TAIYO HOLDINGS CO., LTD.
2-7-1 Hazawa, Nerima-ku, Tokyo 176-8508, Japan
PHONE : 81-3-5999-1511
http: // www.taiyo-hd.co.jp / English

Passionfor innovation
Annual Report 2015
Year Ended March 31, 2015

Management Philosophy
We will realize “a pleasant society” by further advancing “every technology”
the Group has and creating a wide range of products to help fulfill the
dreams for the whole world with our innovative products.

00 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201501

Pickup

Our commitment to generating value

Launching new project
teams to get products tomarket sooner
Development and manufacturing division personnel have been added and new project teams are being createdwith the aim of commercializing products within one to two years with particular emphasis on sales marketing.
By fostering this type of environment where employees can devote themselves to development, we are able tocreate new products ahead of other companies.

02 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201503

Pickup

Leading the global industry

Everywhere youneed us to be
We are expanding our global networks so that we can supply exceptional products to customers worldwide. We haveestablished manufacturing and sales bases in Japan, China, Taiwan, South Korea, and the United States and havemarketing and technical service centers in Shenzhen and Hong Kong in China as well as in Singapore and Thailand,
to cover global markets. In addition, we are actively increasing the overseas materials procurement rate to reducerisks posed by currency exchange rate fluctuations.

04 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201505

PickupCreating the one and only productSelf-sufficient personnel
are vital to the future of
the group
For the Taiyo Group to achieve continuous growth, we need all employees to be self-sufficient, that is, personnel
who are able to use opportunities and achieve personal growth. The Group creates such opportunities by
dispatching employees to universities as well as improving workplace environments so that employees can create
flexible ideas in their day-to-day work. Thanks to these innovations, in fiscal 2014, we also achieved results
including increases in sales and income.

06 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201507

Basic Management Policies
Sales by Segment ( includinginter- segment sales and transactions)( Millions of Yen)

60,000

Profile50,0004,140
3,524
10,59940,000The Taiyo Group is the chemical manufacturer that commands a global market share ofmore than 60% for solder resist, which is essential for the printed wiring boards (PWBs)
used in a variety of electronics products, from such IT devices as mobile phones, PCs,
and other digital equipment to digital household appliances and in-vehicle electronics

Established in 1953 as Taiyo Ink Manufacturing Co., Ltd., with the manufacture and saleof printing ink and related material products as its business objective, the Group
undertook a major transformation of its business domains in 1976, to a business in

Philosophy and Basic Management Policy below. We will develop by continuing the spirit of our

9,614

Management Philosophy without changes and reviewing our Basic Management Policies to match

8,398

20,00010,0000equipment.

Taiyo Holdings Co., Ltd. ( “we ” or “ our ”) has identified its objectives as a corporate group in the Management

9,199

30,000

Japan
other

17,791

14,005

2014/ 3
China

20,421

To target further growth this year, which marks the 60th anniversary of its establishment,
the Group is enhancing “every technology” of all its companies based on the2015 / 3
Taiwan

Korea

Operating Income by Segment( Millions of Yen )6,000

manufacture of solder resist. The Group will continue to supply across the world

5,000

innovative products that go beyond solder resist.

4,000

In addition to maintaining its unwavering No. 1 position in the solder resist field, in the

3,000

years to come, the Group will be focusing on research and development and on thecultivation of businesses that will become pillars of new growth.

We will generate profit and increase corporate value, thereby contributing to the well-being
and prosperity of customers, communities, shareholders, and employees.

2

We will discharge our corporate social responsibility with regard to the achievement of ourManagement Philosophy, including complying with the law, protecting the environment,
ensuring thorough quality management, and contributing to society.

3

We will leverage our global system to always provide superior products and services.

4

We will constantly create opportunities for employees to challenge and develop themselves,aiming to have a corporate group composed of people who are highly motivated to be successful
and to achieve goals set by themselves.

5

We will increase our comprehensive corporate strengths by maximizing cooperation between
the Group companies and strengthen the teamwork of all employees with emphasis on “speed
and communication.”

6

We aim to have a group of global companies able to contribute to the realization of a pleasantsociety by constantly working for technological innovation and creating new products andbusinesses.

1,212

8,000

technological capabilities that have been accumulated in the development and

1

555

9,000

7,000

changes in the environment and strategy on a long-term basis.

15,786

10,000which solder resist was made its mainstay product.

Basic Management Policies

453
1,073

1,763

1,427

2,617

3,507

2,000
1,000
0
Japan

1,906

2014 / 3
China

2,466

2015 / 3
Taiwan

Korea

other

Contents

26 Topics
26 Environmental Initiatives
27 Creating Optimal Working Environments

Matters Regarding Forward - Looking Statements

02 Pickup

28 CSR

This annual report contains forward-looking statements regarding Taiyo Holdings’ current management plans, strategies, and

08 Basic Management Policies

30 Corporate Governanceother matters. Readers are cautioned that these forward-looking statements hold inherent risks and uncertainties, and may

10 Main Products

32 Board of Directors and Audit & Supervisory Board Members

differ materially from actual results or business performance.

12 New products

33 Financial Section

14 Review of Operations
14 Summary of Sales by Segment
15 Summary of Sales by Product Group16 Message from the CEO
18 Supply Chains
20 Regional Information
20 Japan
22 China
23 Taiwan
24 Korea
25 USA / Singapore / Thailand

08 TAIYO HOLDINGS CO., LTD. Annual Report 2015

34 Six-Year Summary
36 Management ’s Discussion and Analysis
40 Consolidated Balance Sheet
42 Consolidated Statement of Income
43 Consolidated Statement of Comprehensive Income
44 Consolidated Statement of Changes in Equity
46 Consolidated Statement of Cash Flows
48 Notes to Consolidated Financial Statements
76 Independent Auditor ’s Report
77 Domestic and Global Network
78 Corporate Information

TAIYO HOLDINGS CO., LTD. Annual Report 201509

Main Products

1

Preventing solder attachment in areas
where it is not needed

Photoimageable Solder Resist Pattern
Formation Process ( Photolithography )1. Printing (coating)
SR is applied to the entire
surface.

When various components are mounted on a PWB, SR plays a role inpreventing short circuits that can occur as a result of solder adhering toareas other than contacts that are electrically connected.

Before SR application(Copper circuit pattern formed)

2. Pre-curing

2

The wiring board is heated
to 80°C for 20 to 30 minutes
and provisionally dried.

Protecting circuit patterns from dust,
heat, and moisture

SR protects circuit patterns from the external environment including dust,

3. Light exposure

heat, and moisture. This makes it possible for electronic devices to operate

The wiring board is exposed
to ultraviolet light passed
through a negative film.

stably over extended periods.

The SR in areas exposedto the light hardens.

3

Roles of
Solder Resist

Maintaining electrical insulation
between circuit patterns

4. Developing

In conjunction with the miniaturization of electronic devices, package
substrates are also becoming increasingly fine with circuit patterns on
general circuit boards in the 50 µm to 150 µm range. SR maintains
insulation between circuit patterns, preventing short circuits.

5. Post-curing

The unhardened SR iswashed off using adeveloping agent (a dilute
alkali water solution).

The circuit board is heated to 150 °C for 50 to 60
minutes to harden the SR.
The SR pattern formation process is complete.

FeaturesMain applications

Electrical resistancePCsof the Taiyo Group, protects PWBs by coating the surface of the conductor circuits, preventing short

High temperature resistance

Automotive components

circuits and other product problems, and making long-term, stable use possible.

High resolution

Flat-screen televisions

Excellent strength and adhesion

Smart phones

Printed wiring boards (PWBs) are used in various digital consumer electronics such as mobile phones aswell as electronic products such as automobile electronics equipment. Solder resist (SR), a core productChemical resistance

Liquid-Type SR

Dry Film-Type SR

There are various types of SR, but Taiyo Ink was a pioneer

Existing liquid-type SR can be preprocessed into a film and ain the development of alkaline developable liquid-type

uniform thickness can be achieved. The use of dry film-type SR

SR, which has now become a leading product. It ison semiconductor PKG substrates is increasing. Because thecharacterized by high sensitivity as well as outstanding

drying process, which is essential for liquid-type SR, can begold plating resistance and water-soluble flux resistance.

eliminated, it is expected that dry film-type SR will reduce

It is also used as SR on automotive PWBs for its excellent

manufacturing costs.

migration resistance and pressure cooker test resistance.
Taiyo Ink SR products

10 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 2015

11

New productsTechnology
Background

Current Status

Taiyo Group ’s Proposal

Two types of insulator

Photoimageable Coverlay Filmmaterials are used together( alkaline developable)
High resolution &excellent bendability

Solder resist( alkaline developable)
Adequate bendability
cannot be achieved

Coverlay film

( thermally curable)

The volume of information processed by integrated circuits is increasing in conjunction with the incorporation of multiple

Micro-machining is difficult

functions into mobile information devices, and as a result, circuit designs are becoming denser and more complex. At the1

Simplified manufacturing
processes

2

Higher reliability throughconsolidation of materials

3

Lower total costs

same time, mobile information devices are being made smaller and thinner, making the space available for mounting PWBs
even smaller, and the demand for flexible printed circuits (FPCs) that are lightweight and can be curved for mounting isrising. In response to these issues, the Taiyo Group combined its technologies to develop photoimageable coverlay film andanisotropic conductive adhesive.

Anisotropic Conductive Adhesive
Mobile information devices and other equipment generally use connectors, a type of mechanical connection, as themethod for joining rigid PWBs and flexible PWBs. To respond to higher component densities in conjunction with thedevelopment of smaller and lighter devices, we developed an anisotropic conductive adhesive that quickly cures at low
temperature.

1

Rapid, low-temperature curing is possible

2

Good adhesive strength even on glass circuit boards

3

Reworking is possible

For di agram, s ee bel ow .

Connection area
1 Coating

Application locations
3 Press lamination

PWB / FPC

FeaturesPhotoimageable Coverlay Film
This film offers excellent micro-machining properties and bendability while maintaining

2 Positioning and alignment
Glass / FPC

reliability, properties that were difficult to achieve in a single product, which will make itpossible to integrate FPC materials in the future. In addition, customers that already use
SR will be able to continue using their existing facilities, simplifying FPC manufacturing

FPC / FPC

processes.

12 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201513

Review of Operations

Summary of Sales

Summary of Sales

by Segment

by Product Group

Other

Consolidated Net SalesJapan¥ 48,260 million

8.4%

Korea

19.5%

Consolidated Net Sales

3.7%
4.1%

¥ 48,260 million

18.3%

22.7%

Japan

Rigid PWB Materials¥ 9,410 million

14.8%

Both sales volume and sales amount increased year on year

69.5%

¥33,539 million

39.0%

As a result of firm demand for smartphone, server, anddue to firm performance of high functional products such as

automotive related materials and the effects of exchange

PKG substrate materials, mainly for smartphones.

rates, sales were up by 14.7% year on year.

TaiwanChina ( including Hong Kong)

China ( including Hong Kong)¥18,837 million
Both sales volume and sales amount increased from theprevious year as a result of the inclusion in consolidated
accounting of Onstatic Ink (Shenzhen) Co., Ltd. as well as
strong sales of PWB materials, particularly automotive andsmartphone related materials.

Korea

PWB Materials Other than Rigid PWB
Rigid PWB Materials

Sales for high-function PKG substrates materials were strong¥ 8,835 million
In the FPD materials market, both sales volume and sales
amount decreased year on year, due to the effect ofdue to increased demand, particularly for smartphone relatedmaterials. As a result, sales increased by 21.6%.

Other Related Products

important clients withdrawing from the PDP business. On theother hand, demand was strong for the high function PKG

TaiwanPWB Materials
Other than
Rigid PWB

¥10,935 million

substrate materials used in smartphones, which have ahigh-profit margin, and profit increased year on year.

¥ 7,141 million¥1,808 million

FPD Materials¥1,976 million
Both sales volume and sales amount were down due to theOthereffects of the withdrawal of key customers from the plasma

as a result of the inclusion in consolidated accounting of¥ 4,034 million

display panel (PDP) business. As a result, sales decreased

Onstatic Technology Co., Ltd. as well as strong sales ofExports to the European market were firm.

PWB materials, particularly automotive, server, andSales in the ASEAN market were strong as a result ofsmartphone related materials.

expansion of the automotive related materials market.

Both sales volume and sales amount were up year on year

56.6% year on year.

4,034
3,436
2,796
10,985

Changes in Sales
by Segment ( Consolidated)

8,835
7,141

5,575
18,837

16,203
10,682

FY 2012

1,443
4,554

10,312

2,897

8,822

869
Unit: Million yen

7,316

Japan

Changes in Sales

China

by Product Group ( Consolidated)

9,410

8,697
FY 2013

Korea

1,808
1,976
10,935

8,991
Unit: Million yen

7,735

29,235

Taiwan33,53920,262

Other

Rigid PWB Materials
PWB Materials Other than
Rigid PWB (PKG, FPC, andbuild-up board materials)
FPD Materials

FY 2014

Note: Sales figures exclude transactions among Group companies within segments.

14 TAIYO HOLDINGS CO., LTD. Annual Report 2015

Other Related
Products

FPD Materials

FY 2012FY 2013

FY 2014

Other Related Products

TAIYO HOLDINGS CO., LTD. Annual Report 201515

Message from the CEO

A Strategy to Stay Ahead as
World’s No.1 Solder Resist
Manufacturer
As of March 2015, four years have passed since I was

cannot be gained in the workplace facilitates the emergence of

appointed president and CEO. During that time, we havenew ideas and can also be applied in work. These values have

faced ongoing challenges including establishing new producttaken root in our corporate culture and are reflected in ourdevelopment projects and transforming business structures

business results.

that are impacted by exchange rate fluctuations.

We achieved record high financial results in fiscal 2014. As a

New personnel have been added in the development andr e s u l t o f s o l i d d e m a n d f o r smartphones a n d a u t o m o t i v emanufacturing divisions and new product teams are being

electronics, net sales were ¥48,260 million (up 9.1% year onlaunched emphasizing sales marketing with the aim ofyear), operating income was ¥9,254 million (up 22.3% year oncommercializing products in one to two years. By enablingyear), and net income was ¥6,667 million (up 35.2% year on

personnel to devote themselves to development activities, weyear). With the acquisition of Onstatic Technology Co., Ltd.

have created the seeds of several new businesses that will

(OTC) in fiscal 2013, we were able to avoid price competition

become core within our business in the future. In addition,and product prices stabilized. In addition, the Japanese

we are creating processing technologies in-house that wegovernment’s policy of correcting the high value of the yen alsopreviously outsourced, accumulating know-how so that weboosted income. Increased sales of high added value products

can rapidly develop new products.

was another key factor.

