Vol. 2, Tab 11 - LECIP Inc. - Statements and

Transcription

The MBTA specification currently requires that the primary suppliers of subsystems
delineated in Tab 1.1 to have the following information included in a Bidder’s Proposal. We
request that you provide this information to us so that it can be incorporated into our
submittal. As noted in our cover letter, we are requesting clarification from MBTA
regarding the need for this material. We will advise you of their response, but we must
currently proceed as if it will be required. We request your return of this information by
January 31, 2014.
1.
Attach relevant Certificate of Good Standing from the Secretary of State of the
Commonwealth of Massachusetts.
2.
Provide the names and telephone numbers of all business owners, shareholders if
not a publicly held corporation, and/or members if a limited liability company.
3.
Provide the names, title and telephone numbers of all officers.
LECIP: Not Applicable – LECIP Inc. is incorporated in Illinois.
LECIP Holdings Corporation
+81-58-324-3121
Kazuo Ueno
CEO
312-626-2525
Fumitoshi Nakamura
CFO
312-626-2525
Chung Chung Tam
Toyoji Sugisawa
President & COO
Secretary
312-626-2525
312-626-2525
4.
Has the business or an owner or shareholder of the business ever had a prior
contractual relationship with the MBTA? If yes, please describe relationship.
5.
Has the business or an owner or shareholder of the business ever been in default of
any obligations under a contract with the MBTA, any other Massachusetts state
agency or any federal agency? If yes, please describe the circumstances. Please
indicate whether it resulted in a termination for cause.
No.
No.
6.
Have any of the business owners, shareholders, or officers ever been convicted of
felony violations of Federal, state or local laws? If yes, please describe the
circumstances.
No.
7.
Are there any pending recent law suits against the business or any of its owners or
shareholders? If yes, please describe the circumstances.
8.
Provide the name, address, account number, contact person and telephone number
of the insurance agent responsible for procuring insurance required by the
Solicitation Documents.
9.
No.
Secure Futures
1622 Willow Road, Suite 111, Northfield, IL 60093
Auto: 35UECJE7438
Pack: 355BAPJ4952
Workers Comp: 35WECVY0168
Contact person: Diane Klimek
Telephone Number: 847-999-9906
Provide the name, address, contact person and telephone of three business credit
references, including but not limited to your primary banking institution.
Vitaltech
850 W. Jackson, Suite 575, Chicago, IL 60607
Contact Person: Micheal Berk
Telephone: 312-533-4900
Bank of Tokyo –Mitsubishi UFJ
227 WE Monroe St, Chicago, Il 60606
Contact Person: Natsuko Dunn
Telephone: 312-696-4690
Northstar Metal Products, Inc.
591 Mitchell Road, Glendale Heights, IL 60139
Contact Person: Jeffery True
Telephone: 630-446-7800
10. Has the business or any of the business’s owners or shareholders ever filed for
bankruptcy or invoked insolvency proceedings under state law?
No
11. Provide the last three (3) years of audited financial statements, or reasonable
equivalent of the Offeror. If the Offeror is a joint venture or other combination of
business entities, provide the last three (3) years audited financial statements for
each entity.
Please see attached Financial Statement from LECIP Holdings Corporation.
12. Provide the business’s current code of business ethics or equivalent.
Please see LECIP Inc. Code of Ethics document.
13. Provide the responses to Questions Nos. 1 through 12 for all proposed suppliers of
major subsystems identified in response to Tab I.1 - Technical Approach.
N/A
LECIP HOLDINGS CORPORATION
and Consolidated Subsidiaries
Consolidated Financial Statements
for the Years Ended March 31, 2011 and 2010
and Independent Auditors’ Report
LECIP HOLDINGS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2011 AND 2010
Thousands of Yen
2011
2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Notes and accounts receivable:
Trade notes and accounts
Non-consolidated subsidiaries
Other
Allowance for doubtful accounts
¥ 883,347
70,000
¥ 524,046
70,000
Thousands of
U.S. Dollars
(Note 1)
2011
$
10,643
843
4,391,926
7,317
41,406
(1,900)
4,438,749
1,383,312
102,874
40,505
6,918,787
5,723,193
51,286
(2,630)
5,771,849
1,332,027
219,404
69,717
7,987,043
52,915
88
499
(23)
53,479
16,666
1,239
489
83,359
Land
Construction in progress
Net property, plant and equipment
3,042,417
4,267,694
7,310,111
(5,855,224)
1,454,887
120,186
1,307
1,576,380
3,192,715
4,147,709
7,340,424
(5,731,523)
1,608,901
130,957
277
1,740,135
36,655
51,418
88,073
(70,545)
17,528
1,448
16
18,992
INVESTMENTS AND OTHER ASSETS:
Investment securities (Note 3)
Investments in non-consolidated subsidiaries
Deferred tax assets (Note 10)
Other assets (Notes 6)
Total investments and other assets
238,958
207,245
400,334
356,683
1,203,220
223,597
108,845
255,992
206,168
794,602
2,879
2,497
4,823
4,298
14,497
¥ 9,698,387
¥ 10,521,780
$ 116,848
Inventories (Note 4)
Prepaid expenses and other current assets
Total current assets
PROPERTY, PLANT AND EQUIPMENT (Note 7):
Buildings and structures
Machinery and equipment
Accumulated depreciation
TOTAL
(Continued)
2
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2011 AND 2010
Thousands of Yen
2011
2010
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings (Note 7)
Current portion of long-term debt (Note 7)
Notes and accounts payable:
Other
Accrued expenses
Income taxes payable
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:
Long-term debt (Note 7)
Liability for employees' retirement benefits (Note 8)
Other long-term liabilities
Total long-term liabilities
EQUITY (Note 9):
Common stock:
Authorized - 22,000,000 thousand shares
Issued - 6,399,100 thousand shares
in 2011 and 2010
Capital surplus
Retained earnings
Treasury stock - at cost: 8,797 shares in 2011 and 8,685 shares in 2010
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Total
Total equity
TOTAL
¥
265,101
¥
660,000
176,228
Thousands of
U.S. Dollars
(Note 1)
2011
¥
3,194
2,145,398
489,658
2,635,056
359,870
177,042
48,270
3,485,339
2,549,273
347,635
2,896,908
458,993
56,616
75,518
4,324,263
25,848
5,900
31,748
4,336
2,133
581
41,992
707,089
14,120
216,009
937,218
651,594
11,310
245,581
908,485
8,519
170
2,603
11,292
735,645
719,407
3,838,438
(14,104)
735,645
719,407
3,887,402
(14,030)
8,863
8,668
46,246
(170)
37,036
(40,592)
(3,556)
33,308
(72,700)
(39,392)
446
(489)
(43)
5,275,830
¥ 9,698,387
5,289,032
¥ 10,521,780
63,564
$ 116,848
See notes to consolidated financial statements.
(Concluded)
3
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED MARCH 31, 2011 AND 2010
Thousands of Yen
2011
2010
NET SALES
COST OF SALES (Note 11)
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 11)
Operating income
Thousands of
U.S. Dollars
(Note 1)
2011
¥ 12,575,652
10,087,192
2,488,460
¥ 13,633,296
10,905,713
2,727,583
$ 151,514
121,533
29,981
2,348,502
139,958
2,661,767
65,816
28,295
1,686
OTHER INCOME (EXPENSES):
Interest and dividend income
Interest expense
Grants received
Gain on sales and disposals of long-lived asses, net
Refunded import duty
Gain on sales of scraps
Foreign exchange loss, net
Prior year adjustment
Write-down of investment securities
Impairment loss of long-lived assets
Special retirement payments
Compensation income
Other-net
Other income (expenses) - net
4,526
(13,879)
3,835
45,290
6,662
10,353
(7,270)
(59)
37,981
15,932
103,371
4,526
(22,380)
18,954
1,912
3,085
(10,016)
31,440
(7,862)
(19,619)
(29,757)
3,800
6,538
(19,379)
55
(167)
46
546
80
125
(88)
(1)
458
192
1,246
NET INCOME BEFORE MINORITY INTERESTS
243,329
46,437
2,932
INCOME BEFORE INCOME TAXES
243,329
46,437
2,932
INCOME TAXES (Note 10):
Current
Deferred
Total income taxes
204,292
(7,856)
196,436
58,765
(54,163)
4,602
2,461
(94)
2,367
NET INCOME
¥ 46,893
¥ 41,835
Yen
PER SHARE OF COMMON STOCK (Notes 2.s and 16):
Basic net income
Cash dividends applicable to the year
$ 565
U.S. Dollars
¥ 7.34
12.50
¥ 6.55
15.00
4
$ 0.08
0.15
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED MARCH 31, 2011
Thousands
of
2011
Thousands of
U.S. Dollars
(Note 1)
2011
¥ 46,893
$ 565
OTHER COMPREHENSIVE INCOME (Note 15):
Total other comprehensive income
COMPREHENSIVE INCOME (Note 15)
3,728
32,108
35,836
¥ 82,729
45
387
432
¥ 997
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO (Note 15):
Owners of the parent company
Minority interests
¥ 82,729
-
¥ 997
-
5
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
YEARS ENDED MARCH 31, 2011AND 2010
Shares
BALANCE AT MARCH 31, 2009
Net income
Cash dividends, ￥17 per share
Net changes in the year
Net income
Cash dividends, ￥15 per share
Purchase of treasury stock
Net income
Cash dividends, ￥0.18 per share
Number of
Common Stock
Outstanding
6,390,415
6,390,415
(112)
6,390,303
Common
Stock
¥
735,645
735,645
¥
735,645
Common
Stock
$ 8,863
$ 8,863
¥
¥
Capital
Surplus
719,407
719,407
719,407
Capital
Surplus
$ 8,668
$ 8,668
¥
¥
Retained
Earnings
3,954,204
41,835
(108,637)
3,887,402
46,893
(95,857)
3,838,438
Retained
Earnings
$ 46,836
565
(1,155)
$ 46,246
6
Treasury
Stock
¥
(14,030)
(14,030)
(74)
¥
(14,104)
Thousands of Yen
Unrealized Gain on
Foreign Currency
Available-for-sale
Translation
Securities
Adjustments
¥
14,238
¥
(70,343)
19,070
(2,357)
33,308
(72,700)
3,728
32,108
¥
37,036
¥
(40,592)
Thousands of U.S. Dollars (Note 1)
Unrealized Gain on
Treasury
Available-for-sale
Stock
Securities
$ (169)
$ 401
(1)
45
$ (170)
$ 446
Foreign Currency
Translation
Adjustments
$ (876)
387
$ (489)
¥
¥
-
Total
Equity
5,339,121
41,835
(108,637)
16,713
5,289,032
46,893
(95,857)
(74)
35,836
5,275,830
Total
$ 63,723
565
(1,155)
(1)
432
$ 63,564
CONSOLIDATED STATEMENTS OF CASH FLOWS
Thousands of Yen
2011
2010
OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Income taxes - paid
Depreciation and amortization
Gain on sales and disposals of long-lived assets, net
Impairment loss on long-lived assets
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable
(Increase) decrease in inventories
(Decrease) increase in notes and accounts payable - trade
Increase (decrease) in liability for retirement benefits
Other - net
Total adjustments
Net cash provided by (used in) operating activities
Thousands of
U.S. Dollars (Note 1)
2011
¥ 243,329
¥ 46,437
(84,310)
308,977
(45,290)
-
(372,668)
353,721
(1,912)
19,619
(1,016)
3,723
(546)
-
1,215,461
(52,601)
(225,083)
2,809
(61,685)
1,058,278
1,301,607
(709,080)
231,945
101,094
(9,297)
(186,364)
(572,942)
(526,505)
14,644
(634)
(2,712)
34
(743)
12,750
15,682
INVESTING ACTIVITIES:
Purchases of investment securities
Proceeds from sales of investment securities
Acquisition of shares of a non-consolidated subsidiary
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Other - net
Net cash used in investing activities
(9,231)
(98,400)
(144,402)
89,464
(98,364)
(260,933)
(24,967)
11,380
(45,245)
(197,329)
27,035
(10,204)
(239,330)
(111)
(1,186)
(1,740)
1,078
(1,185)
(3,144)
FINANCING ACTIVITIES:
(Decrease) increase in short-term borrowings - net
Proceeds from long-term debt
Repayment of long-term debt
Cash dividends
Other-net
Net cash (used in) provided by financing activities
(660,000)
300,000
(213,510)
(95,714)
(14,333)
(683,557)
436,140
280,000
(164,392)
(108,300)
(8,763)
434,685
(7,952)
3,614
(2,572)
(1,153)
(173)
(8,236)
2,184
(8,757)
27
359,301
524,046
¥ 883,347
(339,907)
863,953
¥ 524,046
4,329
6,314
$ 10,643
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
$ 2,932
See notes to consolidated financial statements
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the
provisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in conformity with accounting principles generally accepted in Japan
(“Japanese GAAP”), which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
Under Japanese GAAP, a consolidated statement of comprehensive income is required from the
fiscal year ended March 31, 2011 and has been presented herein. Accordingly, accumulated other
comprehensive income is presented in the consolidated balance sheet and the consolidated
statement of changes in equity. Information with respect to other comprehensive income for the
year ended March 31, 2010 is disclosed in Note 15. In addition, “net income before minority
interests” is disclosed in the consolidated statement of income from the year ended March 31, 2011.
In preparing these consolidated financial statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements issued domestically in order to present
them in a form which is more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2010 financial statements to conform to the classifications
used in 2011.
The consolidated financial statements are stated in Japanese yen, the currency of the country in
which LECIP HOLDINGS CORPORATION (the “Company”) is incorporated and operates. The
translations of Japanese yen amounts into U.S. dollar amounts are included solely for the
convenience of readers outside Japan and have been made at the rate of ¥ 83 to $ 1, the
approximate rate of exchange at March 31, 2011. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Consolidation — The consolidated financial statements as of March 31, 2011 include the
accounts of the Company and its 5 significant (3 in 2010) subsidiaries (together, the “Group”).
Under the control or influence concept, those companies in which the Company, directly or
indirectly, is able to exercise control over operations are fully consolidated.
Investments in remaining non-consolidated subsidiaries are stated at cost. If the equity
method of accounting had been applied to the investments in these companies, the effect on the
accompanying consolidated financial statements would not be material.
All significant intercompany balances and transactions have been eliminated in consolidation.
All material unrealized profit included in assets resulting from transactions within the Group is
eliminated.
b. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements — In May 2006, the Accounting Standards Board of Japan (the
“ASBJ”) issued ASBJ Practical Issues Task Force (PITF) No.18, “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
8
Financial Statements.” PITF No.18 prescribes: (1) the accounting policies and procedures
applied to a parent company and its subsidiaries for similar transactions and events under
similar circumstances should in principle be unified for the presentation of the consolidated
financial statements, (2) financial statements prepared by foreign subsidiaries in accordance
with either International Financial Reporting Standards or the generally accepted accounting
principles in the United States of America tentatively may be used for the consolidation
process, (3) however, the following items should be adjusted in the consolidation process so
that net income is accounted for in accordance with Japanese GAAP unless they are not
material: 1) amortization of goodwill; 2) scheduled amortization of actuarial gain or loss of
pensions that has been directly recorded in the equity; 3) expensing capitalized development
costs of R&D; 4) cancellation of the fair value model of accounting for property, plant, and
equipment and investment properties and incorporation of the cost model of accounting; 5)
recording the prior years’ effects of changes in accounting policies in the income statement
where retrospective adjustments to financial statements have been incorporated; and 6)
exclusion of minority interests from net income, if contained.
c. Cash Equivalents—Cash equivalents are short-term investments that are readily convertible
into cash and that are exposed to insignificant risk of changes in value. Cash equivalents
include time deposits which mature within three months from the date of acquisition.
d. Inventories— Inventories are stated at the lower of cost, determined by the average method for
finished products and work in process, by the weighted average cost for merchandise and raw
materials, and by the last purchase price method for supplies, or net selling value.
e. Investment Securities—All investment securities are classified and accounted for, depending
on management's intent, as available-for-sale securities, which are not classified as either
trading securities or held-to-maturity securities, are reported at fair value, with unrealized gains
and losses, net of applicable taxes, reported as a separate component of equity.
Non-marketable available-for-sale securities are stated at cost determined by the movingaverage method. For other than temporary declines in fair value, investment securities are
reduced to net realizable value by a charge to income.
f.
Property, Plant and Equipment—Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the Company and its consolidated domestic
subsidiary is computed substantially by the declining-balance method based on the estimated
useful lives of the assets, while the straight-line method is applied to buildings acquired after
April 1, 1998 and lease assets of the Company and its consolidated domestic subsidiary, and all
property, plant and equipment of consolidated foreign subsidiaries. The range of useful lives
is principally from 3 to 47 years for buildings and structures, and from 4 to 12 years for
machinery and equipment. The useful lives for lease assets are the terms of the respective
leases.
g. Long-lived assets―The Group reviews its long-lived assets for impairment whenever events
or changes in circumstances indicate the carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the carrying amount of an asset or
asset group exceeds the sum of the undiscounted future cash flows expected to result from the
continued use and eventual disposition of the asset or asset group. The impairment loss
would be measured at the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows from the continued use
and eventual disposition of the asset or the net selling price at disposition.
h. Other assets―Software for internal use is amortized over 5 years by the straight-line method.
9
i.
Retirement and Pension Plans—The Company and its domestic consolidated subsidiary have
defined contribution pension plans for employees and unfunded retirement benefit plans for
part-time employees.
For part-time employees, the Company and its domestic consolidated subsidiary have defined
benefit pension plans and account for the liability for retirement benefits based on the amount
that would be required if all the part-time employees are retired at each balance sheet date.
j.
Asset Retirement Obligations―In March 2008, the ASBJ published the accounting standard
for asset retirement obligations, ASBJ Statement No.18 “Accounting Standard for Asset
Retirement Obligations” and ASBJ Guidance No.21 “Guidance on Accounting Standard for
Asset Retirement Obligations.” Under this accounting standard, an asset retirement
obligation is defined as a legal obligation imposed either by law or contract that results from
the acquisition, construction, development and the normal operation of a tangible fixed asset
and is associated with the retirement of such tangible fixed asset. The asset retirement
obligation is recognized as the sum of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the obligation is incurred if a reasonable
estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be
made in the period the asset retirement obligation is incurred, the liability should be recognized
when a reasonable estimate of asset retirement obligation can be made. Upon initial
recognition of a liability for an asset retirement obligation, an asset retirement cost is
capitalized by increasing the carrying amount of the related fixed asset by the amount of the
liability. The asset retirement cost is subsequently allocated to expense through depreciation
over the remaining useful life of the asset. Over time, the liability is accreted to its present
value each period. Any subsequent revisions to the timing or the amount of the original
estimate of undiscounted cash flows are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the related asset retirement cost. This
standard was effective for fiscal years beginning on or after April 1, 2010.
The Company applied this accounting standard effective April 1, 2010. The effect of this
change was to decrease operating income by ¥ 477 thousand ($ 6 thousand) and income before
income taxes and minority interests by ¥ 2,702 thousand ($ 33 thousand).
k. Research and Development Costs—Research and development costs are charged to income as
incurred.
l.
Leases— In March 2007, the ASBJ issued ASBJ Statement No.13, “Accounting Standard for
Lease Transactions,” which revised the previous accounting standard for lease transactions
issued in June 1993. The revised accounting standard for lease transactions was effective for
fiscal years beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases that were deemed to transfer ownership
of the leased property to the lessee were capitalized. However, other finance leases were
permitted to be accounted for as operating lease transactions if certain “as if capitalized”
information was disclosed in the note to the lessee’s financial statements. The revised
accounting standard requires that all finance lease transactions be capitalized to recognize lease
assets and lease obligations in the balance sheet.
The Company and its domestic consolidated subsidiary applied the revised accounting standard
effective April 1, 2008. In addition, the Company accounted for leases which existed at the
transition date and do not transfer ownership of the leased property to the lessee as operating
lease transactions as perrmitted under the revised accounting standard.
All other leases are accounted for as operating leases.
10
m. Bonuses to directors and corporate auditors―Bonuses to directors and corporate auditors are
accrued in the year to which such bonuses are attributable.
n. Construction Contracts—In December 2007, the ASBJ issued ASBJ Statement No. 15,
“Accounting Standard for Construction Contracts,” and ASBJ Guidance No. 18, “Guidance on
Accounting Standard for Construction Contracts.” Under the previous Japanese GAAP,
either the completed-contract method or the percentage-of-completion method was permitted
to account for construction contracts. Under this new accounting standard, the construction
revenue and construction costs should be recognized by the percentage-of-completion method,
if the outcome of a construction contract can be estimated reliably. When total construction
revenue, total construction costs and the stage of completion of the contract at the balance
sheet date can be reliably measured, the outcome of a construction contract can be estimated
reliably. If the outcome of a construction contract cannot be reliably estimated, the
completed-contract method should be applied. When it is probable that the total construction
costs will exceed total construction revenue, an estimated loss on the contract should be
immediately recognized by providing for a loss on construction contracts. This standard is
applicable to construction contracts and software development contracts and was effective for
fiscal years beginning on or after April 1, 2009. The Company applied the accounting
standard effective April 1, 2009 for its software sales contracts.
o. Income Taxes—The provision for income taxes is computed based on the pretax income
included in the consolidated statements of income. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to the temporary
differences.
p. Foreign Currency Transactions—All short-term and long-term monetary receivables and
payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the balance sheet date. The foreign exchange gains and losses from translation are
recognized in the income statement to the extent that they are not hedged by forward exchange
contracts.
q. Foreign Currency Financial Statements—The balance sheet accounts of the consolidated
foreign subsidiaries are translated into Japanese yen at the current exchange rate as of the
balance sheet date except for equity, which is translated at the historical rate.
Differences arising from such translation were shown as “Foreign currency translation
adjustments” under accumulated other comprehensive income in a separate component of
equity.
Revenue and expense accounts of consolidated foreign subsidiaries are translated into yen at
the average exchange rate.
r. Derivatives and Hedging Activities—The Group uses derivative financial instruments to
manage its exposures to fluctuations in foreign exchange. Foreign exchange forward
contracts are utilized by the Group to reduce foreign currency exchange risks. The Group
does not enter into derivatives for trading or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted
for as follows: a) all derivatives are recognized as either assets or liabilities and measured at
fair value, and gains or losses on derivative transactions are recognized in the income
statement and b) for derivatives used for hedging purposes, if derivatives qualify for hedge
accounting because of the high correlation and effectiveness between the hedging instruments
and the hedged items, gains or losses on derivatives are deferred until maturity of the hedged
transactions.
11
The foreign currency forward contracts employed to hedge foreign exchange exposures for
export sales are measured at fair value and the unrealized gains and losses are recognized in
income.
Trade receivables and payables denominated in foreign currencies are translated at the
contracted rates if the forward contracts qualify for hedge accounting.
s. Per Share Information—Basic net income per share is computed by dividing net income
available to common shareholders by the weighted-average number of common shares
outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share is not disclosed since the Company has no dilutive securities.
Cash dividends per share presented in the accompanying consolidated statements of income are
dividends applicable to the respective years including dividends to be paid after the end of the
year.
t.
New Accounting Pronouncements
Accounting Changes and Error Corrections―In December 2009, ASBJ issued ASBJ
Statement No. 24 “Accounting Standard for Accounting Changes and Error Corrections” and
ASBJ Guidance No. 24 “Guidance on Accounting Standard for Accounting Changes and Error
Corrections.” Accounting treatments under this standard and guidance are as follows:
(1) Changes in Accounting Policies - When a new accounting policy is applied with revision
of accounting standards, the new policy is applied retrospectively unless the revised
accounting standards include specific transitional provisions. When the revised accounting
standards include specific transitional provisions, an entity shall comply with the specific
transitional provisions. (2) Changes in Presentations - When the presentation of financial
statements is changed, prior period financial statements are reclassified in accordance with the
new presentation. (3) Changes in Accounting Estimates - A change in an accounting
estimate is accounted for in the period of the change if the change affects that period only, and
is accounted for prospectively if the change affects both the period of the change and future
periods. (4) Corrections of Prior Period Errors - When an error in prior period financial
statements is discovered, those statements are restated. This accounting standard and the
guidance are applicable to accounting changes and corrections of prior period errors which are
made from the beginning of the fiscal year that begins on or after April 1, 2011.
12
3.
INVESTMENT SECURITIES
Investment securities at March 31, 2011 and 2010 consisted of the following:
2011
Non-current:
Equity securities
Total
Thousands of Yen
2010
¥ 238,958
¥ 238,958
Thousands of
