fy2016 consolidated financial and operating … · representative: shigeo yamamoto, president &...

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FY2016 Consolidated Financial and Operating Results<JGAAP> (Overview – English translation of the Japanese original) April 27, 2016

Company Name: SANYO DENKI CO., LTD. Code Number: 6516 (Listed on the First Section of the Tokyo Stock Exchange) (URL: http://www.sanyodenki.co.jp/) Representative: Shigeo Yamamoto, President & CEO Contact: Kanichiro Tamokami, Operating Officer for Administration, Manager of Accounting Department Phone: (03) 5927-1020 Scheduled date for the Ordinary General Meeting of Shareholders: June 15, 2016 Scheduled date for commencement of dividend payments: June 16, 2016 Scheduled date for submitting the Securities Report: June 15, 2016 Availability of supplementary briefing material on annual results: Yes Schedule of annual results briefing session: Yes (For analysts)

(Amounts below one million yen are truncated.)

1. Overview of the Consolidated Financial and Operating Results for FY2016 (from April 1, 2015 to March 31, 2016)

(1) Consolidated operating results (% indicates changes from the previous term)

Net sales Operating income Ordinary income

Profit attributable to owners of parent

¥ Million % ¥ Million % ¥ Million % ¥ Million %

FY2016 80,282 (12.5) 5,342 (28.6) 5,387 (35.9) 3,685 (35.6) FY2015 91,745 35.6 7,478 55.1 8,409 56.6 5,720 53.4

Note: Comprehensive income: FY2016: ¥1,606 million (-79.1%) FY2015: ¥7,698 million (23.9%)

Basic earnings

per share Diluted earnings

per share Rate of return

on equity

Ratio of ordinary income to total

assets

Ratio of operating

income to net sales

Yen Yen % % %

FY2016 59.34 – 7.1 6.2 6.7 FY2015 92.09 – 11.7 10.0 8.2

(Reference) Equity in earnings of affiliates: FY2016: ¥– million FY2015: ¥– million

In preparation of consolidated financial statements until FY2014, necessary adjustments for consolidated accounting

had been made with using the financial statements of 14 overseas consolidated subsidiaries as of three months before.

We have changed our method to use the financial statements of the overseas consolidated subsidiaries for the same

period as ours, beginning from FY2015. Therefore, the consolidated statements of income for the previous fiscal year

include the three-month results from January 1 to March 31, 2014 of the overseas consolidated subsidiaries.

As a result, documents are provided in “Analysis of Operating Results” on page 5 of these documents which allow for

comparison between the results for FY2016 and the twelve-month results of the consolidated statements of income for

FY2015 that exclude the results of overseas consolidated subsidiaries from January 1 to March 31, 2014.

(2) Consolidated financial position

Total assets Net assets Equity ratio Net assets per share

¥ Million ¥ Million % Yen

FY2016 84,945 52,099 61.3 838.80 FY2015 90,176 51,618 57.2 830.94

(Reference) Equity: FY2016: ¥52,092 million FY2015: ¥51,612 million

(3) Consolidated cash flows

Cash flows from

operating activities Cash flows from

investing activities Cash flows from

financing activities

Cash and cash equivalents at end of

year ¥ Million ¥ Million ¥ Million ¥ Million

FY2016 4,863 (2,057) (2,708) 12,743 FY2015 5,801 (3,587) (3,352) 13,151

http://www.sanyodenki.co.jp/

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2. Dividends

Annual cash dividend per share Total amount of cash

dividends (Annual)

1Q 2Q 3Q 4Q Annual

Yen Yen Yen Yen Yen ¥ Million

FY2015 – 8.00 – 9.00 17.00 1,055 FY2016 – 9.00 – 9.00 18.00 1,117

FY2017 (Forecast) – 9.00 – 9.00 18.00

Payout ratio

(Consolidated)

Ratio of dividends to

net assets

(Consolidated)

% %

FY2015 18.5 2.2 FY2016 30.3 2.2

FY2017 (Forecast) 24.3

3. Forecast for FY2017 (from April 1, 2016 to March 31, 2017) (% indicates changes from the previous corresponding term)

Net sales Operating income Ordinary income Profit attributable to

owners of parent

Basic earnings per

share ¥ Million % ¥ Million % ¥ Million % ¥ Million % Yen

Interim period 39,300 (2.7) 2,900 (4.7) 2,900 (7.7) 2,000 2.1 32.20

Full year 82,300 2.5 6,700 25.4 6,700 24.4 4,600 24.8 74.07

4. Others (1) Significant changes in subsidiaries during FY2016: None (Change of certain subsidiaries that involves the scope of consolidation) (2) Changes in accounting policies, changes in accounting estimates, and restatements of prior period

financial statements after error corrections 1) Changes in accounting policies due to revisions to accounting standards: Exists 2) Changes in accounting policies due to other than 1): Exists 3) Changes in accounting estimates: Exists 4) Restatement of prior period financial statements after error corrections: None

(3) Number of issued shares (common shares)

1) Number of issued shares at

the end of the period

(including treasury stock) FY2016

64,860,935

shares FY2015

64,860,935

shares

2) Number of treasury stock at

the end of the period FY2016

2,757,424

shares FY2015

2,748,132

shares

3) Average number of shares

during the period FY2016

62,107,090

shares FY2015

62,115,156

shares

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(Reference) Summary of the Non-consolidated Financial and Operating Results 1. Overview of the Non-consolidated Financial and Operating Results for FY2016 (from April 1, 2015 to March 31, 2016) (1) Non-consolidated operating results

(% indicates changes from the previous term)

Net sales Operating income Ordinary income Profit

¥ Million % ¥ Million % ¥ Million % ¥ Million %

FY2016 60,301 (11.5) 2,851 (42.6) 3,516 (40.4) 2,272 (42.4) FY2015 68,102 24.5 4,969 68.9 5,898 68.0 3,948 65.8

Basic earnings

per share Diluted earnings

per share Yen Yen

FY2016 36.60 – FY2015 63.57 –

(2) Non-consolidated financial position

Total assets Net assets Equity ratio Net assets per share

¥ Million ¥ Million % Yen

FY2016 60,430 39,117 64.7 629.87 FY2015 65,805 38,076 57.9 613.02

(Reference) Equity: FY2016: ¥39,117 million FY2015: ¥38,076 million

2. Forecast Non-consolidated Performance for FY2017 (from April 1, 2016 to March 31, 2017) (% indicates changes from the previous corresponding term)

Net sales Ordinary income Profit Basic earnings

per share

¥ Million % ¥ Million % ¥ Million % Yen

Interim period 30,400 (1.7) 2,100 (15.7) 1,500 (20.5) 24.15

Full year 64,000 6.1 4,500 28.0 3,200 40.8 51.53

*Status of execution of the audit procedures of financial results

The audit procedures under the Financial Instruments and Exchange Act have not been completed at

the time of the disclosure of these financial results.