The Taiyo Group holds the top share globally for solder resist

In the coming fiscal year, we will expand the overseas

and we have expanded our network and continue toprocurement of raw materials, focus on development of new

introduce outstanding products and services. However, we

products and other areas, and continuously and actively makemust address the issue that the business structure isnecessary investments. Our long-term goal is to achieve an

impacted by exchange rate fluctuations. To avoid these risks,

operating income rate of 20% or higher. The market scale for

we are developing systems to locally procure raw materials

interlayer dielectrics alone, for example, is approximately

and produce goods to sell locally in an effort to unify income¥30,000 million, and thus, there is still considerable untappedand expenditure within the one currency.

demand for our existing products.

As a chemical manufacturer, the Group seeks to enhance all

We have achieved a cumulative shareholder return ratio oftechnologies and use innovation to develop products that111.5% for the five consecutive years since fiscal 2010, and we

people around the world dream of, and to create a better

have continuously and stably provided high shareholder returns.

society. To achieve this, we require self-sufficient human

We will continue paying stable dividends over the medium toresources. The Group has placed the highest priority onlong term with the aim of achieving a minimum dividend on

developing human resources by providing environments where

equity (DOE) ratio of 5%. The industry is undergoing drastic

employees can learn and can tackle new challenges. Specificchange, but we will establish corporate structures that canmeasures include dispatching employees to universities

respond more flexibly and maintain stable growth. I ask for theand subsidizing activity expenses on days off. We do thiscontinued understanding and support of all our stakeholders.

Eiji Sato, President and CEO

because we believe that the accumulation of experience that

16 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201517

Supply Chains

Supply Chains

Quality Management in the Overall Supply Chain

Network Covering the Global Market

To provide superior products and services at all times toMoreover, the Group has structured a quality management

customers throughout the world, activities to improvesystem based on ISO 9001 at each of the Group’s production

quality through the Group’s supply chain are indispensable.

bases.

First, to enable customers to select the optimal products

Finally, the Group is aiming to win a high level of customer

In fiscal 2014, about 90% of the Taiyo Group sales weremarketing and technical service centers in Shenzhen andfor their needs from the diverse lineup of items the Groupsatisfaction by creating a detailed management system

accounted for by PWB materials. The principal centers forHong Kong in China, Singapore, and Thailand.

offers, marketing personnel in charge endeavor to matchthat extends from packing and shipment through to

production of PWBs have shifted from the United States

The quality of the Group’s products and services together

product specifications with client requirements throughdeliveries. The Group is also providing follow-up afterand Europe to Japan and then to emerging countries, and,with the agility of its global network has enabled the Group

close communication. When client requirements exceed

deliveries and is asking for assessments as well as

in recent years, production in China has risen rapidly.

to secure the leading share in SR in global markets, andthe specifications of existing products, this is communicatedfeedback from customers regarding each stage of the

While responding to these global changes in the businessoverseas sales have climbed to account for about 80% of

to product development divisions, designs are drawn up,

su p p l y ch a i n .

environment, the Group has conducted transactions with

its net sales. Further growth is expected in the m e d i u m toand, after production process plans are prepared by the

PWB manufacturers around the world. The Group haslong term in demand for PWB materials for use in

manufacturing divisions, the Group works to provide

been aware that its most-important mission is to provide

electronics components around the world. The Group will

customers with products that match their specifications. To

superior products and services at all times and has worked

step up its activities to develop its businesses globally andenhance quality and provide for smooth deliveries toto expand this network to cover global markets. Today, thewill endeavor to respond to burgeoning demand.

customers, another important process is materials

Group has manufacturing and marketing bases in Japan,

procurement.

China, Taiwan, Korea, and the United States as well as

To ensure the stable procurement of both volumes andquantities, the Group conducts audits of supplier factories
and makes periodic assessments of their operations, while

Global Network

also setting standards for the acceptance of raw materials
and ensuring that deliveries of raw materials that are not
up to standard are prevented.

TAIYO INK MFG. CO., (KOREA) LTD.

TAIYO INK ( SUZHOU) CO., LTD.

ONSTATIC INK ( SHENZHEN) CO., LTD.

TAIYO INK
( THAILAND ) CO., LTD.

CHUGAI KASEI CO., LTD.
TAIYO AMERICA, INC.

TAIYO HOLDINGS CO., LTD.

TAIYO INK MFG. CO., LTD.
TAIWAN TAIYO INK CO., LTD.
ONSTATIC TECHNOLOGY CO., LTD.

TAIYO INK INTERNATIONAL(SINGAPORE) PTE LTD.

TAIYO INK INTERNATIONAL ( HK) LTD.

TAIYO INK TRADING (SHENZHEN) CO., LTD.

Production and Marketing Subsidiaries
Marketing or Technical Support Subsidiaries

18 TAIYO HOLDINGS CO., LTD. Annual Report 2015

Offering Advantages to Customers through“ Local Production and Local Procurement ”
The Group does business with customers in virtually every“Local production and local procurement” leads tocountry. In many cases, product sales prices are quoted instrengthening the Group’ s capabilities for responding toforeign currencies, and one management issue is thatclient requests and needs. For example, through thisfluctuations in exchange rates have an impact on thea p p r o a ch , th e Gr o u p ca n d evelop products that meet

Gr o u p ’ s p e r fo r m a n ce . To d e a l w i th th i s, th e Gr o u p i s

customers’ needs in the local markets quickly, and leadpromoting the implementation of “local production andtime for filling orders can be shortened. This approach is

local procurement” or, in other words, “products that arealso effective for facilitating business continuity plans

sold in local areas (markets) are made from materials(BCPs) because it means that prices of raw materials canprocured in the local area and manufactured there.” By

be lowered and that multiple supply chains can beincreasing the percentage of raw materials that are

structured.

procured locally, the Group is working to respond by

Especially regarding lead time, the Group is rapidly making

having income and expenditures denominated in the same

preparations for shortening required delivery times to meetcurrency.

clients’ requests and put into place systems that will
enable the next-day delivery of orders.

TAIYO HOLDINGS CO., LTD. Annual Report 201519

Regional InformationJapan

TAIYO INK MFG CO., LTD. Kitakyushu Plant
Sales

Operating income

Operating income rate

( Millions of Yen)

( Millions of Yen)

( %)16,00015,786
14,005

2,466

2,500

1,906

13.6

12,000

2,000

8,000

1,500

8

4,000

1,000

4

0

2014/ 32015 /3

02014/ 3 2015/ 3

15.6

16

Yahatanishi-ku, Kitakyushu, Fukuoka (within Mitsubishi
Chemical Corporation Kurosaki Plant)

2 Site area approx. 18,000 ㎡

120

1 Location

3 Investment amount
4 Product
2014/ 32015 /3

approx. 3.5 billion yen

Liquid-type SR and dry film-type SR for semiconductor
PKG board

5 Capacity Liquid-type: 1,500 tons per year

Dry film-type : 2,800,000 ㎡ per year

Core of Marketing Activities
CHUGAI KASEI CO., LTD.
One of the consolidated Group companies located in

In China, for example, new entrants into the smartphone part

Japan is Taiyo Ink Mfg. Co., Ltd., a manufacturing andmarket are emerging as manufacturing companies spin off orsales subsidiary.

otherwise break away from large companies in the field.

In fiscal 2014, sales volume and value increased from theGrasping information on their presence is difficult for locallyprevious year as a result of solid sales of PKG substrate

based companies acting alone. Therefore, the Group’s base inmaterials and other high-performance products, particularly

Japan draws on its marketing capabilities and makes direct

smartphone related materials. As a result, sales in Japan

approaches to promising PWB manufacturers. If it isin fiscal year 2014 were ¥15,786 million (up 12.7% year

discovered that these companies have needs that have noton year) and operating income was ¥2,466 million (upbeen encountered thus far, the Group turns its attention to the

29.4% year on year).

consideration of developing new products answering thoseFoundedSe p te m b e r 1 8 , 1 9 4 1

Paid-in capital
OfficeJPY 49.5 million

Nihonmatsu Head Office / Factory,
Urawa Factory, Tokyo Sales OfficeBusiness description

Manufacture and marketing of dyes,
pigments, chemicals, and inks

needs.
In addition, we are constructing a new plant as a manufacturing

Voice of the Employee

base in Kitakyushu City from the perspectives of reinforcing
production systems for semiconductor PKG substrate SR,
demand for which is expected to grow in the future, as well as
business continuity plans. In June 2015, the Group acquired

Takaoka Sachiko, PCB Materials Sales Department,
Taiyo Ink Mfg. Co., Ltd.

Chugai Kasei Co., Ltd., which possesses strong research anddevelopment capabilities, primarily in the fine chemical

Current position :field. Going forward, we will make c o m p l e m e n t a r y a n dMarketing Section, PCB Materials Sales Department

effective use of both companies’ management resources toexpand new business development options, reinforce
One of the principal roles of the Group holding company

competitiveness, and develop business in new fields withis to be in overall charge of strategies for Asian markets

the expectation of responding promptly and precisely toand promote their implementation. In more-specificcustomer requirements.

terms, the holding company must keep a watchful eye

In this way, Japan plays a role as the core for marketing inon the Asian markets as a whole at all times, identify

Asia and promotes improvement in performance in otherneeds before they emerge, and create new products thatcountries in the region.

Job description :Domestic and overseas marketing to expand PCB product sales( currently for the automotive industry )What I want to contribute to the Company in the future :I want to develop new customers and build good relationships so that I
can establish structures for obtaining information from customers before
anyone else.

match these needs through R&D, b a s e d o n marketing.

20 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201521

Regional Information

China( including Hong Kong)

Sales

Operating income

Operating income rate

Sales

Operating income

Operating income rate

( Millions of Yen)

( Millions of Yen)

( %)( Millions of Yen)

( Millions of Yen)

( %)25,0003,600

20,421

20,00017,791

2,700

3,507
2,617

20

15

15,0001,800

1010,000900

502014/ 32015 /3

02014/ 32015 /3

0

17.2
14.7

2014/ 3The consolidated Group companies located in China areprevious fiscal year) (these figures include transactions

Taiyo Ink (Suzhou) Co., Ltd., a manufacturing and sales

among Group companies.).

subsidiary that was established in 2001, and Onstatic Ink

The Taiyo Group has a market share of in the Chinese(Shenzhen) Co., Ltd., which is a subsidiary of Onstatic

market and is implementing three strategies to further

Technology Co., Ltd., which was acquired in 2013. In

increase its share.

addition, the Taiyo Group has other subsidiaries: Taiyo Ink

First, in the standard product field, the Group is procuring

International (HK) Ltd. and Taiyo Ink Trading (Shenzhen)materials in the local market to reduce costs. Second, in thein the southern China region.
In fiscal 2014, both sales volume and sales value wereup from the previous year as a result of the inclusion
starting in the first quarter of the consolidated fiscal
term in consolidated accounting of the profit and loss
statements of Onstatic Ink (Shenzhen), although profit
and loss had been accounted for in the first quarter of theprevious consolidated fiscal term using the equity method.
Another contributing factor was strong sales, particularlyof automotive and smartphone related materials. As aresult, sales in China in fiscal year 2014 amounted to¥20,421 million (up 14.8 % year on year), and operating
income was ¥3,507 million (an increase of 34.0% over the

automotive market, the Group is marketing to automobile
manufacturers that have selected and are using its PWB
materials.

8,000

1,600

6,000

1,400

10

4,000

1,200

5

2014/ 32015 /3

02014/ 3

2015/30

2014/3

2015/3( these f i g u r e s i n c l u d e t r a n s a c t i o n s a m o n g G r o u p

Taiyo Co., Ltd., a manufacturing and marketing subsidiary,companies .).

which was established as the Taiyo Group's first company

The economy of Taiwan is heavily dependent on exports,

in Taiwan in 1996. At present, other Group companies inand, among export products, the largest contributor is

Taiwan are Onstatic Technology Co., Ltd. (OTC) and threeelectronics devices. However, as seen in the industrialized

other subsidiaries, which are also actively engaged incountries, Taiwanese manufacturers are shifting their

manufacturing and marketing.

p r o d u c t i o n f a c i l i t i e s t o t h e e m e r g i n g countries. PWB

In fiscal 2014, sales volume and sales value were both
starting in the first quarter of the consolidated fiscal term,sold by Chinese manufacturers is forecast to rise to thein consolidated accounting of the profit and loss statements

top level in the world in view of China’s population. New partsof OTC and three other subsidiaries, although profit andmanufacturers based in China are entering the market,

loss had been accounted for in the first quarter of theand, in some cases, these have developed to become

previous consolidated fiscal term using the equity

top-notch companies in the terminal and parts markets.

method. Also contributing to the increases was strong

The Group is searching for new parts m a n u f a c t u r e r s ,demand for automotive, server, and smartphone related

examining their technological capabilities and thematerials. As a consequence, sales in Taiwan during

customers they supply, and, in the years ahead, will tap

fiscal year 2014 were ¥9,614 million (an increase of

into the substantial needs of these companies.

14.5% year on year), and operating income was ¥1,763
million (a gain of 23.5% over the previous fiscal year)

producers, in particular, have moved most of theirproduction to China and other countries. However, R&D
d i vi si o n s re ma i n i n Ta i w a n , and, in general, decision
making regarding the selection and adoption of newmaterials to be used in new products takes place in
Taiwan. In addition, for semiconductors and the otherhigh-valueadded components in core products, theprocesses from R&D through production continue to belocated in Taiwan. Accordingly, the Group is working toe x p a n d i t s sales in Taiwan and is making aggressive
product proposals to the R&D divisions of PWB manufacturers
and other electronics related and other companies, including
semiconductor companies.

Voice of the Employee

Mao Zhong Xiang, Sales Department,

Yu Ya Ting, R&D Department,

Taiyo Ink (Suzhou) Co., Ltd.

Taiwan Taiyo Ink Co., Ltd.

Current position : Chief of Sales Section Ⅱ, Sales Department

Current position : R&D Team, R&D Section, R&D Department

Job description : Sa le s a n d a fte r - sa le s se r v i ce i n C hi na

Job description : C us tomer s upport to res ol v e produc t faul ts ;22 TAIYO HOLDINGS CO., LTD. Annual Report 2015

15

1,427

Voice of the Employee

the Taiyo Group in the Chinese market.