U.S. Dollars
2011
¥ 223,597
¥ 223,597
$2,879
$2,879
The costs and aggregate fair values of investment securities at March 31, 2011 and 2010 were as
follows:
March 31, 2011
Securities classified as:
Available-for-sale:
Equity securities
March 31, 2010
Available-for-sale:
Equity securities
March 31, 2011
Available-for-sale:
Equity securities
Thousands of Yen
Unrealized
Unrealized
Gains
Losses
Cost
¥ 123,220
¥ 72,326
¥ 10,836
Fair
Value
¥ 184,710
Thousands of Yen
Unrealized
Unrealized
Gains
Losses
Cost
¥ 114,047
¥ 56,557
¥ 1,255
Fair
Value
¥ 169,349
Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
Losses
Cost
$ 1,485
$ 871
$ 131
Fair
Value
$ 2,225
Available-for-sale securities whose fair value is not readily determinable as of March 31, 2011 and
2010 were as follows:
Carrying amount
Thousands of Yen
2011
2010
Available-for-sale:
Equity securities
¥ 54,248
¥ 54,248
Thousands of
U.S. Dollars
2011
$ 654
There were no available-for-sale securities sold during the year ended March 31, 2011.
13
The information of available-for-sale securities which were sold during the year ended March 31,
2010 was as follows:
March 31, 2010
Available-for-sale:
Equity securities
Proceeds
Thousands of Yen
Realized
Gains
¥ 11,380
Realized
Losses
¥ 848
The impairment losses on available-for-sale equity securities for the years ended March 31, 2011
and 2010 were ¥59 thousand ($1 thousand) and ¥7,862 thousand, respectively.
4.
INVENTORIES
Inventories at March 31, 2011 and 2010 consisted of the following:
Thousands of Yen
2011
2010
Merchandise and
finished products
Work-in-process
Raw materials
Supplies
Total
5.
¥ 331,931
364,907
676,131
10,343
¥ 1,383,312
¥
¥
277,781
332,276
707,592
14,378
1,332,027
Thousands of
U.S. Dollars
2011
$3,999
4,396
8,146
125
$ 16,666
LONG-LIVED ASSETS
The Group reviewed its long-lived assets for impairment as of March 31, 2011 and 2010. As a
result, for the year ended March 31, 2010, the Group recognized an impairment loss of ¥19,619
thousand as other expense for certain assets of Thai LECIP Corporation Limited due to the close
down of a plant. No impairment loss was recognized in 2011.
6.
INVESTMENT PROPERTY
On November 28, 2008, the ASBJ issued ASBJ Statement No. 20, “Accounting Standard for
Investment Property and Related Disclosures,” and issued ASBJ Guidance No.23, “Guidance on
Accounting Standard for Investment Property and Related Disclosures.” This accounting
standard and the guidance were applicable to investment property and related disclosures at the
end of the fiscal years ending on or after March 31, 2010. The Group applied the new
accounting standard and guidance effective March 31, 2010.
The Group was some rental properties such as office buildings in Gifu City. Rental income net
of operating expenses for those rental properties was ¥29,407 thousand ($354 thousand) for the
fiscal year ended March 31, 2011.
In addition, the carrying amounts, changes in such balances and market prices of such properties
are as follows:
April 1, 2010
Thousands of Yen
Carrying Amount
Increase/
(Decrease)
March 31, 2011
14
Fair Value
March 31, 2011
-
¥ 89,233
¥（134）
¥89,099
April 1, 2009
¥ 95,041
Thousands of Yen
Carrying Amount
Increase/
(Decrease)
March 31, 2010
¥ (5,808)
¥ 89,233
April 1, 2010
$ 1,075
Thousands of U.S.Dollars
Carrying Amount
Increase/
(Decrease)
March 31, 2011
$（2）
$1,073
¥353,000
Fair Value
March 31, 2010
¥ 374,000
Fair Value
March 31, 2011
$4,253
Notes:
1) Carrying amount recognized in balance sheet is net of accumulated depreciation and
accumulated impairment losses, if any.
2) Fair values of properties as of March 31, 2011 and 2010 are measured by the Group in
accordance with its Real-estate Appraisal Standard.
7.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2010 consisted mainly of bank overdrafts and notes to banks.
The weighted average interest rate on short-term borrowings as of March 31, 2010 was 0.67%.
There were no short-term borrowings at March 31, 2011.
Long-term debt at March 31, 2011 and 2010 consisted of the following:
Thousands of
U.S. Dollars
2011
Thousands of Yen
2011
2010
Borrowings from banks due serially to
March 2014 with weighted average
interest rates of 1.24% (2011) and ¥ 862,898
1.38% (2010)
Lease obligations
109,292
Total
972,190
Less: portion due within one year
(265,101)
Long-term debt, less current portion ¥ 707,089
¥ 776,408
$ 10,396
51,414
827,822
(176,228)
¥ 651,594
1,317
11,713
(3,194)
$ 8,519
Annual maturities of long-term debt and lease obligations at March 31, 2011, were as follows:
Year ending March 31
2012
2013
2014
2015
2016
2017 and thereafter
Total
Thousands of
Yen
¥ 265,101
484,979
198,808
16,380
6,922
¥972,190
15
Thousands of
U.S. Dollars
$ 3,194
5,843
2,395
197
84
$11,713
The carrying amounts of assets pledged as collateral for short-term borrowings and long-term debt
(including current portion) of ¥669,170 thousand ($8,062 thousand) at March 31, 2011 were as
follows:
Thousands of
Yen
Property, plant and equipment—net of
accumulated depreciation
8.
Thousands of
U.S. Dollars
¥ 1,108,908
$ 13,360
LIABILITY FOR RETIREMENT BENEFITS
The Company and its consolidated domestic subsidiary have retirement benefit plans for
employees. The Company and its domestic consolidated subsidiary have defined contribution
plans for employees and unfunded defined benefit pension plans for part-time employees.
The liability for employees’ retirement benefits at March 31, 2011 and 2010 consisted of the
following:
Thousands of Yen
2011
2010
Projected benefit obligation
Amount recognized as liability
¥14,120
¥14,120
¥ 11,310
¥ 11,310
Thousands of
U.S. Dollars
2011
$ 170
$ 170
The components of net periodic benefit costs for the years ended March 31, 2011 and 2010 were as
follows:
Thousands of Yen
2011
2010
Service cost
Additional retirement payments
Net periodic benefit costs
9.
¥79,176
10,698
¥89,874
¥ 109,851
2,034
¥ 111,885
Thousands of
U.S. Dollars
2011
$ 954
129
$1,083
EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The
significant provisions in the Companies Act that affect financial and accounting matters are
summarized below:
(a) Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year
in addition to the year-end dividend upon resolution at the shareholders meeting. For
companies meeting certain criteria such as; (1) having a Board of Directors, (2) having
independent auditors, (3) having a Board of Corporate Auditors, and (4) the term of service
of the directors is prescribed as one year rather than two years of normal term by its articles
of incorporation, the Board of Directors may declare dividends (except for dividends in
kind) at any time during the fiscal year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so because it does not meet all of the
above criteria. Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporation of the company so
stipulate. The Company qualifies for this provision. The Companies Act provides
16
certain limitations on the amounts available for dividends or the purchase of treasury stock.
The limitation is defined as the amount available for distribution to the shareholders, but the
amount of net assets after dividends must be maintained at no less than ¥ 3 million.
(b) Increases / decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be
appropriated as a legal reserve (a component of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on the equity account charged upon the
payment of such dividends until the total aggregate amount of legal reserve and additional
paid-in capital equals 25% of the common stock. Under the Companies Act, the total
amount of additional paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in
capital, other capital surplus and retained earnings can be transferred among the accounts
under certain conditions upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose of
such treasury stock by resolution of the Board of Directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution to the shareholders which is
determined by a specific formula. Under the Companies Act, stock acquisition rights are
presented as a separate component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition rights and treasury stock. Such
treasury stock acquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.
10.
INCOME TAXES
The Company and its domestic consolidated subsidiary are subject to Japanese national and local
income taxes which, in the aggregate, resulted in normal effective statutory tax rate of
approximately 39.8% for the years ended March 31, 2011 and 2010.
The tax effects of significant temporary differences and tax loss carry-forwards which resulted in
deferred tax assets and liabilities at March 31, 2011 and 2010 were as follows:
17
Thousands of Yen
2011
2010
Deferred Tax Assets:
Allowance for bad debt
Accrued bonuses
Accrued warranty
Accrued enterprise tax
Accrued retirement benefits to
directors and corporate auditors
Accrued social insurance
Property, plant and equipment
Small depreciable property
Inventories
Impairment of long-lived assets
Loss on liquidation of a subsidiary
Amount of tax loss carry forwards
Other
Total
Less: valuation allowance
Total deferred tax assets
¥
¥
10,491
27,540
21,185
40,952
20,465
134,565
251,448
30,542
721,082
(193,292)
¥
Deferred Tax Liabilities:
Unrealized gain on available-for-sale
securities
Other
Total deferred tax liabilities
Net deferred tax assets
17,222
75,055
21,840
16,985
52,792
¥
¥
¥
527,790
503,208
10,115
106,075
24,672
4,495
52,792
$208
904
263
205
636
14,564
32,946
10,575
57,996
25,625
130,242
136,293
33,264
639,654
(142,116)
126
332
255
493
247
1,621
3,030
368
8,688
(2,329)
497,538
$6,359
¥
24,455
127
24,582
Thousands of
U.S. Dollars
2011
¥
¥
¥
21,993
149
22,142
475,396
$
$
295
2
297
6,062
Reconciliations between the normal effective statutory tax rates and the actual effective tax rates
reflected in the accompanying consolidated statements of income for the years ended March 31,
2011 and 2010 were as follows:
2011
39.8
9.5
Normal effective statutory tax rate
Expenses not deductible for income tax
purposes
Revenues excluded from income tax such as
dividend received
Per capita tax
Net change in valuation allowance
Tax adjustments
Different income rate applicable to certain
consolidated subsidiaries
Loss on liquidation of a subsidiary
Foreign currency translation adjustment
Other - net
Actual effective tax rate
%
%
(1.6)
-
18
2010
39.8
30.8
4.5
23.5
(4.8)
21.2
199.6
7.6
(6.3)
9.2
(1.0)
80.7
(280.5)
(0.7)
9.9
%
%
11.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs were ¥168,127 thousand ($2,026 thousand) and ¥164,460
thousand for the years ended March 31, 2011 and 2010, respectively.
12.
LEASES
The Group leases certain machinery, computers and software.
Pro forma information of leased property whose lease inception was before March 31, 2008
ASBJ Statement No.13, “Accounting Standard for Lease Transactions” requires that all finance
lease transactions be capitalized to recognize lease assets and lease obligations in the balance
sheet. However, the ASBJ Statement No. 13 permits leases without ownership transfer of the
leased property to the lessee and whose lease inception was before March 31, 2008 to continue to
be accounted for as operating lease transactions if certain “as if capitalized” information is
disclosed in the note to the financial statements. The Company applied ASBJ Statement No. 13
effective April 1, 2008 and accounted for such leases as operating lease transactions. Pro forma
information of leased property whose lease inception was before March 31, 2008 was as follows:
(As lessee)
March 31, 2011
Machinery
Acquisition cost
Net leased property
¥ 353,230
338,587
¥ 14,643
March 31, 2010
¥ 14,820
13,039
¥ 1,781
Machinery
Acquisition cost
Net leased property
¥ 553,904
460,653
¥ 93,251
March 31, 2011
$ 4,255
4,079
$ 176
Total
¥ 48,662
42,048
¥ 6,614
¥ 416,712
393,674
¥ 23,038
Thousands of Yen
Tools
Other
¥ 73,326
65,450
¥ 7,876
Machinery
Acquisition cost
Net leased property
Thousands of Yen
Tools
Other
Total
¥ 49,699
33,288
¥ 16,411
¥ 676,929
559,391
¥ 117,538
Tools
Other
$ 178
157
$ 21
$ 587
507
$ 80
Total
$ 5,020
4,743
$ 277
Obligations under finance leases:
Due within one year
Due after one year
Total
Thousands of Yen
2011
2010
¥ 20,493
¥ 97,007
3,502
23,995
¥ 23,995
¥ 121,002
Thousands of
U.S. Dollars
2011
$ 247
42
$ 289
Depreciation expense, interest expense and other information under finance leases:
19
Depreciation expense
Interest expense
Total
Thousands of Yen
2011
2010
¥ 94,501
¥ 130,875
858
2,172
¥ 95,359
¥ 133,047
Lease payments
¥ 97,865
Thousands of
U.S. Dollars
2011
$ 1,139
10
$ 1,149
¥ 135,418
$ 1,179
Depreciation expense and interest expense, which are not reflected in the accompanying
statements of income, are computed by the straight-line method and the interest method,
respectively.
(As lessor)
Pro forma information of such leases which existed at the transition date on an “as if sold” basis
for the years ended March 31, 2011 and 2010 was as follows:
March 31
Acquisition cost
Accumulated
depreciation
Net leasing property
Thousands of Yen
2011
2010
Thousands of U.S.
Dollars
2011
¥ 102,500
55,888
¥ 137,500
59,886
$ 1,235
673
¥ 46,612
¥ 77,614
$ 562
Expected revenue:
Thousands of Yen
Due within one year
Due after one year
Total
2011
¥ 3,876
33,592
¥ 37,468
2010
¥ 6,132
59,276
¥ 65,408
Thousands of
U.S. Dollars
2011
$ 46
405
$ 451
The amounts of expected revenue under the finance leases include the imputed interest revenue
portion.
Lease revenue and depreciation expenses under finance leases:
Lease revenue
Depreciation expenses
Thousands of Yen
2011
2010
¥ 3,876
¥ 6,132
4,969
5,808
Thousands of
U.S. Dollars
2011
$ 47
60
Expected lease revenues to be received under the non-cancelable operating lease subsequent to
March 31, 2011 and 2010 were as follows:
20
Due within one year
Due after one year
Total
2011
¥
17,280
150,096
¥ 167,376
Thousands of Yen
2010
¥
36,252
350,775
¥ 387,027
Thousands of
