanese Business Environment

greenery to the home. This was followed in November 2012 by

Strong trends are estimated for the Japanese economy. In

the launch of the Sangate Solar, a residential shutter gate

addition to an improvement in overseas economic trends, Japan

operated using power generated from the natural energy of thewill also benefit from a shift to export growth aided by thesun. In December 2012, we introduced the Madomore Screen S

correction for the overvalued yen, as well as a last-minutesolar type window shutters, which are powered solely bydemand surge ahead of the consumption tax increase.

electricity produced by solar panels.
In August 2012, the front sash manufacturer and seller, Ace

The priorities for the Sanwa Group in this environment are
the further diversification of product ranges and the expansion ofCo., Ltd. was acquired by Showa Front Co., Ltd., a member of theand enhancement of service businesses. We are working toward

Sanwa Group, with the aim of expanding its front sash business.
We will continue to diversify our product ranges by building

these goals under the First Three-Year Plan, which is the firston these achievements.

medium-term plan under our long-term management vision,

17

Business Overview

North
America

Genie Matamoros Plant tostart operation
Genie is consolidating electronics andcommercial operator assembly into a new
facility in Matamoros, Mexico. To cut laborand overhead cost, the production base forcommercial operators was moved to Mexico.
Utilizing the shelter manufacturing system
in Matamoros, ODC continues to drive lower
product cost.

GHX (Heavy Duty)
Genie commercial garage door openers, whichmeet the UL standards, were launched to
distributors and sales centers. Leveraging thebroad network, Genie is to expand sales andmarket share.

Performance of Overhead Door Corporation (ODC)

Net Sales

Operating Income(Thousand of U.S. dollars)(Thousand of U.S. dollars)

771,881802,889

866,586

49,027

Horton/Door Services acquired
Door Controls Inc. and Advanced
Door Automation LLC

38,86732,336

FY 2010

2011

2012

FY 2010

2011

Door Services, ODC’s subsidiary company,
acquired Door Controls Inc. in Louisiana andAdvanced Door Automation LLC in North
Carolina, which sell and install automatic
doors. ODC aims for high profitability andgrowth opportunities by developing a forward
integration strategy through enhancement ofmaintenance service and installation network.

2012* ODC’s fiscal year is from Jan. 1 to Dec. 31

Despite fears of a “fiscal cliff” the U.S. economy benefited

A gradual recovery in the U.S. housing market was reflected
in a healthy trend in the performance of the U.S.-based

from an improvement in the employment situation in the year

company Overhead Door Corporation (ODC). In local-

ended December 2012. There was also a gradual recovery trend

currency terms, net sales increased by 7.9% year on year,

in the housing construction market. One of the priorities for theand income was substantially higher with a 26.1% increment

Sanwa Group in this economic environment was to achieve

thanks to the reduction of operating costs.

effective synergies with newly acquired companies. We also
worked to build our service businesses and maintain flexible

Overview of Operations and Financial Resultsin FY 2012

pricing policies linked to fluctuations in the cost of materials.

The Sanwa Group’s activities in the United States center onthrough tighter cost management and improvements in

Overhead Door Corporation (ODC), which is based in Dallas,transportation efficiency.

At the same time we continued to target cost reductions

Texas. ODC manufactures and sells overhead doors, shutters,

As signs of improvement began to appear in the U.S.

door openers and other products for commercial and residential

housing market, we worked to develop synergies made possibleuse. In addition to residential and commercial overhead doors

by the Wayne Dalton (WD) merger while also promoting sales ofsold under the Overhead Door and Wayne Dalton brands, thenew-model door openers and services. ODC continued tocompany also supplies Genie door operators, Horton Automatics

strengthen the competitiveness of its automatic door businessautomatic doors and TODCO truck and trailer doors. ODC has

and expand its maintenance service business. It acquired Door

continued to consolidate its business base in the North American

Control, a U.S. distributor of automatic doors, in May 2012 andmarket with the acquisition of the door manufacturer Wayne

Advanced Door Automation (ADA) in October 2012. The

Dalton in December 2009 and the door maintenance service

acquisition of these door service companies also contributed tocompany Creative Door Services in December 2011.

the performance of the automatic door business.

18

Overhead Door is coming off of a good year in 2012 where we achieved a 26% operating
income improvement and gathered some positive momentum moving into 2013. Whileas the media tells us the US economy is on the mend, in our segment, it is slower than
anticipated. Despite the intermittent economy, we have made great strides in growing
our capabilities by attracting and continuing to develop talented, what we call “Powerful
People” in key roles. In addition, in our second year of deploying new systems
technology, we have completed the design phase and are moving through testing with
implementation scheduled in 2015. We are also making progress on our three-partstrategy: (1.Grow the Core 2.Forward Integration 3.Grow International)
We remain confident that with the continued support of our parent company we willachieve our ambitious long range growth and earnings goals.
Overhead Door Corporation CEO

Dennis Stone

Sales from the overhead door business increased by 9.9%

truck and trailer door segment. In addition, the correction of theyear on year, thanks to the combined effects of a recovery trend

overvalued yen is expected to continue. On this basis, we arein the commercial door and garage door markets and thepredicting year-on-year sales growth of 7.9% in the year ending

acquisition of Creative Door Services. Sales in the door opener

March 2014.

category were 1.6% higher, reflecting strong demand for
products for commercial facilities. Sales growth in the automatic

Strategies and Initiatives

door business was marginal at 0.4% year on year because of

We are determined to ensure that our U.S. business benefits fully

cutbacks in public sector spending. A continuing recovery in thefrom the recovery of the U.S. economy. We will continue ourtrucking business resulted in substantial growth in sales from theefforts to strengthen and expand our core activities while

truck and trailer door business, which were 17.0% higher year

focusing on key priorities under our First Three-Year Plan.

on year.

One goal is to achieve further growth in our share of the market

Total net sales in North America increased by 8.6% (8.0% in

for housing-related products. We aim to achieve this by

local currency terms) to ¥69,391 million. This sales growth,

introducing new products, including garage doors that match

combined with efforts to improve profitability and tighten costmarket needs and high-added-value door openers, and by

management, resulted in substantial growth in segment income

strengthening our promotion activities at home centers and otherwith a 21.6% year-on-year increase to ¥3,486 million.

retail channels.

Trends in the Business Environment

in the commercial door market by introducing new products,

In the United States, a slow economic recovery is likely to resultsuch as energy-efficient thermally insulated doors andin slow trends in both the residential and non-residentialcommercial door openers, an area in which we lead the market.

categories in the year ending March 2014. However, new

We will also provide training for installation technicians throughhousing starts and other housing market indicators are expecteddistributors, which are our sales channels for professionals. In

to strengthen in step with the recovery of the U.S. economy.

addition, we will strengthen our installation and maintenanceWe expect this recovery in the U.S. economy to drive theservice capabilities with the aim of improving profitability andWe will also continue our efforts to strengthen our presence

expanding growth areas.

growth of the Sanwa Group’s North American business. We will

Another priority will be the expansion of sales outside ofalso work to build our market share and maintain our number
one position in industry leadership while also improving our profit

North America through marketing initiatives in Brazil, Mexico andratios through further cost savings. Another goal is to expand ourother Central and South American countries. We will also target

growth frontiers under the forward integration strategy based on

further improvements in productivity and efficiency bysynergies within the ODC Group.

establishing production operations in Mexico.
Continuing the improvement of our business processes, we

In the housing market, we expect the year ending March2014 to bring sales growth in both the garage door and door

will introduce a new systems technology based on enterprise

opener segments. Sales of commercial doors are also expectedresource planning (ERP). We aim to strengthen competitiveness,

to rise in step with a gradual recovery in capital expenditure. We

reduce management costs, improve productivity and optimize

also anticipate a continuing recovery and sales growth in theour production network.

19

Business Overview
BAU 2013 – a great successwith a new stand concept

EuropeNovoferm joined the Bau fair in Munich in
January very successful. The Bau fair is witharound 2.000 exhibitors and 235.000 visitors
the world leading fair for building materials.
Novoferm presented the products in a newconcept structured in application fields (e.g.
office, hotel, private, logistics) to show thepossibilities of our broad product range.

NovoSpeed Thermo – combines
efficiency with energy saving
NovoSpeed Thermo is a new, fast acting
sectional door with an opening speed more than
2 m/s. The outstanding U-Value of < 1,1 W/
m²K for a door of 5000 x 5000 mm is a uniqueselling proposition in the European market. The
NovoSpeed Thermo is available in dimensions
up to 6000 x 6000 mm and includes aninnovative hermetical closing system throughspecial side seals.

Performance of Novoferm (NF)

Net Sales

Operating Income(Thousand of Euro)(Thousand of Euro)

340,101

10,710338,722

307,351

New Novoferm operators – withmodern and environmentallyfriendly LED

7,452
5,309

FY 2010

2011

2012

FY 2010

2011

With the market introduction of our new
operator range we combine low standby energy
consumption with new LED technique. The LED
lights are 13 times brighter than conventionalbulbs of identical wattage,extremely durable fora practically unlimited working life andoptimized
in energy consumption.

2012* NF’s fiscal year is from Jan. 1 to Dec. 31

Novoferm (NF) was affected by a downturn in the garage

implemented in various countries in the wake of thedoor market resulting from decelerating economic trends in

European debt crisis and by the downturn in the southern

Europe. Net sales were 0.4% lower year on year in local

European economies.
The NF Group responded to this situation by working tocurrency terms, while operating income declined by 30.4%.

expand order and sales volumes through increased sales

Overview of Operations and Financial Resultsin FY 2012

promotion activities in the relatively strong German market.

The core of the Sanwa Group’s business activities in Europe isincluding business restructuring in southern Europe, and a shift

the Novoferm (NF) Group. Based in Germany, the NF Group is

to procurement from China as a way of reducing costs.

These efforts were paralleled by radical countermeasures,

These measures resulted in 4.0% year-on-year sales growth

Europe’s second-biggest manufacturer of door-related
products. In addition to its operations in Germany, the NF Groupin Germany, but there were declines of 2.2% in France, 5.7% in

has sales and manufacturing operations in France, theItaly and 1.4% in the Netherlands.
Segment sales figures show that sales of garage doors were

Netherlands, Italy, Poland, Spain, the United Kingdom andSouth Korea. It manufactures and sells residential doors, door

2.9% lower year on year because of market contraction inframes, garage doors and other products throughout Europe

southern Europe and the Netherlands. Sales of hinged doors wereand in South Korea.

1.5% higher, while in the industrial door category there was also a
marginal increase of 1.0% in sales of dock equipment, etc.

In the year ended December 2012, harsh economic

Net sales of Novoferm declined by 0.4% year on year in local

conditions continued throughout the eurozone. While trends in
the German housing construction market remained basicallycurrency terms, while operating income was 30.4% lower

firm, the eurozone as a whole was affected by a slump in

because of increases in labor costs and other cost items, which

consumer spending under the impact of fiscal austerity measures

could not be absorbed due to reduced garage door sales.

20Europe is still suffering from the ongoing economic crisis. High unemployment rates anduncertainties about the future lead to an overall reluctant consumption in a lot of countries.
This general condition is also influencing the construction industry negatively and is thechallenge everybody is faced with. Under these severe market conditions the Novoferm
Group is doing well by concentrating on efficiency improvements and cost reductions. We
are following our strategy to differentiate ourselves clearly from the competitors by offering
better products and service solutions. We are introducing innovative solutions, like the new“Novospeed Thermo” door, which combines an excellent insulation performance with highspeed opening; it’s a perfect solution for energy-saving. Furthermore, our new garage door
operator line offers excellent performance combined with low energy consumption. The
harmonization of the European norms will also open up the way to new market andsegments. We have already developed solutions based on a modular system platform. This
gives us the possibility to adapt our products to new markets in a speedy way.
Overall, the Novoferm Group is well prepared for the challenges of the next years
and we will continue in our successful way.
Novoferm Group CEO

Rainer Schackmann

venture with Hobbs Industries, a garage door manufacturing

In yen terms, total net sales in Europe decreased by 7.7% tocompany and owner of the Cardale brand, and the Garage Door

¥34,884 million year on year.