18.3

The consolidated company located in Taiwan is Taiwan

smartphone sector. The number of information terminals

internal teamwork, meet the needs of customers, and contribute to the growth of

17.0

Consolidation of OTC

up from the previous year as a result of the inclusion

I want to actively communicate inside and outside the company, strengthen

20

Substantial Rise in Sales and Income due to

The Group’s third strategy is to develop the market in the

What I want to contribute to the Company in the future :

1,763

1,800

8,398

0

2015 /3

Expanding Market Share through Three Strategies

Co., Ltd., which are sales subsidiaries operating mainly

Taiwan9,614

10,000tec hni c al s erv i c e and produc t i mprov ement

What I want to contribute to the Company in the future :I hope to accumulate specialized knowledge and develop my innovative thinking
capabilities, and I will strive to provide creative and high-quality products with
future potential to customers.

TAIYO HOLDINGS CO., LTD. Annual Report 201523

Regional Information

Korea

Sales

Operating income

Operating income rate

( Millions of Yen)

( Millions of Yen)

( %)12,0001,400

10,599
9,199

9,000

1,200

6,000

1,000

3,000

800

0

2014/ 32015 /3

14

13.2

1,212

0

12

1,073

10

10.1

8

2014/ 32015 /3

02014/ 3

USA
Singapore
Thailand

Sales

Operating income

Operating income rate

( Millions of Yen)

( Millions of Yen)

( %)Business and Expanding Dry film-type SR

USA

453

4,140

555

14

12.9

400

12

2,000

200

10

1,000

100

8

4,000

2015 /3

Improving Profit Rates by Withdrawing from the PDP

600

6,000

0

3,524

2014/ 32015 /3

02014/ 3

2015/30

2014/3

13.4

2015/3

Voice of the Employee

Curt Tims, Operations Department, Taiyo America, Inc.

The Taiyo Group’s consolidated subsidiary in Korea isplasma display panel (PDP) was expected in global

Taiyo Ink Mfg. Co., (Korea) Ltd., a manufacturing and sales

markets, but demand for PDP in the flat-screen televisionsubsidiary estab lis hed in 1988.

market is declining, and numerous PDP manufacturers

In fiscal 2014, flat panel display (FPD) materials sales

were withdrawing from the business. Under thesevolume and value both decreased compared to the previous

circumstances, the Group terminated PDP production in

year. In contrast, sales of PKG substrate materials were

September 2014 as a result of the effects from the withdrawal

strong in conjunction with increased demand forby leading customers from the PDP business, and sales ofhigh-performance smartphone related materials, and as a

Taiyo Ink Mfg. Co., (Korea) Ltd., a manufacturing subsidiary,

result, profits were up from the previous year. As adeclined. On the other hand, sales of high-profit dry film-type

consequence, sales in Korea during fiscal 2014 wereSR for PKG substrate increased in Korea, and as a result¥9,199 million (down 13.2% year on year) and operating

profitability improved and the profit rate increased. Going

income was ¥1,212 million (a year on year increase of

forward, the Group will focus on further structuring its

12.9%) (these figures include transactions among Groupbusiness strategy for the Korean market in ways that willcompanies).

improve profitability through cost cutting and other

Current position : Administrator of Accounts & Admin Department

Against this backdrop, strong demand for high-resolution

measures.

Job description : Handling administration, accounts and sales coordination

Current position : Manager of Logistics Section, Operations Department
Job description : Manage inventories and costs of materials, plan production schedule and coordinate
freight and delivery of finished goods

What I want to contribute to the Company in the future :By using my skills and knowledge to ensure that Taiyo America continues to be successful in the global
market, I want to contribute to the company by doing my best to control costs and helping my fellow
employees for the greater good of the company.

Singapore

Voice of the Employee

Law Moi Li, Accounts & Admin Department,
Taiyo Ink International (Singapore) Pte Ltd.

What I want to contribute to the Company in the future :I strive to be a positive and responsible Taiyo team member. I approach my job with commitment andpassion by constantly expanding my experience and knowledge. I am ready to take on new challenge andcontribute to the growth of the company.

Voice of the Employee

Lim Seok Bong, Marketing & Sales Pioneering Office,Thailand

Taiyo Ink Mfg. Co., ( Korea) Ltd.

Jayawat Tungsiriwathanawong, Engineering Department,
Taiyo Ink (Thailand) Co., Ltd.

Current position :General Manager of Marketing & Sales Pioneering Office

Job description :Development of new markets for existing products ;discovery and development of new items

What I want to contribute to the Company in the future :In the short term, I want to find methods of increasing the added value ofliquid-type SR and commercialize products. In the long term, my contribution to
the company will be creating an environment and providing support to teammembers who cooperate with one another so that they can freely and frequently
propose new ideas that contribute to the company.

24 TAIYO HOLDINGS CO., LTD. Annual Report 2015

Voice of the Employee

Current position : Technical Support Engineer of Engineering Department
Job description : T o c o o p e r a t e w i t h c o l l e a g u e s a n d c u s t o m e r s o n t e c h n i c a l s u p p o r t a n d q u a l i t y
feedback for after sale service, including getting updated customer and competitor
information

What I want to contribute to the Company in the future :As I work in Taiyo Ink (Thailand) not in the product development segment but in customer support, I
would like to build the best relationship with our customers through the best service and technicalsupport. In my opinion, the customers are not only buyers but they should be our partners. Their trust in
our company and products is going to be the brand loyalty.

TAIYO HOLDINGS CO., LTD. Annual Report 201525

Topics

Environmental Initiatives

Creating Optimal Working
Environments

Solar Power

Office Spaces

Brighter Communities, Greener Environment :Launching a Solar Power BusinessA new workplace environment designed to embrace CHANGE

The Taiyo Group launched the solar power business with a

In addition to these programs, the Group is making otherby existing ideas. For this reason, the Taiyo Group places

water- based mega - solar installation in Ranzan - machi,

active contributions to the local communit y throughparticular emphasis on easy to use office environments thatlocated in the Hiki District of Saitama Prefecture, and ameasures such as donating facilities equipped with solar

present a significant departure from existing workplaces. For

roof top generating facilit y on the management building

panels and bat ter ies to the H anamidai Industr ial Par k

rooftop of the Ranzan Facility.

Management Center, which is the designated evacuation

T h e G r o u p ’s e f f o r t s s t a r t e d w i t h t h e i n s t a l l a t i o n o farea of Ranzan-machi, in order to provide electricity in thegenerating facilities on the management building rooftop at

event of a power outage.

CHANGE is essential for developing self-sufficient personnel
who can freely express themselves without being constrained

example, par titions that separ ate divisions have been
removed and glass has been installed in meeting and otherindividual rooms. Other innovations include pillars and wallsthat can be used as whiteboards to ensure that no ideas
arising in these work spaces are lost.

the Ranzan Facility on February 27, 2015. This was followedin O c tober 2015 by the lease of a regulating reser voir

Cafeter ia

adjacent to the Ranzan-machi Hanamidai Industrial Park

More than just a cafeteria— it’s a place to meet up and exchange ideas

from the Ranzan-machi council and the installation of awater- based me ga - solar fac ilit y. A pprox imately 4, 5 0 0

Effective internal communications are crucial for accelerating

solar panels provide enough electr icit y for around 370

product development and customer proposals to outperform

households. In terms of reducing carbon dioxide emissions,competitors. Based on this idea, the cafeteria was renovatedthe mega-solar facility alone is expected to cut emissions byto create a space that can also be used for meetings among

approximately 400 tons annually.

employees and with business partners as well as for creating
new ideas. “Local production for local consumption” ispromoted through the use of locally-sourced ingredients, andthe cafeteria interior is decorated with cedar and cypress

Plant Factory

Starting production of safe and secure
vegetables at a clean room farm
In October of 2015, the Group began full-scale operations offewer physical burdens on workers, and as the populationa plant factory, which are increasingly common in recent

ages, we expect that it will provide employment opportunities

y e a r s , as a p a r t o f i t s c o n t r i b u t i o n s , as a c h e m i c a l s

for senior citizens.

manufacturer, to a safe and secure food supply. The facility

from Saitama Prefecture.

Nursery School ( On-Site Daycare Center )An on-site daycare center will be opened for employees
to let them focus on work without worries.
As a part of efforts to create an optimal work environment for
employees, a daycare center will open at a site adjacent to thewas established in a Taiyo Holdings research center andRanzan Facility in December 2015. The center will be equipped

uses artificial light for hydroponic cultivation. Operations arewith security facilities to provide peace of mind. There is a forest

not affected by the weather and regularly produce fresh,

nearby, and there will be many opportunities for the children toorganic vegetables. Initially, the vegetables will help supplied
the on-site employee cafeteria, and when stable productionis achieved, sales channels will be expanded.
Compared to outdoor cultivation, the plant factory imposes

26 TAIYO HOLDINGS CO., LTD. Annual Report 2015

experience the blessings of nature including living creatures
and trees. Such efforts will assist in recruiting outstanding
personnel, whether mid-career employees or recent graduates.
The daycare center will also be open to local residents
to enhance local options for childcare.

Designed and supervised by Atelier4A

TAIYO HOLDINGS CO., LTD. Annual Report 2015

27

CSR

Relationship with Shareholders
Investor Relations
In order to provide shareholders and investors with information that will be effective for making investment decisions, theTaiyo Holdings’ fundamental policy is to carry out investor relations measures that ensure accuracy, fairness, and timeliness.

Relationship with Local
Communities and Society
Support for Events

Specific measures include the provision of investor relations information on the Group website, issuing annual reports,

Interest in the health has been rising in recent years, and in conjunction with this change, various sporting events open to

holding financial briefings for analysts and institutional investors, and meeting individually with institutional investors.

participation by members of the public are being held. The Group provides subsidies to such events with the hope ofSince fiscal 2014, our announcement of financial results has been approximately one week earlier than usual as a result of

promoting the health of participants and contributing to the revitalization of local communities.

our efforts to provide timely information disclosures.

In fiscal 2014, we supported the Nerima Kobushi Half Marathon, which was held near the Taiyo Holdings head office,as well as the 22nd Ogawa Washi Marathon and the 37th Nihon Three-Day March, which were held near Ranzan-machi
in Saitama Prefecture, where Taiyo Ink Mfg. Co., Ltd. is based.

Relationship with Suppliers

Voice of the Employee

Implementation of Supplier Evaluations and On-Site Audits

My Participation in a Half Marathon

This fiscal year, the Group continued conducting on-site audits in cooperation with suppliers in order to build and strengthen

I put on uniform created by supporters and ran the Nerima Kobushi Half Marathon

relationships of trust.
Audits are conducted by teams made up primarily of personnel from the Purchasing Department and Quality Assurance
Division, and in some cases employees from manufacturing technology and design divisions also participate. Audits are
conducted with the aim of enhancing the quality of raw materials and secondary materials.

with five others. I ran as hard as I could under the spring sun along the course withblooming magnolias and cherry trees and shouts of encouragement from mycolleagues. When I initially took up long distance running, I hadn’ t intended to compete
in the event, but I was able to achieve a sense of excitement and accomplishment
different from my work, and I felt physically and mentally refreshed. I hope tocontribute to society in the future through good communications with other employees
and the local community.
Masahiro Hirata, PCB Sales Division, Taiyo Ink Mfg. Co., Ltd.

Employee Stock Ownership Plan Introduced
Taiyo Holdings introduced an employee stock ownership plan (ESOP; a trust-type employee incentive plan)with the aim of enhancing its employee compensation programs by making use of its own stock.
Under the plan, Taiyo Holdings designates employees who meet certain requirements as beneficiaries of atrust that our company created by contributing capital acquired for the company’s shares. Company sharesare granted to employees at no cost during certain periods according to the number of years of employment

Environmental Protection Activities
Protection of Great Purple Emperor, Japan’s National Butterfly

and work skills.
Granting shares effectively increases wages and makes employees into company shareholders. This is

Designated Japan’s national butterfly, the great purple emperor (Sasakia

expected to enhance employee awareness of the company’s financial results and share price and to

charonda) is found in nettle trees (Celtis sinensis), on which it feeds during theencourage the implementation of business operations with the aim of improving financial results.

larval stage and on which adults deposit eggs. The butterfly inhabits the densely
wooded areas in the town of Ranzan in Saitama Prefecture, including on two
species of oak tree, Quercus serrata and Quercus acutissima, which produce thesap on which the adult butterflies feed.
Tai yo Ink undertakes protection activities in conjunction with the town, for instanceby creating an environment within our Ranzan Facility site in which the butterflies
can easily pass the winter. Employees also take an active part in the volunteer
activity of creating secondary forest.

28 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201529

Corporate GovernanceInternal Controls

Corporate GovernanceWe regard the construction of a system of internal controls as a critical part of corporate governance. These controls include the fivecomponents described below. (1) Keep all directors and employees informed about our CSR (Corporate Social Responsibility) Philosophy andthe Code of Conduct. (2) The appointment of one director as chief compliance officer to chair the Ethics Committee and lead a team promotinginternal business ethics. (3) An internal hotline to enable employees to report compliance violations or any related concerns to an external

Construction of Sound
Management Structures

Basic Thinking on Corporate
Governance

We have a holding company structure. Having Group management

In line with our Management Philosophy and Basic Management

To maintain the reliability of our financial reporting, we have also developed a system of internal controls to ensure that effective and appropriate

and strategic functions, the holding company aims to develop and

Policy, we aim to prosper together with our customers, regional

internal control reports are produced, based on the provisions of the Financial Instruments and Exchange Law.

improve our strategies while optimizing the allocation of resources.

communities, shareholders, employees, business partners, andThe operating subsidiaries under the holding company can act

other stakehol ders. We al so bel i eve i t i s necessary fo r us topromptly and autonomously. This system enables us to respondembrace social responsibilities as well as seek to generate profits.

better to customers across various markets while also speeding up

To this end, we seek to promote management transparency and todecision making and boosting operational efficiency. Its aim is tofulfill our disclosure obligations to support the Company’s continued

increase profits and help us build corporate value.

prosperity.

lawyer. (4) Regular reports by the chief compliance officer to the Board of Directors concerning the ethics and compliance framework status.
(5) Establishment of an independent Internal Audit Department that reports audit findings to the Board of Directors and the Audit & Supervisory
Board, and where necessary to the accounting auditors as well.