*Explanation for the appropriate use of performance forecasts and other special notes

Statements in these reports regarding the next fiscal year and other future events are evaluations

made based upon the information available at the time these reports were prepared and believed to be

reasonable. Therefore, they do not constitute a guarantee that they will be realized. Accordingly, actual

results may vary significantly from the forecast results stated here for a number of factors.

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Table of Contents 1. Analyses of Operating Results and Financial Position ................................................................. 5

(1) Analysis of Operating Results .................................................................................................. 5 (2) Analysis of Financial Position ................................................................................................... 7 (3) Dividend Policy and Payments for the Current Fiscal Year and the Next Fiscal Year ................ 8

2. Overview of the Group ................................................................................................................. 9 3. Management Policies ................................................................................................................. 11

(1) Basic Management Policies of the Company .......................................................................... 11 (2) Management Targets .............................................................................................................. 11 (3) Medium- to Long-Term Business Strategies of the Company .................................................. 11 (4) Issues to be Addressed by the Company ............................................................................... 12 (5) Other Important Matters for Management of the Company .................................................... 12

4. Basic Policy on Selection of Accounting Standards .................................................................... 12

5. Consolidated Financial Statements ............................................................................................ 13

(1) Consolidated Balance Sheets ................................................................................................ 13 (2) Consolidated Statements of Income and Comprehensive Income .......................................... 15 (3) Consolidated Statements of Changes in Net Assets ............................................................... 17 (4) Consolidated Statements of Cash Flows ................................................................................ 19 (5) Notes to the Consolidated Financial Statements .................................................................... 21

(Notes on Going Concern Assumption) ............................................................................... 21 (Important Matters that Form the Basis for Preparing Consolidated Financial Statements) ......................................................................................................................... 21 (Omission of Disclosure) ..................................................................................................... 21 (Changes in Accounting Policies) ........................................................................................ 21 (Changes in Accounting Policies that Are Difficult to Distinguish from Changes in Accounting Estimates) ......................................................................................................... 21 (Segment Information, etc.) ................................................................................................. 22 (Per Share Information) ....................................................................................................... 26 (Material Subsequent Events) ............................................................................................. 26

6. Non-consolidated Financial Statements ..................................................................................... 27

(1) Non-consolidated Balance Sheets ......................................................................................... 27 (2) Non-consolidated Statements of Income ................................................................................ 30 (3) Non-consolidated Statements of Changes in Net Assets ........................................................ 31 (4) Notes to the Non-consolidated Financial Statements ............................................................. 37

(Notes on Going Concern Assumption) ............................................................................... 37 7. Others ....................................................................................................................................... 37

(1) Changes in Directors and Corporate Auditors ........................................................................ 37

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1. Analyses of Operating Results and Financial Position (1) Analysis of Operating Results

During the fiscal year under review, the Japanese economy remained stagnant due to such factors

as weakness in domestic demand and slowdown in the Chinese economy.

Under such circumstances, the demand from the equipment industries, including machine tools and

robots, which are the Group’s main clients, was significantly sluggish.

As a result, consolidated net sales totaled ¥80,282 million in the fiscal year under review, down

12.5% from the previous year. Consolidated operating income decreased by 28.6% to ¥5,342 million

and consolidated ordinary income declined by 35.9% to ¥5,387 million, while profit attributable to

owners of parent amounted to ¥3,685 million, down 35.6%.

Order intake decreased by 15.9% to ¥79,460 million, while the backlog of orders decreased by

27.9% to ¥11,904 million.

In preparation of consolidated financial statements so far, necessary adjustments for consolidated

accounting have been made with using the financial statements of 14 overseas consolidated

subsidiaries as of three months before. In order to prepare the most up-to-date consolidated financial

statements, we have changed our method to use the financial statements of the overseas consolidated

subsidiaries for the same period as ours, beginning from FY2015.

Therefore, the actual results for the previous fiscal year include the three-month results from January

1 to March 31, 2014 of the overseas consolidated subsidiaries. The comparison between the actual

results for the fiscal year under review and the actual results for the previous fiscal year that exclude the

results of the overseas consolidated subsidiaries from January 1 to March 31, 2014 is as shown in the

following table:

(Million yen)

FY2016 Actual Results

FY2015

Actual Results

January - March 2014

Actual Results for Overseas Consolidated Subsidiaries

FY 2015 Actual Results

(After Adjustment)

Year on Year Change

After Adjustment

Net Sales 80,282 91,745 4,641 87,104 (7.8%)

Operating Income 5,342 7,478 434 7,043 (24.2%)

Ordinary Income 5,387 8,409 425 7,984 (32.5%)

Profit Attributable to

Owners of Parent 3,685 5,720 313 5,406 (31.8%)

Segment operating results by geographical area are as follows (Note 1):

1) Japan

Companies operating in Japan are the Company and its consolidated subsidiaries: SANYO KOGYO

CO., LTD. and SANYO DENKI Techno Service CO., LTD. Segment sales amounted to ¥80,124 million,

down 9.0% from the previous year. Segment profit decreased by 34.0% to ¥3,816 million.

2) North America

The Company has a consolidated subsidiary in North America: SANYO DENKI AMERICA, INC.

Segment sales decreased by 11.1% to ¥8,208 million. Segment profit decreased by 4.7% to ¥227

million. 3) Europe

The Company’s consolidated subsidiaries operating in Europe are SANYO DENKI EUROPE S.A.

and SANYO DENKI GERMANY GmbH. Segment sales went down by 17.8% to ¥4,609 million.

Segment profit decreased by 43.1% to ¥299 million.

4) East Asia

The Company’s consolidated subsidiaries operating in East Asia include SANYO DENKI SHANGHAI

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CO., LTD., SANYO DENKI (H.K.) CO., LIMITED, SANYO DENKI TAIWAN CO., LTD., SANYO DENKI

KOREA CO., LTD., SANYO DENKI ENGINEERING (Shanghai) CO., LTD., which is a subsidiary of

SANYO DENKI SHANGHAI CO., LTD., as well as SANYO DENKI (Shenzhen) CO., LTD., SANYO

DENKI (Zhongshan) CO., LTD. and SANYO DENKI ENGINEERING (Shenzhen) CO., LTD., all of which

are subsidiaries of SANYO DENKI (H.K.) CO., LIMITED. Segment sales decreased by 23.2% to

¥11,769 million. Segment profit decreased by 91.6% to ¥52 million.

5) Southeast Asia

The Company’s consolidated subsidiaries operating in Southeast Asia include SANYO DENKI

PHILIPPINES, INC., SANYO DENKI SINGAPORE PTE. LTD., and SANYO DENKI INDIA PRIVATE

LIMITED as well as SANYO DENKI (THAILAND) CO., LTD., which is a subsidiary of SANYO DENKI

SINGAPORE PTE. LTD. Segment sales decreased by 18.4% to ¥16,463 million. Segment profit

increased by 22.1% to ¥627 million.