Company, a major British garage door dealer. This company isBusiness Environment and Trends

now working energetically to develop its business activities andA generalized economic recovery in Europe is unlikely in the year

build its share of the British garage door market by expanding its

ending March 2014, and challenging conditions are expected to

product line-up, which includes both Cardale brand and NF

continue. A full-scale recovery is not expected to emerge before

brand products.

the year ending March 2015. However, current predictions

In addition, the Sanwa Group will also pursue growth bysuggest that the German economy will be able to maintainactively opening branches and expanding into other markets,

positive growth in this environment.

including the Scandinavian countries, Russia and Eastern
European countries.

Despite a strong sense of uncertainty surrounding themarket, the Sanwa Group anticipates a firm underlying trend in

Our product and service strategies call for further expansion

the German economy. By focusing on the capture of projects inof our energy-saving solutions business through the introduction

Germany, the Group expects to achieve year-on-year salesof new products, including high-speed sectional doors withgrowth of 1.9%. Income is expected to increase by 7.3%, in part

improved opening and closing speeds for the industrial market,

because of the benefits of restructuring in France.

as well as products with thermal insulation. We will also develop
and market unique new products, including software to monitor

We predict that sales of garage doors will remain static

the opening and closing of doors.

because of lower sales in southern Europe. However, sales ofhinged doors and industrial doors are expected to rise thanks to

In addition, we will strengthen the service business byaggressive marketing targeted toward major projects and theutilizing the newly established European spare part center which

introduction of new products.

delivers all spare parts with short delivery times europewide. We
will also establish a business model centered on the provision ofStrategies and Initiatives

solutions to customers’ needs.
Another goal will be the reduction of costs through the

Future initiatives relating to the Sanwa Group’s business activities
in Europe will focus on the strengthening of the businessintegration of business operations for each production category

structures of existing companies so that they can better copein the major markets of Germany, France, Italy, Spain, the United

with the impact of the European fiscal crisis. Specific measures

Kingdom and the three Benelux countries. At the same time, wewill include the restructuring of group companies in southernwill strengthen the Group’s income base by restructuring theEurope, which have been affected by the crisis, and increased

hinged door business in Germany and France and improving thecost reduction efforts.

profitability of the door and frame business.

In April 2012, we established Novoferm U.K. as a joint

21

Business Overview
Dolphin Plaza

Asia

Vina-Sanwa, our subsidiary in Vietnam has
supplied fire rated steel doors to luxurious andmodern condominiums.

Vina-Sanwa manufactures and sells shutters and doors

We are devoting considerable effort to the reinforcement of
the Sanwa Group’s business base and manufacturing andin Vietnam. In FY 2012, it faced challenging conditions,sales organizations in Asia, following similar initiatives inincluding monetary tightening. It responded by strengthening

Japan, the United States and Europe. In FY 2012, theits marketing infrastructure, including the reinforcement of its

aggregate net sales of our five key group companies in theorganizations in Hanoi and Ho Chi Minh City. These efforts

region, which are based in Hong Kong and Shanghai, China,

brought year-on-year growth in both net sales and operating

and in Vietnam and Taiwan, increased by ¥800 million year

income, enabling the company to achieve a positive incomeon year to ¥4.2 billion.

result for the first time since its founding in 2008.
An-Ho Metal Industrial is building a door and shutter

Overview of Operations in FY 2012business in Taiwan. In FY 2012 it faced a number of challenges,

Our Chinese joint venture, Shanghai Baosteel-Sanwa,

including the postponement of major projects due to a prolonged

manufactures and sells heavy-duty shutters and overhead doors.

slowdown affecting the entire Taiwanese economy. However, theIn the year ended December 2012, an economic slowdown incompany was able to strengthen its income structure by

China and monetary tightening by the government caused

improving productivity and pursuing orders with the emphasis on

drastic cooling of the markets for housing and commercial

profitability, and both net sales and income exceeded thefacilities. Shanghai Baosteel-Sanwa focused on sales activities

previous year’s results.
Established in Hong Kong in 1986, Sanwa Shutter H.K. wasto projects from Japanese-affilliated companies. It alsocollaborated with NF Shanghai and strengthened its productiona frontrunner in the globalization of the Sanwa Group. It issystems, while also working to enhance its sales capabilities—

involved in the door and shutter business. Aggressive marketing,including the expansion of sales operations in regions other thanincluding sales activities targeting redevelopment projects,

Shanghai and the Yangtze Delta. These initiatives brought

resulted in year-on-year growth in net sales. However, operating

growth in both orders and sales, but operating income wasincome fell short of the previous year’s figure.
These Asian companies in the Sanwa Group will continue

lower year on year.
NF Shanghai, which manufactures and sells steel doors into strengthen their management structures and build business

China, is working with Baosteel-Sanwa to capture local demand

structures capable of delivering positive income results andfor doors. It has an advantage in the Chinese market thanks toincome growth. They will also continue to develop businessits ability to manufacture fireproof doors, having obtainedmodels that match local markets by taking steps to deal withgovernment approval. In FY 2012, the company expanded its

priority targets in their regions, including the reinforcement ofdoor production facilities and increased monthly production

their capacity to respond to local projects. Strategies tocapacity to 4,000 doors. However, monetary tightening caused

strengthen business structures in Asia include the efficienta downturn in construction of condominiums and detachedinvestment of management resources, and the expansion of

housing, and there was also a downward trend in demand forjoint development of strategic products and reciprocal

doors for use in medical institutions and other facilities. This

procurement of materials and products through our groupresulted in lower figures for net sales and operating income.

network in Asia.

22

CSR Activities
Compliance
The Sanwa Group is determined to meet public expectations

We also monitor employee awareness of compliance issues

and earn the trust of society. We have established a Compliancethrough surveys. The findings are used to identify and remedy

Code of Conduct, and implemented a range of measures

issues through ongoing improvement activities.

designed to make the concepts contained therein an integral

The Sanwa Group is committed to improving its process forpart of our corporate culture.

prevention and early discovery of improper conduct that violates

The Compliance Code of Conduct defines the specific rules

the law. To this end, we have introduced a corporate ethics

of behavior to follow when translating the mission, corporate

hotline as part of our objective to promote compliance with laws

philosophy and values of the Sanwa Group and the spirit of ourand public expectations. The ethics hotline office can receive

behavior guidelines, into actual conduct.

reports by phone, fax or through the Internet, and handles

Employees learn about the Compliance Code of Conductcompany-internal or external cases.

through in-house training and other activities. The purpose of
these activities is to ensure legal compliance and to instill
judgment and conduct that comply with public expectations.

The Sanwa Group’s
CSR Promotion System

CSR Promotion
Organizational System• The CSR Promotion Council
proposes initiatives and developmentof Group-wide CSR activities.

Sanwa Holdings Board of Directors

Chairman: Officer in charge ofCorporate Planning Unit

Sanwa Holdings President

Members: Officers in chargeof divisions, generalmanager of Audit
Department and Group
Company Presidents
and others• Group companies establish CSR
Promotion Committees and CSR
Promotion Subcommittees tocoordinate CSR activities.
• The CSR Promotion Department
serves as the secretariat for theGroup CSR Promotion Council and
CSR promotion activities in general.

Initiative proposal/development

Group CSR Promotion Council
Secretariat

CSR Promotion Department

Implementation divisions
Group Company

Group Company

Group Company

CSR Promotion Committee

CSR Promotion Committee

CSR Promotion Committee

CSR Promotion
Subcommittee

CSR Promotion
Subcommittee

CSR Promotion
Subcommittee

23

CSR Activities
Risk Management

Environmental Protection Activities

Our risk management systems are designed to detect

The Sanwa Group has formulated the Sanwa Grouppotential risks (factors that may adversely affect or hinder

Environmental Policy and is firmly committed to environmental

business activities) in advance at all stages of our operations atpreservation activities based on the policy.

every group company and business unit. We can thenWe have also designated June 10 as “Sanwa Environment

implement countermeasures to prevent these risks fromDay” to raise our employees’ awareness of the need to protect

causing actual problems.

the environment and to promote environmental protection

We are developing our risk management systems by

activities. On this day, group company employees participate inapplying the PDCA cycle. We work to detect risks promptly andcommunity clean-up campaigns in the areas around our various

then analyze and evaluate them to identify which risks are critical.

business sites, and similar environmental activities. Also, with

Next, we devise and implement countermeasures. Afterthe primary aim of reducing CO2 emissions, our manufacturing

implementation, we evaluate the countermeasures and continue

units have developed energy conservation measures that coverthem when necessary.

proper operation of machinery and equipment as well as
thorough monitoring of energy usage, and our sales units takecare to follow eco-friendly driving practices when using
company vehicles.

Sanwa Group
Environmental Policy

Basic Philosophy

4. Actively promote the development of environment-

As globally integrated manufacturers of building

friendly products, and endeavor to improve ourmaterials, the Sanwa Group contributes to thetechnological level further.
5. Endeavor to raise the awareness of environmental

realization of an enriched society capable of sustainable
development through environmentally responsible

preservation of all people working for thebusiness activities and the supply of environment-

Sanwa Group by ensuring they understand thisfriendly products and services.

Environmental Policy and providing them withinformation about the environment.

Basic Policies

6. Encourage the companies that cooperate with us in

1. To comply with legal systems and other

our business activities to undertake environmental

requirements related to the environment, andpreservation initiatives, and endeavor to support theircommunicate with society.

efforts to do so.

2. Appropriately assess impacts on the environment, set

In order to promote the above policies we will endeavor

objectives and goals, and continuously work for theto implement, maintain and continuously improve ourpreservation and improvement of the environment.

environmental management system.

3. Promote conservation and recycling of natural
resources and energy, and endeavor to prevent
pollution, for example through the reduction of waste.

24

Sanwa Group seeks to contribute to society primarily through on
community-based employee participation activities, to fulfill our roles
and responsibilities as a member of the community.
Sanwa Group Social Contribution Policy

1. The Sanwa Group will contribute to society through

The Sanwa Group wants to be part of a society in which people

products and services of the highest quality.

can enjoy happy, fulfilling lives. We will help to build such a

2. As a good corporate citizen, the Sanwa Group willsociety through our continuing social contribution activities, andcontribute to the development of local communities.

through human resource development initiatives designed to3. The Sanwa Group will provide effective support forenrich the wider human characteristics of our employees.

social contribution activities involving its employees.

The Social Contribution ClubThe Sanwa Group Social Contribution Club was established infrom executives and employees.

November 2006 to commemorate the 50th anniversary of the

In the year ended March 2013, a total of ¥3.9 million was donatedfounding of Sanwa Shutter Corporation. The Club carries out

to eight organizations. The following are some of the messages

social contribution activities using funds that include donationsof appreciation that were received from these organizations.

We are sincerely grateful for your donation to support the activities of ourorganization. Ocean trash is an international environmental problem about which there
is still little public awareness in Japan. Through our ongoing activities, we are cleaning
up drifting trash and gathering data about the problem. It will take time before theareas affected by the problem start to show improvement. However, contributions
such as yours help to sustain our activities and encourage us to continue. We will
ensure that your donation is used to achieve the greatest possible benefit.

Left: Ms. Kojima of JEAN
Right: Mr. Kinoshita of the Social Contribution Club
Administration Committee—Japan Environmental Action Network (JEAN)

Thank you very much for

We would

your recent donation. Everyday

like to express our

throughout the world around 800

heartfelt appreciation

women lose their lives as a result

for the donation thatof pregnancy and childbirth. Our

we have received

organization is working to improvefrom the Sanwa

public health and medical facilities
and healthcare services and give
women the knowledge to protect

Left: Mr. Kanno of JOICFPRight: Mr. Yamamoto of the Social
Contribution Club Administration
Committee

Group Social
Contribution Club.

Left: Ms. Palmer of Second Harvest Japan
Right: Mr. Maeda of the Social Contribution
Club Administration Committee

We will use these

their own health, so that as many women as possible can gofunds with great care to provide food support for children

through pregnancy and childbirth safely.

in care facilities, families in refuges for domestic violence
victims, and people suffering from poverty.

—Japanese Organization for International
Cooperation in Family Planning (JOICFP)—Second Harvest

In June 2013, Social Contribution Club members helped Second Harvest to collect food from manufacturers
and farmers and distribute it to those in need. Although still edible, the food was destined for disposal.