U.S. Dollars
2011
$ 208
1,808
$ 2,016
13. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
On March 10, 2008, the ASBJ revised ASBJ Statement No. 10, “Accounting Standard for
Financial Instruments,” and issued ASBJ Guidance No.19, “Guidance on Accounting Standard
for Financial Instruments and Related Disclosures.” This accounting standard and the guidance
was applicable to financial instruments and related disclosures at the end of the fiscal years
ending on or after March 31, 2010. The Group applied the revised accounting standard and the
new guidance effective March 31, 2010.
(1) Group policy for financial instruments
The Group uses financial instruments, mainly long-term debt including bank loans, based on its
management and financing plan. Short-term bank borrowings are used to fund its ongoing
operations. Derivatives are used, not for speculative purposes, but to manage exposure to
financial risks as described in (2) below.
(2) Nature and extent of risks arising from financial instruments
Receivables such as trade notes and trade accounts are exposed to customer credit risk.
Although receivables in foreign currencies are exposed to the market risk of fluctuation in
foreign currency exchange rates, the position is hedged by using forward foreign currency
contracts. Investment securities, mainly equity instruments of customers and suppliers of the
Group, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and trade accounts, are five months or less.
Although payables in foreign currencies are exposed to the market risk of fluctuation in foreign
currency exchange rates, those risks are hedged by using forward foreign currency contracts.
Maturities of bank loans and long-term debt are six years or less after the balance sheet date.
Derivatives include forward foreign currency contracts, which are used to manage exposure to
market risks from changes in foreign currency exchange rates of receivables and payables.
Please see Note 14 for more detail about derivatives.
(3) Risk management for financial instruments
Credit Risk Management
Credit risk is the risk of economic loss arising from a counterparty’s failure to repay or service
debt according to the contractual terms. The Company and its subsidiaries manage their credit
risks from receivables on the basis of internal guidelines, which include monitoring of payment
terms and balances of customers to identify the default risk of customers at an early stage.
Please see Note 14 for the detail about derivatives.
Market risk management
Foreign currency trade receivables and payables are exposed to market risk resulting from
21
fluctuations in foreign currency exchange rates.
forward foreign currency contracts.
Such foreign exchange risk is hedged by
Investment securities are managed by monitoring the market values and financial position of
issuers on a regular basis.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on
maturity dates. The Group manages its liquidity risk by holding adequate volumes of liquid
assets, along with adequate financial planning by the planning and accounting department.
(4) Fair values of financial instruments
Fair values of financial instruments are based on a quoted price in active markets. If a quoted
price is not available, other rational valuation techniques are used instead.
(a) Fair value of financial instruments
Thousands of Yen
Carrying
March 31, 2011
Amount
¥ 883,347
Time deposits
70,000
Trade notes and accounts receivable
4,399,243
Investment securities
184,710
¥ 5,537,300
Trade notes and accounts payable
¥ 2,145,398
Long-term debt including current portion
972,190
Other accounts payable
489,658
177,042
¥ 3,784,288
Fair Value
¥ 883,347
70,000
4,399,243
184,710
¥ 5,537,300
¥ 2,145,398
979,683
489,658
177,042
¥ 3,791,781
Unrealized
Gain/Loss
¥ 7,493
¥ 7,493
Thousands of Yen
Carrying
Amount
¥ 524,046
70,000
5,723,193
169,349
¥ 6,486,588
¥ 2,549,273
Short-term borrowings
660,000
827,822
347,635
56,616
¥ 4,441,346
March 31, 2010
Time deposits
22
Fair Value
¥ 524,046
70,000
5,723,193
169,349
¥ 6,486,588
¥ 2,549,273
660,000
831,488
347,635
56,616
¥ 4,445,012
Unrealized
Gain/Loss
¥ 3,666
¥ 3,666
March 31, 2011
Time deposits
Carrying
Unrealized
Amount
Fair Value
Gain/Loss
$ 10,643
$ 10,643
843
843
53,003
53,003
2,225
2,225
$ 66,714
$ 66,714
$ 25,848
$ 25,848
11,713
11,803
$ 90
5,900
5,900
2,133
2,133
$ 45,594
$ 45,684
$ 90
Cash and cash equivalents and Time deposits
The carrying values of cash and cash equivalents and time deposits approximate fair value
because of their short maturities.
Trade notes and accounts receivables
The carrying values of trade notes and accounts receivables approximate fair value because of
their short maturities.
The fair values of investment securities are measured at the quoted market price of the stock
exchange for the equity instruments.
Trade notes and accounts payables, Short-term borrowings, Other accounts payable and
The carrying values of these financial instruments approximate fair value because of their
short maturities.
The fair values of long-term debt are determined by discounting the cash flows related to the
debt at the Group’s assumed corporate borrowing rate.
(b) Financial instruments whose fair value cannot be reliably determined
Thousands of Yen
2011
2010
Thousands of
U.S.Dollars
2011
Investments in equity instruments that do not
have a quoted market price in an active market
¥ 54,249
¥54,249
$ 654
Investments in non-consolidated subsidiaries
¥163,645
¥108,845
$1,972
(5) Maturity analysis for financial assets and securities with contractual maturities
Please see Note 7 for annual maturities of long-term debt.
23
14.
DERIVATIVES
The Company enters into foreign exchange forward contracts to reduce foreign currency exchange risk
related to exports and imports. The Company does not enter into derivative transactions for trading
or speculative purposes, and applies hedge accounting for all derivatives.
The Company holds foreign exchange forward contracts associated with exports and imports, only up
to the estimated amounts of sales to and purchases from overseas customers and suppliers.
Although foreign exchange forward contracts and interest rate swaps are subject to market risk, the
counterparties to these derivatives are limited to major domestic financial institutions and the
Company does not anticipate any losses arising from market risk.
The Company has internal policies for derivative transactions. Under these internal policies, based on
the requests from the department related to exports and imports, derivative transactions are carried out
by the planning and accounting department of the Company. The planning and accounting
department reports to the managers in charge of the operation periodically.
Since no derivatives contracts were outstanding at March 31, 2011 and 2010, quantitative information
of derivatives were not disclosed.
15.
COMPREHENSIVE INCOME
For the year ended March 31, 2010
Total comprehensive income for the year ended March 31, 2010 was the following:
2010
Total comprehensive income attributable to:
Owners of the parent
Minority interests
Total comprehensive income
¥58,548
¥58,548
Other comprehensive income for the year ended March 31, 2010 consisted of the following:
2010
Other comprehensive income:
16.
¥19,070
(2,357)
¥16,713
NET INCOME PER SHARE
Basic net income per share ("EPS") for the years ended March 31, 2011 and 2010 is calculated as
follows:
24
Thousands of
Yen
Net income
Thousands of
Shares
Weighted
average shares
U.S.
Dollars
Yen
EPS
Basic EPS
Net income available to common shareholders
¥ 46,893
6,390
¥
7.34 $ 0.08
¥ 41,835
6,390
¥
6.55
For the year ended March 31, 2010:
Basic EPS
25
17.
SEGMENT INFORMATION
For the year ended March 31, 2011 and 2010
In March 2008, the ASBJ revised ASBJ Statement No. 17 “Accounting Standard for Segment
Information Disclosures” and issued ASBJ Guidance No.20 “Guidance on Accounting Standard
for Segment Information Disclosures.” Under the standard and guidance, an entity is required
to report financial and descriptive information about its reportable segments. Reportable
segments are operating segments or aggregations of operating segments that meet specified
criteria. Operating segments are components of an entity about which separate financial
information is available and such information is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing performance. Generally,
segment information is required to be reported on the same basis as is used internally for
evaluating operating segment performance and deciding how to allocate resources to operating
segments. This accounting standard and the guidance are applicable to segment information
disclosures for the fiscal years beginning on or after April 1, 2010.
The segment information for the year ended March31, 2010 under the revised accounting
standard is also disclosed hereunder as required.
1. Description of reportable segments
The Group’s reportable segments are those for which separate financial information is available
and regular evaluation by the Company’s management is being performed in order to decide
how resources are allocated among the Group. Therefore, the Group consists of three
segments; Transport Equipment, Sign and Display and Industrial Equipment. Transport
Equipment segment provides system equipments for buses and trains and lighting equipments
for vehicles. Sign and Display segment manufactures and sells neon transformers, lighting
effect units for outside display, cold cathode lumps and power supply units for LED.
Industrial Equipment segment consists of manufacturing terminal readers, power backup units,
rechargers for battery-driven forklift, battery charger and board implementation.
2. Methods of measurement for the amounts of sales, profit (loss), assets and other items for
each reportable segment
The accounting policies of each reportable segment are consistent to those disclosed in Note 2,
“Summary of Significant Accounting Policies.”
26
3. Information about sales, profit (loss), assets, liabilities and other items is as follows.
Thousands of Yen
2011
Transport
Equipment
Sales
Sales to customers
Intersegment
sales or transfers
Total
Segment profit (loss)
Segment assets
Other:
Depreciation
Increase in property,
plant and equipment
and intangible assets
Reportable segment
Sign and
Industrial
Display
Equipment
Total
Other
Total
Reconciliations
Consolidated
¥8,525,361
¥825,526
¥3,181,188
¥12,532,075
¥43,577
¥12,575,652
-
¥12,575,652
8,525,361
357,490
5,226,533
825,526
(230,797)
726,524
3,181,188
64,429
1,518,066
12,532,075
191,122
7,471,123
43,577
18,949
89,104
12,575,652
210,071
7,560,227
¥(70,113)
2,138,160
12,575,652
139,958
9,698,387
155,826
39,053
47,517
242,396
3,205
245,601
63,376
308,977
146,380
10,355
33,378
190,113
-
190,113
56,162
246,275
Thousands of Yen
2010
Transport
Equipment
Sales
Sales to customers
Intersegment
sales or transfers
Total
Segment profit
Segment assets
Other:
Depreciation
plant and equipment
Impairment losses of
assets
Reportable segment
Sign and
Industrial
Display
Equipment
Total
Other
Total
Reconciliations
Consolidated
¥9,107,482
¥1,380,510
¥3,097,672
¥13,585,664
¥47,632
¥13,633,296
-
¥13,633,296
9,107,482
424,252
6,251,031
1,380,510
(209,018)
1,106,149
3,097,672
(122,327)
1,461,066
13,585,664
92,907
8,818,246
47,632
36,285
89,233
13,633,296
129,192
8,907,479
¥(63,376)
1,614,301
13,633,296
65,816
10,521,780
212,975
33,100
43,760
289,835
5,808
295,643
58,078
353,721
68,544
45,871
24,135
138,550
-
138,550
50,322
188,872
-
19,619
-
19,619
-
19,619
-
19,619
27
2011
Transport
Equipment
Sales
Sales to customers
Intersegment
sales or transfers
Total
Segment assets
Other:
Depreciation
plant and equipment
Reportable segment
Sign and
Industrial
Display
Equipment
Total
Other
Total
Reconciliations
Consolidated
$102,715
$9,946
$38,328
$150,989
525
$151,514
-
$151,514
102,715
4,307
62,970
9,946
(2,780)
8,754
38,328
776
18,290
150,989
2,303
90,014
525
228
1,073
151,514
2,531
91,087
$(845)
25,761
151,514
1,686
116,848
1,877
471
572
2,920
39
2,959
764
3,723
1,764
125
402
2,291
-
2,291
676
2,967
Notes：
1. Reconciliations are the corporate expenses or assets.
28
18.
SUBSEQUENT EVENTS
The following appropriation of retained earnings at March 31, 2011 was approved at the
Company’s shareholders meeting held on June 24, 2011:
a.
Appropriation of retained earnings
Thousands of
Thousands of
Yen
U.S. Dollars
Year-end cash dividends, ¥12.5 ($0.15)
per share
¥ 79,879
******
29
$962
LECIP HOLDINGS CORPORATION
and Consolidated Subsidiaries
Consolidated Financial Statements
for the Year Ended March 31, 2013,
and Independent Auditor’s Report
TOTAL
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 3 and 12)
Investments in nonconsolidated subsidiaries (Note 12)
Software
Other assets
Total investments and other assets
Land (Note 5)
Construction in progress
Net property, plant and equipment
PROPERTY, PLANT AND EQUIPMENT (Note 6):
Buildings and structures (Note 5)
Machinery and equipment
Furniture and fixtures
Lease assets (Note 11)
Inventories (Note 4)
Prepaid expenses and other current assets
Total current assets
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 12)
Time deposits (Note 12)
Notes and accounts receivable (Note 12):
Nonconsolidated subsidiaries
Other
Allowance for doubtful accounts
CONSOLIDATED BALANCE SHEET
MARCH 31, 2013
¥
¥
9,791,369
279,241
61,477
91,168
100,517
227,060
759,463
3,093,754
896,624
3,239,449
105,052
7,334,879
(6,059,149)
1,275,730
120,186
7,658
1,403,574
5,023,852
60,969
49,759
(48,805)
5,085,775
1,446,417
280,077
112,036
7,628,332
649,027
55,000
278,024
62,219
68,017
161,137
253,815
823,212
3,060,390
902,230
3,357,022
84,566
7,404,208
(6,048,920)
1,355,288
120,186
24,847
1,500,321
5,133,067
134
111,409
(1,618)
5,242,992
1,493,723
242,000
34,886
8,023,554
954,953
55,000
3
¥ 10,347,087
¥
Thousands of Yen
2013
2012
$
$
(Continued)
104,108
2,969
654
969
1,069
2,414
8,075
32,895
9,533