(Note 1): With regard to the segment sales and segment profit from 2) to 5) above, the year-on-year

change between the twelve-month operating results for the previous fiscal year that exclude the results

of the overseas consolidated subsidiaries from January 1 to March 31, 2014 and the operating results

for the fiscal year under review is as following:

Segment sales:

North America: up 11.4% Europe: up 1.9% East Asia: down 11.3% Southeast Asia: down 0.3%

Segment profit:

North America: up 49.0% Europe: down 29.3% East Asia: down 90.4% Southeast Asia: up 73.0%

The general state of business by division is as follows (Note 2):

1) Cooling Systems Division

As for “San Ace,” which is Sanyo Denki’s brand name for cooling system products, demand was

higher in the telecommunications industry and servers for data centers. Conversely, demand for

mounters and machine tools in the factory automation industry, and demand for power conditioners for

photovoltaic generation within the environmental industry decreased.

As a result, net sales decreased by 9.9% year on year to ¥21,212 million. The amount of orders

received dropped by 9.2% to ¥21,477 million, and the order backlog increased by 9.0% to ¥3,197

million. 2) Power Systems Division

Among our products under the brand name of “SANUPS” for power supply equipment, demand for

power conditioners declined because grid connection negotiations for photovoltaic generation were

prolonged in many cases.

As a result, net sales decreased by 21.8% year on year to ¥11,204 million, the amount of orders

received dropped by 20.3% to ¥11,179 million, and the order backlog decreased by 1.1% to ¥2,260

million.

3) Servo Systems Division

As for “SANMOTION,” which is the brand name for servo systems, demand from domestic and

overseas manufacturers of machine tools, injection molding machines and robots declined significantly,

due to the slowdown in the Chinese economy. Conversely, demand for semiconductor manufacturing

equipment was strong, due to an increase in capital expenditure.

Consequently, net sales went down by 16.0% year on year to ¥35,813 million, the amount of orders

received decreased by 21.9% to ¥34,479 million, and the order backlog dropped by 21.4% to ¥4,896

million.

4) Electrical Equipment Sales Division

Sales of industrial electrical equipment, control equipment and electronic materials were slightly

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weak for such sectors as industrial machines, and demand from machine tools, robots and medical

devices sectors were also stagnant. On the other hand, demand for photovoltaic generation control

panels for overseas was strong, leading to a considerable growth in sales.

In iron and steel-related business sectors, demand for the renewal of aged equipment was solid.

Concerning transactions that are made as an agent, net sales and cost of sales were previously

recorded as total amounts until FY2015, but beginning in the first quarter of the fiscal year under review,

we changed the method to recording net amount of net sales and cost of sales.

As a result, net sales increased by 14.0% year on year to ¥9,681 million, the amount of orders

received dropped by 1.1% to ¥9,813 million, and the order backlog decreased by 82.1% to ¥793 million.

5) Electrical Works Contracting Division

With respect to factory equipment in steel mills, the volume of renewal work and repair work carried

out exceeded the initial plan, buoyed by an increase in demand.

Conversely, with regard to demand for the construction of photovoltaic generation equipment, both

orders and sales decreased due to declined purchase price for photovoltaic power.

As a result, net sales decreased by 14.3% year on year to ¥2,370 million, the amount of orders

received dropped by 7.4% to ¥2,511 million, and the order backlog increased by 22.8% to ¥757 million.

(Note 2): With regard to net sales and the amount of orders received by division from 1) to 3) above, the

year-on-year change between the twelve-month operating results for the previous fiscal year that

exclude the results of the overseas consolidated subsidiaries from January 1 to March 31, 2014 and the

operating results for the fiscal year under review is as following:

Net sales:

Cooling Systems Division: down 0.9% Power Systems Division: down 21.5% Servo Systems Division: down 10.8%

Amount of orders received:

Cooling Systems Division: down 0.2% Power Systems Division: down 20.0% Servo Systems Division: down 17.3%

As for the outlook for the next fiscal year, although there are concerns about deflation observed in

Europe and deceleration in the Chinese economy, the economy will likely continue on a recovery path,

supported by factors such as domestic demand due to economic measures and increased capital

investment in line with a recovery in corporate earnings.

Amid such an environment, the Group will continue activity for globalization of the entire corporate

activities and will continuously promote the production and sale of the industry-leading high

performance, highly trustworthy products.

(2) Analysis of Financial Position

As for the financial position in the fiscal year under review, total assets went down by ¥5,230 million

from the previous fiscal year, liabilities decreased by ¥5,711 million, and net assets increased by ¥480

million.

Major factors of fluctuation in total assets were a reduction of ¥2,679 million in notes and accounts

receivable-trade, a decrease of ¥682 million in cash and bank deposits, and an increase of ¥610 million

in machinery, equipment and vehicles, net.

Major factors of fluctuation in liabilities were a decrease of ¥1,754 million in accrued income taxes, a

reduction of ¥1,332 million in notes and accounts payable-trade, and an increase of ¥1,063 million in

net defined benefit liability.

Major factors of fluctuations in net assets included an increase of ¥2,567 million in retained earnings,

a decrease of ¥978 million in foreign currency translation adjustments, and a decrease of ¥775 million

in remeasurements of defined benefit plans.

(Conditions of cash flows)

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Cash and cash equivalents (hereinafter referred to as “cash”) for the fiscal year under review

decreased by ¥407 million year on year to ¥12,743 million. The conditions of each cash flow and factors

thereof are as follows:

(Cash flows from operating activities)

Net cash provided by operating activities during the fiscal year under review decreased by ¥938

million year on year to ¥4,863 million. This is mainly attributable to income before income taxes and

non-controlling interests of ¥5,385 million, income taxes paid of ¥3,335 million and depreciation and

amortization of ¥1,978 million.

(Cash flows from investing activities)

Net cash used in investing activities during the fiscal year under review amounted to ¥2,057 million

and the cash used decreased by ¥1,529 million from the previous year. This is mainly attributable to

purchase of property, plant and equipment of ¥2,180 million such as production equipment and others.

(Cash flows from financing activities)

Net cash used in financing activities during the fiscal year under review amounted to ¥2,708 million

and the cash used decreased by ¥643 million from the previous year. This is mainly attributable to

¥1,180 million in repayments of long-term debt, dividends paid of ¥1,113 million, and ¥152 million in

payment of lease obligations payable.

(Reference) Changes in cash flow related indicators

Fiscal year

ended

March 31, 2012

Fiscal year

ended

March 31, 2013

Fiscal year

ended

March 31, 2014

Fiscal year

ended

March 31, 2015

Fiscal year

ended

March 31, 2016

Shareholders’ equity ratio 55.0% 60.2% 58.6% 57.2% 61.3%

Shareholders’ equity ratio

based on fair value 44.9% 61.4% 53.0% 59.0% 38.4%

Ratio of cash flow to

interest-bearing debt 1.5 years 1.9 years 1.8 years 1.5 years 1.5 years

Interest coverage ratio 51.1 43.2 66.9 67.3 62.8

Shareholders’ equity ratio: Shareholders’ equity/total assets

Shareholders’ equity ratio based on fair value: Total market value of stock/total assets

Ratio of cash flow to interest-bearing debt: Interest-bearing debt/cash flow

Interest coverage ratio: Cash flow/interest paid

* The indicators were calculated by using consolidated financial figures.