25Corporate Governance
Board of Directors(As of June 26, 2013)

Masahiro Fukuda

Yasushi Takayama
Tamotsu Minamimoto
Toshitaka Takayama

Board of Directors, Statutory Audit & Supervisory
Board Members and Executive Officers

Ichiro Ueeda

Shunsaku Hashimoto
Wadami Tanimoto

Audit & Supervisory Board Members(As of June 26, 2013)(As of June 26, 2013)

Representative Director
President CEO&COO

Toshitaka Takayama
Representative Director
Executive Vice-President
Deputy President

Director
Senior Executive Officer
Subleader,Overseas Business Unit
Americas Business

Senior Executive Officer
General Manager,
General Affairs Dept.

Masahiro Fukuda

Tatsuto Satsuka

Shunsaku Hashimoto

Senior Executive Officer
President,
Okinawa Sanwa Shutter
Corporation

Director
Senior Managing
Executive Officer
Overseas Business Unit

Standing Statutory Audit &Supervisory Board Member

Senior Executive Officer
Strategic Re-Engineering Unit

Wadami Tanimoto

Toshiaki Nakaya

Hiroatsu Fujisawa

Director
Senior Managing
Executive Officer
Corporate Planning Unit

Standing Statutory Audit &Supervisory Board Member

Executive Officer
Asia BusinessJiro Ichioka

Tsunahiro Watanabe

Yasushi Takayama

Statutory Audit &Supervisory Board Member

Director
Senior Managing
Executive Officer
Domestic Business Unit

Katsuhiko Tanabe

Executive Officer
President,
Sanwa Tajima Corporation

Ichiro Ueeda

Jumpei Morimoto

Executive Officer
Europe Business

Senior Executive Officer
Subleader, Overseas
Business Unit

Executive Officer
President, VINA-SANWA
Company Liability Ltd.

Sampei Kametaka

Hidemine Yasui

Tamotsu Minamimoto

Outside Director

Statutory Audit &Supervisory Board Member

Mamoru Hikita

Katsuhiko Tanabe

Mikio Kurusu

Takenobu Hoizumi

26

Toshiaki Nakaya

Jiro Ichioka

Jumpei Morimoto

Basic Stance on Corporate GovernanceRisk Management

Sanwa Holdings Corporation is a global corporation with group

In accordance with the basic matters pertaining to risk

companies in the United States, Europe and Asia including

management established in the Risk Management Regulations,

China. Our basic approach to corporate governance is to

the Company identifies, shares, and mitigates risks and strives tocontinuously raise our corporate value through fair and equitable

minimize loss in the event an emergency occurs. In addition, thebusiness transactions in a business environment characterizedCompany is developing a groupwide risk management system

by intense global competition. To this end, the Sanwa Groupconsisting of Risk Management Guidelines and Crisis

seeks to build a highly transparent system that allows us toManagement Guidelines, which stipulate procedures from

effectively achieve our corporate vision.

reporting when an emergency occurs to recovery measures.

In accordance with this approach, we have introduced an
executive officer system to separate the decision-making

Corporate Governance Structure

function of the Board of Directors from the business execution

Sanwa Holdings has established a Board of Directors and afunction of the executive officers. We undertook this initiative to

Audit & Supervisory Board. The Board of Directors is composed

strengthen management effectiveness and to give the Board ofof seven members, including one outside director, and the Audit

Directors oversight of business execution as exercised by the& Supervisory Board has four corporate audit & supervisory

executive officers. Preceding this, we moved to a holding

board members, including two outside audit & supervisory board

company structure in October 2007 with three purposes: 1) tomembers. The outside directors and audit & supervisory board

improve group-level governance, 2) to strengthen themembers have been designated to play an independent role.

competitiveness of operating companies and 3) to reinforce

The Board of Directors Meetings and the Audit &group-level strategic functions. We will continue to work to better

Supervisory Board Meetings are normally held once per month.

fulfill of our corporate governance obligations by preparing

The Board of Directors makes important management decisions

systems that ensure competence in business operations.

based on their considered judgment and supervise theexecution of the directors’ responsibilities. To maintain andInternal Control Systemenhance management effectiveness, the Board consists of

Pursuant to “System to ensure conformance of execution of

directors who are very familiar with Sanwa’s operations and an

duties by directors and employees to laws, ordinances andoutside director with keen insight gained from a wealth ofarticles of incorporation” as provided in Article 362, paragraph 4,

corporate management experience.

item 6 of the Companies Act, the Basic Policy on Internal Control

The Audit & Supervisory Board monitors the status of

System was adopted by resolution at a meeting of the Board ofbusiness execution by the Board of Directors and the executive

Directors held on May 15, 2006. In accordance with theofficers, issue reports on their findings, and ensure that

resolution, the Company has established and implemented an

management actions are legal and proper. To increase theinternal control system, has established prescribed standards

effectiveness of audits, they have been granted independence

and procedures in each business operation to ensure that the

combined with enhanced responsibilities and authority. In

Company’s internal organizations are operated soundly,

partnership with the Audit Department, the corporate audit &effectively, and efficiently, free from improprieties, mistakes, andsupervisory board members ensure that the business is in sounderrors, and has implemented controls based on the standards

financial health and pursue compliance with rigor andand procedures.

consistency across the Sanwa Group.
In fiscal 2012, the Board of Directors met 14 times with a
97.6% attendance rate for directors and corporate audit &supervisory board members, and the Audit & Supervisory
Board met 12 times with a 97.9% attendance record.

27

Corporate Governance

CSR Promotion Department, meets four times a year. The

We have also established a Group Strategy Committee as
an advisory body to the Board of Directors. This council

council deliberates CSR policies of the entire Group, mattersconducts high-level examination and coordination of grouprelated to the quality assurance system and other CSR issues.

management policies as well as business management plans

Sanwa is actively working to fulfill its corporate social

and budgets, and formulates medium-to-long term groupresponsibilities, and to this end has established CSR Promotion

strategies. They also deliberate matters pertaining to group-level

Committee that plan and promote CSR activities together withstrategies, offer their recommendations on these matters, andindividual work sites.
To establish and maintain a corporate governance system

work with the Board of Directors to ensure timely and effectivethat earns the trust of society through its financial health, audit

business decisions.

& supervisory board members travel directly to subsidiaries andSupervision and audits of the detailed status of businessexecution is carried out at the PDCA Council, held quarterly byaffiliates to study their situation or issue requested reports.

the directors, executive officers and audit & supervisory board

Furthermore, Sanwa’s independent auditors, Kyoritsu Audit

members, and similar organizations. The directors monitor

Corporation, conducts financial audits of Sanwa Holdings’

progress against the management plan and provide guidance on

major consolidated subsidiaries.
It is the view of Sanwa Holdings that the structure outlined

management issues, while the corporate audit & supervisoryboard members audit the state of business execution by theabove constitutes a governance system that ensures theexecutive officers.

competence of the Group’s business operations and fulfills its
corporate governance obligations.

To develop a consistent set of CSR activities across the
Sanwa Group, the Group CSR Promotion Council, run by the

Sanwa Group
Corporate Governance System

General Shareholders’ Meeting
Appointment
Dismissal

Group Strategy Committee

Proposal(Consultation on major items)

ReportBoard of Directors
Appointment Selection

ReportDomestic Business/
Overseas Business
PDCA Council, etc.

Appointment
Dismissal

Report

Audit
ReportAudit

Representative Directors
MonitorCooperation

Audit
ReportAccounting
Audit

ReportDirectExecutive Officers

ReportIndependent Auditors

ReportAudit &
Supervisory Board

ReportAppointment
Dismissal

ReportReportReportReportSupervise
MonitorGroup CSR
Promotion Council

Promotionand Support

ReportEach Division/Group Company

28

Internal Audit

Audit Department

Financial Information

Contents
30

Consolidated Balance Sheets

32

Consolidated Statements of Operations

32

Consolidated Statements of Comprehensive Income

33

Consolidated Statements of Changes in Net Assets

34

Consolidated Statements of Cash Flows35

Notes to the Consolidated Financial Statements

52

Independent Auditors’ ReportConsolidated Balance Sheets
Sanwa Holdings Corporation and Subsidiaries
As of March 31, 2013 and 2012
Thousands of
U.S. dollars (Note 1)

Millions of yen

2013

2012

2013

¥ 22,275¥ 16,825

ASSETS
Current assets:
Cash and cash equivalents (Note 10)$ 236,968

Short-term investments (Notes 3, 10)

2,243

1,824

23,862

Notes and accounts receivable, trade (Note 10)

63,82061,578678,936

Allowance for doubtful accounts(1,335)(1,222)(14,202)

Inventories (Note 4)

38,17036,590406,064

Deferred income taxes (Note 14)

4,185

3,287

44,521Other current assets

4,498

4,080

47,851

133,856

122,962

1,424,000

Total current assets
Property, plant and equipment:Land

22,58322,292

240,245

Buildings and structures

43,21441,512459,723

Machinery and equipment

56,77953,763604,032

Construction in progress

1,218

990

12,957

123,794

118,557

1,316,957(73,374)(69,013)(780,574)

50,42049,544536,383

Less accumulated depreciation
Total property, plant and equipment
Intangible assets:
Goodwill

2,325

3,225

24,734

Other intangible assets (Note 5)

14,718

12,774

156,574

17,043

15,999181,308

Investments in non-consolidated subsidiaries and affiliates (Notes 3, 10)

8,104

7,268

86,213

Investments in securities (Notes 3, 10)

22,835

19,915242,926

Deferred income taxes (Note 14)

4,961

6,757

52,777

Total intangible assets
Investments and other assets:

Allowance for doubtful accounts

(469)

(492)

(4,989)Other assets

5,021

4,626

53,41540,452

38,074

430,342¥241,771¥226,579$2,572,033

Total investments and other assets
Total assets
The accompanying notes are an integral part of these statements.

30

Thousands of
U.S. dollars (Note 1)

Millions of yen

2013

2012

2013

¥ 11,954¥ 12,956$ 127,170

Notes and accounts payable, trade (Note 10)

38,39838,334408,489

Accrued income taxes

3,754

2,064

39,936

Accrued expenses

13,134

12,479139,723

30

110

319

12,577

11,231

133,798

79,847

77,174849,435

Long-term debt (Notes 6, 10)

48,846

48,651

519,638

Retirement and severance benefits (Note 7)

9,440

8,780

100,426

Deferred income taxes (Note 14)

3,942

3,277

41,936

LIABILITIES AND NET ASSETS
Current liabilities:
Short-term debt (Notes 6, 10 )Deferred income taxes (Note 14)
Other current liabilities
Total current liabilities
Long-term liabilities:

2,561

3,175

27,24564,78963,883

689,245

144,636

141,057

1,538,680

38,41338,413

408,649

Additional paid-in capital

39,90239,902424,489

Retained earnings

30,97525,999329,521

Treasury stock, at cost
(18,134,664 shares in 2013 and 17,618,606 shares in 2012)(9,833)(9,694)(104,605)

99,457

94,6201,058,054(1,601)(3,315)(17,032)

Other long-term liabilities
Total long-term liabilities
Total liabilities
Contingent liabilities (Note 8)
NET ASSETS
Shareholders’ equity (Note 12)
Common stock:
Authorized—550,000,000 shares in 2013 and 2012
Issued—257,920,497 shares in 2013 and 2012

Total Shareholders’ equity
Accumulated other comprehensive income
Net unrealized holding losses on securities
Foreign currency translation adjustments
Total accumulated other comprehensive income
Stock acquisition rights
Total net assets
Total liabilities and net assets

31

(844)

(5,909)(8,979)(2,445)(9,224)(26,011)

123

126

1,310

97,13585,522

1,033,353¥241,771¥226,579$2,572,033

Consolidated Statements of Operations
Sanwa Holdings Corporation and Subsidiaries
For the years ended March 31, 2013 and 2012
Thousands of
U.S. dollars (Note 1)

Millions of yen

Net sales

2013¥265,913

2012¥248,2142013$2,828,862

Cost of sales (Note 13)
Gross profit

196,632
69,281

186,684
61,5302,091,830
737,032

Selling, general and administrative expenses (Note 12)
Operating income

55,107
14,17452,6758,855

586,245
150,787

588
(935)
117
(868)
(1,098)13,076600(1,029)(269)(1,331)(2,029)
6,826

6,255
(9,947)
1,245(9,234)(11,681)
139,106

5,439
456
5,895
7,181
7,181

2,258
1,271
3,529
3,297
3,297

57,861
4,851
62,712
76,39476,394

Other income (expenses):Interest and dividend income
Interest expenses
Equity in earnings of non-consolidated subsidiaries and affiliates
Other, net (Note 15)
Net income before income taxes and minority interests
Income taxes (Note 14):Current
DeferredIncome before minority interests
Net income

¥

¥
Yen

Per share:
Net income —Basic		—Diluted
Cash dividends

U.S. dollars (Note 1)

2013

2012

¥

¥

29.93
29.87
10.00

$

2013

13.72
13.69
8.00

$

0.318
0.318
0.106

The accompanying notes are an integral part of these statements.