34,444
1,117
77,989
(64,425)
13,564
1,278
82
14,924
53,417
648
529
(519)
54,075
15,379
2,978
1,191
81,109
6,901
585
Thousands of
U.S. Dollars
(Note 1)
2013
TOTAL
Total equity
EQUITY (Note 8):
Common stock:
Authorized - 22,000,000 shares
Issued - 6,399,100 shares
in 2013 and 2012
Capital surplus
Retained earnings
Treasury stock - at cost: 978,970 shares in 2013 and 8,934 shares in 2012
Accumulated other comprehensive income:
Total
LONG-TERM LIABILITIES:
Long-term debt (Notes 6 and 12)
Long-term accounts payable - other
Long-term guarantee deposited
Liability for employees' retirement benefits (Note 7)
Other long-term liabilities
Total long-term liabilities
Accrued expenses
Income taxes payable (Note 12)
Other current liabilities
Total current liabilities
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term bank loans (Notes 6 and 12)
Current portion of long-term debt (Notes 6 and 12)
Notes and accounts payable (Note 12):
Other
CONSOLIDATED BALANCE SHEET
MARCH 31, 2013
¥
¥
5,308,672
¥ 10,347,087
4,755,472
9,791,369
4
42,313
(16,924)
5,308,672
48,084
(15,336)
4,755,472
258,795
125,178
69,971
15,080
8,750
477,774
2,870,618
430,294
3,300,912
559,732
51,640
143,066
4,560,641
505,291
735,645
719,407
3,842,428
(14,197)
¥
735,645
719,407
4,039,465
(771,793)
208,485
125,178
70,167
17,000
7,174
428,004
2,179,124
445,188
2,624,312
397,131
86,253
491,845
4,607,893
750,000
258,352
Thousands of Yen
2013
2012
$
$
(Concluded)
50,563
104,108
511
(163)
50,563
7,822
7,649
42,950
(8,206)
2,217
1,331
746
181
76
4,551
23,170
4,733
27,903
4,223
917
5,230
48,994
7,974
2,747
Thousands of
U.S. Dollars
(Note 1)
2013
292,890
292,890
¥
¥
NET INCOME
PER SHARE OF COMMON STOCK (Notes 2.s and 14):
Basic net income
Cash dividends applicable to the year
214,039
19,463
233,502
INCOME TAXES (Note 9):
Current
Deferred
Total income taxes
46.85
15.00
Yen
526,392
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS
(2,738,631)
477,100
13,480,006
(10,264,275)
3,215,731
4,754
(8,540)
308
(1,555)
11,354
19,209
(9,497)
27,774
(16,137)
21,622
49,292
¥
5
¥
¥
¥
20.80
15.00
132,927
132,927
226,182
79,504
305,686
438,613
4,551
(11,427)
3,547
(839)
11,214
(1,017)
(8,000)
(16,381)
(50,833)
14,447
(54,738)
(2,698,939)
493,351
13,059,997
(9,867,707)
3,192,290
Thousands of Yen
2013
2012
OTHER INCOME (EXPENSES):
Interest and dividend income
Interest expense
Grants received
Loss on sales and disposals of long-lived asses, net
Gain on sales of scraps
Foreign exchange gain (loss), net
Write-down of investments in nonconsolidated subsidiaries
Gain on sales of investment securities (Note 3)
Provision of allowance for investment loss
Write-down of investments in capital of subsidiaries and affiliates
Loss of foreign currency translation adjustments due to exclusion of a subsidiary
Other - net
Other income (expenses) - net
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 10)
Operating income
NET SALES
COST OF SALES (Note 10)
Gross profit
CONSOLIDATED STATEMENT OF INCOME
$
$
$
$
0.50
0.16
U.S. Dollars
3,114
3,114
2,276
207
2,483
5,597
51
(91)
3
(17)
121
204
(101)
295
(172)
231
524
(29,119)
5,073
143,328
(109,136)
34,192
Thousands of
U.S. Dollars
(Note 1)
2013
¥
¥
OTHER COMPREHENSIVE INCOME (Note 13):
COMPREHENSIVE INCOME (Note 13)
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO (Note 13):
Owners of the parent company
Minority interests
¥
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
300,248
-
5,771
1,587
7,358
300,248
292,890
¥
¥
¥
164,608
-
5,278
26,403
31,681
164,608
132,927
Thousands of Yen
2013
2012
$
$
$
6
3,192
-
61
17
78
3,192
3,114
Thousands of
U.S. Dollars
(Note 1)
2013
Net income
Cash dividends, $0.15 per share
Disposal of treasury stock
BALANCE AT APRIL 1, 2011
Net income
Change of scope of consolidation
Change of scope of consolidation - foreign currency translation adjustment
Net income
Disposal of treasury stock
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Number of
Common Stock
Outstanding
6,390,303
(137)
6,390,166
(975,336)
5,300
5,420,130
Shares
$
7,822
$
7,649
-
$
$
-
Common
Stock
7,822
Capital
Surplus
7,649
¥
¥
719,407
719,407
¥
735,645
-
Capital
Surplus
719,407
735,645
Common
Stock
¥
735,645
$
$
¥
¥
7
Retained
Earnings
40,855
3,114
(1,019)
42,950
Retained
Earnings
3,838,438
132,927
(79,879)
(49,058)
3,842,428
292,890
(95,853)
4,039,465
$
$
¥
¥
Thousands of U.S. Dollars (Note 1)
Unrealized Gain on
Foreign Currency
Treasury
Available-for-Sale
Translation
Stock
Securities
Adjustments
(151)
$
450
$
(180)
(8,099)
44
61
17
(8,206)
$
511
$
(163)
Treasury
Stock
(14,104)
(93)
(14,197)
(761,735)
4,139
(771,793)
Thousands of Yen
Accumulated Other Comprehensive Income
Unrealized Gain on
Foreign Currency
Available-for-Sale
Translation
Securities
Adjustments
¥
37,036
¥
(40,592)
(2,735)
5,277
26,403
42,313
(16,924)
5,771
1,588
¥
48,084
¥
(15,336)
$
$
¥
¥
Total
56,445
3,114
(1,019)
(8,099)
44
78
50,563
Total
5,275,830
132,927
(79,879)
(49,058)
(93)
(2,735)
31,680
5,308,672
292,890
(95,853)
(761,735)
4,139
7,359
4,755,472
$
$
¥
¥
Total
Equity
56,445
3,114
(1,019)
(8,099)
44
78
50,563
Total
Equity
5,275,830
132,927
(79,879)
(49,058)
(93)
(2,735)
31,680
5,308,672
292,890
(95,853)
(761,735)
4,139
7,359
4,755,472
NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS OF A NEWLY CONSOLIDATED
SUBSIDIARY
DECREASE IN CASH AND CASH EQUIVALENTS RESULTING FROM
EXCLUSION OF A SUBSIDIARY FROM CONSOLIDATION
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR
¥
83,317
(3,561)
883,347
954,953
(7,144)
954,953
649,027
¥
(8,150)
(6,094)
50,000
(248,575)
(80,131)
(93)
(29,414)
(308,213)
(298,782)
7,149
750,000
190,000
(472,388)
(95,852)
(761,735)
(26,393)
(416,368)
FINANCING ACTIVITIES:
Increase in short-term bank loans - net
Proceeds from long-term debt
Repayments of long-term debt
Cash dividends
Repurchase of treasury stock
Other - net
Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
(5,439)
39,874
(16,741)
(63,377)
(93,608)
1,198
(138,093)
INVESTING ACTIVITIES:
Purchases of investment securities
Proceeds from sales of investment securities
Acquisition of shares of a nonconsolidated subsidiary
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of intangible asset
Other - net
Net cash used in investing activities
(35,659)
(134,667)
124
(32,667)
13,034
(189,835)
(732,677)
(105,819)
650,663
(1,178)
960
260,524
57,379
495,992
438,613
49,517
49,608
68,137
(657,192)
146,471
1,920
18,737
(277,862)
248,530
¥
(342,583)
275,817
839
50,833
526,392
(198,288)
243,813
1,555
(27,774)
9,497
16,137
¥
Thousands of Yen
2013
2012
OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments for:
Income taxes - paid
Depreciation and amortization
Loss on sales and disposals of long-lived assets, net
Gain on sales of investment securities
Write-down of investments in nonconsolidated subsidiaries
Loss of foreign currency translation adjustments due to exclusion of a subsidiary
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable
Decrease (increase) in inventories
Decrease in claims provable in bankruptcy
(Decrease) increase in notes and accounts payable - trade
Increase (decrease) in advances received
Increase in liability for retirement benefits
Other - net
Total adjustments
Net cash provided by operating activities
CONSOLIDATED STATEMENT OF CASH FLOWS
$
$
8
(76)
10,154
6,901
-
(3,177)
75
7,975
2,020
(5,023)
(1,019)
(8,099)
(281)
(4,427)
(58)
424
(178)
(674)
(995)
13
(1,468)
526
527
725
(6,987)
1,557
20
199
(2,954)
2,643
(2,108)
2,592
17
(295)
101
172
5,597
Thousands of
U.S. Dollars (Note 1)
2013
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the
provisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting principles generally accepted in Japan
(“Japanese GAAP”), which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements issued domestically in order to present
them in a form which is more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2012 consolidated financial statements to conform to the
classifications used in 2013.
The consolidated financial statements are stated in Japanese yen, the currency of the country in
which LECIP HOLDINGS CORPORATION (the “Company”) is incorporated and operates. The
translations of Japanese yen amounts into U.S. dollar amounts are included solely for the
convenience of readers outside Japan and have been made at the rate of ¥94.05 to $1, the
approximate rate of exchange at March 31, 2013. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Consolidation — The consolidated financial statements as of March 31, 2013, include the
accounts of the Company and its seven (seven in 2012) significant subsidiaries (together, the
“Group”).
Under the control or influence concept, those companies in which the Company, directly or
indirectly, is able to exercise control over operations are fully consolidated.
Investments in remaining nonconsolidated subsidiaries are stated at cost. If the equity method
of accounting had been applied to the investments in these companies, the effect on the
accompanying consolidated financial statements would not be material.
All significant intercompany balances and transactions have been eliminated in consolidation.
All material unrealized profit included in assets resulting from transactions within the Group is
also eliminated.
LECIP (SINGAPORE) PTE LTD is newly included in the scope of consolidation as it was
established during the current fiscal year. LECIP U.S.A., INC. is excluded from the scope of
consolidation, but the statement of income is consolidated, as it stopped business activities,
and the effect of this company on the consolidated financial statements would not be material.
b. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements — In May 2006, the Accounting Standards Board of Japan (the
“ASBJ”) issued ASBJ Practical Issues Task Force (PITF) No. 18, “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements.” PITF No. 18 prescribes that the accounting policies and procedures
9
applied to a parent company and its subsidiaries for similar transactions and events under
similar circumstances should in principle be unified for the presentation of the consolidated
financial statements. However financial statements prepared by foreign subsidiaries in
accordance with either International Financial Reporting Standards or the generally accepted
accounting principles in the United States of America tentatively may be used for the
consolidation process, except for the following items which should be adjusted in the
consolidation process so that net income is accounted for in accordance with Japanese GAAP,
unless they are not material: (a) amortization of goodwill; (b) scheduled amortization of
actuarial gain or loss of pensions that has been directly recorded in the equity; (c) expensing
capitalized development costs of research and development (R&D); (d) cancellation of the fair
value model of accounting for property, plant, and equipment and investment properties and
incorporation of the cost model of accounting; and (e) exclusion of minority interests from net
income, if contained in net income.
c. Cash Equivalents—Cash equivalents are short-term investments that are readily convertible
into cash and that are exposed to insignificant risk of changes in value. Cash equivalents
include time deposits, which mature within three months from the date of acquisition.
d. Inventories— Inventories are stated at the lower of cost, mainly determined by the annualaverage method for finished products and work in process, the moving-average cost for
merchandise and raw materials, and the last purchase price method for supplies, or net selling
value.
e. Investment Securities—All investment securities are classified and accounted for, depending
on management's intent, as available-for-sale securities, which are not classified as either
trading securities or held-to-maturity securities, and are reported at fair value, with unrealized
gains and losses, net of applicable taxes, reported as a separate component of equity.
Nonmarketable available-for-sale securities are stated at cost determined by the movingaverage method. For other-than-temporary declines in fair value, investment securities are
reduced to net realizable value by a charge to income.
f.
Property, Plant and Equipment—Property, plant and equipment are stated at cost.
Depreciation of property, plant and equipment of the Company and its consolidated domestic
subsidiaries is computed substantially by the declining-balance method based on the estimated
useful lives of the assets, while the straight-line method is applied to buildings acquired after
April 1, 1998, and lease assets of the Company and its consolidated domestic subsidiaries, and
all property, plant and equipment of consolidated foreign subsidiaries. The range of useful
lives is principally from 3 to 47 years for buildings and structures, from 4 to 12 years for
machinery and equipment, and from 2 to 20 for furniture and fixtures. The useful lives for
lease assets are the terms of the respective leases.
g. Long-Lived Assets―The Group reviews its long-lived assets for impairment whenever events
or changes in circumstances indicate the carrying amount of an asset or asset group may not be
recoverable. An impairment loss is recognized if the carrying amount of an asset or asset
group exceeds the sum of the undiscounted future cash flows expected to result from the
continued use and eventual disposition of the asset or asset group. The impairment loss
would be measured at the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows from the continued use
and eventual disposition of the asset or the net selling price at disposition.
h. Other assets―Software for internal use is amortized over five years by the straight-line
method. And software for sales is amortized over three years, which is the expected sales
period, by straight-line method.
10
i.
Retirement and Pension Plans—The Company and its domestic consolidated subsidiaries