* The total market value of stock was calculated based on the total number of shares outstanding,

excluding the treasury stock.

* The figures of cash flows from operating activities are used in the table.

* Interest-bearing debt includes all debts recorded on the balance sheets for which interest is

paid.

(3) Dividend Policy and Payments for the Current Fiscal Year and the Next Fiscal Year

The Company will further reinforce its business structure that can survive intensifying competition in

the industry and increase internal reserves in consideration of business developments in the future, and

its basic policy is to pay dividends in proportion to the achievements the Company has made.

As for the cash dividend for the fiscal year under review, the year-end cash dividend is set at ¥9 per

share, and the total dividend for the year will be ¥18 per share, including a ¥9 interim dividend per

share. The cash dividend for the next fiscal year is scheduled to be ¥18 per share, including a ¥9

interim dividend per share and a ¥9 year-end dividend per share.

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2. Overview of the Group The Group is comprised of the Company and 17 subsidiaries, and its major businesses include

manufacturing and sale of cooling fans, power supply equipment, stepping motors, drive units,

servomotors, controllers and others.

Some of the products of the Group are manufactured by its subsidiaries, SANYO DENKI

PHILIPPINES, INC. and SANYO DENKI (Zhongshan) CO., LTD. In Japan, its products are

manufactured by its subsidiary, SANYO DENKI Techno Service CO., LTD. Products are sold in Japan

by its subsidiary, SANYO KOGYO CO., LTD., in Europe by SANYO DENKI EUROPE S.A. and SANYO

DENKI GERMANY GmbH, in North America by SANYO DENKI AMERICA, INC., and in China, Asia and

Oceania by Asian-based subsidiaries that are SANYO DENKI SHANGHAI CO., LTD., SANYO DENKI

(H.K.) CO., LIMITED, SANYO DENKI SINGAPORE PTE. LTD., SANYO DENKI KOREA CO., LTD.,

SANYO DENKI TAIWAN CO., LTD., SANYO DENKI Techno Service (Shenzhen) CO., LTD. and

SANYO DENKI (THAILAND) CO., LTD.

Our subsidiaries are as follows:

Consolidated subsidiaries

Japan

SANYO KOGYO CO., LTD. Sale and installation of electrical machinery

and equipment

SANYO DENKI Techno Service CO., LTD. Manufacturing and repair of electrical

machinery and equipment

Overseas

SANYO DENKI PHILIPPINES, INC. Manufacturing of electrical machinery and

equipment

SANYO DENKI (Zhongshan) CO., LTD. Manufacturing of electrical machinery and

equipment

SANYO DENKI EUROPE S.A. Sale of electrical machinery and equipment

SANYO DENKI AMERICA, INC. Sale of electrical machinery and equipment

SANYO DENKI SHANGHAI CO., LTD. Sale of electrical machinery and equipment

SANYO DENKI (H.K.) CO., LIMITED Sale of electrical machinery and equipment

SANYO DENKI TAIWAN CO., LTD. Sale of electrical machinery and equipment

SANYO DENKI SINGAPORE PTE. LTD. Sale of electrical machinery and equipment

SANYO DENKI GERMANY GmbH Sale of electrical machinery and equipment

SANYO DENKI KOREA CO., LTD. Sale of electrical machinery and equipment

SANYO DENKI (Shenzhen) CO., LTD. Sale of electrical machinery and equipment

SANYO DENKI (THAILAND) CO., LTD. Sale of electrical machinery and equipment

SANYO DENKI INDIA PRIVATE LIMITED Sale of electrical machinery and equipment

SANYO DENKI ENGINEERING (Shanghai) CO.,

LTD.

Repair of electrical machinery and equipment

SANYO DENKI Techno Service (Shenzhen) CO.,

LTD.

Repair of electrical machinery and equipment

Non-consolidated subsidiaries

There is no relevant information.

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The business diagram of the Company is as shown below:

Customers in China, Asia and Oceania Customers in Japan Customers in North America Customers in Europe

Subsidiaries of SANYO DENKI (H.K.) CO., LIMITED SANYO DENKI (Shenzhen) CO., LTD. SANYO DENKI Techno Service (Shenzhen) CO., LTD.

Subsidiaries SANYO DENKI EUROPE S.A. SANYO DENKI GERMANY GmbH

Subsidiary SANYO DENKI AMERICA, INC.

Subsidiary SANYO KOGYO CO., LTD .

SANYO DENKI CO., LTD .

Subsidiary SANYO DENKI (H.K.) CO., LIMITED

Subsidiaries of SANYO DENKI SINGAPORE PTE. LTD. SANYO DENKI (THAILAND) CO., LTD.

Subsidiary SANYO DENKI SINGAPORE PTE. LTD .

Subsidiary of SANYO DENKI SHANGHAI CO., LTD. SANYO DENKI ENGINEERING (Shanghai) CO., LTD .

Subsidiary SANYO DENKI SHANGHAI CO., LTD .

Subsidiary SANYO DENKI KOREA CO., LTD. SANYO DENKI TAIWAN CO., LTD. SANYO DENKI INDIA PRIVATE LIMITED

Subsidiary of SANYO DENKI (H.K.) CO., LIMITED SANYO DENKI ( Zhongshan ) CO., LTD .

Subsidiary SANYO DENKI PHILIPPINES, INC .

Subsidiary SANYO DENKI Techno Service CO., LTD .

Flow of products and services

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3. Management Policies (1) Basic Management Policies of the Company

The Group aims to increase its existence value in human society and has declared the following

corporate philosophy: “We SANYO DENKI make the dreams of people come true for the happiness of

people in cooperation with people.” To realize this corporate philosophy, we have decided the following

six management philosophies and the code of conduct that we ourselves must comply with in our

business activities.

・ For society and the natural environment, we will help preserve the global environment and

contribute to the prosperity of mankind through our corporate activities.

・ For customers and users, we will create new values through technology, products and services.

・ For suppliers and vendors, we will strive for integrated technical development and harmonious

mutual prosperity through parts purchase, production contracting and joint development.

・ For investors and financial institutions, we will increase our investment worth and credit through

sound management policy and good access to information.

・ For competitors and the industry, we will strive to build industrial and technical development

through technical alliances and competition.

・ For all of our employees, we will help individuals to achieve self-fulfillment through their work

and the company.

(2) Management Targets

1. Management with focus on free cash flow (FCF)

2. Maintenance of return on equity (ROE) at 8% or higher

(3) Medium- to Long-Term Business Strategies of the Company

The Group started the five-year “8th Mid-term Management Plan” in April 2016.