Consolidated Statements of Comprehensive Income
Sanwa Holdings Corporation and Subsidiaries
For the years ended March 31, 2013 and 2012
Thousands of
U.S. dollars (Note 1)

Millions of yen

Income before minority interests
Other comprehensive income (Note 16)
Net unrealized holding gains on securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Share of other comprehensive income of non-consolidated subsidiaries
and affiliates accounted for using the equity method
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests
The accompanying notes are an integral part of these statements.

32

2013
¥ 7,1812012¥ 3,2972013$ 76,394

1,712
—
4,890

18
(107)
(1,824)

18,213—52,021

176

5

1,872

6,778
¥13,959(1,908)¥ 1,389

72,106$148,500¥13,959—¥ 1,389—$148,500—

Consolidated Statements of Changes in Net Assets
Sanwa Holdings Corporation and Subsidiaries
For the years ended March 31, 2013 and 2012
Millions of yen
Commonstock

Balance at March 31, 2011

¥38,413Additional
paid-in
capital¥39,902

Retainedearnings¥24,625

Net unrealized
Deferredholding gains
gains (losses)(losses) onon hedges
securities

Treasurystock¥(9,693)¥(3,334)¥ 107

Foreigncurrencytranslation
adjustments

StockacquisitionrightsTotal
net assets¥(4,089)¥ 90¥86,021

Net changes during the year
Cash dividends(1,922)

Net income for the year

3,297

(1,922)
3,297

Purchase of treasury stock
Disposal of treasury stock

(2)

(2)

(1)

1

0

Net changes during the year otherthan shareholders’ equity
Total net changes during the year
Balance at March 31, 2012

19

(107)

(1,820)

36

—

—

1,374

(1)

19

(107)

(1,820)36(1,872)(499)¥38,413¥39,902¥25,999¥(9,694)¥(3,315)¥ —¥(5,909)¥126¥85,522Net changes during the year
Cash dividends(2,160)Net income for the year

7,181

Purchases of treasury stock
Disposal of treasury stock(45)(2,160)
7,181
(226)

(226)

87

42

Net changes during the year otherthan shareholders’ equity
Total net changes during the year
Balance at March 31, 2013

1,714

5,065

(3)

6,776

—

—

4,976

(139)

1,714

—

5,065

(3)

11,613¥38,413¥39,902¥30,975¥(9,833)¥(1,601)¥ —¥ (844)¥123¥97,135

Foreigncurrencytranslation
adjustments

StockacquisitionrightsTotal
net assets

Thousands of U.S. dollars (Note 1)

Balance at March 31, 2012

Commonstock

Additional
paid-in
capitalRetainedearnings

Treasurystock$408,649$424,489$276,585$(103,128)

Net unrealized
Deferredholding gains
gains (losses)(losses) onon hedges
securities$(35,266)$ —$(62,862)$1,340 $ 909,807

Net changes during the year
Cash dividends(22,979)

Net income for the year

76,394Purchases of treasury stock
Disposal of treasury stock(479)(22,979)
76,394(2,404)(2,404)927

448

Net changes during the year otherthan shareholders’ equity
Total net changes during the year
Balance at March 31, 2013

18,23453,883——52,936(1,477)

18,234—53,883$408,649$424,489$329,521$(104,605)$(17,032)$ —$ (8,979)

The accompanying notes are an integral part of these statements.

33

(30)

72,087(30)

123,546$1,310 $1,033,353

Consolidated Statements of Cash Flows
Sanwa Holdings Corporation and Subsidiaries
For the years ended March 31, 2013 and 2012
Thousands of
U.S. dollars (Note 1)

Millions of yen

2013

2012

2013

¥13,076¥ 6,826$139,106

Depreciation and amortization

5,785

5,605

61,543Equity in earnings of non-consolidated subsidiaries and affiliates

(117)

269

(1,245)Interest and dividend income

(588)

(600)

(6,255)Interest expenses

935

1,029

9,947

Increase in allowance for doubtful accounts

5

132

53

Increase (decrease) in allowance for bonuses

382

(29)

4,064
4,170

Cash flows from operating activities:
Net income before income taxes and minority interests
Adjustments for:

Increase (decrease) in retirement and severance benefits

392

212

Increase (decrease) in provision for loss on disaster

—

(260)

—

Decrease (increase) in notes and accounts receivable(260)(8,011)(2,766)

Increase in inventories

213(3,536)

2,266

Increase (decrease) in notes and accounts payable
Other, net

(802)
3

4,714
1,668

(8,532)32

SubtotalInterest and dividend income received

19,024
586

8,019
636

202,3836,234Interest expenses paid
Income taxes paid

(938)
(3,817)(1,045)(2,157)(9,979)(40,606)

14,855

5,453

158,032(58,106)

Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchase of investments in securities(5,462)(2,103)

Proceeds from sales of investments in securities

4,556

846

48,468

Payments for purchase of tangible and intangible assets(4,293)(2,897)(45,670)

Payments for advances(1,504)(1,206)(16,000)

Proceeds from collections of advances

1,240

1,153

13,191

Acquisition for business(292)(1,383)(3,106)—(3,621)—

Acquisition of investments in subsidiaries resulting
in change in scope of consolidation
Other, net
Net cash used in investing activities

442

(42)

4,702

(5,313)(9,253)(56,521)

12,968Cash flows from financing activities:
1,219(1,855)

Proceeds from long-term bank loans

13

3,567

138

Repayments of long-term bank loans(827)(1,296)(8,798)Proceeds from issuance of bond

3,000

2,000

31,915

Repayments of bonds(5,000)—(53,191)

Increase (decrease) in short-term bank loans, net

Purchase and disposal of treasury stock, net
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

(185)

(1)

(1,968)(2,160)(401)(1,922)(180)(22,979)(4,266)(4,341)

313(46,181)

249

6

2,649

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year

5,450
16,825(3,481)
20,30657,979178,989

Cash and cash equivalents at the end of year

¥22,275¥16,825$236,968

The accompanying notes are an integral part of these statements.

34

Notes to the Consolidated Financial Statements
Sanwa Holdings Corporation and Subsidiaries

1. Basis‌of Presenting
Consolidated
Financial Statements

Sanwa Holdings Corporation (the “Company”) and its domestic subsidiaries maintain their accounts andrecords in accordance with the provisions set forth in the Japanese Corporate Law and the Financial
Instruments and Exchange Law and in conformity with accounting principles and practices generally
accepted in Japan, which are different from the accounting and disclosure requirements of International
Accounting Standards.
The Company’s overseas subsidiaries have been prepared in conformity with International Financial
Reporting Standards or US GAAP for the Company’s consolidation process, except for certain items
which are required to be adjusted in the consolidation process.
The accompanying consolidated financial statements are prepared based on the consolidated
financial statements of the Company and its subsidiaries (the “Group”), which were filed with the Directorof Kanto Local Finance Bureau as required by the Financial Instruments and Exchange Law.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenienceof the reader, using the approximate exchange rate at March 31, 2013, which was ¥94 to US$1.00.

2. ‌Summary of
Significant
Accounting Policies(a) Scope of Consolidation
At March 31, 2013, the Company had 79 subsidiaries and 20 affiliates.
The consolidation for the year ended March 31, 2013 (FY2012) includes Sanwa Holdings
Corporation and its 38 consolidated subsidiaries. Equity method accounting is applied to investments in
7 non-consolidated subsidiaries and 5 affiliates at March 31, 2013.
(b) Foreign currency translation
All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at
the exchange rates prevailing at the year-end and revenues and expenses accounts are translated into
Japanese yen at average exchange rates during the year.
Shareholders’ equity accounts of foreign subsidiaries and affiliates are translated at historical rates.
The resulting translation differences are debited or credited to the foreign currency translation
adjustment account in shareholders’ equity or to the minority interests in consolidated subsidiaries in the
consolidated balance sheets.
(c) Cash Equivalents
All highly liquid investments with original maturities of three months or less are considered to be
cash equivalents.
(d) Short-term Investments and Investments in Securities
The Group adopted the Accounting Standards for Financial Instruments which was issued by theBusiness Accounting Deliberation Council. In accordance with these standards, securities are classified
into four categories: trading securities, held-to-maturity debt securities, equity investments in associates,and other securities. Based on this classification, securities with a maturity of less than one year are
included in “Short-term investments” as current assets.
Securities held by the Group are all classified as other securities. Marketable securities classified asother securities are carried at fair value with the unrealized gain and loss, net of applicable tax, reported
in a separate component of shareholders’ equity. Non-marketable securities classified as othersecurities are carried at cost determined by the moving average method. Realized gain and loss anddeclines in value judged to be other than temporary on other securities are charged to income.
(e) Inventories
Inventories of the domestic consolidated companies are valued at cost, determined by the grossaverage method (Carrying amount in the balance sheet is calculated with consideration of write-downs
due to decreased profitability). The costs of inventories held by foreign consolidated subsidiaries arestated at the lower of cost or market value method by the first-in, first-out method or the moving
average method.

35

(f) Property, Plant and Equipment (Excluding Lease Assets)
Property, plant and equipment are stated at cost. Depreciation is computed by the declining-balancemethod over the estimated useful lives of assets, except that the straight-line method is applied tobuildings (other than structures attached to the buildings) acquired subsequent to April 1, 1998. The
foreign consolidated subsidiaries adopt the straight-line method for depreciation.
Costs of maintenance, repairs and minor renewals are charged to income in the year incurred,
although major renewals and improvements are capitalized.
(Changes in Method of Accounting)
Effective April 1, 2012, the Company and its domestic consolidated subsidiaries changed their methodof depreciation for property, plant and equipment acquired on or after April 1, 2012 in accordance withthe amended Corporation Tax Law of Japan.
The effect of this change on the consolidated operating results for the year ended March 31, 2013
was immaterial.
(g) Amortization of Goodwill
Amortization of goodwill is determined on a case basis and in generally amortized over a period notexceeding 20 years.
(h) Leased Assets
Leased assets related to finance lease transactions that do not transfer ownership rights are amortizedunder the straight-line method based on the lease term as the useful life with residual value of zero.
However, the Group continues to apply the method for ordinary operating lease transactions to financelease transactions contracted before March 31, 2008.
(i) Retirement and Severance Benefits
The Company and its domestic subsidiaries in Japan have severance indemnity plans, defined
contribution pension plans and defined benefit pension plans. Under these plans, employees who
terminate their service with the Company and its domestic subsidiaries are, under most circumstances,
entitled to lump-sum severance indemnities and pension payments, determined by reference to current
basic rates of pay, length of service and conditions under which the terminations occur.
The Company and its domestic subsidiaries in Japan also have contributory pension benefit planscovering substantially all of their employees, including the governmental welfare pension benefit plan
which would otherwise be provided by the Japanese government. The contributions to the contributory
and the non-contributory pension plans are placed into trusted pension funds.
The foreign consolidated subsidiaries have defined benefit pension plans or contributory pension
plans, which substantially cover all of their employees, under which the cost of benefits is currently
funded or accrued.
(j) Revenue recognition
The Group recognizes revenue at the time products are shipped, which is when title and risk of loss
pass to the customer. The Group recognizes revenue related to installation of products at the time
installation is complete.
However, revenues and costs of construction contracts, of which the percentage of completion canbe reliably estimated, are recognized by the percentage-of-completion method. To estimate theprogress of such construction projects, the Group measures the percentage of completion bycomparing costs incurred to date with the most recent estimate of total costs required to complete theproject (cost to cost basis). If a reliable estimate cannot be made, revenues and costs of construction
contract are recognized by the completed-contract method.
(k) Research and Development Expense and Software
Research and development expenditure is charged to income when incurred.
Expenditure relating to software developed for internal use is charged to income when incurred,36