Risk Managemen t
The Group has studied and instituted ways of mitigating, or of taking appropriate steps in response to, a variety of risks associated with businessactivities. One director is appointed as “the director in charge of risk management.” Moreover, the department in charge of risks occurring in thecourse of natural work operations evaluates and responds to these risks. Furthermore, the Risk Management Committee conducts risk management ina cross-departmental manner over the entire Group. As regards the detailed activities conducted during the fiscal year ended March 2012, the Group

Corporate Governance Structurescompletely reviewed the Risk Management Manual, and also focused activities on issues related to the aftermath of the Great East Japan Earthquake

Our corporate governance system is centered on the Board of Directors and the Audit & Supervisory Board, whose members are both

framework, and arranged for domestic bases to hold frequent television conferences. As a result, the Group confirmed that it could respond rapidly inthat occurred in March 2011. As part of our responses in the period after the earthquake, we established an earthquake countermeasure conference

approved by resolutions at the Shareholders’ Meeting. We have also adopted a system of executive officers to invigorate the Board of

the event of an earthquake. We also verified that we had secured a method of communication to use immediately after an earthquake, and that

Directors and expedite operational execution.Executive officers are granted an extensive scope of decision-making authority for carrying

time is needed to confirm the safety status of those employees who are on leave when an earthquake occurs.

out their duties, and it is believed that this will enable rapid decision-making. In addition, a discretionary Compensation Advisory

In this context, the Risk Management Committee used this post-earthquake information as a basis to review a manual describing the emergency

Committee was established as an advisory body to the Board of Directors in order to ensure objectivity and transparency in director andsituation caused by a fire or earthquake, and how to respond afterwards. This manual forms part of the Risk Management Manual, and is meant to be

executive officer compensation. A discretionary Nomination Advisory Committee was also established to ensure objectivity andused in such an emergency. We ensured that the manual is simply written and clearly lists what must be done. We also combined the antidisastertransparency in nominating directors and audit & supervisory board members. The results of resolutions of both of these bodies are

drills that had been conducted at each base hitherto, and performed a joint drill at three domestic bases.

reported to the Board of Directors. Majorities of both the Compensation Advisory Committee and Nomination Advisory Committee areo u t s i d e me m b e r s, a nd th e ch a ir m en a r e se l ec te d fr o m a m o ng th e o u tsi d e m e mb e rs .Th e Bo a rd o f D i r e cto r s i s c om p o se d o f e i g h t
directors, two of whom are outside directors. The Audit & Supervisory Board is composed of three audit & supervisory board members,
two of whom are outside auditors. Meetings of the Board of Directors are held regularly each month, but the Board can also holdextraordinary meetings if necessary. The Board discusses and resolves important matters, and also oversees the execution of duties by
the representative director. Audit & supervisory board members, including outside auditors, attend most meetings of the Board andExecutive Committee, which convene on a number of occasions each year, to engage in discussions and to monitor proceedings in

Executive Compensation
In addition to base compensation, a director compensation system that provides for the payment of performance-basedmonetary compensationand performance-based stock compensation to executive directors (here and hereafter, directors specified in each item of Article 363, Paragraph
1 of the Companies Act of Japan) was approved at the ordinary General Shareholders’ Meeting held on June 20, 2014.

detail. One of the audit & supervisory board member is full-time auditor with the power to submit questions to the Group employees.

This director compensation system is intended to provide even further motivation to executive directors to raise the corporate value of the GroupThe system enables the audit & supervisory board members to conduct adequate monitoring of the execution of duties by directors.

over the medium to long term by increasing the degree to which executive directors share interests with shareholders.

The Internal Audit Department, which has a staff of two employees, is fully independent of other Group operations. It undertakes an audit of allCompensation paid to directors other than executive directors and to audit & supervisory board members consists of base compensation only.

departments of the holding company and operating subsidiaries based on the annual audit plan approved by the Board of Directors. Results of

The amount of base compensation paid to directors and the methods of calculating amounts of performance-based monetary compensation andthese audits are reported to the Board of Directors and Audit & Supervisory board.

performance-based stock compensation paid to to executive directors as well as the timing of payment, distribution, and so on are determined by
the Board of Directors with within the range approved by the General Shareholders' Meeting. When making such decisions, the chairman of the

System Outline

Compensation Advisory Committee, who is an outside director, performs an objective, comparative verification of compensation levels using

Shareholders' Meeting
Reports toCompensation Advisory
Committee
Nomination Advisory
Committee

Reports toBoard of Directors
Reports toReports to

President and CEO

Reports toBoard of Corporate Auditors
AuditsCooperation

Cooperation

Instructs

Compensation paid to audit & supervisory board members is determined through consultations with the audit & supervisory board members within
the range approved by the General Shareholders’ Meeting.

Executive compensation for the year ended March 2015 is shown below.

AuditsExecutive Category
Directors

Instructs

Departments and Subsidiaries

30 TAIYO HOLDINGS CO., LTD. Annual Report 2015

Accounting Auditors
Cooperation

Office of Internal Audits

Executive Officer
Reports to

Appoints andDismisses

Appoints andDismisses

AuditsAppoints andDismisses

Board of Directors. The Board makes determinations based on the Committee’s report.

Reports to

Appoints andDismisses

Appoints andDismisses

officer compensation survey data from an outside research organization, deliberates on compensation policies and levels, and reports to theInternal Audits

Total Amount ofCompensation( million yen )Amounts of Compensation by Type ( million yen )Basecompensation

Performancebased monetarycompensation

Performancebased stockcompensation

Retirement
Benefits

Number of
executives

413

97

106

209

-

7

( excluding outside audit & supervisoryboard members)

12

12

-

-

-

2

Outside officers

31

31

-

-

-

4

(excluding outside directors )Audit & supervisor y board members

TAIYO HOLDINGS CO., LTD. Annual Report 201531

Board of Directors and Audit & Supervisory Board Members

Financial
Section34 Six-Year Summary
36 Management’s Discussion and Analysis
40 Consolidated Balance Sheet
42 Consolidated Statement of Income
43 Consolidated Statement of Comprehensive Income
44 Consolidated Statement of Changes in Equity

Front row ( left to right )Eiji Takehara
Director

Masahisa Kakinuma
Director

46 Consolidated Statement of Cash Flows
Eiji Sato
President and CEO

Seiki Kashima
Managing Director

Takayuki Morita
Director

Takato Kawahara
Director

48 Notes to Consolidated Financial Statements
76 Independent Audito r’s Report

Back row ( left to right )Haruomi Yoshimoto
Audit & Supervisory
Board Member

Isamu Mori
Outside Director

Directors

Masayuki Hizume
Outside Director

Akihito Sakai
Outside Audit & Supervisory
Board Member

Kiyoshi Endo
Outside Audit & Supervisory
Board Member

Audit & Supervisory Board Members

Eiji Sato

President and CEO

Akihito Sakai

Outside Audit & Supervisory Board Member

Seiki Kashima

Managing Director

Kiyoshi Endo

Outside Audit & Supervisory Board Member

Masahisa Kakinuma

Director

Haruomi Yoshimoto

Audit & Supervisory Board Member

Takayuki Morita

Director

Eiji Takehara

Director

Takato Kawahara

Director

Masayuki Hizume

Outside Director

Isamu Mori

Outside Director( As of June 19, 2015)32 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201533

Financial Section

Six-Year Summary
Millions of Yen

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
The years ended March 31

2010

2011

2012

2013

2014

2015

¥ 35,056
24,123
6,089
4,843
3,010
1,261
3,126
(70)
(2,366)¥ 40,366
28,428
6,557
5,381
3,403
1,127
4,575
758
(3,696)¥ 39,797
5,934
4,040
2,503
1,046
2,793
(1,343)(2,979)¥ 36,184
25,319
6,479
4,386
3,368
1,004
6,109
(2,478)(2,314)¥ 44,225
28,349
8,307
7,569
4,931
1,181
7,020
(3,839)2,350¥ 48,260
28,865
10,1409, 255
6,667
1, 4129,233( 2,913 )( 9,920 )

43,704
13,954
8,018
679
35,68542,851
13,0508,664
696
34,18640,703
12,546
7,227
478
33,47644,023
12,664
7,213
605
36,81058,36914,376
15,713
2,046
42,656

61,242
16,86519,9292,238
41,312¥ 116.08
90.00
1,349.61¥ 131.78
115.001,316.53¥ 98.38
90.00
1,297.18¥ 132.38
90.00
1,423.26¥ 193.83
120.001,596.45¥ 264.05
90.00
1,703.14

13.8%
8.7
80.1

13.3%
9.9
78.2

10.2%
7.5
81.1

12.1%
9.7
82.2

17.1%
12.8
69.6

19.2 %
16.7
63.8

27,464,000

27,464,000

27, 464 ,000

For the Year :Net sales
Cost of sales
Selling, general and administrative expenses
Operating income
Net income
Depreciation and amortization
Net cash provided by operating activities
Net cash used in (provided by) investing activities
Net cash provided by (used in) financing activities

At year-end :Total assets
Property, plant and equipment, net
Total liabilities
Minority interests
Total equity

Per share data :Basic net income
Cash dividends applicable to the year
Net assets

Ratios :Ratio of operating income to net sales
Return on equity
Equity ratio

Thousands of Shares

Common stock :Number of shares issued

27,464,000

27,464,000

27,464,000

See notes to consolidated financial statements.

Net Sales

Operating Income and Operating Income Ratio

Net Income and Net Income Per Share( Millions of Yen)

( Millions of Yen)(%)

( Millions of Yen)

10,00030

7,000

48,26050,00040,36640,00044,22539,797

9,255

8,000

36,1846,000

30,0004,000

20,000

7,569
5,381
13.3

4,040
10.2

4,386

19.2

4,000

17.1

2,000
6
Operating Income

0

2011

2012

2013

2014

2015

( Years ended March 31)

34 TAIYO HOLDINGS CO., LTD. Annual Report 2015

0

2011

2012

( Years ended March 31)

2013

2014

2015

0

3,403

3,000

12

2,000

10,000

4,931

5,000
18

12.1

6,667

6,000

24

Operating Income Ratio

131.78

3,368
2,503

264.052012( Years ended March 31)

20,0

16.7

300
15,0

12.8

200

193.83

10,0

9.9

150

132.38

2013

7.5

100

98.38

2011

( Millions of Yen)

350

250

1,000
0

Return on Equity
(Yen)

2014

2015

9.7

5,0

50

Net Income0

Net Income Per Share

0

2011

2012

2013

2014

2015

( Years ended March 31)

TAIYO HOLDINGS CO., LTD. Annual Report 201535

Financial Section

Management’s Discussion and Analysis

3. Taiwan

In the FPD materials market, both the sales volume and the sales

The consolidated companies comprising the Taiwan segment areamount decreased year on year, due to the effect of important clients

manufacturing and marketing subsidiaries Taiwan Taiyo Ink Co., Ltd., andwithdrawing from the PDP business. On the other hand, demand was

Onstatic Technology Co., Ltd. (and another three subsidiaries).

strong for the high function PKG board materials used in smartphones,

In the PWB materials market, both the sales volume and the sales amountwhich have a high-profit margin, and profit increased year on year.

Analysis of operating results

increased year on year. This reflected not only the consolidation, effective

As a result, net sales amounted to 9,199 million yen ( down 13.2% year on

from the first quarter ended June 30, 2014, of the statement of income ofyear ) with segment profit at 1,212 million yen ( up 12.9% year on year ).

In the global economy during the fiscal year ended March 31, 2015, the U.S. economy has been on solid upward trends, backed by bullish market

Onstatic Technology Co., Ltd. (and another three subsidiaries), for which

confidence and a boost in consumer spending, and the European economy also showed signs of a recovery. On the other hand, in the Chinese

profit and loss was accounted for under the equity method in the firsteconomy, the speed for economic expansion slowed down, although the market sentiment of manufacturing industry temporarily recovered against thequarter ended June 30, 2013, but also strong demand for materials for

5. Otherbackdrop of the government’ s economic stimulus measures, etc. In the Japanese economy, the economic slump after the consumption tax hike has

vehicle installation parts, servers and smart phones.

The consolidated companies comprising the operations in areas otherbeen fading and the economy remained on a moderate recovery track on the back of improvement in employment and income environment.

As a result, net sales amounted to 9,614 million yen (up 14.5% year on

than the above are Taiyo America, Inc. and Taiyo Ink International

In the electronics components industry, in which the Group operates, demand for materials for smartphones, servers, and vehicle installationyear) with segment profit at 1,763 million yen (up 23.5% year on year).

(Singapore) Pte Ltd.

parts remained firm.

At Taiyo America, exports performed strongly.
Taiyo Ink International (Singapore) performed steadily due to theUnder these conditions, net sales for the current fiscal year amounted to 48,260 million yen (up 9.1% year on year).

4. KoreaIn the PWB (printed wiring board) materials market, the sales volume increased, reflecting firm sales of rigid board materials and PKG (semiconductor

The consolidated company comprising the Korea segment is Taiyo

packages) board materials. The sales amount also increased year on year due to the favorable effect of foreign currency exchange rate. As a result, net

Ink Co., (Korea) Ltd., a manufacturing and marketing subsidiary.

sales of PWB materials were 44,475 million yen (up 16.3% year on year).

expansion of the market of material for vehicle installation parts.
As a result, net sales amounted to 4,140 million yen (up 17.5% year onyear) with segment profit at 555 million yen (up 22.5% year on year).

In the FPD (flat panel display) materials market, mainly consisting of PDP (plasma display panel) materials, sales volume decreased due to the effect ofimportant clients withdrawing from the PDP business. As a result, net sales of FPD materials were 1,976 million yen (down 56.6% year on year).
As a result, operating income amounted to 9,254 million yen (up 22.3% year on year) with ordinary income at 9,529 million yen (up 21.7% year on year)
and net income at 6,667 million yen (up 35.2% year on year).

Consolidated forecasts for the next fiscal year
The operating environment in the next fiscal year ending March 31, 2016 is expected that demand for small-sized information terminals suchas smartphones and tablet devices, servers and vehicle installation parts continues to be strong in the electronics components industry inSales results by product group category

which the Group operates.
Under these circumstances, the Group will continue to strengthen its marketing capability, expand the proportion of raw materials that it

The following are sales results by product group category for the fiscal year ended March 31, 2015.

(Millions of yen)Compared to the previous fiscal year
Name of product group category

Previous fiscal
year results

Current fiscal
year results

ChangeRate of change (%)

procures from overseas markets and improve productivity. At the same time, it will actively promote the development and marketing of new
products with the ultimate goal of increasing its market share and expanding earnings.
Net sales(Millions of yen)

Operating income(Millions of yen)

Ordinary income(Millions of yen)

Profit attributableto owners of parent(Millions of yen)

Net income
per share(yen)

PWB materials
Rigid board materials
PKG board and flexible board materials
Build-up board materials

29,235
7,965
1,025

33,539
9,844
1,091

4,304
1,878
65

14.7
23.6
6.4

For the fiscal year ending March 31,
2016 (Forecast)

51,500

10,20010,3007,000

305.12

FPD materials
PDP materials

For the fiscal year ended March 31,
2015 (Actual results)

48,260

9,254

9,529

6,667

264.05

4,554

1,976

(2,577)(56.6)

Rate of change (%)

6.7

10.2

8.1

5.0

15.6

Other related products

1,443

1,808

365

25.3

Total

44,224

48,260

4,035

9.1

Analysis of financial position
Results by segment are as follows.