With an aim to become a global enterprise and create the “world’s top brand” with the entire Group

working as one, we will implement measures under the following important policies and action

guidelines.

Policies

1) Expand markets in new regions and in new industries.

2) Develop products that will realize new dreams.

3) Aim to be No. 1 in the industry in operation quality.

4) Establish a corporate structure capable of turning environmental changes into opportunities.

Action guidelines

1) We take on challenges in fields in which we do not excel and change ourselves so that we

come to excel in them.

2) We become No. 1 in fields in which we excel.

3) We provide products and services of consistently high quality to our customers worldwide.

4) We execute business processes of consistently high quality by sharing information across the

entire Group in a timely manner.

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(4) Issues to be Addressed by the Company

With the “ensuring of orders received” and “lowering of break-even point” as the basics, we aim to

“promote the Company’s brand to the world’s top level,” and create a system for production, sale and

technical support that can quickly and appropriately cope with any environmental changes.

(5) Other Important Matters for Management of the Company

There is an insurance contract concluded between the Company and KYODO KOGYO CO., LTD.

(Representative Director: Shoichi Yamamoto) as a major shareholder of the Company.

4. Basic Policy on Selection of Accounting Standards In consideration of comparability across periods and across companies for the consolidated financial

statements, the Group will prepare consolidated financial statements under Japanese accounting

standards for the foreseeable future, and concerning the application of International Financial Reporting

Standards (IFRS), appropriate action will be taken in consideration of trends within and outside of

Japan.

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5. Consolidated Financial Statements (1) Consolidated Balance Sheets

(Million yen)

As of March 31, 2015 As of March 31, 2016

Assets Current assets

Cash and bank deposits 13,896 13,213 Notes and accounts receivable-trade 23,073 20,393 Electronically recorded monetary claims -

operating 3,067 3,412

Securities 54 – Merchandise and finished goods 6,244 5,757 Raw materials 7,449 7,007 Work in process 3,498 3,245 Costs on uncompleted construction contracts 119 249 Supplies 25 35 Other receivables 599 360 Deferred tax assets 1,123 762 Others 1,365 925 Allowance for doubtful accounts (27) (24) Total current assets 60,488 55,339

Fixed assets Tangible fixed assets

Buildings and structures, net 9,902 9,483 Machinery, equipment and vehicles, net 2,223 2,833 Land 6,458 6,450 Construction in progress 665 516 Others, net 876 1,104 Total tangible fixed assets 20,127 20,388

Intangible fixed assets 506 489 Investments and other assets

Investments in securities 6,009 5,382 Deferred tax assets 371 651 Others 2,690 2,712 Allowance for doubtful accounts (17) (17) Total investments and other assets 9,054 8,728

Total fixed assets 29,687 29,606 Total assets 90,176 84,945

14

(Million yen)


Liabilities Current liabilities

Notes and accounts payable–trade 15,956 14,623 Short-term debt 7,429 6,816 Accrued income taxes 1,974 220 Deferred tax liabilities 2 3 Reserve for bonuses to directors and corporate

auditors 92 89

Other current liabilities 6,053 4,085 Total current liabilities 31,509 25,839

Long-term liabilities Long-term debt 1,263 514 Lease obligations 463 304 Deferred tax liabilities 152 0 Deferred tax liabilities–revaluation 885 840 Net defined benefit liability 4,283 5,347 Total non-current liabilities 7,048 7,007

Total liabilities 38,558 32,846 Net assets

Shareholders’ equity Common stock 9,926 9,926 Capital surplus 11,460 11,460 Retained earnings 27,431 29,998 Treasury stock (912) (919) Total shareholders’ equity 47,906 50,466

Accumulated other comprehensive income Unrealized holding gain on securities 1,589 1,220 Revaluation reserve for land, net of tax 891 936 Foreign currency translation adjustments 2,343 1,365 Remeasurements of defined benefit plans (1,119) (1,895) Total accumulated other comprehensive income 3,705 1,626

Non-controlling interests 6 6 Total net assets 51,618 52,099

Total liabilities and net assets 90,176 84,945

15

(2) Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income

(Million yen)

For the fiscal year

ended March 31, 2015

For the fiscal year


Net sales 91,745 80,282 Cost of sales 71,163 61,808 Gross profit 20,582 18,474 Selling, general and administrative expenses 13,103 13,131 Operating income 7,478 5,342 Other income

Interest income 72 39 Dividend income 100 114 Gain on sales of securities 0 0 Foreign exchange gain 526 – Subsidy income 132 – Rent income 83 82 Others 121 134 Total other income 1,037 370

Other expenses Interest expense 74 65 Loss on sales of notes payable 8 9 Foreign exchange loss – 239 Others 22 10 Total other expenses 105 325

Ordinary income 8,409 5,387 Extraordinary income

Gain on sales of fixed assets 1 1 Total extraordinary income 1 1

Extraordinary loss Loss on sales of fixed assets 0 – Loss on retirement of fixed assets 8 3 Loss on valuation of membership 3 – Total extraordinary loss 12 3

Income before income taxes and non-controlling interests

8,398 5,385

Income taxes-current 2,970 1,280 Income taxes-deferred (292) 419 Total income taxes 2,677 1,699 Profit 5,721 3,685 Profit attributable to non-controlling interests 1 0 Profit attributable to owners of parent 5,720 3,685

16

Consolidated Statements of Comprehensive Income (Million yen)

For the fiscal year


For the fiscal year


Profit 5,721 3,685 Other comprehensive income

Unrealized holding gain on securities 899 (369) Revaluation reserve for land, net of tax 91 44 Foreign currency translation adjustments 1,217 (978) Remeasurements of defined benefit plans (231) (775) Total other comprehensive income 1,977 (2,079)

Comprehensive income 7,698 1,606 Comprehensive income attributable to:

Owners of parent 7,697 1,606 Non-controlling interests 0 0

17

(3) Consolidated Statements of Changes in Net Assets For the fiscal year ended March 31, 2015

(Million yen)

Shareholders’ equity

Common stock Capital surplus Retained earnings

Treasury stock Total

shareholders’ equity

Balance at the beginning of the year

9,926 11,460 23,605 (906) 44,086

Cumulative effects of changes in accounting policies

(900) (900)

Restated balance 9,926 11,460 22,704 (906) 43,185

Changes of items during the year

Cash dividends (993) (993)


5,720 5,720

Acquisition of treasury stock

(6) (6)

Disposal of treasury stock

0 0 0

Net changes of items other than shareholders’ equity

–

Total changes of items during the year

– 0 4,726 (5) 4,721

Balance at the end of the year

9,926 11,460 27,431 (912) 47,906

Accumulated other comprehensive income

Non-controlling interests

Total net assets Unrealized holding gain on

securities

Revaluation reserve for land,

net of tax

Foreign currency

translation adjustments

Remeasure-

ments of defined benefit

plans

Total accumulated

other comprehensive

income


690 799 1,125 (887) 1,727 5 45,819


(900)