except if it contributes to the generation of income or to the future cost savings. Such expenditures
capitalized as assets are amortized using the straight-line method over their estimated useful lives offive years.
(l) Income Taxes
The provision for income taxes is computed based on the pretax income included in the consolidated
statements of operations. Deferred income taxes are recorded to reflect the expected future tax
consequence of temporary differences between the carrying amounts and the tax bases of assets
and liabilities.
(m) Net Income per Share
The computation of basic net income (loss) per share is based on the weighted-average number ofshares of common stock outstanding. The average number of shares used in the computation was
239,960 thousand and 240,305 thousand for the years ended March 31, 2013 and 2012, respectively.
Cash dividends per share shown in the consolidated statements of operations are the amounts
applicable to the respective years.
(n) Derivative and Hedging Activities
The Group utilizes derivative transactions related to foreign currency exchange rates and interest rates
in order to reduce their risk exposure arising from fluctuations in these rates and prices, to reduce thecost of the funds financed and to improve their return on invested funds.
Derivative transactions currently utilized by the Group include interest rate swap contracts andcurrency swap contracts.
Net asset or liability arising from derivative transactions is measured at fair value, with unrealized gainor loss included in earnings. Hedging transactions, which meet the criteria of hedge accounting are
accounted for using deferral hedge accounting, which requires the unrealized gain or loss to be deferred
as a liability or asset until gain or loss relating to the hedge object is recognized.
In addition, certain forward exchange contracts and certain interest rate swap transactions areaccounted for using the allocation method and the special method, respectively, which are regulated in
the standard. The allocation method requires recognized foreign currency receivables or payables
covered by forward exchange contracts to be translated at such contract rates. Under the special
method, interest rate swap transactions are accounted for as if the interest rates under thosetransactions were originally applied to underlying borrowing.
The Group has established a control environment, which includes policies and procedures for risk
assessment and for the approval, reporting and monitoring of derivative transactions. The Group does
not do derivative transactions for trading purposes. The Group is exposed to certain market risks
arising from derivative transactions. The Group is also exposed to the risk of credit loss in the event of
non-performance by the counterparties to those transactions. However, the Group does not
anticipate non-performance by any of these counterparties, all of whom are financial institutions withhigh credit ratings.
The Group evaluates hedge effectiveness by comparing the cumulative changes in cash flows or
the changes in fair value of the hedged items with the corresponding changes in the hedging
derivative instruments.
The assessment of hedging effectiveness regarding interest rate swaps which are accounted forunder the above special accounting method is omitted.
(o) Reclassifications
Certain reclassifications of the financial statements for the year ended March 31, 2012 have been madeto conform to the presentation for the year ended March 31, 2013.
(p) Accounting Standards Issued but Not Yet Effective· ‌The “Accounting Standard for Retirement Benefits” (Accounting Standards Boards of Japan Statement37

No. 26, issued on May 17, 2012)· ‌The “Guidance on Accounting Standard for Retirement Benefits” (Accounting Standards Boards ofJapan Guidance No. 25, issued on May 17, 2012)(1) Overview
	Revisions apply mainly to the accounting treatments for unrecognized actuarial gains and losses aswell as unrecognized prior service costs, the calculation methods for retirement benefit obligations
as well as service costs, and broadening disclosure taking into consideration improvements tofinancial reporting and international trends.
(2) Scheduled Effective Date	The revised Accounting Standard and Guidance are effective from the end of fiscal years beginningon or after April 1, 2013. However, revisions to the calculation methods for retirement benefit
obligations and service costs are effective from the fiscal year beginning on April 1, 2014.
(3) The Impact of the Adoption of the Revised Accounting Standard and Guidance	The impact of the adoption of the revised accounting standard and guidance on consolidated
financial statements are in process of measuring.

3. ‌Short-term Investments,
Investments in Securities
and Investments
in Non-consolidated
Subsidiaries and Affiliates

At March 31, 2013 and 2012, other securities, which are included in short-term investments andinvestment in securities, were as follows:
Millions of yen

2013
Other securities
Cost

Gross
unrealized gains

Grossunrealized losses

Book value(Estimated fair value)

Market value available¥19,069¥1,023¥(3,456)¥16,636

Bonds and debentures

1,004

5

—

1,009

Other

4,670

87

(112)

4,645

¥24,743¥1,115¥(3,568)¥22,290

Equity securities

Market value not available
Total

2,788

—

—

2,788

¥27,531¥1,115¥(3,568)¥25,078

Millions of yen

2012
Other securities
Cost

Gross
unrealized gains

Grossunrealized losses

Book value(Estimated fair value)

Market value available
Equity securities¥17,887¥142¥(5,155)¥12,874

Bonds and debentures

1,105

4

—

1,109

Other

4,400

44

(114)

4,330

¥23,392¥190¥(5,269)¥18,313

Market value not available
Total

38

3,426

—

—

3,426

¥26,818¥190¥(5,269)¥21,739

Thousands of U.S.dollars

2013
Other securities
Cost

Gross
unrealized gains

Grossunrealized losses

Book value(Estimated fair value)

Market value available$202,862$10,882$(36,766)$176,978Bonds and debentures

10,681

53—

10,734

Other

49,681926(1,191)

49,416$263,224$11,861$(37,957)$237,128

Equity securities

Market value not available
Total

29,660——29,660$292,884$11,861$(37,957)$266,788

At March 31, 2013 and 2012, investments in non-consolidated subsidiaries and affiliates were as follows:
Thousands of
U.S. dollars

Millions of yen

Equity securities
Advances

4. Inventories

2013

2012

2013

¥6,187¥5,422$65,819

1,917

1,846

20,394¥8,104¥7,268$86,213Inventories at March 31, 2013 and 2012 comprised the following:Thousands of
U.S. dollars

Millions of yen

5. O ther Intangible Assets

2013

2012

2013

Finished goods¥ 7,950¥ 7,242$ 84,574

Work in process

18,33918,271

195,096

Raw materials and supplies

11,881

11,077

126,394¥38,170¥36,590$406,064

Other intangible assets at March 31, 2013 and 2012 comprised the following:Thousands of
U.S. dollars

Millions of yen

2013

2012

2013

Trademark¥ 4,066¥ 3,060$ 43,255

Software

4,916

6,339

52,298

Other

5,736

3,375

61,021¥14,718¥12,774$156,574

39

6. Short-term‌Debt andLong-term Debt

Short-term debt and long-term debt at March 31, 2013 and 2012 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Short-term loans (unsecured)
Current portion of long-term debt

2013

2012

2013

¥ 8,592¥ 7,138$ 91,404

3,362

818

35,766

—

5,000

—

¥11,954¥12,956$127,170

Current portion of unsecured bonds
Short-term debt
1.32% unsecured bonds, due 2013

—

5,000

—

1.03% unsecured bonds, due 2014

15,00015,000159,574

1.04% unsecured bonds, due 2015

2,000

2,000

21,277

1.16% unsecured bonds, due 2016

2,400

2,400

25,532

0.89% unsecured bonds, due 2016

10,00010,000106,383

1.00% unsecured bonds, due 2017

2,000

2,000

21,277

0.73% unsecured bonds, due 2018

3,000

—

31,915Loans from banks and other financial institutions
unsecured maturing 2013–2015 withinterest average rate from 0.90% to 5.49%.

17,80818,069189,447

Long-term debt
Less, current portion¥52,208(3,362)¥54,469(5,818)$555,404(35,766)

Long-term debt

¥48,846¥48,651$519,638

Aggregate annual maturities of long-term loans at March 31, 2013 were as follows:
Years ending March 31

Millions of yen

Thousands of
U.S. dollars

231
14,2152,457
151,223¥14,446$153,680

2015
2016

7. ‌Retirement andSeverance Benefits

The following tables set forth the changes in benefit obligation, fair value of plan assets and funded
status of the Group at March 31, 2013 and 2012.
Thousands of
U.S. dollars

Millions of yen

Benefit obligation at the end of year

2013

2012

2013

¥(41,402)¥(36,330)$(440,447)

Fair value of plan assets at the end of year

27,612

24,596

293,745

Funded status
Unrecognized actuarial loss

(13,790)
6,323(11,734)
4,489(146,702)
67,266

Accrued pension liability recognizedin the consolidated balance sheets¥ (7,467)¥ (7,245)$ (79,436)

Prepayment pension cost
Retirement and severance benefits

1,973(9,440)1,535(8,780)20,990(100,426)

Some domestic subsidiaries have adopted alternative treatment of the accounting standards for
retirement benefit for small business entities.

40

Severance and pension cost of the Group included the following components for the years ended
March 31, 2013 and 2012.
Thousands of
U.S. dollars

Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization:
Prior service cost
Actuarial loss
Loss on transfer of defined benefit pension
Other
Net periodic benefit cost

2013

2012

2013

¥ 1,118971(1,066)¥ 1,142984(1,069)$ 11,893
10,330(11,340)—982¥ 2,0052747¥ 1,806—
10,447$ 21,330214¥ 2,219215¥ 2,0212,276$ 23,606

Assumption used in the accounting for the defined benefit plans for the years ended March 31, 2013
and 2012, were as follows:
Method of attributing benefits to periods of service
Discount rateLong-term rate of return on fund assets
Amortization period for prior service cost:
The Company and its domestic subsidiaries
The foreign consolidated subsidiaries
Amortization period for actuarial loss

8. ‌Contingent
Liabilities

2013

2012

Straight-line basis
Mainly 1.0%
Mainly 3.5%

Straight-line basis
Mainly 2.0%
Mainly 3.5%

Mainly 1year
Mainly 10year
Mainly 10year

Mainly 1year
Mainly 10year
Mainly 10year

Contingent liabilities at March 31, 2013 and 2012, were as follows:2013

As a guarantor of indebtedness of:Affiliates

9. Leases

Thousands of
U.S. dollars

Millions of yen

2012¥1,082¥842

2013$11,511

The following pro forma amounts represent the acquisition costs, accumulated depreciation and net
book value of the leased assets under finance lease contracts, commencing on or before March 31,
2008 that do not transfer ownership to the lessee at March 31, 2013 and 2012, which would have beenreflected in the accompanying consolidated balance sheets if finance lease accounting had been
applied to the finance leases currently accounted for as operating leases:
Machinery and equipment
Thousands of
U.S. dollars

Millions of yen

2013

¥378
334
¥ 44

Acquisition costs
Accumulated depreciation
Net book value

41

2012

¥861
778
¥ 83

2013

$4,021
3,553$ 468

The Group leases certain machinery and equipment. Total lease payments under these leases were ¥38
million ($404 thousand) and ¥116 million for the years ended March 31, 2013 and 2012, respectively.
Obligations under non-cancelable operating leases as of March 31,2013 and 2012 were as follows:
Thousands of
U.S. dollars

Millions of yen

Due within one year
Due after one year

10. ‌Financial
Instruments

2013

2012

2013

¥1,231
2,857¥4,088¥1,3082,533¥3,841$13,096
30,394$43,490

1. Status of financial instruments(1) Policy for financial instruments	In light of plans for financing, the Group raises the funds it requires through bank loans and bonds
issuance.
		 The Group manages temporary fund surpluses through financial assets that have high levelsof safety.
		 The Group reduces the customer credit risk by having the internal policies for managing credit risk.
		 Long-term debt and bonds are taken out principally for the purpose of capital expenditure
and acquisitions.
		 The Group undertakes interest rate swap transactions as a hedging instrument for certain
long-term debt to reduce such risk and fix interest expense for debt bearing interest at variable rates.
		 The Group limit the use of derivatives to the volume of long-term debt and bonds and actual
requirements based on the established internal control rules, and do not engage in speculativetransactions.
(2) Types of financial instruments and related risk
	Trade receivables—notes receivables and accounts receivables - are exposed to credit risk inrelation to customers.
		 The Group holds securities and investments in securities, which are mainly issued by companies
who have business relationships with the Group, and these securities are exposed to the risk offluctuation in market prices.
		 Trade payables—notes payable and accounts payable — mostly have payment due dates within
one year.
		 Bank loans and bonds are taken out principally for the purpose of working capital, capital
expenditure and acquisitions, which are exposed to the liquidity risk and the interest-rate risk.
		 The forward exchange contract and the interest swap transaction are almost used for the hedge
as a type of derivative transactions.
(3) Risk management for financial instruments(a) Monitoring of credit risk (the risk that customers or counterparties may default)		In accordance with the internal policies for managing credit risk of the Group, the Group monitors
credit worthiness of their main customers periodically, and monitors due dates and outstandingbalances by customer.
			 To minimize the credit risk when entering into derivative transactions, counterparties arelimited to financial institutions with high ratings.
(b) Monitoring of market risks		Derivatives mainly include forward foreign currency contracts and interest rate swaps, which areused manage exposure to market risks from charges in foreign currency exchange rates ofreceivables and payables, and from changes in interest rates of bank loans.
			 Investments in securities, primarily the equity securities of corporations with which the Group
does business, are exposed to the risk of fluctuations in market price.