1. Japanmanufacturing and marketing subsidiaries, and Taiyo Ink International(HK) Ltd and Taiyo Ink Trading (Shenzhen) Co., Ltd., marketing
subsidiaries operating mainly in the southern China region. Onstatic Ink

The consolidated company comprising the Japan segment is Taiyo Ink( Shenzhen ) Co., Ltd. is a subsidiary of Onstatic Technology Co., Ltd.

Mfg. Co., Ltd., a manufacturing and marketing subsidiary.

In the PWB materials market, both the sales volume and the sales amount

Both the sales volume and the sales amount increased year on year due

increased year on year. This ref lected not only the consolidation,

to firm performance of high function products such as PKG board

effective from the first quarter ended June 30, 2014, of the statement ofmaterials, mainly for smartphones.

income of Onstatic Ink (Shenzhen) Co., Ltd., for which profit and loss was

As a result, net sales amounted to 15,786 million yen (up 12.7% year on

accounted for under the equity method in the first quarter ended June 30,year) with segment profit at 2,466 million yen (up 29.4% year on year).

2013, but also strong sales m a i n l y o f m a t e r i a l s r e l a t e d t o v e h i c l einstallation parts and smartphones.

2. China (including Hong Kong)
The consolidated companies comprising the China segment are Taiyo

a. Positions of assets, liabilities and net assets
The following shows the positions of assets, liabilities and net assets as of March 31, 2015.
As of March 31, 2014
(Millions of yen)

ChangeAs of March 31, 2015
(Millions of yen)
(Millions of yen)

Current assets

37,79837,942

144

Cash and deposits decreased approx. 1,300 million yen, notes andaccounts receivable - trade increased approx. 1,200 million yen,merchandise and finished goods increased approx. 100 million yen,and prepaid expenses increased approx. 100 million yen.

Non-current assets

20,57023,2982,728

Construction in progress increased approx. 1,500 million yen,buildings and structures increased approx. 400 million yen, machineryand equipment increased approx. 400 million yen, and net defined
benefit asset increased approx. 300 million yen.

Total assets

58,36961,241

2,872

As a result, net sales amounted to 20,421 million yen (up 14.8% year onyear) w i t h s e g m e n t p r o f i t a t 3 , 5 0 7 m i l l i o n y e n ( u p 3 4 . 0 % y e a r o nyear).

Main factors(comparison with the end of the previous fiscal year)

Ink (Suzhou) Co., Ltd. and Onstatic Ink (Shenzhen) Co., Ltd.,36 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201537

Financial Section

As of March 31, 2014
(Millions of yen)

Total liabilities

Main factors(comparison with the end ofthe previous fiscal year)

As of March 31, 2015
Change(Millions of yen) (Millions of yen)

15,71319,929Long-term loans payable increased approx. 2,000 million yen,accounts payable - other increased approx. 600 million yen, income
taxes payable increased approx. 600 million yen, current portion of
long-term loans payable increased approx. 300 million yen, anddeferred tax liabilities increased approx. 400 million yen.

4,215

Total net assets

42,65541,312(1,343)

Total liabilities andnet assets

58,36961,241

2,872

Treasury shares increased approx. 9,200 million yen due to sharebuyback, net income increased approx. 6,700 million yen, foreign
currency translation adjustment increased approx. 3,000 million yen,cash dividends paid of approx. 2,300 million yen, and retained
earnings increased approx. 400 million yen due to change inaccounting policies.

As already announced, we also plan to pay a year-end dividend of 45 yen and this will be placed on the agenda of the next General Meeting of Shareholders.
This will result in an annual dividend of 90 yen per share for the current fiscal year.
In addition, in the current fiscal year, the Company acquired treasury shares worth 9,200 million yen through the resolution at the Board of Directors’ meeting.
As a result, returns to shareholders, as a basis of the current fiscal year, amounted to 11,377 million yen (or the ratio of 170.6%), and the ratio of returns toshareholders on a cumulative basis for the five fiscal periods from the fiscal year ended March 31, 2011 to the fiscal year ended March 31, 2015 was 111.5%. In
the aforementioned calculation, the dividend amounts and the amount used for the acquisition of treasury shares pertaining to the Employee Stock O wnership
Plan (“ESOP”) trust for granting stock were excluded.
Concerning dividends of the next fiscal year, we plan to pay an interim dividend of 55 yen and a year-end dividend of 55 yen, and this will result in an annual
dividend of 110 yen per share and a rate of return to shareholders of 36.1%.

Risk factors
The following are the main risks that may influence the business development of the Company.

b. Cash flow position

a. Technological innovation risks

The following is the position of cash flows for the fiscal year ended March 31, 2015.
Fiscal year ended March 31, 2015
(Millions of yen)

Net cash provided by (used in)operating activities
Net cash provided by (used in)investing activities

Main factors

9,232

Income before income taxes and minority interests provided approx. 9,900 million yen, depreciation
provided approx. 1,400 million yen and income taxes paid used approx. 2,100 million yen(2,913)Purchase of property, plant and equipment used approx. 2,700 million yen, payment into time
deposits used approx. 2,200 million yen, proceeds from withdrawal of time deposits provided approx.
1,600 million yen and proceeds from sales of investment securities provided approx. 700 million yen.

Net cash provided by (used in)financing activities(9,919)Net increase (decrease) incash and cash equivalents(2,154)

Cash and cash equivalents
at end of period

18,183Purchase of treasury shares used approx. 9,200 million yen, proceeds from long-term loans payableprovided approx. 6,600 million yen, repayments of long-term loans payable used approx. 4,900
million yen and cash dividends paid used approx. 2,300 million yen.

Our Group is reliant on the manufacture and sale of PWB materials, and SR ine. Country-specific risks related to businessdeployment overseas

particular, as a major source of our income. If radical technological

Our Group conducts manufacturing activities in Japan, Taiwan, Korea,

developments, such as electronic parts that do not use PWBs or PWBs that do

China, and the United States. Sales of our Group’s products particularly in

not use SR, were to be widely adopted, this would result in a significant

China, Taiwan, Korea, ASEAN countries, and other Asian markets are

decrease in demand for our products.

expanding. Accordingly, terrorist activities, destabilization of the political

From the viewpoint of product characteristics, operability, and economic

situation, economic fluctuations, the outbreak of earthquakes andviability, there is little possibility that such technological innovations will becontagion, unforeseen changes to legal, regulatory or tax systems, andwidely adopted in the near future. However, the Company considers it asother country-specific risks could impact on the business strategies andimportant issue in the field of research and development to find possible new

performance of our Group.

methods for PWBs.

b. Risks associated with patents
In order for our Group to maintain a superior competitive position, efforts arebeing made to protect the products and technology we develop throughpatents and intellectual property. However, in the event a patent application,etc. does not result in the granting of rights or a third-party requests

c. Trend of indicators

invalidation, insufficient protection of our rights as a Group may result.

The following is the transition of cash flow indicators.
Fiscal year ended
March 31, 2011

Fiscal year ended
March 31, 2012

Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

Equity ratio (%)

78.2

81.1

82.2

69.6

63.8

Equity ratio on mark-to-market basis (%)

152.0

138.7

156.0

133.1

158.3

–

–

–

0.9

1.0

Interest coverage ratio ( times)

1,350.2

992.5

3,850.3

331.3

302.2

Equity ratio:(Net assets - Minority interests) / Total assets

Equity ratio on mark-to-market basis:

Total market capitalization / Total assets

Interest-bearing debt to cash flow ratio:

Interest-bearing debt / Cash flow

Interest coverage ratio:

Operating cash flow / Interest paid

Interest-bearing debt to cash flow ratio (year)(1) The above indicators are calculated based on consolidated financial figures.
(2) Total market capitalization is calculated based on total number of issued shares at the fiscal year end (excluding treasury shares) × stock market price at the fiscal
year end(3) Net cash provided by (used in) operating activities stated in the consolidated statement of cash flows is used for “Cash flows.” “Interest paid” are the amounts
stated under interest expenses paid in the consolidated statement of cash flows.

The Company regards profit distribution to shareholders in cash as an important policy and will effectuate a continuous, stable profit distribution at highlevels. We use the dividend on equity ratio as our target index, keeping this figure at least 5% of consolidated financial results for the mid-to long-term.
In accordance with this policy, the Company paid an interim dividend of 45 yen per share.

38 TAIYO HOLDINGS CO., LTD. Annual Report 2015

Our ratio of overseas sales to net sales is high and there are many instances
when we calculate product prices in foreign currencies. Accordingly, ourbusiness performance is affected by fluctuations in exchange rates, with ahighly appreciated yen normally leading to reduced income and profits.

Moreover, infringing the intellectual property rights owned by a third-party

g. Risk of price fluctuations in key products

could impact the performance of our Group as a result of the payment of

PWB manufacturing is shifting to other Asian countries, especially China, androyalties or large amounts of damages.

we are engaged in continuing price wars with rival companies including local
companies as well as other Japanese firms regarding SR. There is alsoc. Risk of major production facilities being
affected by a disaster
Our Group has manufacturing bases in Japan, Taiwan, Korea, China and theUnited States. In the event that any of our manufacturing bases is damaged bya natural disaster and manufacturing functions are obstructed, manufacturing
and supply functions would be switched to another manufacturing base as an
emergency measure. However, this would require some preparation andadjustment and our business would be affected in the interim.

d. Risk related to procurement of raw materials
The Group procures many of its raw materials from external raw material
manufacturers. Problems at these raw material manufacturers or a lackof supplies that hinder the Group’s production activities may affect theperformance of the Group.

Basic policy on profit distribution and dividends for the current fiscal year
and next fiscal year

f. Risk of exchange rate fluctuations

pressure to lower SR prices which has resulted from price competition in the
PWB market. Because of this, there is a possibility that the price of our main
product, SR, may drop thus affecting the performance of our Group.

h. Risks related to fluctuations in productdemandDemand for our Group’s main products is influenced by electronic components
market trends, which may affect the performance of our Group.

i. Credit risks related to receivables
The Group has many customers and, although we do not concentrate anexcessive amount of receivables on specific customers, the deterioration of
the financial position of customers and the resulting bad debt may affectthe performance of our Group.

j. Risks related to the soaring cost of raw
materials
Due to the state of the oil market, the prices of certain raw materials haverisen, which may affect the performance of our Group.

TAIYO HOLDINGS CO., LTD. Annual Report 201539

Financial Section

Consolidated Balance Sheet
Thousands of
U.S. Dollars( Note 1 )TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
March 31, 2015

Millions of Yen
ASSETS

2015

2014

2015

¥ 18,183¥ 20,338$ 151,273

Time deposits (Note 13)

1,584

811

13,178Notes and accounts receivable—trade (Notes 4 and 13)

13,112

11,891109,085

Cash and cash equivalents ( Note 13)

Millions of Yen
LIABILITIES AND EQUITY

1

Marketable securities (Note 3)

2015

2014

2015

¥ 730

¥ 534

$ 6,073

CURRENT LIABILITIES:
Short-term bank loans (Notes 8 and 13)

CURRENT ASSETS:

Thousands of
U.S. Dollars( Note 1 )Current portion of long-term debt (Notes 8 and 13)

340

2,829

Notes and accounts payable—trade (Note 13)

5,661

5,433

47,096

Accounts payable—other (Note 13)

2,033

1,394

16,913

Income taxes payable (Note 13)

1,139

563

9,476

Accrued expenses

702

654

5,840

4,527

4,388

37,662

Deferred tax liabilities (Note 11)

403

287

3,353

Consumption taxes receivable

169

151

1,406

Other current liabilities

49

71

408

Deferred tax assets (Note 11)

100

91

832

Total current liabilities

11,057

8,936

91,988Other current assets

609

400

5,067

(341)

( 273 )

(2,837)37,94337,798315,666

Inventories (Note 5)

Allowance for doubtful accounts (Note 13)
Total current assets

PROPERTY, PLANT, AND EQUIPMENT ( Note 6 ) :LONG-TERM LIABILITIES:
7,686

5,658

63,944

Liability for retirement benefits (Note 9)

10

327

83

Asset retirement obligations

56

55

Accrued liability for stock benefits

42

Long-term debt (Notes 8 and 13)

1,070

702

8,902

9

35

75

8,873

6,777

73,819

6,135

6,135

51,040

7,144

7,102

59,43436,99732,257

307,796( 14,599 )( 5,373 )( 121,456 )

35,677

40,121

296,814

111

235

923

3,332

329

27,721(46)(75)( 383)

Total accumulated other comprehensive income

3,397

489

28,261

Minority interests

2,238

2,046

18,619Total equity

41,31242,656343,694¥ 61,242¥ 58,369$ 509,501

Deferred tax liabilities (Note 11)

Land

4,342

4,237

36,123

Other long-term liabilities (Note 9)

Buildings and structures—net

8,014

7,626

66,672

Total long-term liabilities

Machinery, equipment, and vehicles—net

1,970

1,608

16,389

747

657

6,215

Construction in progress

1,792

248

14,909Total property, plant, and equipment

16,865

14,376140,308

Tools, furniture, and fixtures—net

COMMITMENTS AND CONTINGENT LIABILITIES ( Note 15 )EQUITY (Notes 10 and 20):
Shareholders' equity:
Common stock—authorized, 50,000,000 shares;
issued, 27,464,000 shares in 2015 and 2014
Capital surplus
Retained earnings

INVESTMENTS AND OTHER ASSETS:
362

749

3,012

39

19

324

Goodwill

4,850

4,745

40,349Software

306

236

2,546

Net defined benefit asset (Note 9)340

Investment securities (Notes 3 and 13)
Investments in unconsolidated subsidiaries (Note 13)

2,828

Deferred tax assets (Note 11)

63

16

524

Other assets

475

431

3,952

Allowance for doubtful accounts

(1)

(1)

(8 )

6,434

6,195

53,527¥ 61,242¥ 58,369$ 509,501

Total investments and other assets

TOTAL

466
349

Treasury stock—at cost, 4,521,990 shares in 2015 and2,026,110 shares in 2014
Total shareholders' equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans (Note 9)

TOTAL

See notes to consolidated financial statements.