Restated balance 690 799 1,125 (887) 1,727 5 44,918


Cash dividends (993)


5,720


(6)


0


899 91 1,218 (231) 1,977 0 1,978


899 91 1,218 (231) 1,977 0 6,699


1,589 891 2,343 (1,119) 3,705 6 51,618

18

For the fiscal year ended March 31, 2016 (Million yen)


Common stock Capital surplus Retained earnings

Treasury stock Total

shareholders’ equity


9,926 11,460 27,431 (912) 47,906


Restated balance 9,926 11,460 27,431 (912) 47,906


Cash dividends (1,117) (1,117)


3,685 3,685


(7) (7)




– – 2,567 (7) 2,559


9,926 11,460 29,998 (919) 50,466

Accumulated other comprehensive income

Non-controlling interests

Total net assets Unrealized holding gain on

securities

Revaluation reserve for land,

net of tax

Foreign currency

translation adjustments

Remeasure-

ments of defined benefit

plans

Total accumulated

other comprehensive

income


1,589 891 2,343 (1,119) 3,705 6 51,618


Restated balance 1,589 891 2,343 (1,119) 3,705 6 51,618


Cash dividends (1,117)


3,685


(7)



(369) 44 (978) (775) (2,078) 0 (2,078)


(369) 44 (978) (775) (2,078) 0 480


1,220 936 1,365 (1,895) 1,626 6 52,099

19

(4) Consolidated Statements of Cash Flows (Million yen)

For the fiscal year


For the fiscal year


Cash flows from operating activities Income before income taxes and non-controlling

interests 8,398 5,385

Depreciation and amortization 2,202 1,978 Increase (decrease) in net defined benefit liability 32 (12) Increase (decrease) in allowance for doubtful

accounts (21) (1)

Increase (decrease) in reserve for bonuses to directors and corporate auditors

20 (3)

Interest and dividend income (172) (154) Net loss (gain) on sales of securities (0) 3 Loss on valuation of membership 3 – Interest expenses 74 65 Loss on sales of notes payable 8 9 Foreign exchange loss (gain) 146 (47) Net loss (gain) on sales of fixed assets (0) (1) Net loss (gain) on disposal of fixed assets 8 3 Decrease (increase) in notes and accounts

receivable-trade (3,656) 1,942

Decrease (increase) in inventories (2,818) 585 Decrease (increase) in other receivables (103) 228 Increase (decrease) in notes and accounts

payable–trade 2,636 (860)

Others 1,012 (1,000) Subtotal 7,771 8,121 Interest and dividend received 173 154 Interest paid (86) (77) Income taxes paid (2,056) (3,335) Net cash provided by (used in) operating activities 5,801 4,863

Cash flows from investing activities Increase in time deposits (330) (0) Decrease in time deposits 33 312 Purchase of property, plant and equipment (2,745) (2,180) Proceeds from sales of property, plant and

equipment 51 3

Purchase of intangible fixed assets (168) (147) Purchase of investment securities (84) (46) Proceeds from sales of investment securities 34 88 Payment of loans – (10) Proceeds from loans 21 16 Others (398) (93) Net cash provided by (used in) investing activities (3,587) (2,057)

20

(Million yen)

For the fiscal year


For the fiscal year


Cash flows from financing activities Increase (decrease) in short-term debt (944) (136) Proceeds from long-term debt – 21 Repayments of long-term debt (1,193) (1,180) Acquisition of treasury stock (6) (7) Dividends paid (990) (1,113) Dividends paid to non-controlling interests (7) (0) Payment of lease obligations payable (159) (152) Others (50) (139) Net cash provided by (used in) financing activities (3,352) (2,708)

Effect of exchange rate change on cash and cash equivalents

570 (504)

Net increase (decrease) in cash and cash equivalents (568) (407) Cash and cash equivalents at beginning of year 13,719 13,151 Cash and cash equivalents at end of year 13,151 12,743

21

(5) Notes to the Consolidated Financial Statements (Notes on Going Concern Assumption)


(Important Matters that Form the Basis for Preparing Consolidated Financial Statements) 1. Scope of consolidation

Consolidated subsidiaries: 17

Non-consolidated subsidiaries: –

2. Application of the equity method

There is no relevant company.

3. Closing dates of consolidated subsidiaries

Companies with same closing dates as the company that submits consolidated financial

statements: 3 (March 31)

Companies with differing closing dates as the company that submits consolidated financial

statements: 14 (December 31)

For preparation of consolidated financial statements, financial statements based on provisional

settlements of accounts as of the consolidated closing date are used.

(Omission of Disclosure)

Disclosure is omitted with respect to notes on consolidated balance sheets, consolidated statements

of income, consolidated statements of comprehensive income, consolidated statements of changes in

net assets, consolidated statements of cash flows, lease transactions, transactions with related parties,

tax effect accounting, financial instruments, securities and retirement benefits, since the Company

considers there to be no great necessity for disclosing such information in the financial results.

(Changes in Accounting Policies)

The Accounting Standard for Business Combinations (ASBJ Statement No. 21, September 13, 2013),

the Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22, September 13,

2013) and the Revised Accounting Standard for Business Divestitures (ASBJ Statement No. 7,

September 13, 2013) and other standards have been applied from the fiscal year ended March 31,

2016 to change the presentation of net income and other items, and change minority interests to

non-controlling interests. To reflect the changes in presentation, consolidated financial statements for

the previous fiscal year have been reclassified.

(Changes in Accounting Policies that Are Difficult to Distinguish from Changes in Accounting Estimates)

For depreciation of tangible fixed assets, the Company and its domestic consolidated subsidiaries

previously used the declining-balance method for certain tangible fixed assets. But from the fiscal year

ended March 31, 2016, the straight-line method has been applied.

Responding to the increasing demand overseas, we started operations at the third plant of SANYO

DENKI PHILIPPINES, INC. during the previous fiscal year, and took other measures to enhance the

overseas production system. Upon examining the usage conditions of tangible fixed assets, state of

operation of tangible fixed assets owned by the Company and its domestic consolidated subsidiaries is

hereafter expected to be stable and level out.

The Company decided to change the depreciation method from the previous declining-balance

method to the straight-line method based on the belief that, evenly allocating the depreciation expense

would more appropriately reflect the actual usage status of tangible fixed assets of the Company and its

domestic consolidated subsidiaries.

As a result of this change, operating income, ordinary income and income before income taxes and

non-controlling interests for the fiscal year ended March 31, 2016 increased by ¥254 million each,

22

compared with the amounts under the formerly applied method.

(Segment Information, etc.)

1 Description of reporting segment

(1) Method of decision on reporting segments

The Group’s reporting segments are determined on the basis that separate financial information

of such segments are available and examined periodically by the Board of Directors to make

decisions regarding the allocation of management resources and assess the business performances

of such segments.