42			 The Group manages this risk by periodically examining market prices and the financial
condition of the issuing entities.
			 The Group executes and manages derivative transactions within the limits of establishedinternal rules and regulations, and reduces credit risk by limiting counterparties to highly
creditworthy financial institutions.
(c)	Monitoring of liquidity risk for financing (the risk that the Companies may not be able to meet its
obligations on the scheduled due dates)			 The Group manages the liquidity risk mainly through the cash-flow plans, which are preparedby financial department.
			 In order to achieve more efficient and flexible financing, the Group contracts line-of-credit
agreements with certain financial institutions.
(4) Supplementary explanation of items relating to the market value of financial instruments
	The Group calculates the fair value of financial instruments based on market prices, or by using
reasonable estimates when market prices are not available. These estimates include variable factors,
and are subject to fluctuation due to change in the underlying assumptions. The contract amounts ofderivatives are not an indicator of the market risk associated with derivative transactions.
2. Market value of financial instruments
Amounts recognized in the consolidated balance sheets, market values and the differences between
them on March 31, 2013 and 2012 are as shown below.
Moreover, items for which it is extremely difficult to determine market values are not included in thefollowing table (see (note 2)).
Millions of yen

2013
Book valueMarket value

Difference¥ 21,740¥ 21,740¥ —(2) Notes and accounts receivables, trade63,82063,820—(3) Securities and Investments in securities

22,29022,290—¥107,850¥107,850¥ —(38,398)(11,954)(38,398)(11,954)——(1) Cash and deposits

Total assets(1) Notes and accounts payables, trade(2) Short-term debt
(3) Long-term debt
Total liabilities(48,846)(49,451)(605)¥ (99,198)¥ (99,803)¥(605)

Millions of yen

2012Book valueMarket value

Difference¥ 16,921¥ 16,921¥ —(2) Notes and accounts receivables, trade61,57861,578—(3) Securities and Investments in securities

18,31318,313—¥ 96,812¥ 96,812¥ —(38,334)(12,956)(38,334)(12,956)——(1) Cash and deposits

Total assets(1) Notes and accounts payables, trade(2) Short-term debt
(3) Long-term debt
Total liabilities

43(48,651)(49,257)(606)¥(99,941)¥(100,547)¥(606)

Thousands of U.S. dollars

2013Book value$(1) Cash and deposits(2) Notes and accounts receivables, trade(3) Securities and Investments in securities
Total assets(1) Notes and accounts payables, trade(2) Short-term debt
(3) Long-term debt
Total liabilities

231,266
678,936

Market value$

Difference

231,266$

678,936

237,128

237,128$ 1,147,330$ 1,147,330(408,489)(127,170)(408,489)(127,170)

—
—
—

$

—
—
—

(519,638)(526,074)(6,436)$(1,055,297)$(1,061,734)$(6,436)

Note 1: ‌Methods to determine the estimated fair value of financial instruments and other matters related
to securities and derivative transactions
Assets(1) Cash and deposits and (2) Notes and accounts receivables, trade
Since these items are settled in a short period, their carrying value approximates fair value.
(3) Securities and investments in securities
	The fair value of equity securities is based on quoted market prices. The fair value of debt securities
is based on either quoted market prices or prices provided by the financial institutions making
markets in these securities.
		 For information on securities classified by holding purpose, please refer to Note 3. of the notes tothe consolidated financial statements.
Liabilities(1)	Notes and accounts payables, trade and (2) Short-term debt
Since these items are settled in a short period of time, their carrying value approximates fair value.
(3) Long-term debt
(Long-term loan)
	The market value of long-term loans payable is calculated by applying a discount rate to the total ofprincipal and interest. That discount rate is based on the assumed interest rate if a similar new loans
was entered into.
		 Because long-term loans payable with variable interest rates are based on the condition thatinterest rates are revised periodically, their market values are almost the same as their book values,
the relevant book values are used.
		 A specially treated interest rate swap is accounted for as an integral part of long-term loans
payable, or the subject of hedging, so that the fair value of the swap is stated by being included in
the fair value of Long-term loans payable.
(Bonds)	The quotation of the company bond that our company issues calculates the one based on themarket price, and the one without the market price is calculated by the present value that discounts
the principal and interest money total at the interest rate in which it tempers with the remaining
period and the credit risk of the company bond.
Derivative transactions
	For information on derivative transactions, please refer to Note 11. “Derivative transactions” of thenotes to the consolidated financial statements.

44

Note 2: Financial instruments for which it is extremely difficult to determine the fair value were as follows;
Thousands of
U.S. dollars

Millions of yen

2013

2013

2012
Book value

Investments in non-consolidated—subsidiaries and affiliates
Other securities
Unlisted equity securities
OthersBook value¥6,187¥5,422$65,819

3,259
65

3,260
70

34,670691

Because it is recognized that these do not have market values and that the market values are extremely
difficult to determine, they are not included in the chart above.
Note 3: ‌Planned redemption amounts after the balance sheet date for monetary assets and investment
securities with monetary assets and maturity dates
Millions of yen

2013
Within 1 year

Cash and deposits
Notes and accounts receivables, trade
Securities and Investments in securities
Other securities (Bonds)
Other securities (Others)
Total

2012
Over 1 year

Within 1 year

Over 1 year

¥21,739
63,820¥——¥16,92161,578¥—2,779¥88,338

1,074
1,866
¥2,94070
659¥79,228

1,108
2,672
¥3,780——Thousands of U.S. dollars

2013
Within 1 year

Cash and deposits
Notes and accounts receivables, trade
Securities and Investments in securities
Other securities (Bonds)
Other securities (Others)
Total

11. ‌Derivative
Transactions

Over 1 year

$231,266
678,936$———
29,564$939,766

11,426
19,851$31,277

There were no derivative transactions to which hedge accounting was not applied at March 31, 2013
and 2012.
Derivative transactions to which hedge accounting was applied at March 31, 2013 and 2012 wereas follows:
Millions of yen

2013

Interest swap contracts:
Objected by Long-term loans
Receive floating, pay fixed2012

Contract
amountsOver
1 yearMarketvalue

Contract
amountsOver
1 year¥8,700¥8,200¥(105)¥9,200¥8,700Thousands of U.S. dollars

2013

Interest swap contracts:
Objected by Long-term loans
Receive floating, pay fixedContract
amountsOver
1 yearMarketvalue$92,553$87,234 $(1,117)

Note: The market value is provided by financial institutions with which we made the contracts.

45

Market
value

¥(96)

12. Stock Options

1. The amount of expense appropriation and the accounting name during the years ended March 31, 2013
and 2012.
Equity deal expense (Included in “Selling, general and administrative expenses”) were ¥38 million ($404
thousand) and ¥35 million for the years ended March 31, 2013 and 2012.
2. The contents, scale, and change situation of Stock Options(1) The contents of Stock Options
June 2008 stock option

Company

Sanwa Holdings Corporation

Resolution dateJune 26, 2008

Grantee classification and the number

3 directors

Type and number of shares

Common stock of the Company: 76,000 shares

Date of grant
Exercise period of rights

July 15, 2008
For 30 years from grant date (from July 16, 2008 to July 15, 2038)

Company

Sanwa Holdings Corporation

Resolution dateJune 30, 2009

Grantee classification and the number

3 directors

Type and number of shares

Common stock of the Company: 82,000 shares

Date of grant
Exercise period of rights

July 15, 2009
For 30 years from grant date (from July 16, 2009 to July 15, 2039)

June 2009 stock option

June 2010 stock option

Company

Sanwa Holdings Corporation

Resolution dateJune 30, 2010

Grantee classification and the number

3 directors

Type and number of shares

Common stock of the Company: 99,000 shares

Date of grant
Exercise period of rights

July 15, 2010
For 30 years from grant date (from July 16, 2010 to July 15, 2040)

Company

Sanwa Holdings Corporation

Resolution dateJune 29, 2011

Grantee classification and the number

3 directors

Type and number of shares

Common stock of the Company: 102,000 shares

Date of grant
Exercise period of rights

July 14, 2011
For 30 years from grant date (from July 15, 2011 to July 14, 2041)

Company

Sanwa Holdings Corporation

Resolution dateJune 28, 2012

Grantee classification and the number

6 directors

Type and number of shares

Common stock of the Company: 156,000 shares

Date of grant
Exercise period of rights

July 13, 2012
For 30 years from grant date (from July 14, 2012 to July 15, 2042)

June 2011 stock option

June 2012 stock option

46

(2) Scale, and change situation of Stock Options(2)-1 Number of stock options
SharesJune 2008
stock option

June 2009
stock option

June 2010
stock option

June 2011
stock option

June 2012
stock option

Before vested
Beginning of period

—

—

—

146,000—

Granted

—

—

—

—

156,000

Forfeited

—

—

—

—

—

Vested———146,000—

Unvested

—

—

—

—

156,000

110,000

118,000

141,000

—

—

—

—

—

146,000—

Exercised

34,00036,00042,00044,000—

ExpiredExercisable—
76,000—82,000—99,000—102,000——

June 2011
stock option

June 2012
stock option

After vested
Beginning of period
Vested(2)-2 Unit value and exercise period for stock option rights
Yen
June 2008
stock option

June 2009
stock option

June 2010
stock option

1

1

1

1

1

315
301

315
263

315
250

315
243

—
252

June 2008
stock option

June 2009
stock option

June 2011
stock option

June 2012
stock option

Exercise price
Average share price at exercise
Fair value unit price (Date of grant)

U.S. dollars
June 2010
stock option

Exercise price

0.011

0.011

0.011

0.011

0.011

Average share price at exercise
Fair value unit price (Date of grant)

3.351
3.202

3.351
2.798

3.351
2.660

3.351
2.585

—
2.681

3. Assumptions used in estimation of the fair value of stock options above ware as follows:
June 2008
stock option

Method of estimation

June 2010
stock option

June 2011
stock option

June 2012
stock option

Black-Scholes Black-Scholes Black-Scholes Black-Scholes Black-Scholes
model
model
model
model
model

Volatility

26.6%

30.7%

31.4%

33.5%

30.0%

Expected remaining period

8 years

7 years

6 years

5 years

10 years¥5 per share
0.46%¥8 per share
0.41%¥8 per share
0.78%

Expected dividend
Risk-free interest rate

13. ‌Research andDevelopment
ExpensesJune 2009
stock option¥13 per share ¥10 per share
1.33%
0.94%

Research and development expenses included in selling, general and administrative expenses were¥2,147 million (US$ 22,840 thousand) and ¥2,073 million for the years ended March 31, 2013 and2012, respectively.
And so on, research and development expenses included in cost of sales were ¥293 million(US$3,117 thousand) and ¥383 million for the years ended March 31, 2013 and 2012, respectively.