40 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201541

Financial Section

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year Ended March 31, 2015

Thousands of
U.S. Dollars( Note 1 )Millions of Yen

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year Ended March 31, 2015

2015

2014

2015

NET SALESCOST OF SALES¥48,260
28,865¥44,225
28,349$ 401,498
240,142NET INCOME BEFORE MINORITY INTERESTS

Gross profit

19,395

15,876

161,356

OTHER COMPREHENSIVE INCOME ( Note 17 ) :10,1408,307

84,359

9,255

7,569

76,997SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES (Note 12)
Operating income

Interest and dividend income
Interest expense
Foreign exchange gain—net
Subsidy income
Refunded consumption taxes
Commission for purchase of treasury shares
Gain on sales of investment securities
Loss on valuation of golf club membership
Equity in earnings of associated companies
Loss on impairment of long-lived assets (Note 7)
Loss on step acquisitions (Note 19)
Gain on liquidation of subsidiaries and affiliates
Other—net

126
(30)
127
5
28
(52)
387
(15)

Other income—net

150
(33)
24

1,048
(250)
1,057
42
233
(433)
3,220
(125)

89

13
(279)
(73)
59
164

740

665

25

5,532

9,920

7,594

82,529Current
Deferred

2,671
277

1,909
485

22,221
2,305

Total income taxes

2,948

2,394

24,526

6,972

5,200

58,003

305

269

2,537

¥ 6,667¥ 4,931$ 55,466

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS

2015

2014

2015

¥ 6,972¥ 5,200$ 58,003

Valuation difference on available-for-sale securities(125 )

100(1,040 )Foreign currency translation adjustments

3,324

2,790

27,654Remeasurements of defined benefit plans

29

Total other comprehensive income

OTHER INCOME (EXPENSES):

Millions of Yen

Thousands of
U.S. Dollars( Note 1 )COMPREHENSIVE INCOME

242

3,228

2,890

26,856¥ 10,200¥ 8,090$ 84,859¥ 9,651¥ 7,560549

530$ 80,291
4,568

COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent
Minority interests
See notes to consolidated financial statements.

INCOME TAXES (Note 11):NET INCOME BEFORE MINORITY INTERESTSMINORITY INTERESTS IN NET INCOME
NET INCOME

Yen

U.S. Dollars

PER SHARE OF COMMON STOCK ( Notes 2.t and 18 ) :Basic net income
Cash dividends applicable to the year

¥ 264.05
90.00¥ 193.83
120.00$ 2.200.75

See notes to consolidated financial statements.

42 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201543

Financial Section

Consolidated Statement of Changes in Equity
TAIYO HOLDINGS CO., LTD. andConsolidated Subsidiaries
Year Ended March 31, 2015

Millions of Yen

Thousands of U.S. Dollars (Note 1)

Shareholders' Equity

Shareholders' Equity

Number of
Shares ofCommonStock
Outstanding

CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock—At CostTotal
Shareholders'EquityBALANCE, APRIL 1, 2013
Net income
Dividends from surplus
Purchase of treasury stock
Changes of items during the year

25,438,174¥ 6,135¥ 7,102¥ 30,379¥ ( 5,372 )¥ 38,244

(1)

4,931
(3,053)(1)

BALANCE, MARCH 31, 2014

25,437,890

4,931(3,053)(284)(as previously reported)

7,102

Cumulative effects of changes
in accounting policies

32,257(5,373)362

BALANCE, APRLI 1, 2014

6,135

( as restated )Net income
Dividends from surplus
Purchase of treasury stock
Disposal of treasury stock
Changes of items during the year

7,102

362

32,619(5,373)

6,667( 2,289)(9,520)( 2,606,180 )
110,300

40,12142

294

40,483
6,667(2,289)(9,520)336$ (44,701)$ 333,785

Stock

Surplus$ 51,040$ 59,085

Cumulative effects of changes
in accounting policies

3,012
51,04059,085

3,012

271,373( 44,701)(79,201)
2,446

336,797
55,466(19,043)(79,201)
2,795$ (121,456)$ 296,814

55,466( 19,043)

Net income
Dividends from surplus
Purchase of treasury stock
Disposal of treasury stock
Changes of items during the year
BALANCE , MARCH 31, 2015

$ 268,361

Retained

BALANCE, APRIL 1, 2014

6,135

Total
Shareholders'EquityCapital(as restated)(as previously reported)

BALANCE, MARCH 31, 2015

BALANCE, MARCH 31, 2014

Earnings

Treasury
Stock—At CostCommon349$ 51,040$ 59,434$ 307,796

Thousands of U.S. Dollars ( Note 1)
Accumulated Other Comprehensive Income

22,942,010¥ 6,135¥ 7,144¥ 36,997¥ (14,599 )¥ 35,677

Millions of Yen

BALANCE, MARCH 31, 2014

Accumulated Other Comprehensive Income

BALANCE, APRIL 1, 2013
Net income
Dividends from surplus
Purchase of treasury stock
Changes of items during the year
BALANCE, MARCH 31, 2014(as previously reported)

Valuation
Difference on
Available-forSale Securities

Foreign
Currency
Translation
Adjustments¥ 135¥ ( 2,174)(as previously reported)

RemeasureTotalments ofAccumulated Other
DefinedComprehensive
Benefit Plans
Income (Loss)¥ (2,039)

Minority
Interests

Total
Equity

¥ 605

100

2,503

( 75)

2,528

1,441

¥ 36,810
4,931( 3,053 )
( 1)
3,969

235

329

(75)

489

2,046

42,656

Cumulative effects of changes
in accounting policies
BALANCE, MARCH 31, 2014
( as restated )362

Valuation
Difference on
Available-forSale Securities

Foreign
Currency
Translation
Adjustments

Remeasurements of
DefinedBenefit Plans

Total
Accumulated
Other
Comprehensive
Income (Loss)

Minority

Total

Interests

Equity$ 1,955$ 2,737$ ( 624)$ 4,068$ 17,022$ 354,875

Cumulative effects of changes
in accounting policies
BALANCE, MARCH 31, 2014(as restated)
Net income
Dividends from surplus
Purchase of treasury stock
Disposal of treasury stock
Changes of items during the year
BALANCE, MARCH 31, 2015

3,012
1,955

2,737

( 624 )

4,068

17,022(1,032)

24,984241

24,193

1,597

357,887
55,466(19,043)(79,201)
2,795
25,790$ 923$ 27,721$ (383)$ 28,261$ 18,619$ 343,694

See notes to consolidated financial statements.

235

329

(75)

Net income
Dividends from surplus
Purchase of treasury stock
Disposal of treasury stock
Changes of items during the year

( 124 )

3,003

29

BALANCE, MARCH 31, 2015

¥ 111

¥ 3,332¥ (46)

489

2,046

43,018

2,908

192

6,667
(2,289)(9,520)336
3,100¥ 3,397¥ 2,238¥ 41,312

See notes to consolidated financial statements.

44 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201545

Financial Section

Consolidated Statement of Cash Flows
TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year Ended March 31, 2015
Thousands of
U.S. Dollars(Note 1)Millions of Yen

OPERATING ACTIVITIES:
Income before income taxes and minority interests

2015

2014

2015

¥ 9,920¥ 7,594$ 82,529(2,033)
1,412( 387 )

(1,956)
1,181

Income taxes—paidDepreciation and amortization
Gain on sales of investment securities
Impairment loss
Decrease (increase) in notes and accounts receivable—trade
Decrease in inventories
Decrease in notes and accounts payable—trade
Increase (decrease) in other current liabilities(Decrease) increase in accrued expenses
Other—net

NET INCREASE (DECREASE ) IN CASH AND CASH
EQUIVALENTS—(Forward)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

Adjustments for:(16,914)
11,747(3,220)

366
275
(580)
31
(14)
243

279
( 228)
722( 200)( 334)
35
(73)

3,045
2,288
(4,825)
258
(116)
2,022

Total adjustments( 687)( 574)( 5,715)

Net cash provided by operating activities

9,233

7,020

76,814(2,188)
1,579( 2,711)( 3,284)
3,449(1,728)(1,927)(18,203)13,136(22,554)

Thousands of
U.S. Dollars(Note 1)Millions of Yen

CASH AND CASH EQUIVALENTS, END OF YEAR

2015

2014

2015

¥ (2,155)¥ 6,571$ (17,928)

20,33813,767

169,201¥ 18,183¥ 20,338$ 151,273

See notes to consolidated financial statements.

INVESTING ACTIVITIES:Payments into time deposits
Proceeds from withdrawal of time deposits
Purchases of property, plant, and equipment
Purchase of OTC, net of cash acquired
Purchase of investments in subsidiaries resulting in change
in scope of consolidation
Purchase of sof tware
Proceeds from sales of investment securities
Other—net
Net cash provided by operating activities
FINANCING ACTIVITIES:
Proceeds from short-term loans
Repayments of short-term loans
Proceeds from long-term debt
Repayments of long-term debt
Purchase of treasury stock
Disposal of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Net cash provided by operating activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS—(Forward)

46 TAIYO HOLDINGS CO., LTD. Annual Report 2015

(127)
571
(37)
(2,913)( 862)(143 )
656(1,056)4,750(308 )( 3,839 )(24,235)

1,808(1,671)
6,632(4,925)(9,201)18(2,290)(291)(3,053)(215)

15,042(13,902)55,175(40,973)( 76,548)150(19,052)(2,421)(9,920)2,350(82,529)

1,445

1,040

12,022¥ (2,155)¥ 6,571$ (17,928)

5,619
(1)

TAIYO HOLDINGS CO., LTD. Annual Report 201547

Financial Section

Notes to Consolidated Financial Statements

Investments in the remaining two (one as of March 31, 2014) unconsolidated subsidiaries are stated at cost. If theequity method of accounting had been applied to the investments in these companies, the effect on theaccompanying consolidated financial statements would not be material.

TAIYO HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year Ended March 31, 2015

The excess of the cost of an acquisition over the fair value of the net assets of the acquired subsidiary at the date ofacquisition is being amortized on a straight-line basis over a period of 5 or 20 years.

1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements haveconsolidated financial statements to conform to thebeen prepared in accordance with the provisions set forthclassifications used in 2015.

in the Japanese Financial Instruments and Exchange Act

The consolidated financial statements are stated in

and its related accounting regulations and in accordanceJapanese yen, the currency of the country in which Taiyo

with accounting principles generally accepted in Japan

Holdings Co., Ltd. (the "Company"), is incorporated and("Japanese GAAP"), which are different in certain respects

operates. The translation of Japanese yen amounts into

as to application and disclosure requirements of

U.S. dollar amounts is included solely for the convenience

I nte rna tion al Financ ial Repor t ing St andar ds .

of readers outside Japan and has been made at the rate of

In preparing these consolidated financial statements,¥120.2 to $1, the approximate rate of exchange at Marchcertain reclassifications and rearrangements have been

31, 2015. Such translation should not be construed as

made to the consolidated financial statements issued

representations that the Japanese yen amounts could bedomestically in order to present them in a form that isconverted into U.S. dollars at that or any other rate.

more familiar to readers outside Japan. In addition,certain reclassifications have been made in the 2014

There are no investments in associated companies accounted for using the equity method in 2015 and 2014.
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.
The fiscal years of two (three as of March 31, 2014) consolidated subsidiaries closed their accounts on December 31.
To prepare the Company's consolidated financial statements, Taiyo Ink (Suzhou) Co., Ltd. and Taiyo Ink Trading(Shenzhen) Co., Ltd., prepared a set of accounts with a closing date of March 31 and these were used forconsolidation purposes. The Company used the financial statements of OTC whose fiscal year ends on December 31
for consolidation since the difference of fiscal year ends between the Company and OTC is no more than threemonths. The necessary adjustments for significant transactions, if any, during the intervening period are made on
consolidation.

b. Unification of Accounting Policies Applied to Foreign Subsidiaries
for the Consolidated Financial Statements
In May 2006, the Accounting Standards Board of Japan ("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 (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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation
The consolidated financial statements as of March 31, 2015, include the accounts of the Company and its 14
significant (14 as of March 31, 2014) subsidiaries (collectively, the "Group").
Under the control and influence concepts, those companies in which the Company, directly or indirectly, is able
to exercise control over operations are fully consolidated and those companies over which the Group has theability to exercise significant influence are accounted for using the equity method.

unified for the preparation of the consolidated financial statements; (2) financial statements prepared by foreignsubsidiaries in accordance with either International Financial Reporting Standards or the accounting principles
generally accepted 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 inaccordance 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 recorded in equity through other comprehensive
income; (c) expensing capitalized development costs of research and development ("R&D"); (d) cancellation of thefair value model accounting for property, plant, and equipment and investment properties, and incorporation of thecost model accounting; and (e) exclusion of minority interests from net income, if included.

(Names of Consolidated Subsidiaries)
TAIYO INK MFG. CO., LTD.
TAIWAN TAIYO INK CO., LTD.
TAIYO INK CO., (KOREA) LTD.

c. Business Combinations
In October 2003, the Business Accounting Council issued a statement of opinion, "Accounting for Business

TAIYO INK (SUZHOU) CO., LTD.

Combinations," and in December 2005, the ASBJ issued ASBJ Statement No. 7, "Accounting Standard for Business

TAIYO AMERICA, INC.

Divestitures" and ASBJ Guidance No. 10, "Guidance for Accounting Standard for Business Combinations and

TAIYO INK INTERNATIONAL (SINGAPORE) PTE LTD.

Business Divestitures." The accounting standard for business combinations allowed companies to apply the

TAIYO INK INTERNATIONAL (HK) LTD.

pooling-of-interests method of accounting only when certain specific criteria were met such that the business

TAIYO INK TRADING (SHENZHEN) CO., LTD.
ONSTATIC TECHNOLOGY CO., LTD. ("OTC")As OTC owns 5 subsidiaries, the total number of consolidated subsidiaries is 14.
On February 20, 2015, one subsidiary of OTC was liquidated.

48 TAIYO HOLDINGS CO., LTD. Annual Report 2015

combination was essentially regarded as a uniting-of-interests. For business combinations that did not meet theuniting-of-interests criteria, the business combination was considered to be an acquisition and the purchase methodof accounting was required. This standard also prescribed the accounting for combinations of entities under common
control and for joint ventures.