The Group mainly produces and sells cooling fans, power supply equipment and servomotors.

The Company and its domestic subsidiaries are in charge of such operations in Japan, and overseas

subsidiaries are in charge of such operations in their respective regions. Each of the consolidated

subsidiaries is an independent business unit, and formulates comprehensive business strategies for

their products and promotes its business activities.

(2) Types of regions that belong to reporting segments

The Group is composed of five reporting segments, Japan, North America, Europe, East Asia and

Southeast Asia, which are determined by grouping the respective consolidated subsidiaries by

region.

2 Calculation method for the amounts of net sales, profit (loss), assets, liabilities and other items for

each reporting segment

The accounting method used for reporting business segments is generally the same as stated in

“Important Matters That Form the Basis for Preparing Consolidated Financial Statements.”

Profit amounts of reporting segments are based on operating income. Intersegment sales and

transfers are based on actual market prices.

(Change in depreciation method of tangible fixed assets)

As written in “Changes in Accounting Policies that Are Difficult to Distinguish from Changes in

Accounting Estimates,” the Company and its domestic consolidated subsidiaries previously used the

declining-balance method for certain tangible fixed assets. But from the fiscal year ended March 31,

2016, the straight-line method has been applied.

As a result of this change, segment profit in “Japan” for the fiscal year ended March 31, 2016

increased by ¥254 million, compared with the amount under the formerly applied method.

23

3 Information on net sales, profit (loss), assets, liabilities and other items by reporting segment


Reporting segment

Japan

North

America Europe East Asia

Southeast

Asia Total

Sales

Sales to customers 64,782 9,003 5,580 10,818 1,560 91,745

Intersegment sales or transfers

23,291 225 27 4,503 18,617 46,666

Total 88,074 9,229 5,608 15,322 20,177 138,412

Segment profit 5,784 238 526 620 514 7,683

Segment assets 77,496 4,066 3,147 8,231 9,851 102,794

Segment liabilities 35,083 2,201 1,432 3,503 3,785 46,006

Other items

Depreciation and amortization

1,488 25 8 53 641 2,217

Increase in tangible fixed assets and intangible fixed assets

1,340 170 11 158 1,738 3,419

In preparation of consolidated financial statements so far, necessary adjustments for consolidated

accounting have been made with using the financial statements of 14 overseas consolidated

subsidiaries as of three months before. In order to prepare the most up-to-date consolidated financial

statements, we changed our method to use the financial statements of the overseas consolidated

subsidiaries for the same period as ours, beginning from FY2015.

Therefore, the consolidated statements of income for the previous fiscal year include the three-month

results from January 1 to March 31, 2014 of the overseas consolidated subsidiaries. The three-month

results for overseas consolidated subsidiaries between January 1, 2014 and March 31, 2014 included

in the consolidated statements of income for the previous fiscal year are as follows:

(From January 1, 2014 to March 31, 2014)

(Million yen)

Reporting segment

Japan

North


Southeast

Asia Total

Sales

Sales to customers – 1,841 1,074 1,446 278 4,641


– 19 8 600 3,391 4,019

Total – 1,861 1,083 2,046 3,669 8,661

Segment profit – 86 102 77 151 417

24


Reporting segment

Japan

North


Southeast

Asia Total

Sales

Sales to customers 58,322 8,142 4,576 8,032 1,207 80,282


21,801 65 32 3,737 15,255 40,892

Total 80,124 8,208 4,609 11,769 16,463 121,175

Segment profit 3,816 227 299 52 627 5,023

Segment assets 73,298 3,468 2,844 6,736 9,303 95,652

Segment liabilities 29,468 1,608 1,038 2,480 3,138 37,734

Other items

Depreciation and amortization

1,242 58 6 68 608 1,983

Increase in tangible fixed assets and intangible fixed assets

1,802 28 11 16 643 2,502

25

4 Differences between amounts recognized in reporting segments and the corresponding amounts

reported in the consolidated financial statements, and the primary items contributing to the difference

(Million yen)

Sales For the fiscal year


For the fiscal year


Total of reporting segments 138,412 121,175

Elimination of intersegment transactions (46,666) (40,892)

Consolidated net sales 91,745 80,282

(Million yen)

Profit For the fiscal year


For the fiscal year



Elimination of intersegment transactions (204) 318

Consolidated operating income 7,478 5,342

(Million yen)

Assets For the fiscal year


For the fiscal year




Consolidated total assets 90,176 84,945

(Million yen)

Liabilities For the fiscal year


For the fiscal year




Consolidated total liabilities 38,558 32,846

(Million yen)

Other items

Total of reporting

segments Adjustments Consolidated

As of

March 31,

2015

As of

March 31,

2016

As of

March 31,

2015

As of

March 31,

2016

As of

March 31,

2015

As of

March 31,

2016

Depreciation and

amortization 2,217 1,983 (14) (5) 2,202 1,978

Increase in tangible

fixed assets and

intangible fixed assets

3,419 2,502 (33) (21) 3,386 2,480

(Note) Adjustments for increase in tangible fixed assets and intangible fixed assets are due to

elimination of intersegment transactions.

26

(Per Share Information)

For the fiscal year


For the fiscal year


Net assets per share ¥830.94 ¥838.80

Basic earnings per share ¥92.09 ¥59.34

Diluted earnings per share – –

(Note) 1. Diluted earnings per share is not disclosed since there are no potentially dilutive shares.

2. The basis for the calculation of basic earnings per share is as follows:

Items For the fiscal year


For the fiscal year


Basic earnings per share

Profit attributable to owners of parent (million

yen) 5,720 3,685

Amount not attributable to common

stockholders (million yen) – –

Profit attributable to owners of parent relating

to common stock (million yen) 5,720 3,685

Average number of common stock outstanding

(shares) 62,115,156 62,107,090

3. The basis for the calculation of net assets per share is as follows:

Items For the fiscal year


For the fiscal year


Total net assets (million yen) 51,618 52,099

Deductible amount from total net assets (million

yen) 6 6

(Subscription rights to shares) – –

(Non-controlling interests) 6 6

Net assets relating to common stock at end of

year (million yen) 51,612 52,092

Number of common stocks for calculation of net

assets per share at end of year 62,112,803 62,103,511

(Material Subsequent Events)


27

6. Non-consolidated Financial Statements (1) Non-consolidated Balance Sheets

(Million yen)


Assets Current assets

Cash and bank deposits 3,554 2,704 Notes receivable-trade 705 457 Electronically recorded monetary claims -

operating 3,067 3,037

Accounts receivable-trade 19,932 15,588 Finished goods 3,005 3,559 Raw materials 4,666 4,505 Work in process 3,034 2,850 Supplies 25 35 Prepaid expense 73 79 Deferred tax assets 632 386 Others 1,079 948 Allowance for doubtful accounts (2) (1) Total current assets 39,774 34,150