have defined contribution pension plans for employees.
For part-time employees, the Company and its domestic consolidated subsidiaries have the
severance lump-sum payment plan and account for the liability for retirement benefits based on
the amount that would be required if all the part-time employees are retired at each balance
sheet date.
Furthermore, additional retirement benefits are paid in some cases.
j.
Asset Retirement Obligations―In March 2008, the ASBJ published ASBJ Statement No. 18,
“Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No. 21,
“Guidance on Accounting Standard for Asset Retirement Obligations.” Under this accounting
standard, an asset retirement obligation is defined as a legal obligation imposed either by law
or contract that results from the acquisition, construction, development, and the normal
operation of a tangible fixed asset and is associated with the retirement of such tangible fixed
asset. The asset retirement obligation is recognized as the sum of the discounted cash flows
required for the future asset retirement and is recorded in the period in which the obligation is
incurred if a reasonable estimate can be made. If a reasonable estimate of the asset retirement
obligation cannot be made in the period the asset retirement obligation is incurred, the liability
should be recognized when a reasonable estimate of the asset retirement obligation can be
made. Upon initial recognition of a liability for an asset retirement obligation, an asset
retirement cost is capitalized by increasing the carrying amount of the related fixed asset by the
amount of the liability. The asset retirement cost is subsequently allocated to expense
through depreciation over the remaining useful life of the asset. Over time, the liability is
accreted to its present value each period. Any subsequent revisions to the timing or the
amount of the original estimate of undiscounted cash flows are reflected as an adjustment to
the carrying amount of the liability and the capitalized amount of the related asset retirement
cost.
k. Research and Development Costs—R&D costs are charged to income as incurred.
l.
Leases—In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for
Lease Transactions,” which revised the previous accounting standard for lease transactions.
The revised accounting standard for lease transactions was effective for fiscal years beginning
on or after April 1, 2008.
(As lessee) Under the previous accounting standard, finance leases that were deemed to
transfer ownership of the leased property to the lessee were capitalized. However, other
finance leases were permitted to be accounted for as operating lease transactions if certain “as
if capitalized” information was disclosed in the note to the lessee’s financial statements. The
revised accounting standard requires that all finance lease transactions be capitalized by
recognizing lease assets and lease obligations in the balance sheet.
(As Lessor) Under the previous accounting standard, finance leases that were deemed to
transfer ownership of the leased property to the lessee were treated as sales. However, other
finance leases were permitted to be accounted for as operating lease transactions if certain "as
if sold" information was disclosed in the note to the lessor's financial statements. The revised
accounting standard requires that all finance leases that are deemed to transfer ownership of
the leased property to the lessee be recognized as lease receivables, and that all finance leases
that are not deemed to transfer ownership of the leased property to the lessee be recognized as
investments in lease.
11
The Company and its domestic consolidated subsidiaries applied the revised accounting
standard effective April 1, 2008. In addition, the Company accounted for leases which
existed at the transition date and do not transfer ownership of the leased property to the lessee
as operating lease transactions as permitted under the revised accounting standard.
All other leases are accounted for as operating leases.
m. Bonuses to Directors and Audit & Supervisory Board Members—Bonuses to directors and
Audit & Supervisory Board Members are accrued at the end of the year to which such bonuses
are attributable.
n. Construction Contracts—In December 2007, the ASBJ issued ASBJ Statement No. 15,
“Accounting Standard for Construction Contracts,” and ASBJ Guidance No. 18, “Guidance on
Accounting Standard for Construction Contracts.” Under this accounting standard,
construction revenue and construction costs should be recognized by the percentage-ofcompletion method, if the outcome of a construction contract can be estimated reliably.
When total construction revenue, total construction costs and the stage of completion of the
contract at the balance sheet date can be reliably measured, the outcome of a construction
contract is deemed to be estimated reliably. If the outcome of a construction contract cannot
be reliably estimated, the completed-contract method should be applied. When it is probable
that the total construction costs will exceed total construction revenue, an estimated loss on the
contract should be immediately recognized by providing for a loss on construction contracts.
o. Income Taxes—The provision for income taxes is computed based on the pretax income
included in the consolidated statement of income. The asset and liability approach is used to
recognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to the temporary
differences.
The Group files a tax return under the consolidated corporate-tax system, which allows
companies to base tax payments on the combined profits or losses of the parent company and
its wholly owned domestic subsidiaries.
p. Foreign Currency Transactions—All short-term and long-term monetary receivables and
payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the balance sheet date. The foreign exchange gains and losses from translation are
recognized in the consolidated statement of income to the extent that they are not hedged by
forward exchange contracts.
q. Foreign Currency Financial Statements—The balance sheet accounts of the consolidated
foreign subsidiaries are translated into Japanese yen at the current exchange rate as of the
balance sheet date except for equity, which is translated at the historical rate.
Differences arising from such translation are shown as “Foreign currency translation
adjustments” under accumulated other comprehensive income in a separate component of
equity.
Revenue and expense accounts of consolidated foreign subsidiaries are translated into yen at
the average exchange rate.
r. Derivatives and Hedging Activities—The Group uses derivative financial instruments to
manage its exposures to fluctuations in foreign exchange. Foreign exchange forward
contracts are utilized by the Group to reduce foreign currency exchange risks. The Group
does not enter into derivatives for trading or speculative purposes.
12
Derivative financial instruments are classified and accounted for as follows: (1) all derivatives
are recognized as either assets or liabilities and measured at fair value, and gains or losses on
derivative transactions are recognized in the consolidated statement of income and (2) for
derivatives used for hedging purposes, if such derivatives qualify for hedge accounting because
of the high correlation and effectiveness between the hedging instruments and the hedged
items, gains or losses on derivatives are deferred until maturity of the hedged transactions.
The foreign currency forward contracts are utilized to hedge foreign currency exposures for
export sales and procurement from overseas suppliers. Trade receivables and payables
denominated in foreign currencies are translated at the contracted rates if the forward contracts
qualify for hedge accounting.
s. Per Share Information—Basic net income per share is computed by dividing net income
available to common shareholders by the weighted-average number of common shares
outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share is not presented as the Company has no dilutive securities.
Cash dividends per share presented in the accompanying consolidated statements of income are
dividends applicable to the respective years, including dividends to be paid after the end of the
year.
t.
Accounting Changes and Error Corrections—In December 2009, the ASBJ issued ASBJ
Statement No. 24, "Accounting Standard for Accounting Changes and Error Corrections" and
ASBJ Guidance No. 24, "Guidance on Accounting Standard for Accounting Changes and Error
Corrections." Accounting treatments under this standard and guidance are as follows: (1)
Changes in Accounting Policies—When a new accounting policy is applied following revision
of an accounting standard, the new policy is applied retrospectively unless the revised
accounting standard includes specific transitional provisions, in which case the entity shall
comply with the specific transitional provisions. (2) Changes in Presentation—When the
presentation of financial statements is changed, prior-period financial statements are
reclassified in accordance with the new presentation. (3) Changes in Accounting Estimates—
A change in an accounting estimate is accounted for in the period of the change if the change
affects that period only, and is accounted for prospectively if the change affects both the period
of the change and future periods. (4) Corrections of Prior-Period Errors—When an error in
prior-period financial statements is discovered, those statements are restated.
u. Accounting for Employee Stock Ownership Plan Trust—Pursuant to the resolution by the
meeting of the Board of Directors held on February 4, 2013, the Company has introduced an
employee incentive plan ,”Employee Stock Ownership Plan (ESOP) Trust” and “Stock
Granting ESOP Trust” (together the “Trust”), for the purpose of improving corporate value for
the medium- and long-term perspective.
Acquisition and sales of the Company’s shares by the Trust are accounted for under the
assumption that the Company and the Trust are the same entity. Accordingly, assets,
including the Company’s shares owned by the Trust, and liabilities, and profits and loss of the
Trust are included in the Company’s consolidated balance sheet, consolidated statement of
income, and consolidated statement of changes in equity.
At March 31, 2013, ESOP Trust and Stock Granting ESOP Trust held 238 thousand and 306
thousand shares of the Company, respectively.
13
3.
INVESTMENT SECURITIES
Investment securities at March 31, 2013 and 2012, consisted of the following:
2013
Non-current:
Equity securities
Total
Thousands of
U.S. Dollars
2013
Thousands of Yen
2012
¥ 279,241
¥ 279,241
¥ 278,024
¥ 278,024
$ 2,969
$ 2,969
The costs and aggregate fair values of investment securities at March 31, 2013 and 2012, were as
follows:
March 31, 2013
Available-for-sale:
Equity securities
March 31, 2012
Available-for-sale:
Equity securities
March 31, 2013
Available-for-sale:
Equity securities
Thousands of Yen
Unrealized
Unrealized
Gains
Losses
Cost
¥ 152,217
¥ 77,434
¥ 3,685
Fair
Value
¥ 225,966
Thousands of Yen
Unrealized
Unrealized
Gains
Losses
Cost
¥ 158,878
¥ 73,530
¥ 8,632
Fair
Value
¥ 223,776
Unrealized
Unrealized
Gains
Losses
Cost
$ 1,619
$ 823
Fair
Value
$ 39
$ 2,403
The information of available-for-sale securities which were sold during the year ended March 31,
2013, was as follows:
March 31, 2013
Available-for-sale:
Equity securities
March 31, 2013
Available-for-sale:
Equity securities
Thousands of Yen
Realized
Gains
Proceeds
¥ 39,874
Proceeds
Realized
Losses
¥ 27,774
Realized
Realized
Gains
Losses
$ 424
$
295
There were no available-for-sale securities sold during the year ended March 31, 2012.
14
-
-
The impairment losses on available-for-sale equity securities for the years ended March 31, 2013
and 2012, were ¥973 thousand ($10 thousand) and none, respectively.
4.
INVENTORIES
Inventories at March 31, 2013 and 2012, consisted of the following:
Thousands of Yen
2013
2012
Merchandise and
finished products
Work in process
Raw materials
Supplies
Total
5.
¥
411,047
424,526
602,135
8,709
¥ 1,446,417
¥
342,623
503,240
637,419
10,441
¥ 1,493,723
Thousands of
U.S. Dollars
2013
$
4,370
4,514
6,402
93
$ 15,379
INVESTMENT PROPERTY
In November, 2008, the ASBJ issued ASBJ Statement No. 20, “Accounting Standard for
Investment Property and Related Disclosures” and issued ASBJ Guidance No. 23, “Guidance on
Accounting Standard for Investment Property and Related Disclosures.”
The Group has some rental properties such as office buildings in Gifu City. Rental income net
of operating expenses for those rental properties was ¥29,770 thousand ($317 thousand) and
¥29,111 thousand for the fiscal years ended March 31, 2013 and 2012, respectively.
In addition, the carrying amounts, changes in such balances, and market prices of such properties
are as follows:
April 1, 2012
¥ 82,957
Thousands of Yen
Carrying Amount
Increase/
(Decrease)
March 31, 2013
¥（13,792）
¥ 69,165
April 1, 2011
¥ 89,099
Thousands of Yen
Carrying Amount
Increase/
March 31, 2012
(Decrease)
¥ (6,143)
¥ 82,956
April 1, 2012
$ 882
Carrying Amount
Increase/
(Decrease)
March 31, 2013
$（147）
$ 735
15
Fair Value
March 31, 2013
¥ 347,000
Fair Value
March 31, 2012
¥ 353,000
Fair Value
March 31, 2013
$ 3,690
Notes:
1) Carrying amount recognized in the consolidated balance sheet is net of accumulated
depreciation and accumulated impairment losses, if any.
2) Fair values of properties as of March 31, 2013 and 2012, are measured by the Group in
accordance with its Real-estate Appraisal Standard.
6.
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2013, principally consisted of bank loans with average interest
rate of 0.56%. There were no short-term borrowings at March 31, 2012.
Long-term debt at March 31, 2013 and 2012, consisted of the following:
Thousands of
U.S. Dollars
2013
Thousands of Yen
2013
2012
Borrowings from banks due serially to