TAIYO HOLDINGS CO., LTD. Annual Report 201549

Financial Section
In December 2008, the ASBJ issued a revised accounting standard for business combinations, ASBJ Statement No. 21,"Accounting Standard for Business Combinations." Major accounting changes under the revised accounting standard are
as follows: (1) The revised standard requires accounting for business combinations only by the purchase method. As aresult, the pooling-of-interests method of accounting is no longer allowed. (2) The previous accounting standard accounts
for R&D costs to be charged to income as incurred. Under the revised standard, in-process R&D acquired in a businesscombination is capitalized as an intangible asset. (3) The previous accounting standard provided for a bargain purchasei. Long-Lived Assets
The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate thecarrying 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 as the amount by which the carrying amount of the asset exceeds its recoverable amount, which isgain (negative goodwill) to be systematically amortized over a period not exceeding 20 years. Under the revised standard,

the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net

the acquirer recognizes the bargain purchase gain in profit or loss on the acquisition date immediately after reassessing

selling price at disposition.

and confirming that all of the assets acquired and all of the liabilities assumed have been identified after a review of theprocedures used in the purchase allocation. This standard was applicable to business combinations undertaken on or af ter

j. Software

April 1, 2010. The Company adopted this standard on April 1, 2010.

Software for internal use is amortized using the straight-line method over the estimated useful life of mainly
five years.

d. Cash Equivalents

k. R&D Costs

Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to

R&D costs are charged to income as incurred.

insignificant risk of changes in value.
Cash equivalents include time deposits, certificates of deposit, commercial paper, and bond funds, all of whichmature or become due within three months of the date of acquisition.

e. Inventories
Inventories are principally stated at the lower of cost, determined by the moving-average method, or net selling value.

l. Accrued Bonuses
The Company and certain consolidated subsidiaries provide accrued bonuses for employees, directors, andcorporate auditors based on future projections for the current fiscal year.

m. Accrued Liability for Stock Benefits
The Company accrues liability for stock benefits to be granted to employees in accordance with the " Rules onDistribution of Shares" based on the projected stock benefit liability.

f. Marketable and Investment Securities
The Company classifies all marketable and investment securities as available-for-sale securities, which are reported at fairn. Retirement and Pension Plans

value, with unrealized gains and losses, net of applicable taxes, reported in a separate component of equity.

The benefit formula basis is used to attribute expected benefits to periods of services in calculating projected benefit
obligations.
Prior service costs are amortized using the straight-line method over five years. Actuarial gains (losses) areamortized using the straight-line method over five years from the following year after incurrence. Unrecognizedactuarial gains (losses) and unrecognized prior service cost are accounted for as remeasurements of defined benefit
plans before tax in accumulated other comprehensive income.
The main clause of Article 35 of the "Accounting Standard for Retirement Benefits" (ASBJ Statement No. 26
issued on May 17, 2012, hereinafter "Retirement Benefits Accounting Standard") and the main clause of Article
67 of the "Guidance on Accounting Standard for Retirement Benefits" (ASBJ Guidance No. 25 issued on March
26, 2015, hereinafter "Retirement Benefits Guidance") were adopted from the current fiscal year. Accordingly,
the calculation methods of projected benefit obligation and service cost were changed. Specifically, the methodof determining the portion of projected benefit obligations attributed to periods was changed from the straightline method to the benefit formula basis. In addition, the method of determining the discount rates applied in thecalculation of projected benefit obligation was changed from the method using the average period up to
estimated benefit payment date to the method using the single weighted-average discount rate that reflects theestimated period and amount of benefit payment in each period.
The Retirement Benefits Accounting Standard and other standards were applied in accordance with the transitional
treatment set forth in Article 37 of the Retirement Benefits Accounting Standard, and the effects of the change incalculation methods of projected benefit obligations and service cost were added to or deducted from retained earnings asof April 1, 2014.
As a result, net defined benefit liability decreased by ¥317 million ($2,637 thousand), net defined benefit asset increasedby ¥245 million ($2,038 thousand), and retained earnings increased by ¥362 million ($3,012 thousand), as of April 1, 2014.
Also, operating income and income before income taxes and minority interest for the year ended March 31, 2015,
decreased by ¥25 million ($208 thousand).

Nonmarketable available-for-sale securities are stated at cost determined using the moving-average method. For
other-than-temporary declines in fair value, investment securities are reduced to net realizable value by a charge
to income.

g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is provided for at the aggregate amounts of estimated credit losses basedon the individual financial review of doubtful or troubled accounts and a general reserve for other accounts
based on the Company's historical credit loss experience of a certain past period.

h. Property, Plant, and Equipment
Property, plant, and equipment are stated at cost.
Buildings are depreciated principally using the straight-line method, while property, plant, and equipment other thanbuildings are depreciated principally using the declining-balance method over the estimated useful lives of the assets.
The ranges of useful lives for major categories are as follows:
Buildings and structures:

From 7 to 60 years

Machinery, equipment, and vehicles:

From 4 to 10 years

Tools, furniture, and fixtures:

From 3 to 8 years

50 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201551

Financial Section
In addition, net assets per share as of March 31, 2015, increased ¥11.82 ($0.10) and net income per share for the year
ended March 31, 2015, decreased by ¥0.98 ($0.01).
Liability for directors and corporate auditors is recorded to account for the payments of their retirement benefits based on
the internal rules.
The Company, at the meeting of the board of directors held on April 22, 2010, resolved to abolish the directors' retirement
benefits system, and the agenda item regarding lump sum payments resulting from said abolishment was approved at the64th general meeting of shareholders held on June 29, 2010. These payments will be effected as retirement benefits paidr. Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreign subsidiaries are translated into Japanese yen at the current
exchange rates as of the consolidated balance sheet date, except for equity, which is translated at the historicalexchange rates. 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 accountsof consolidated foreign subsidiaries are translated into Japanese yen at the average exchange rates.

at the time of retirement according to the period of service up to the abolishment of the system.

s. Derivative Financial Instrumentso. Asset Retirement Obligations
In March 2008, the ASBJ published the accounting standard for asset retirement obligations, ASBJ Statement
N o . 1 8 , " A c c o u n t i n g S t a n d a r d f o r A s s e t R e t i r e m e n t O b l i g a t i o n s " a n d A S B J G u i d a n c e N o . 21 , " G u i d a n c e o n
Accounting Standard for Asset Retirement Obligations." Under these accounting standards, 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 theretirement 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 retirementob liga tion c annot be m ade in t he per iod t h e a s s e t r e t i r e m e n t o b l i g a t i o n i s i n c u r r e d , t h e l i a b i l i t y s h o u l d b e
recognized when a reasonable estimate of asset retirement obligation can be made. Upon initial recognition of a

The Company enters into derivative financial instruments to manage foreign exchange risks and interest rate risks.
The Company uses long-term borrowings denominated in foreign currency to reduce foreign currency risks arisingfrom investments in foreign subsidiaries. The Company also uses interest rate swap contracts for the purpose ofhedging the interest rate risk associated with the underlying borrowings.
All derivative financial instruments are recognized at fair value in the consolidated balance sheet. For derivatives
used for hedging purpose, the gains and losses are deferred until the hedge item is recognized. The Company
records in "Foreign currency translation adjustments" the gains or losses on the derivative financial instruments thatare designated as hedging instruments for investments in foreign subsidiaries. Exceptional treatment is applied forinterest rate swap contracts which qualify for hedge accounting and meet specific matching criteria.
The Company evaluates effectiveness of hedging activities for investments in foreign subsidiary by referring theaccumulated gains or losses on the hedging instruments and the related hedged items from the commencement of
the hedging transactions. The Company omits the assessment of hedge effectiveness of interest rate swaps which
qualify for hedge accounting and meet specific criteria.

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 theliability and the capitalized amount of the related asset retirement cost.

t. Per Share Information
Basic net earnings per share ("EPS") is computed by dividing net income available to common shareholders by theweighted average number of common shares outstanding for the period.
Diluted net EPS is not disclosed because it is antidilutive.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicableto the respective years, including dividends to be paid at the end of the year.

p. Income Taxes
The provision for income taxes is computed based on the pretax income included in the consolidated statementof income. The asset and liab ili ty 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 ofassets and liabilities. Deferred taxes are measured by applying currently enacted income tax rates to thetemporary differences.
The Group files a tax return under the consolidated corporate tax system, which allows companies to base tax
payments on the combined profit or losses of the parent company and its wholly owned domestic subsidiaries.

q. Foreign Currency Transactions
All short-term and long-term monetary receivables and payables denominated in foreign currencies aretranslated into Japanese yen at the exchange rates at the consolidated balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated statement of income.

52 TAIYO HOLDINGS CO., LTD. Annual Report 2015u. Accounting Changes and Error Corrections
In December 2009, the ASBJ issued ASBJ Statement No. 24, "Accounting Standard for Accounting Changes andError 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 Presentation—When the presentation of consolidated financial statements is changed,
prior-period consolidated 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 thechange 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 consolidated financial
statements is discovered, those consolidated 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 offiscal years beginning on or after April 1, 2011.

TAIYO HOLDINGS CO., LTD. Annual Report 201553

Financial Section

v. Employee Stock Ownership Plan

(1)

These accounting standards have been revised in relation to transactions such as the acquisition of additional shares of

The Company has applied the "Practical Solution on Transactions of Delivering the Company's Own Stock to

a subsidiary. The revisions primarily pertain to (i) treatment of changes in the parent company's ownership interest in a

Employees etc. through Trusts (Practical Issue Task Force (PITF) No. 30 issued on March 26, 2015)" for thesubsidiary when the parent company retains control over the subsidiary, (ii) the treatment of acquisition costs, (iii) theyear ended March 31, 2015.

(1)

Overview

presentation of net income and the change in presentation from minority interests to non controlling interests, and (iv)the process for the treatments of provisional accounting and other changes related to transactions such as the

Outline of transactionsacquisition of additional shares of a subsidiary.

At the board of directors' meeting held on May 2, 2014, a resolution was made to introduce the Employee Stock Ownership
Plan ("ESOP") trust for granting stock as an employee incentive plan. The purpose of this incentive plan is (i) to increase(2)

employee commitment and encourage involvement in the management of the business; (ii) to raise morale and give

Scheduled date of application

employees an incentive to behave in ways that will contribute to the Company's long-term performance and stock price; andThese accounting standards are effective from the year beginning on April 1, 2015. The revised standards for provisional(iii) to improve the mid- and long-term corporate value of the Company.

accounting treatment are effective for a business combination which will be carried out on or after April 1, 2015.

Under this plan, the Company establishes a trust for persons who satisfy the beneficiary requirements from among(3)

employees, and entrust money necessary for acquisition of the Company's shares. The trustee of the trust will acquire

Effect of the adoption of accounting standards
The impact of adopting the accounting standards and relevant regulations on consolidated financial statements is

the Company's shares, to be distributed to employees in the future, from the Company in accordance with the "Rules oncurrently under assessment.

Distribution of Shares." Afterward, the trustee will grant a certain number of the Company's shares to beneficiaries
based on "qualification grade etc." during the trust term. Beneficiaries will assume no cost in this regard since theunderlying funds in the trust are fully contributed by the Company.
Assets and liabilities in relation to the trust are recorded in the consolidated balance sheet, and gains and losses therefrom

3. MARKETABLE AND INVESTMENT SECURITIES

are recorded in the consolidated statement of income.

(2)

The Company's shares held by the trust

Marketable and investment securities as of March 31, 2015 and 2014, consisted of the following:

The Company's shares held by the trust were accounted for as treasury stock in net assets at book value (that do not include
transaction costs paid to acquire the shares) in the trust. Under the trust, the book value and the number of shares oftreasury stocks as of March 31, 2015, were ¥301 million and 98,760 shares, respectively.

w. Accounting Standards Issued but Not Yet Adopted"Accounting Standard for Business Combinations" (ASBJ Statement No. 21, September 13, 2013)"Accounting Standard for Consolidated Financial Statements" (ASBJ Statement No. 22, September 13, 2013)"Accounting Standard for Business Divestitures" (ASBJ Statement No. 7, September 13, 2013)

Noncurrent:
Marketable equity securities
Government and corporate bonds
Total"Guidance on Accounting Standard for Earnings Per Share" (ASBJ Guidance No. 4, September 13, 2013)

2015

2014

2015

¥ 350

¥ 731
1

$ 2,912

¥ 350

¥ 732

$ 2,912The costs and aggregate fair values of marketable and investment securities as of March 31,
2015 and 2014, were as follows:"Accounting Standard for Earnings Per Share" (ASBJ Statement No. 2, September 13, 2013)"Guidance on Accounting Standards for Business Combinations and Business Divestitures" (ASBJ Guidance No. 10,
September 13, 2013)

Thousands of
U.S. Dollars

Millions of Yen

Millions of Yen

March 31, 2015

Cost

Unrealized
Gains

Unrealized
Losses

Fair
Value

¥ 188

¥ 164

¥ 2

¥ 350

¥ 188

¥ 164

¥2

¥ 350

¥ 365
1

¥ 374

¥8

¥ 731
1

¥ 366

¥ 374

¥8

¥ 732

Securities classified as available for sale:
Equity securities
Debt securities
Total
March 31, 2014
Securities classified as available for sale:
Equity securities
Debt securities
Total

54 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201555

Financial Section

5. INVENTORIES

Thousands of U.S. Dollars

March 31, 2015

Cost

Unrealized
Gains

Unrealized
LossesFair
Value

Inventories as of March 31, 2015 and 2014, consisted of the following:

Securities classified as available for sale:
Equity securities
Debt securities
Total$ 1,564$ 1,364$ 16$ 2,912$ 1,564$ 1,364$ 16$ 2,912Available-for-sale securities whose fair values were not readily determinable as of March 31, 2015 and 2014,
were as follows:
Thousands of
U.S. Dollars

Millions of Yen

Available-for-sale—equity securities

2015

2014

2015

¥ 12

¥ 18

$ 100

The information for available-for-sale securities, which were sold during the year ended March 31, 2015,is as follows:
Millions of Yen

March 31, 2015

Proceeds

Realized Gains

Realized Losses

Total

2015

2014

2015

Merchandise and finished products
Work in process
Raw materials and supplies¥ 2,349292
1,886¥ 2,227320
1,841$ 19,542
2,429
15,691

Total¥ 4,527¥ 4,388$ 37,662

6. PROPERTY, PLANT, AND EQUIPMENT
Accumulated depreciation at March 31, 2015 and 2014, was ¥22,864 million ($190,216 thousand) and ¥21,024 million,
respectively.

7. LONG-LIVED ASSETSThe Group reviewed its long-lived assets for impairment for the years ended March 31, 2015 and 2014.
No impairment losses were recognized for the year ended March 31, 2015.

Securities classified as available for sale—
Equity securities

Thousands of
U.S. Dollars

Millions of Yen

¥ 572

¥ 390

¥4

¥ 572

¥ 390

¥4

The Group recognized impairment losses for the year ended March 31, 2014, as follows:
Location

TAIYO INK CO., (KOREA) LTD.