Fixed assets Tangible fixed assets

Buildings 7,156 7,065 Structures 240 227 Machinery and equipment 1,253 1,641 Vehicles 22 24 Tools, furniture and fixtures 418 599 Land 6,188 6,188 Construction in progress 323 412 Total tangible fixed assets 15,603 16,159

Intangible fixed assets Leasehold right 44 44 Software 293 326 Others 22 22 Total intangible fixed assets 360 393

28

(Million yen)


Investments and other assets Investments in securities 4,897 4,647 Stocks of subsidiaries and affiliates 3,003 2,718 Investments in capital of subsidiaries and

affiliates 208 208

Long-term loans receivable 72 67 Long-term prepaid expenses 25 109 Deferred tax assets 35 122 Others 1,823 1,853 Allowance for doubtful accounts (0) (0) Total investments and other assets 10,066 9,727

Total fixed assets 26,031 26,280 Total assets 65,805 60,430

Liabilities Current liabilities

Notes payable–trade 1,439 1,069 Accounts payable–trade 9,952 7,325 Short-term debt 5,941 5,780 Long-term debt due within one year 855 450 Lease obligations 130 141 Accounts payable–other 928 647 Accrued expenses 2,600 2,029 Accrued income taxes 1,483 27 Advances received 63 23 Deposits received 46 151 Notes payable–facilities 163 115 Reserve for bonuses to directors and corporate

auditors 80 70

Total current liabilities 23,685 17,831 Long-term liabilities

Long-term debt 512 62 Lease obligations 406 302 Deferred tax liabilities–revaluation 885 840 Reserve for retirement benefits 2,238 2,276 Total long-term liabilities 4,043 3,482

Total liabilities 27,728 21,313

29

(Million yen)


Net assets Shareholders’ equity

Common stock 9,926 9,926 Capital surplus

Legal capital surplus 11,458 11,458 Other capital surplus 2 2 Total capital surplus 11,460 11,460

Retained earnings Legal retained earnings 1,032 1,032 Other retained earnings 14,776 15,931

Reserve for retirement allowances 900 900 Reserve for dividends 790 790 Reserve for advanced depreciation of

fixed assets 61 62

General reserve 1,500 1,500 Retained earnings brought forward 11,525 12,678

Total retained earnings 15,808 16,963 Treasury stock (1,401) (1,409) Total shareholders’ equity 35,794 36,941

Valuation and translation adjustments Unrealized holding gain on securities 1,390 1,239 Revaluation reserve for land, net of tax 891 936 Total valuation and translation adjustments 2,282 2,175

Total net assets 38,076 39,117 Total liabilities and net assets 65,805 60,430

30

(2) Non-consolidated Statements of Income (Million yen)

For the fiscal year


For the fiscal year


Net sales 68,102 60,301 Cost of sales 55,307 49,195 Gross profit 12,795 11,105 Selling, general and administrative expenses 7,825 8,254 Operating income 4,969 2,851 Other income

Interest and dividend income 445 689 Foreign exchange gain 308 – Subsidy income 132 – Rent income 95 93 Others 20 41 Total other income 1,002 824

Other expenses Interest expense 55 40 Foreign exchange loss – 108 Loss on sales of notes payable 8 9 Others 10 0 Total other expenses 74 159

Ordinary income 5,898 3,516 Extraordinary income

Gain on sales of fixed assets 0 0 Total extraordinary income 0 0

Extraordinary loss Loss on retirement of fixed assets 1 1 Loss on valuation of membership 3 – Loss on valuation of stocks of subsidiaries and

affiliates – 285

Total extraordinary loss 4 286 Income before income taxes 5,894 3,230 Income taxes-current 2,014 686 Income taxes-deferred (68) 271 Total income taxes 1,945 957 Profit 3,948 2,272

31

(3) Non-consolidated Statements of Changes in Net Assets For the fiscal year ended March 31, 2015

(Million yen)


Common stock

Capital surplus Retained earnings

Legal capital surplus

Other capital surplus

Total capital surplus

Legal retained earnings


9,926 11,458 1 11,460 1,032


Restated balance

9,926 11,458 1 11,460 1,032


Cash dividends

Profit

Provision of reserve for advanced depreciation of fixed assets



0 0



– – 0 0 –


9,926 11,458 2 11,460 1,032

32


Retained earnings

Other retained earnings

Total retained earnings

Reserve for retirement allowances

Reserve for dividends

Reserve for advanced

depreciation of fixed assets

General reserve Retained earnings brought forward


900 790 58 1,500 9,474 13,754


(900) (900)

Restated balance

900 790 58 1,500 8,573 12,854



Profit 3,948 3,948


2 (2) –





– – 2 – 2,951 2,954


900 790 61 1,500 11,525 15,808

33

Shareholders’ equity Valuation and translation adjustments

Total net assets Treasury stock

Total shareholders’

equity

Unrealized holding gain on

securities

Revaluation reserve for land

Total valuation and translation

adjustments


(1,396) 33,745 596 799 1,396 35,142


(900) (900)

Restated balance

(1,396) 32,845 596 799 1,396 34,241



Profit 3,948 3,948


–


(6) (6) (6)


0 0 0


793 91 885 885


(5) 2,949 793 91 885 3,834


(1,401) 35,794 1,390 891 2,282 38,076

34



Common stock

Capital surplus Retained earnings

Legal capital surplus

Other capital surplus

Total capital surplus

Legal retained earnings


9,926 11,458 2 11,460 1,032


Restated balance

9,926 11,458 2 11,460 1,032


Cash dividends

Profit






– – – – –


9,926 11,458 2 11,460 1,032

35


Retained earnings

Other retained earnings

Total retained earnings

Reserve for retirement allowances

Reserve for dividends

Reserve for advanced

depreciation of fixed assets

General reserve Retained earnings brought forward


900 790 61 1,500 11,525 15,808


Restated balance

900 790 61 1,500 11,525 15,808



Profit 2,272 2,272


1 (1) –





– – 1 – 1,153 1,154


900 790 62 1,500 12,678 16,963

36

Shareholders’ equity Valuation and translation adjustments

Total net assets Treasury stock

Total shareholders’

equity

Unrealized holding gain on

securities

Revaluation reserve for land

Total valuation and translation

adjustments


(1,401) 35,794 1,390 891 2,282 38,076


Restated balance

(1,401) 35,794 1,390 891 2,282 38,076



Profit 2,272 2,272


– –


(7) (7) (7)



(150) 44 (106) (106)


(7) 1,147 (150) 44 (106) 1,040


(1,409) 36,941 1,239 936 2,175 39,117

37

(4) Notes to the Non-consolidated Financial Statements

(Notes on Going Concern Assumption)


7. Others (1) Changes in Directors and Corporate Auditors

1. Changes in Representative Directors


2. Changes in Other Directors and Corporate Auditors


fy2016 consolidated financial and operating … · representative: shigeo yamamoto, president &...

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