March 2014 with weighted-average
interest rates of 1.13 % (2013) and ¥ 381,935
1.16% (2012)
Lease obligations
84,902
Total
466,837
Less portion due within one year
(258,352)
Long-term debt, less current portion ¥ 208,485
¥ 664,323
$ 4,061
99,763
764,086
(505,291)
¥ 258,795
903
4,964
(2,747)
$ 2,217
Annual maturities of long-term debt and lease obligations at March 31, 2013, were as follows:
Year ending March 31
2014
2015
2016
2017
2018
2019 and thereafter
Total
Thousands of
Yen
Thousands of
U.S. Dollars
¥
$
258,352
70,659
53,673
43,368
39,513
1,272
¥ 466,837
$
2,747
751
571
461
420
14
4,964
The carrying amounts of assets pledged as collateral for long-term debt (including current portion)
of ¥ 683,346 thousand ($ 7,266 thousand) at March 31, 2013, were as follows:
Thousands of
Yen
Property, plant and equipment—net of
accumulated depreciation
¥1,032,542
16
Thousands of
U.S. Dollars
$10,979
7.
LIABILITY FOR RETIREMENT BENEFITS
The Company and its domestic consolidated subsidiaries have defined contribution pension plans
for employees and the severance lump-sum payment plan for part-time employees.
The liability for employees’ retirement benefits at March 31, 2013 and 2012, consisted of the
following:
Thousands of
Thousands of Yen
U.S. Dollars
2013
2012
2013
Projected benefit obligation
Amount recognized as liability
¥ 17,000
¥ 17,000
¥ 15,080
¥ 15,080
$ 181
$ 181
The components of net periodic benefit costs for the years ended March 31, 2013 and 2012, were
as follows:
Thousands of Yen
2013
2012
Service cost
Other
Net periodic benefit costs
8.
¥
¥
1,890
72,000
73,890
¥
¥
1,575
72,518
74,093
Thousands of
U.S. Dollars
2013
$
20
766
$ 786
EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The
significant provisions in the Companies Act that affect financial and accounting matters are
summarized below:
a
Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year
in addition to the year-end dividend upon resolution at the shareholders meeting. For
companies meeting certain criteria such as; (1) having a Board of Directors, (2) having
independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service
of the directors is prescribed as one year rather than two years of normal term by its articles
of incorporation, the Board of Directors may declare dividends (except for dividends in
kind) at any time during the fiscal year if the company has prescribed so in its articles of
incorporation. However, the Company cannot do so because it does not meet all of the
above criteria. Semiannual interim dividends may also be paid once a year upon resolution
by the Board of Directors if the articles of incorporation of the company so stipulate. The
Company qualifies for this provision. The Companies Act provides certain limitations on
the amounts available for dividends or the purchase of treasury stock. The limitation is
defined as the amount available for distribution to the shareholders, but the amount of net
assets after dividends must be maintained at no less than ¥ 3 million.
b
Increases / Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be
appropriated as a legal reserve (a component of retained earnings) or as additional paid-in
capital (a component of capital surplus), depending on the equity account charged upon the
payment of such dividends, until the aggregate amount of legal reserve and additional paidin capital equals 25% of the common stock. Under the Companies Act, the total amount
of additional paid-in capital and legal reserve may be reversed without limitation. The
17
Companies Act also provides that common stock, legal reserve, additional paid-in capital,
other capital surplus and retained earnings can be transferred among the accounts under
certain conditions upon resolution of the shareholders.
c
9.
Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of
such treasury stock by resolution of the Board of Directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution to the shareholders which is
determined by a specific formula. Under the Companies Act, stock acquisition rights are
presented as a separate component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition rights and treasury stock. Such
treasury stock acquisition rights are presented as a separate component of equity or deducted
directly from stock acquisition rights.
INCOME TAXES
The Company and its domestic consolidated subsidiaries are subject to Japanese national and local
income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of
approximately 37.2% and 39.8% for the years ended March 31, 2013 and 2012, respectively.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in
deferred tax assets and liabilities at March 31, 2013 and 2012, were as follows:
Thousands of Yen
2013
2012
Deferred Tax Assets:
Allowance for bad debt
Accrued bonuses
Accrued warranty
Accrued enterprise tax
Accrued retirement benefits to
directors and Audit & Supervisory
Board Members
Accrued social insurance
Property, plant and equipment
Small depreciable property
Inventories
Impairment of long-lived assets
Loss on investment in
nonconsolidated subsidiaries
Amount of tax loss carryforwards
Other
Total
Less valuation allowance
Total deferred tax assets
Deferred Tax Liabilities:
Unrealized gain on available-for-sale
securities
Other
Total deferred tax liabilities
Net deferred tax assets
¥
25,657
120,627
22,640
9,052
¥
43,562
17,482
15,507
6,825
75,878
11,893
67,558
25,907
116,668
19,096
9,942
Thousands of
U.S. Dollars
2013
$
273
1,283
241
96
46,375
17,105
20,403
8,714
46,034
14,778
126,280
463
186
165
72
807
126
718
138,844
103,130
658,655
(252,315)
¥ 406,340
142,678
36,648
630,628
(204,811)
¥ 425,817
1,476
1,097
7,003
(2,683)
$ 4,320
¥
¥
¥
22,584
96
22,680
$
¥
25,664
82
25,746
¥
380,594
¥
403,137
18
$
272
1
273
$ 4,047
Reconciliations between the normal effective statutory tax rates and the actual effective tax rates
reflected in the accompanying consolidated statement of income for the year ended March 31,
2013, with the corresponding figures for 2012 were as follows:
2013
37.2
3.7
Normal effective statutory tax rate
Expenses not deductible for income tax
purposes
Per capita tax
Net change in valuation allowance
Effect of the consolidated corporate tax
system
Effect of tax rate reduction
Other - net
Actual effective tax rate
2012
39.8
6.7
%
2.6
3.4
(3.8)
3.1
16.7
(2.9)
1.3
44.4
6.7
(0.4)
69.7
%
%
%
On December 2, 2011, new tax reform laws were enacted in Japan, which changed the normal
effective statutory tax rate from approximately 39.8% to 37.2% effective for the fiscal years
beginning on or after April 1, 2012 through March 31, 2015, and to 34.8% afterwards.
10.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs were ¥353,989 thousand ($ 3,764 thousand) and ¥292,837
thousand for the years ended March 31, 2013 and 2012, respectively.
11.
LEASES
The Group leases certain machinery, computers, and software.
Pro forma information of leased property whose lease inception was before March 31, 2008
ASBJ Statement No. 13, “Accounting Standard for Lease Transactions” requires that all finance
lease transactions be capitalized to recognize lease assets and lease obligations in the balance sheet.
However, ASBJ Statement No. 13 permits leases without ownership transfer of the leased property
to the lessee and whose lease inception was before March 31, 2008, to continue to be accounted
for as operating lease transactions if certain “as if capitalized” information is disclosed in the note
to the consolidated financial statements. The Company applied ASBJ Statement No. 13 effective
April 1, 2008 and accounted for such leases as operating lease transactions. Pro forma
information of leased property whose lease inception was before March 31, 2008, was as follows:
(As lessee)
March 31, 2012
Machinery
Acquisition cost
Net leased property
¥ 19,980
19,219
¥
761
Thousands of Yen
Tools
Other
¥ 7,040
6,649
¥
391
There were no leases to be disclosed at March 31, 2013.
19
¥ 12,100
9,882
¥ 2,218
Total
¥ 39,120
35,750
¥ 3,370
Obligations under finance leases:
Due within one year
Due after one year
Total
Thousands of Yen
2012
¥ 3,502
¥ 3,502
Depreciation expense, interest expense, and other information under finance leases:
Depreciation expense
Interest expense
Total
Thousands of Yen
2013
2012
¥ 3,370
¥ 18,667
27
158
¥ 3,397
¥ 18,825
Lease payments
¥ 3,529
Thousands of
U.S. Dollars
2013
$ 36
0
$ 36
¥ 19,651
$ 38
Depreciation expense and interest expense, which are not reflected in the accompanying
consolidated statement of income, are computed by the straight-line method and the interest
method, respectively.
(As lessor)
Pro forma information of such leases which existed at the transition date on an “as if sold” basis
for the years ended March 31, 2013 and 2012, was as follows:
Thousands of Yen
2013
2012
Acquisition cost
Net leasing property
¥ 102,500
64,222
¥ 38,278
¥ 102,500
60,107
¥ 42,393
Thousands of
U.S. Dollars
2013
$
$
1,090
683
407
Expected revenue:
Due within one year
Due after one year
Total
Thousands of Yen
2013
2012
¥
3,876
¥
3,876
25,840
29,716
¥ 29,716
¥ 33,592
Thousands of
U.S. Dollars
2013
$
41
275
$
316
The amounts of expected revenue under the finance leases include the imputed interest revenue
portion.
20
Lease revenue and depreciation expenses under finance leases:
Lease revenue
Depreciation expenses
Thousands of Yen
2013
2012
¥ 3,876
¥ 3,876
4,115
4,219
Thousands of
U.S. Dollars
2013
$ 41
44
Expected lease revenues to be received under the noncancelable operating lease subsequent to
March 31, 2013 and 2012, were as follows:
Due within one year
Due after one year
Total
Thousands of Yen
2013
2012
¥
17,280
¥
17,280
115,536
132,816
¥ 132,816
¥ 150,096
Thousands of
U.S. Dollars
2013
$
184
1,228
$ 1,412
12. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
(1) Group Policy for Financial Instruments
The Group uses financial instruments, mainly long-term debt including bank loans, based on its
management and financing plan. Short-term bank borrowings are used to fund its ongoing
operations. Derivatives are used, not for speculative purposes, but to manage exposure to
financial risks as described in (2) below.
(2) Nature and Extent of Risks Arising from Financial Instruments
Receivables such as trade notes and trade accounts are exposed to customer credit risk.
Although receivables in foreign currencies are exposed to the market risk of fluctuation in
foreign currency exchange rates, the position is hedged by using forward foreign currency
contracts. Investment securities, mainly equity instruments of customers and suppliers of the
Group, are exposed to the risk of market price fluctuations.
Payment terms of payables, such as trade notes and trade accounts, are five months or less.
Although payables in foreign currencies are exposed to the market risk of fluctuation in foreign
currency exchange rates, those risks are hedged by using forward foreign currency contracts.
Maturities of bank loans and long-term debt are six years or less after the balance sheet date.
Derivatives include forward foreign currency contracts, which are used to manage exposure to
market risks from changes in foreign currency exchange rates of receivables and payables.
(3) Risk Management for Financial Instruments
Credit risk management
Credit risk is the risk of economic loss arising from a counterparty’s failure to repay or service
debt according to the contractual terms. The Company and its subsidiaries manage their credit
risks from receivables on the basis of internal guidelines, which include monitoring of payment
terms and balances of customers to identify the default risk of customers at an early stage.
21
Market risk management
Foreign currency trade receivables and payables are exposed to market risk resulting from
fluctuations in foreign currency exchange rates. Such foreign exchange risk is hedged by
forward foreign currency contracts.
Investment securities are managed by monitoring the market values and financial position of
issuers on a regular basis.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on
maturity dates. The Group manages its liquidity risk by holding adequate volumes of liquid
assets, along with adequate financial planning by the planning and accounting department.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted price in active markets. If a quoted
price is not available, another rational valuation technique is used instead.
(a) Fair value of financial instruments
Thousands of Yen
Carrying
Amount
March 31, 2013
Time deposits
¥
¥
Short-term bank loans
¥
¥
Fair Value
Unrealized
Gain/Loss
649,027
55,000
5,084,821
225,966
6,014814
¥
649,027
55,000
5,084,821
225,966
¥ 6,014,814
-
750,000
2,179,124
466,837
445,188
86,253
3,927,402
¥
(510)
(510)
750,000
2,179,124
466,327
445,188
86,253
¥3,926,892
¥
¥
March 31, 2012
Time deposits
¥
954,953
55,000
5,133,201
223,776
¥ 6,366,930
¥
954,953
55,000
5,133,201
223,776
¥ 6,366,930
-
¥
¥ 2,870,618
764,850
430,294
51,640
¥ 4,117,402
(764)
(764)
¥
22
2,870,618
764,086
430,294
51,640
4,116,638
¥
¥
Carrying
Amount
March 31, 2013
Time deposits
$
$
Short-term bank loans
$
$
Fair Value
6,901
585
54,065
2,403
63,954
7,974
23,170
4,964
4,733
917
41,758
$
$
$
$
Unrealized
Gain/Loss
6,901
585
54,065
2,403
63,954
-
7,974
23,170
4,958
4,733
917
41,752
(6)
(6)
$
$
Cash and Cash Equivalents, Time Deposits, and Trade Notes and Accounts Receivables
short maturities.
Investment Securities
The fair values of investment securities are measured at the quoted market price of the stock
exchange for the equity instruments.
Trade Notes and Accounts Payables, Short-term Borrowings, Other Accounts Payable, and
Income Taxes Payable
short maturities.
Long-term Debt Including Current Portion
The fair values of long-term debt are determined by discounting the cash flows related to the
debt at the Group’s assumed corporate borrowing rate.
(b) Financial instruments whose fair value cannot be reliably determined