47

14. Income Taxes

The Company and its domestic subsidiaries are subject to several taxes based on income, which in theaggregate resulted in statutory tax rate of approximately 38.0% and 39.8% for the years ended March 31,
2013 and 2012. Foreign subsidiaries are subject to income taxes of the countries in which they operate.
The effective rates for the years ended March 31, 2013 and 2012 differ from the Company’s
statutory tax rates for the following reasons:Statutory tax rate
Expenses not deductible for income tax purposes
Current operating losses of subsidiaries
Depreciation of goodwill
Effect of changes in corporate tax rates
Other
Effective tax rate

2013

2012

38.0%
1.3
0.1
1.0
—
4.7
45.1

39.8%
1.0
0.6
1.2
5.4
3.7
51.7

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets
and liabilities at March 31, 2013 and 2012 were as follows:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Allowance for bonuses
Retirement and severance benefits
Contribution benefit pension planTax loss carryforwards
Securities
Investment in affiliates securities
Net unrealized holding losses on securities
Other
Less valuation allowance
Total
Deferred tax liabilities:
Depreciation
Prepayment pension cost
Other
Total
Net deferred tax assets

2013

2012

2013

¥

768
4,513
372
957
645
76
864
2,876
11,071(651)¥10,420

¥

725
3,984
663
814
485
554
1,810
2,496
11,531(411)¥11,120

8,170
48,011
3,957
10,181
6,862
809
9,191
30,595
117,776(6,925)$110,851(4,312)(349)(585)¥ (5,246)¥ 5,174(3,883)(266)(314)¥ (4,463)¥ 6,657(45,872)(3,713)(6,223)$ (55,808)$ 55,043$

Net deferred tax assets at March 31, 2013 and 2012 were included in the consolidated balance sheet
as follows:
Thousands of
U.S. dollars

Millions of yen

Current assets
Investments and other assets
Current liabilities
Long-term liabilities
Net deferred tax assets

48

2013

2012

2013

¥ 4,185
4,961(30)(3,942)¥ 5,174¥ 3,287
6,757(110)(3,277)¥ 6,657$ 44,521
52,777(319)(41,936)$ 55,043

15. ‌Other Income(Expenses)

Other, net, for the years ended March 31, 2013 and 2012 consisted of the following:

2013

Gain (Loss) on sales and disposal of fixed assets
Gain (Loss) on sales of investments in securities
Loss on revaluation of derivatives
Write-down of investments in securities
Loss from restructuring cost of subsidiary
Acquisition cost
Penalties of alleged of violations of the Law
Retirement benefit expenses
Disaster loss
Other, net

16. ‌Other Comprehensive
Income (Loss)

Thousands of
U.S. dollars

Millions of yen¥ (49)
213
0
(74)
(869)
—
—
—
—
(89)
¥(868)

2012

2013

¥

$ (521)
2,266
0
(787)
(9,245)
—
—
—
—
(947)
$(9,234)

7
(28)
(77)
(329)
(851)
—
—
—
(31)
(22)
¥(1,331)

The reclassification adjustments and tax effects for components of other comprehensive income (loss)
for the year ended March 31, 2013 and 2012 are as follows:
Thousands of
U.S. dollars

Millions of yen

Unrealized holding gains on securities:
Amount arising during the year
Reclassification adjustments
for losses realized in net income
Before tax effectTax effectTotal unrealized holding gains on securities
Deferred losses on hedges:
Amount arising during the year
Reclassification adjustments
for losses realized in net income
Before tax effectTax effectTotal deferred losses on hedges
Foreign currency translation adjustments:
Amount arising during the year
Reclassification adjustments
for losses realized in net income
Total foreign currency translation adjustments
Share of other comprehensive incomeof non-consolidated subsidiaries andaffiliates accounted for using the equity method:Amount arising during the year
Total other comprehensive income (loss)

49

2013

2012

¥2,799

¥

2013

82

$ 29,777

(140)

310

(1,490)

2,659
(947)
1,712

392
(374)
18

28,287(10,074)
18,213

—

87

—

—

(264)

—

—
—
—

(177)
70
(107)

—
—
—

4,890

(1,828)52,021

—

4

—

4,890

(1,824)52,021

176¥6,778

5¥(1,908)

1,872$ 72,10617. ‌Segment
Information

Information about operations in report segments of the Group for the years ended March 31, 2013 and2012, was as follows:(1) Report Segments
Millions of yen

2013

Sales to customers
Inter-segment

Japan

North America

EuropeTotal¥161,536
8¥69,39140¥34,884
160¥265,811
208

Total sales

161,544

69,431

Segment income (loss)¥ 11,688¥ 3,486¥

Segment assets
Depreciation¥110,985
2,705

Investment in equity
method companies
Capital expenditures

Adjustment
cost

¥

102
(208)

Consolidated
Financial
Statement¥265,913—

35,044

266,019(106)

265,913705¥ 15,879¥ (1,705)¥ 14,174¥45,203
1,624¥25,748
1,046¥181,936
5,375¥59,835
53¥241,771
5,428

—

291

1,120

1,411

2,068

3,479

1,083

1,858

1,345

4,286

7

4,293

Adjustment
cost

Consolidated
Financial
Statement

Millions of yen

2012

Sales to customers
Inter-segment

Japan

North America

EuropeTotal¥146,45019¥63,88153¥37,794
99¥248,125
171

Total sales

89
(171)

¥248,214—

146,469

63,93437,893

248,296

(82)

6,138

¥ 2,865¥ 1,150¥ 10,153¥ (1,298)¥¥110,831
2,626¥39,456
1,548¥21,954
1,116¥172,2415,290¥54,33858¥226,579
5,348

—

258

644

902

2,072

2,974

773

1,154

933

2,860

37

2,897

Adjustment
cost

Consolidated
Financial
Statement

Segment income (loss)¥

Segment assets
Depreciation
Investment in equity
method companies
Capital expenditures¥

248,214
8,855

Thousands of U.S. dollars

2013

Sales to customers
Inter-segment

Japan

North America

EuropeTotal$1,718,469
85$738,202
426$371,106
1,702$2,827,777
2,213

Total sales

1,718,554

738,628

Segment income (loss)$ 124,340$ 37,085$

Segment assets
Depreciation$1,180,691
28,777

Investment in equity
method companies
Capital expenditures$

1,085 $2,828,862(2,213)—372,8082,829,990

7,500$ 168,925$ (18,138) $ 150,787(1,128)2,828,862$480,883
17,277$273,915
11,128$1,935,489
57,182$636,544
564$2,572,033
57,746—

3,096

11,91515,011

22,00037,011

11,521

19,766

14,30945,59674

45,670(2) Related informationa) Information on product and each service
Millions of yen

2013
Commercial¥175,030

Sales to customers

50

Residential¥60,900

Maintenance/Home
improvement¥26,775

Other¥3,208

Consolidated¥265,913

Millions of yen

2012
Commercial

Sales to customers¥159,871

Maintenance/Home
improvement

Residential¥62,800

Other¥22,791¥2,752

Consolidated¥248,214

Thousands of U.S. dollars

2013

Sales to customers

Commercial

Residential

Maintenance/Home
improvement$1,862,022$647,872$284,840

Other

Consolidated$34,128$2,828,862b) Information on each region
Millions of yen

2013
Japan

¥30,136

Fixed assets

North America

Europe¥11,398

Total¥8,886¥50,420

Millions of yen

2012
Japan

Fixed assets¥30,664

North America¥11,171

EuropeTotal¥7,709¥49,544

Thousands of U.S. dollars

2013

Fixed assets

18. ‌Subsequent
EventsJapan

North America$320,596$121,255

Europe$94,532

Total$536,383(Year-end cash dividends)
The following distribution of retained earnings of the Company, which has not been reflected in theaccompanying consolidated financial statements for the year ended March 31, 2013, was approved at
the general shareholders’ meeting held on June 26, 2013:

Year-end cash dividends (¥5.0 per share)

51

Millions of yen

Thousands of
U.S. dollars¥1,198$12,745

Independent Auditors’ Report52Consolidated Subsidiaries and Affiliated Companies
As of March 31, 2013

Domestic

SANWA SHUTTER CORPORATIONSANWA EXTERIOR NIIGATA PLANT CO., LTD.

The core company of the Sanwa Group.
No.1 supplier of rolling steel shutters, overhead doors,
steel hinge doors and maintenance and repair services in Japan.
• Address: Shingashi 2-3-5, Itabashi-ku, Tokyo, 175-0081, Japan• TEL: +81-3-5998-9111

Manufactures various exterior products.
• Address: Oigashima 1397-1, Tsubameshi, Niigata,959-0113, Japan• TEL: +81-256-98-5551

SHOWA FRONT CO., LTD.

Manufactures various partitions.
• Address: Kamagata 3128, Ranzan-machi, Hiki-gun, Saitama,355-0225, Japan• TEL: +81-493-62-6671

VENIX CO., LTD.

A leading manufacturer of facades for stores andother building materials.
• Address: Uchikanda 1-13-7, Chiyoda-ku, Tokyo, 101-0047, Japan• TEL: +81-3-3293-6737

SHOWA KENSAN CO., LTD.

OKINAWA SANWA SHUTTER CORPORATION

Manufactures automatic doors for store fronts.
• Address: Nakano 1453, Oura-machi, Oura-gun, Gunma,370-0603, Japan• TEL: +81-276-88-2121

Manufactures and sells steel building materials such as shutters anddoors, and store building materials.
• Address: Taira 84-1, Tomigusukushi, Okinawa, 901-0212, Japan• TEL: +81-98-840-5538

TAJIMA METALWORK CO., LTD.

SANWA TAJIMA CORPORATION

Top brand designing and marketing company of post boxes.
• Address: Higashi-Ikebukuro 4-41-24, Toshima-ku, Tokyo,170-0013, Japan• TEL: +81-3-5396-7611

Manufactures and sells various kinds of stainless steelbuilding products.
• Address: Ikebukuro 2-77-5, Toshima-ku, Tokyo, 171-0014, Japan• TEL: +81-3-5954-5880

Overseas

OVERHEAD DOOR CORPORATIONSANWA SHUTTER (H.K.) LTD.

A leading U.S. manufacturer of garage doors and shutters.
• Address: 2501 South State Highway 121, Suite 200 Lewisville,
TX 75067, U.S.A.
• TEL: +1-469-549-7110

Manufactures and sells shutters and doors.
• Address: Room 1901, 19/F Emperor Group Centre, No. 288
Hennessy Road, Wanchai, Hong Kong, China• TEL: +852-2833-6619

NOVOFERM GROUP (Novoferm GmbH)

AN-HO METAL INDUSTRIAL CO., LTD.

One of the leading manufacturers of shutters and doors in Europe.
• Address: Isselburger Strasse 31, 46459 Rees, Germany• TEL: +49-2850-910-624

Manufactures and sells shutters and doors.
• Address: 7Fl, No. 27, Section 1, Chungshan North Road,
Taipei, Taiwan• TEL: +886-2-2521-0013

SHANGHAI BAOSTEEL-SANWA DOOR CO., LTD.

VINA-SANWA COMPANY LIABILITY LTD.

Manufactures and sells shutters and overhead doors.
• Address: 988 Yueluo Road, Baoshan, Shanghai, China• TEL: +86-21-5692-5550

Manufactures and sells shutters and doors.
• Address: High-Tech Industrial Zone, Hoa Lac High-Tech Park,
Thach That, Hanoi, Vietnam• TEL: +84-4-3772-8301

NOVOFERM (SHANGHAI) CO., LTD.
Manufactures and sells doors.
• Address: No.118 Mingye Road, Shenshan Industrial Area,
Songjiang, Shanghai, China• TEL: +86-21-5779-3335

SUN METAL CO., LTD.
Manufactures and sells shutters and doors.
• Address: 180-184 METRO Building 4F, Rajawongse Road,
Bangkok 10100, Thailand• TEL: +66-2-222-5190

SANWA HOLDINGS CORPORATION,
SHANGHAI REPRESENTATIVE OFFICE

PT. SANWAMAS METAL INDUSTRY• Address: Room 1405, Chunshenjiang Building,
400 Zhejiang Road (MID), Shanghai, China• TEL: +86-21-3318-0127

Manufactures and sells shutters.
• Address: Jl. Let. Jend. S. Parman kav. 32-34,
Jakarta 11480, Indonesia• TEL: +62-21-548-2308

SANWA SHUTTER DESIGN (SHANGHAI) CORPORATION• Address: Room 7AF, Xinda Building,1399 Beijing West Road, Shanghai, China• TEL: +86-21-3360-6778

53

Global Network

24 18

JAPAN

ASIA

20

1

19
21

17
11

57

22
3

2

13
14
5 10
16 15
4

6

9
12

7

23

8

north america

EUROPE

33
34

39

31
30
29
27

28

53

43
51 42 44
52
46

26
25
50

40
36

48

35

56

45
49
54

41
55

32
37

38

54

Group Plant Locations
Company

Plant NameCountry

SANWA SHUTTER, JAPANESE SUBSIDIARIES & AFFILIATES
Sanwa Shutter Corporation

1 Sapporo

2 Ashikaga
3 Ota
4 Shizuoka
5 Gifu6 Hiroshima
7 Kyushu

Okinawa Sanwa Shutter Corporation
Sanwa Tajima Corporation

8 Okinawa
9 SaitamaJapan

10 Nagoya

Sanwa Exterior Niigata Plant Co., Ltd.
Venix Co., Ltd.
Showa Kensan Co., Ltd.
Yoshida Seisakusyo Co., Ltd.
Suzuka Engineering Co., Ltd.
Metalwork Kansai Co., Ltd.
Hayashi Industries Co., Ltd.

11 Niigata
12 Ranzan
13 Gunma
14 Saku
15 Yokkaichi
16 Sannan
17 Niigata

Products

Rolling Shutters, Overhead Sectional Doors, Doors & Door Frames
Rolling Shutters, Overhead Sectional Doors
Doors & Door FramesWindow Shutters, Doors & Door Frames
Rolling Shutters, Overhead Sectional Doors
Rolling Shutters, Doors & Door Frames
Rolling Shutters
Rolling Shutters, Doors & Door Frames
Stainless Steel Fittings, Automatic Revolving Doors
Stainless Steel Fittings
Exterior Items
Aluminum Partitions
Automatic Doors
Stainless Steel Fittings
Rubber Mixing Plants
Stainless Steel Fittings
Doors & Door Frames

AFFILIATED COMPANIES (ASIA)
Shanghai BaoSteel-Sanwa Door Co., Ltd.
Sanwa Shutter (H.K.) Ltd.
An-Ho Metal Industrial Co., Ltd.
Vina-Sanwa Company Liability Ltd.
Sun Metal Co., Ltd.
Pt. Sanwamas Metal Industry
Novoferm (Shanghai) Co., Ltd.

ODC (U.S.A.)
Access Systems Division

18 Shanghai
19 Hong Kong
20 Hsinchu
21 Hanoi
22 Korat
23 Bekasi
24 Shanghai

China
TaiwanVietnamThailandIndonesia
China

25 Lewistown
26 Williamsport
27 Grand Island
28 Mt. Hope
29 Dalton
30 Trail

U.S.A.

31 Conneaut
32 Pensacola
33 Centralia
34 Portland
35 Reims

Genie

36 Baltic
37 Matamoros

Horton38 Corpus Christi
37 Matamoros
39 Telford

TODCO

40 Marion
41 Tecate

NOVOFERM (EUROPE)
Novoferm (NF) GmbHFranceU.S.A.
MexicoU.S.A.
MexicoU.K.
U.S.A.
Mexico42 Haldern
43 Werth
44 Dortmund

NF Riexinger Tüenwerke GmbHNF Siebau GmbHNF Tormatic GmbHNF France S.A.S.

45 Brackenheim

Germany

46 Buschhütten
47 Dortmund
48 Machecoul
49 BavilliersFrance50 Melun

NF Nederland B.V.

51 Waardenburg
52 Roermond

Novoferm UK Limited
NF Schievano s.r.l.
NF Alsal S.A.
Novoferm Door Sp. zo.oDong Bang Novoferm Inc.

53 Luton
54 Padova
55 Cantabria
56 Wykroty
57 Seoul

Netherlands
U.K.
Italy
Spain
PolandSouth Korea

55

Overhead Sectional Doors, Rolling Shutters, Sheet Shutters
Rolling Shutters, Doors & Door Frames
Doors & Door Frames
Doors & Door Frames, Rolling Shutters, Sheet Shutters
Rolling Shutters, Doors & Door Frames
Rolling Shutters
Hinge Doors

Rolling Doors
Residential Garage Doors, Sectional Steel Doors
Residential Garage Doors, Sectional Steel Doors
Residential Garage Doors, Sectional Steel Doors, Hardware Parts
Rolling Doors
Sheet DoorsWindow Frames, Premium Doors
Residential Garage Doors, Sectional Steel Doors, Hardware Parts
Residential Wood Doors
Residential Garage Doors, Sectional Steel Doors
Residential Garage Door Assembly
Garage Door Openers
Garage Door Opener Assembly
Automatic Entrance Systems
Automatic Entrance Systems
Automatic Entrance Systems
Truck & Trailer Doors
Truck & Trailer Doors

Doors & Door Frames
Residential Garage Doors, Door Frames
Residential Garage Doors, Sectional Door Panels
Fireproof Doors & Door Frames, Industrial DoorsOther DoorsGarage Door Operators
Residential Garage Doors
Residential Garage Doors
Fireproof Doors & Door Frames
Industrial Doors
Industrial Doors
Residential Garage Doors
Doors & Door Frames
Doors & Door Frames, Residential Garage Doors, Industrial Doors
Tubular Frame Doors
Doors & Door Frames

History of Sanwa Holdings

1956

Apr.

 stablished Sanwa Shutter Manufacturing Co., Ltd. (President: Manji Takayama), a predecessor ofE
this company, in Amagasaki, Hyogo Prefecture.

1963

Apr.

Merged three group companies and established Sanwa Shutter Corporation. Relocated headquarters to Tokyo.

1970

Jul.

Listed on the First Section of the Tokyo Stock Exchange.

1974

Aug. Entered into technical tie-up with Overhead Door Corp. (U.S.A.).
Oct.

Relocated the headquarters to Shinjuku, Tokyo.

1981

May

Toshitaka Takayama becomes President and Manji Takayama Corporate Advisor.

1983

Mar.

Deployed nationwide 24-hour service.

1986

Oct.

Established Sanwa Shutter (HK) Ltd. in Hong Kong.

1988

Sep. Established An-Ho Metal Industrial Co., Ltd. in Taiwan.

1992

Oct.

Established Sun Metal Co., Ltd. in Thailand.

1996

Jun.

 stablished Sanwa USA Inc. and acquired Overhead Door Corp. Secured the lion’s share ofE
the U.S. garage door and shutter markets.

Nov. Established PT. Sanwamas Metal Industry in Indonesia.
2003

Oct.

 cquired Novoferm, Europe’s second-largest manufacturer of doors and shutters. With this acquisition,A
Sanwa Shutter established a presence in Europe, as well as Japan and the United States.

2004

Jan.

Established Sanwa Shutter Design (Shanghai) Corporation in Shanghai.

Apr.

 stablished an internal office on corporate social responsibilities to oversee risk management, legal compliance andEenvironment-friendly policies.

2005

Sep. E
 ntered into comprehensive business alliance with Hochiki, a leading fire detection anddisaster-prevention equipment company in Japan.

2006

Apr.

Sanwa Shutter celebrated its 50th anniversary.
 stablished Shanghai BaoSteel-Sanwa Door Co., Ltd., a joint venture with BaoSteel Development Co., Ltd.,E
a subsidiary of BaoSteel, in Shanghai to manufacture and sell overhead doors, rolling shutters and sheet shutters.
Completion of quadruple core structure: Japan, U.S.A., Europe and Asia (China).

2007

Oct.

The Sanwa Group adopts holding company system.
Sanwa Shutter Corporation changed its trade name to “Sanwa Holdings Corporation,” andthe operating company succeeded the trade name “Sanwa Shutter Corporation.” anwa Holdings agreed to establish a joint-venture company, Vina-Sanwa Company Liability Ltd.,S
with the Vietnamese construction and trading company Vinaconex Corporation.

2008

Jan.

2009

Dec. Overhead Door Corporation, our consolidated subsidiary, acquired the door businesses of Wayne Dalton Corporation.

2010

Feb.

Sanwa Shutter Corporation concluded a direct sales agreement for the Japanese market with
EFAFLEX Tor-und Sicherheitssysteme GmbH & Co. KG of Germany.

2011

Jan.

Overhead Door Corporation acquired an automatic door sales, installation, and maintenance business from
Automatic Door Enterprises, Inc., an automatic door distributor in the U.S.

Oct.

The partition sales business of subsidiary Venix Co., Ltd. and the automatic door sales business of subsidiary Showa Kensan Co., Ltd.
were integrated into Sanwa Shutter Corporation, and the two subsidiaries become specialized manufacturing operations.

Dec. Overhead Door Corporation acquired Creative Door Services Ltd., a leader in the door business in Western Canada, andwhich became a new Canadian subsidiary of ODC.
2012

Jan.

Sanwa Shutter Corporation announced that it concluded an OEM contract with LIXIL Corporation to supply some types oflightweight shutters and lightweight doors from March 2012.

Aug. Showa Front Co., Ltd. acquired Ace Co., Ltd., a front sash manufacturer and seller.

56

A new vision
to realize our potential for global
industry leadership

Corporate Data
As of March 31, 2013

HEAD OFFICE:

PRINCIPAL SHAREHOLDERS:

Shinjuku Mitsui Building, 52F

Percentage of voting rights (%)

Nishi-Shinjuku 2-1-1, Shinjuku-ku,

ESTABLISHED:

April 10, 1956

CAPITAL (PAID-IN):¥38,413 million

EMPLOYEES:

Consolidated: 8,387

STOCK LISTINGS:Tokyo Stock Exchange

Japan Trustee Services Bank, Ltd. (Trust Account)
8.44
The Master Trust Bank of Japan, Ltd. (Trust Account)
7.58
Sumitomo Mitsui Banking Corporation
4.71
Japan Trustee Services Bank, Ltd. (Trust Account 9)
4.22
The Dai-ichi Life Insurance Company, Limited
3.37
Nippon Life Insurance Company
3.30
Aioi Nissay Dowa Insurance Co., Ltd.
2.95
Nisshin Steel Co., Ltd.
2.90
The Chase Manhattan Bank, N.A. London Secs Lending Omnibus Account 2.76
Mitsubishi UFJ Trust and Banking Corporation
1.93

TRANSFER AGENT:

Mitsubishi UFJ Trust and Banking Corporation

TREND OF STOCK PRICE:Tokyo, 163-0478, Japan
Telephone: +81-3-3346-3019
Facsimile: +81-3-3346-3177

ProfileCorporate Agency Department
April 1, 2005–March 31, 2006
April 1, 2006–March 31, 2007
April 1, 2007–March 31, 2008
April 1, 2008–March 31, 2009
April 1, 2009–March 31, 2010
April 1, 2010–March 31, 2011
April 1, 2011–March 31, 2012
April 1, 2012–March 31, 2013

Higashisuna 7-10-11 Koto-ku,

The Sanwa Group, headed by Sanwa Holdings Corporation, is a global
corporate group composed of 100 companies, including 79 subsidiaries

Tokyo, 137-8081, JapanCOMMON STOCK:

Authorized: 550,000,000 shares
Issued: 257,920,497 sharesand 20 affiliated companies, as of March 31, 2013. The Group has four

Number of shareholders: 11,590

major fields of business—commercial building materials, residential

High

Low

¥813
¥800
¥763
¥462
¥357
¥367
¥333
¥492

¥559
¥582
¥396
¥223
¥218
¥215
¥222
¥282

housing materials, maintenance service and home improvement, andConvenienceother businesses—and provides a wide range of steel construction
materials for commercial and residential construction, including shutters,

MONTHLY STOCK DATA:

Monthly stock price range(Yen)

Nikkei Stock Average

(Yen)

1,000

25,000800

20,000600

15,000400

10,000200

5,000

doors and other units.
In April 2013, we launched “Sanwa Global Vision 2020” andSafetySecurity

initiated a new mid-term management plan “The First Three Year Plan”(April 2013–March 2016). The aim of the new vision is to establish the
Sanwa Group as a “Global Major Player” and a leading global brandin the access systems industry. We are strengthening production andmarketing synergies across our four key markets, Japan, the UnitedStates, Europe and Asia, and venturing into new markets, such as theenvironmental field, seeking to capture new market opportunities anddrive our sustained growth.

0

Apr. ’07

Jan. ’08

Jan. ’09

Jan. ’10

Jan. ’11

Jan. ’12

Jan. ’13

Jan. ’11

Jan. ’12

Jan. ’13

Monthly trading volume(Thousands of shares)

40,000Contents

35,0002	Our Group		
18	North America

4 Consolidated Financial Highlights		
20	Europe

6 To Our Shareholders		
22 Asia

9 The First Three -Year Plan

23 CSR Activities

15 Business Overview

26 Corporate Governance		
16 Japan

29 Financial Information

30,00025,00020,00015,00010,0005,000
0Apr. ’07

Jan. ’08

Jan. ’09

Jan. ’10

57

0Sanwa Holdings Corporation

Public Relations Section
Nishi-Shinjuku 2-1-1, Shinjuku-ku,
Tokyo 163-0478, Japan
Tel : +81-3-3346-3331
Fax : +81-3-3346-3177
http://www.sanwa-hldgs.co.jp
E-mail: sya01@sip.sanwa-ss.co.jp

Annual Report 2013

Sanwa Holdings Corporation

Moving Toward Leadershipas a Global Player
SANWA HOLDINGS CORPORATION

Annual Report 2013
For the year ended March 31, 2013

Printed in Japan