Thousands of Yen
2013
2012
Thousands of
U.S. Dollars
2013
Investments in equity instruments that do not
have a quoted market price in an active market
¥53,275
¥ 54,248
$ 566
Investments in nonconsolidated subsidiaries
¥61,477
¥ 62,219
$ 654
(5) Maturity analysis for financial assets and securities with contractual maturities
Please see Note 6 for annual maturities of long-term debt.
23
13. COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended March 31, 2013 and 2012,
were as follows:
Thousands of
Millions of Yen
2013
Net unrealized gain on available-for-sale securities:
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Foreign currency translation adjustments:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
14.
2012
¥
U.S. Dollars
36,625
( 27,774)
8,851
( 3,080)
¥
5,771
¥
¥
¥
( 14,550)
16,137
1,587
¥
2013
3,407
3,407
1,871
5,278
¥
1,587
( 1,992)
50,832
48,840
( 22,437)
¥
26,403
¥
7,358
¥
$
389
( 295)
94
( 33)
61
$
$
31,681
$
( 155)
172
17
17
$
78
NET INCOME PER SHARE
Basic net income per share ("EPS") for the years ended March 31, 2013 and 2012, is calculated as
follows:
Thousands of
Yen
Net income
Thousands of
Shares
Weightedaverage shares
U.S.
Dollars
Yen
EPS
Basic EPS
¥ 292,890
6,251
¥
46.9 $ 0.5
¥ 132,927
6,390
¥
20.8
Basic EPS
15.
SUBSEQUENT EVENTS
The following appropriation of retained earnings at March 31, 2013, was approved at the
Company’s shareholders’ meeting held on June 20, 2013:
Appropriation of retained earnings
Thousands of
Yen
Year-end cash dividends, ¥15 ($0.16 )
per share
¥
24
89,462
Thousands of
U.S. Dollars
$
951
16.
SEGMENT INFORMATION
Under ASBJ Statement No. 17 “Accounting Standard for Segment Information Disclosures”
and ASBJ Guidance No. 20 “Guidance on Accounting Standard for Segment Information
Disclosures,” an entity is required to report financial and descriptive information about its
reportable segments.
Reportable segments are operating segments or aggregations of operating segments that
meet specified criteria. Operating segments are components of an entity about which
separate financial information is available and such information is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in assessing
performance. Generally, segment information is required to be reported on the same basis
as is used internally for evaluating operating segment performance and deciding how to
allocate resources to operating segments.
(1) Description of Reportable Segments
The Group’s reportable segments are those for which separate financial information is
available and regular evaluation by the Company’s management is being performed in order
to decide how resources are allocated among the Group. Therefore, the Group’s reportable
segments consist of three segments: Transport Equipment, Sign and Display, and Industrial
Equipment. Transport Equipment segment manufactures and sells system equipments for
buses and trains and lighting equipments for vehicles. Sign and Display segment
manufactures and sells neon transformers, lighting effect units for outside display, cold
cathode lumps, and power supply units for LED. Industrial Equipment segment consists of
manufacturing and selling terminal readers, power backup units, and rechargers for
battery-driven forklift and board implementation.
(2) Methods of Measurement for the Amounts of Sales, Profit (Loss), Assets, and Other
Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in
Note 2, “Summary of Significant Accounting Policies.”
25
(3) Information about Sales, Profit (Loss), Assets and Other Items is as follows.
Thousands of Yen
2013
Reportable Segment
Sign and
Industrial
Display
Equipment
Transport
Equipment
Sales
Sales to external
¥ 8,397,672
customers
Intersegment
sales or transfers
Total ¥ 8,397,672
Segment assets
Other:
Depreciation
plant and
equipment and
intangible assets
¥ 1,272,778
¥ 3,764,836
Reconciliations
Total
Other
Total
¥13,435,286
¥ 44,720
¥13,480,006
-
Consolidated
¥13,480,006
-
-
-
-
-
-
-
¥ 1,272,778
¥ 3,764,836
¥13,435,286
¥ 44,720
¥13,480,006
-
¥13,480,006
¥
¥
¥
¥
¥ 476,791 ¥
5,719,659
131,705
(66,271)
770,795
14,417
１
150,364
116,614
1,549,688
200,390 ３
あ
54,268
３
9,735
527,134
8,040,142
32,573
471
77,526
4,635
527,605
8,117,668 あ
¥
(50,505)
¥
477,100
1,673,701 ９ 9,791,369
205,025
38,788
243,813
２
１
192,672
-
192,672
25,614
218,286
Reconciliations
Consolidated
-
¥ 13,059,997
Thousands of Yen
2012
Reportable Segment
Sign and
Industrial
Display
Equipment
Transport
Equipment
Sales
Sales to external
¥ 8,035,512
customers
Intersegment
sales or transfers
Total ¥ 8,035,512
¥ 1,183,496
Segment profit (loss) ¥ 470,806 ¥
Segment assets
5,762,040
Other:
Depreciation
154,238
plant and
equipment and
101,327
intangible assets
(38,871)
776,309
Other
¥
3,796,246 ¥ 13,015,254
¥
3,796,246 ¥ 13,015,254
¥
¥ 1,183,496
Total
Total
¥
44,743 ¥ 13,059,997
-
-
-
¥
44,743 ¥ 13,059,997
-
¥ 13,059,997
141,000 ¥
572,935 ¥
1,762,413
8,300,762
(1,312) ¥
571,623
83,057
8,383,819
-
-
-
¥
(78,272)
1,963,268
¥
493,351
10,347,087
19,078
57,469
230,785
6,143
236,928
38,889
275,817
11,137
57,266
169,730
-
169,730
28,839
198,569
26
2013
Transport
Equipment
Sales
Sales to external
customers
Intersegment
sales or transfers
Total
Segment assets
Other:
Depreciation
plant and
equipment and
intangible assets
Reportable Segment
Sign and
Industrial
Display
Equipment
Total
Other
Reconciliations
Total
$ 89,290
$ 13,533
$ 40,030
$ 142,853
$ 475
$ 143,328
$ 89,290
$ 13,533
$ 40,030
$ 142,853
$ 475
$ 143,328
$
$
$
$
$
$
Consolidated
-
$ 143,328
5,070
60,815
(705)
8,196
1,240
16,477
5,605
85,488
5
824
5,610
86,312
$
(537)
17,796
1,401
153
577
2,131
49
2,180
412
1,599
104
346
2,049
-
2,049
272
$ 143,328
$
5,073
104,108
2,592
2,321
Note：
Reconciliations principally consist of general and administrative corporate expenses or
assets which are not attributable to any reportable segment.
Associated Information
Information about products and services
Transport
Equipment
Sign and Display
Thousands of Yen
2013
Industrial
Equipment
Other
Total
¥ 44,720
¥ 13,480,006
Other
Total
Sales to external
customers
¥ 8,397,672
Transport
Equipment
Sales to external
customers
¥ 8,035,512
Transport
Equipment
Sales to external
customers
$ 89,290
¥ 1,272,778
Sign and Display
¥ 1,183,496
¥ 3,764,836
Thousands of Yen
2012
Industrial
Equipment
¥ 3,796,246
¥ 44,743
2013
Industrial
Sign and Display
Equipment
$ 13,533
27
$ 40,030
$
¥ 13,059,997
Other
Total
475
$ 143,328
LECIP INC.
CODE OF ETHICS
LECIP INC.
CODE OF ETHICS
LECIP Inc. is committed to maintaining the highest standards of ethical conduct and integrity in all
areas of our activities. The Company’s policy is to conduct its business affairs honestly and in an
ethical manner. This Code of Ethics provides a general statement of the expectations of LECIP Inc.
regarding the ethical standards that each director, officer and employee should adhere to while
acting on behalf of the Company. It does not cover every issue that may arise, but it sets out basic
principles to guide all employees, officers and directors of the Company. This Code of Ethics applies
to all directors, officers, full and part time employees, and contract workers. Conduct in violation of
this policy is unacceptable in the workplace and in any work-related setting outside the workplace.
HONEST AND ETHICAL CONDUCT
All directors, officers and employees of LECIP Inc. are required to perform their duties in an honest
and ethical manner.
COMPLIANCE WITH LAWS
You must comply with all federal, state and local laws and governmental regulations applicable to
your activities on behalf of LECIP Inc. If a law conflicts with this Code or another Company policy,
you must comply with the law; however, if a local custom or policy conflicts with this Code, you
must comply with the Code. If you have any questions about the applicability of any law or
regulation to your activities, or the legality of your or your colleagues’ conduct, you should consult
your supervisor or the General Counsel.
CONFLICTS OF INTEREST
In general, it is not the intent of LECIP Inc. to restrict the right of employees to manage their own
private affairs. However, an employee assumes certain obligations involving
loyalty and trust when employed by LECIP Inc. These obligations may easily be compromised when
a conflict of interest exists. All directors, officers and employees of LECIP Inc. are required to handle
all actual or apparent conflicts of interest in an ethical manner.
In general, a conflict of interest exists when an employee’s private interests interfere or conflict in
any way with the legitimate business interests of LECIP Inc. Examples of actual or potential
conflicts of interest include situations where you or a member of your family:
■
■
1/10/2014
receive improper personal benefits (including benefits from a customer, supplier or
competitor) as a result of your position with LECIP Inc;
use LECIP Inc. property for your personal benefit;
Page 1 of 3
Version 1.0
LECIP INC.
CODE OF ETHICS
■
■
■
have a financial interest in a customer, supplier or competitor that is significant enough
to cause divided loyalty with the Company, or the appearance of such divided loyalty;
acquire an interest in property (including intellectual property) in which you have
reason to know LECIP Inc. has, or might have, an interest; or
make gifts or payments, or provide special favors, to customers or suppliers with a
value significant enough to cause them to take an action beneficial to the Company that
they would not otherwise have taken.
It is almost always a conflict of interest for a LECIP Inc. employee to work simultaneously for a
competitor, customer or supplier. You are not allowed to work for a competitor as a director or
consultant. The best policy is to avoid any direct or indirect business connection with our
customers, suppliers or competitors, except on the Company’s behalf. In addition, employees,
officers and directors are prohibited from taking for themselves personally any opportunities that
are discovered through the use of corporate property, information or position, except with the
consent of the Board of Directors.
Many situations where there is some doubt as to whether a conflict of interest exists can be
resolved with proper advice. Conflicts of interest are not always clear-cut. If you are in doubt about
any situation and the potential for a conflict of interest, you should discuss the matter with your
supervisor.
DISCLOSURE
It is of paramount importance to LECIP Inc. that all disclosure in reports and other documents filed
by LECIP Inc. with the Securities and Exchange Commission or in other public communications by
LECIP Inc. is full, fair, accurate, timely and understandable. All officers, directors, employees and
contract workers must take all steps necessary to assist LECIP Inc. in fulfilling these
responsibilities, consistent with each person’s role in the Company. You should give prompt,
accurate answers to all inquiries in connection with LECIP Inc’s preparation of public reports and
disclosures.
LECIP Inc’s Chief Executive Officer, Chief Financial Officer and Controller (our “Senior Financial
Officers”) each bear a special responsibility with respect to our public disclosure and
communications. Each of our Senior Financial Officers is required to:
■
■
1/10/2014
take all necessary steps to ensure full, fair, accurate, timely and understandable
disclosure in reports that the Company files with, or submits to, governmental agencies
and in other public communications; and
foster a culture throughout LECIP Inc. that ensures the fair and timely reporting of the
Company’s results of operations and financial condition and other financial information.
Page 2 of 3
Version 1.0
LECIP INC.
CODE OF ETHICS
COMPLIANCE
LECIP Inc. is committed to the prompt and consistent enforcement of this Code of Conduct. The
Company will ensure that employees, officers and directors may access this Code of Ethics on the
Company’s website. In addition, each current employee will be provided with a copy of the Code.
New employees will receive a copy of the Code as part of their Employee Manual or new hire
information. From time to time, the Company will sponsor employee training programs in which
the Code and other Company policies and procedures will be discussed.
When an alleged violation of the Code of Ethics is reported, the Company shall take prompt and
appropriate action in accordance with the law and regulations and otherwise consistent with good
business practice.
Any violation of applicable law or any deviation from the standards embodied in this Code of Ethics
will subject you to disciplinary action, up to and including termination of employment. In addition
to imposing discipline upon employees involved in non- compliant conduct, the Company also will
impose discipline, as appropriate, upon an employee’s supervisor, if any, who directs or approves
such employees’ improper actions, or is aware of those actions but does not act appropriately to
correct them, and upon other individuals who fail to report known non-compliant conduct. In
addition to imposing its own discipline, the Company will bring any violations of law to the
attention of appropriate law enforcement personnel.
Any waiver of a violation of this Code of Ethics by an executive officer or director of LECIP Inc. must
be approved by the Company’s Board of Directors, and any such waiver and the reasons for such
waiver must be promptly disclosed to the public.
1/10/2014
Page 3 of 3
Version 1.0

Vol. 2, Tab 11 - LECIP Inc. - Statements and

Transcription

Similar documents

Annual Report 2005

Teleplan Annual Report 2007 from website

Teleplan_GB_2006_Final

16 MONTH LEASE SPECIAL

Annual Report - Makino Milling Machine Co. Ltd.

6-7

URL: http://www.minebea.co.jp/english/

review of financial results

pdf - HaveSiteWillTravel.com

for lease - Godin Property Brokers

for lease - Godin Property Brokers

HEIWA CORPORATION ANNUAL REPORT 2002