There were no available-for-sale securities which were sold during the year ended March 31, 2014.

Usage

Business use

Classification

Millions of Yen

Buildings
Machinery and equipment

¥ 125
154

Thousands of U.S. Dollars

March 31, 2015

Proceeds

Realized Gains

Realized Losses

In principle, business use assets are grouped based on the department of the Group.
Business use assets of Taiyo Ink Co., (Korea) Ltd., a consolidated subsidiary of the Company, were written down to

Securities classified as available for sale—
Equity securities$ 4,759$ 3,245

$ 33

Total

$ 4,759$ 3,245$ 33

recoverable amounts because their profitability and fair values declined drastically compared to their book values.
The recoverable amount is measured at its value in use and the recoverable amount is deemed as zero since no future
cash flow is expected.

8. SHORT-TERM BANK LOANS AND LONG-TERM DEBT

4. NOTES MATURING ON MARCH 31, 2015 AND 2014
Notes that were to mature at the consolidated balance sheet date were accounted for at the date of actual settlement. The
year end of March 31, 2015, of certain subsidiaries and the year end of March 31, 2014, coincided with a bank holiday and

The weighted-average interest rates applicable to the short-term borrowings at March 31, 2015 and 2014, were 0.62%
and 0.66%, respectively.

the following notes maturing on March 31, 2015 and 2014, were included in the consolidated balance sheets as of March 31,
2015 and 2014:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Notes receivable—trade

56 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201557

Financial Section
The liability for retirement benefits at March 31, 2015 and 2014, for directors and corporate auditors is ¥10 million

Long-term debt as of March 31, 2015, consisted of the following :Current portion of long-term debt, with weighted averageinterest of 0.70% as of March 31, 2015
Long-term debt, 2020 with weighted-averageinterest of 0.59% as of March 31, 2015
Total

Millions of Yen

Thousands of
U.S. Dollars¥ 340$ 2,829($83 thousand) and ¥10 million, respectively. The retirement benefits for directors and corporate auditors are paid
subject to the approval of the shareholders.

Defined Benefit Plans
The changes in projected benefit obligations for the years ended March 31, 2015 and 2014, were as follows:

7,686

63,943¥ 8,026$ 66,772
Balance at beginning of year (as previously reported)
Cumulative effects of changes in accounting policies
Balance at beginning of year (as restated)

Long-term debt as of March 31, 2014, consisted of the following :Millions of Yen

Long-term debt, 2018 with weighted-average interest of 0.15%
as of March 31, 2014

¥ 5,658

Total¥ 5,658

Thousands of
U.S. Dollars

Millions of Yen

Service cost
Interest cost
Actuarial (gains) losses
Benefits paid
Transfer to defined contribution plans
Foreign exchange difference
Balance at end of year

2015

2014

2015

¥ 2,772(561)¥ 2,541$ 23,062(4,668)

2,211
208
36
(14)
(126)
(512)
53

2,541
169
42
76
(122)
66

18,394
1,730
300
(116)
(1,048)(4,260)441¥ 1,856¥ 2,772$ 15,441

The changes in plan assets for the years ended March 31, 2015 and 2014, were as follows:

Annual maturities of long-term debt for the next five years and thereafter as of March 31, 2015,
were as follows:Year Ending March 31

Millions of Yen

Thousands of
U.S. Dollars

2016
2017
2018
2019
2020
2021 and thereaf ter

¥ 340
340
340
4,966
2,040

$ 2,829
2,829
2,829
41,314
16,971

Total¥ 8,026$ 66,772

Thousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year
Expected return on plan assets
Actuarial (gains) losses
Employer contribution
Benefits paid
Transfer to defined contribution plans
Foreign exchange difference
Balance at end of year

2015

2014

2015

¥ 2,455
42
(4)
133
(160)
(318)
47

¥ 2,271
34
12
206
(121)
53

$ 20,424
349
(33)
1,106
(1,331)(2,645)391¥ 2,195¥ 2,455$ 18,261

A reconciliation between the liabilities recorded in the consolidated balance sheet and the balances of projected benefit

9. RETIREMENT AND PENSION PLANS

obligations and plan assets as of March 31, 2015 and 2014, was as follows:

2015

2014

2015

Funded projected benefit obligations
Plan assets¥ 1,855(2,195)¥ 2,772(2,455)$ 15,433(18,261)

Net (asset) liability for defined obligations¥ (340)¥ 317$ (2,828)(Asset) liability for retirement benefits¥ (340)¥ 317$ (2,828)

Net (asset) liability for defined benefit obligations¥ (340)¥ 317$ (2,828)

Certain overseas consolidated subsidiaries have defined contribution plans and other types of plans.

58 TAIYO HOLDINGS CO., LTD. Annual Report 2015

Thousands of
U.S. Dollars

Millions of Yen

The Company has non-contributory funded defined benefit plans based on the point system and defined contribution plans.

TAIYO HOLDINGS CO., LTD. Annual Report 201559

Financial Section
Assumptions used for the years ended March 31, 2015 and 2014, were set for th as follows:

The components of net periodic benefit costs for the years ended
March 31, 2015 and 2014, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial gains (losses)
Amortization of prior service cost

¥ 208
36
(42)
33
10

¥ 169
42
(34)
(8)
10

$ 1,730
299
(349)
275
83

Net periodic benefit costs

¥ 245

¥ 179

$ 2,038

Discount rate
Expected long-term rate of return on plan assets
Projected rate of salary increases

2015

2014

0.645%

1.2 %

1.0

1.0

14.12

14.12

Defined Contribution Plans
T h e r e q u i r e d c o n t r i b u t i o n a m o u n t t o t h e d e f i n e d c o n t r i b u ti o n p l a n s b y t h e C o m p a n y a n d i ts c e r t a i n c o n s o l i d a te d
subsidiaries at March 31, 2015 and 2014, is ¥46 million ($383 thousand) and ¥30 million, respectively.

Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined benefit plans before tax for the years ended March 31, 2015 and 2014, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Actuarial losses
Prior service cost

¥ 46
10

$ 383
83

Total

¥ 56

$ 466

10. 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

Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect ofdefined benefit plans before tax as of March 31, 2015 and 2014, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Unrecognized actuarial losses
Unrecognized prior service cost

¥ (18)(41)¥ (64)(51)$ (150)
(341)

Total

¥ (59)¥ (115 )$ (491)

dividend upon resolution at the shareholders' meeting. For companies that meet certain criteria, including (1) having aboard of directors; (2) having independent auditors; (3) having a board of corporate auditors; and (4) the term ofservice 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 thecompany has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends in kind (noncash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the board of directors if the articles ofincorporation of the Company so stipulate. 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 theshareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.

Plan assets as of March 31, 2015 and 2014, consisted of the following:
2015

2014

General account

100%

100%

Total

100%

100%

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 that was charged upon the payment of such dividends until the total of aggregate amount oflegal reserve and additional paid-in capital equals 25% of the common stock.

The expected long-term rate of return on plan assets is determined considering the current and expected distribution of plan

Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed

assets and the current and expected long-term rate of return derived from various components of plan assets.

without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capitalsurplus, and retained earnings can be transferred among the accounts under certain conditions upon resolutionof the shareholders.

60 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201561

Financial Section

c. Treasury Stock and Treasury Stock Acquisition Rights

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in theaccompanying consolidated statement of income for the year ended March 31, 2015, with the corresponding figures

The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stockfor 2014, is as follows:by resolution of the board of directors. The amount of treasury stock purchased cannot exceed the amount
2015

2014

11. INCOME TAXES

Normal effective statutory tax rate
Tax rates difference relating to overseas subsidiaries
Elimination of dividend income
Deduction of foreign corporation tax carried forward
Undistributed earnings of associated companies
Nondeductible withholding income tax of dividends
Tax exemption for experiments and research expenses and other
Valuation allowance
Other

35.52%(13.31)0.85(0.10)
3.67
4.89(2.57)(0.34)
1.10

37.87%(14.75 )0.95( 0.12)
2.86
5.53(1.82)( 0.92)
1.92

The Company and its domestic subsidiaries are subject to Japanese national and local income taxes, which, in the

Actual effective tax rate

29.71%

31.52%

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 andtreasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or
deducted directly from stock acquisition rights.

aggregate, resulted in normal effective statutory tax rates of approximately 36% and 38% for the years ended March 31,
2015 and 2014, respectively.

The "Act on Partial Revision of the Income Tax Act" (Act No. 9 of 2015) and "Act on Partial Revision of the Local Tax Act" (Act No.

The tax effects of significant temporary differences, which resulted in deferred tax assets and liabilities as of March 31, 2015

2 of 2015) were promulgated on March 31, 2015. Accordingly, the normal effective statutory tax rates used to calculate deferredand 2014, are as follows:

tax assets and deferred tax liabilities were changed to 32.95% for temporary differences which are expected to reverse in thefiscal year beginning on April 1, 2015, and 32.18% for those in the fiscal year beginning on April 1, 2016.
Thousands of
U.S. Dollars

Millions of Yen

2015

2015

2014

¥3
100
48
27
97
14
259

¥ 89
96
72
1
96
272

$ 25
832
399
225
807
116
2,155

548
(133)

626
( 171)

4,559(1,107)

415

455

3,452

(1,480)
(24)
(52)
(115)
(54)

(1,083 )
(57)
(130)
(67)

(12,313)
(200)
(432)
(957)
(449)

(1,725)(1,337)(14,351)¥ (1,310)¥ (882)$ (10,899 )Deferred tax assets:
Retirement benefits
Unrealized profit
Deduction of foreign corporation tax carried forward
Allowance for doubtful accounts
Accrued expenses
Accrued liability for stock benefits
Other
Total deferred tax assets
Less valuation allowance
Total deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Undistributed earnings of associated companies
Reserve for technique and development
Valuation difference on available-for-sale securities
Net defined benefit assets
Other
Total deferred tax liabilities
Net deferred tax liabilities

The effects of this change are immaterial.

12. R&D COSTS
R&D costs charged to income for the years ended March 31, 2015 and 2014, were ¥2,213 million ($18,411 thousand) and¥1,594 million, respectively.

13. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1)

Summary of Financial Instruments Statusa. Group policy for financial instruments
The Group's policy is to fund operations internally wherever possible. With large-scale capital projects, the Groupborrows funds from banks or arranges other types of funding, depending on market conditions.
Short-term surplus funds are managed conservatively using only financial instruments that provide high security.
The Group employs derivatives to mitigate known future risks, but does not use such instruments for speculative
purposes as a matter of policy.

b. Nature and extent of risks arising from financial instruments
Operating receivables, such as trade notes and trade accounts, are exposed to credit risks relating to the Group's
customers. Operating receivables denominated in foreign currencies that arise in the course of conducting overseas
business are additionally exposed to exchange rate fluctuation risk.

62 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201563

Financial Section
Marketable and investment securities mainly comprise bonds and investments in the shares of affiliated business partners.
These investments are exposed to the risk of fluctuations in market prices.

(2)

Fair Value of Financial Instruments

Operating liabilities, such as notes and accounts payable—trade, typically have payment due dates within four months. The

Carrying amounts, fair values, and unrealized gain (loss) as of March 31, 2015 and 2014, were as follows:

Group also has some foreign currency-denominated liabilities of this kind that are exposed to exchange rate fluctuation risk.

Financial instruments whose fair values are difficult to measure are excluded from the table below.

Foreign exchange forward contracts and others are used to hedge the exchange rate fluctuation risk associated with foreign
currency-denominated operating assets and others.
Please see Note 14 for more details about derivatives.

Millions of Yen

March 31, 2015

c. Risk management system for risks associated with financial instruments
Management of Credit Risk (Relating to Contractual Defaults by Business Partners)(1) Cash and cash equivalents(2) Time deposits(3) Notes and accounts receivable — trade
Less allowance for doubtful receivables

The Company monitors the status of business partners with respect to operating assets regularly in line with internal
regulations governing the management of credit limits and trade receivables. Besides managing due dates andoutstanding balances by counterparty, the Company also aims to identify as early as possible and alleviate any
concerns about nonpayment caused by deterioration in financial condition or other factors.
Consolidated Group subsidiaries also follow the Company's policy on credit risk management.
Bond investments are limited to high-rated bonds. The associated credit risk is judged to be minimal.
The Group only enters into derivative contracts with highly rated financial institutions as counterparties. The associatedcredit risk is regarded as negligible.
Management of Market Risk (Relating to Fluctuations in Exchange Rates, Interest Rates, Etc.)
To manage the currency fluctuation risk associated with foreign currency-denominated operating assets and liabilities
and long-term debt, the Company and certain consolidated Group subsidiaries assess related exposures for eachcurrency on a monthly basis.

(4) Investment securities(5) Notes and accounts payable—trade(6) Accounts payable—other(7) Income taxes payable(8) Short-term bank loans(9) Long-term debt
(10) Derivatives—net

Carrying Amount

Fair Value¥ 18,183
1,584
13,112( 341)¥ 18,183
1,584

12,771
350
5,661
2,033
1,139
730
8,026

12,771
350
5,661
2,033
1,139
730
8,050

¥ 20,338
811
11,891(273)¥ 20,388
811

11,618
731
5,433
1,394
563
534
5,658
16

11,618
731
5,433
1,394
563
534
5,658
16

Unrealized Loss

¥ (24)(a) Derivatives to which hedge accounting
is not applied(b) Derivatives to which hedge accounting
is applied

The market values and financial condition of issuers (most of which are the Group's business partners) are assessed
regularly for all marketable and investment securities. The ownership of any shares is reviewed on an ongoing basis,
depending on market conditions and the relationships with relevant business partners.
With respect to the management of derivatives, the internal party responsible for the transaction must gain the approvalof the authorized settlement managers to exercise any derivatives contract, in line with internal management regulations
specifying the transactional authority and related limits for contractual exposures. The results of derivative transactions
are reported to the board of directors periodically.
Management of Liquidity Risks Associated with Fund Procurement (Relating to Risk of Nonpayment by Due Date)

March 31, 2014
(1) Cash and cash equivalents(2) Time deposits(3) Notes and accounts receivable—trade
Less allowance for doubtful receivables

Appropriate operational funding plans are created and approved for all Group firms. The Group manages any related
liquidity risks and ensures that cash on hand is maintained at adequate levels.

d. Fair value of financial instruments and related matters
The fair value of financial instruments is based on market prices where available and rational estimates in the case of(4) Investment securities(5) Notes and accounts payable—trade(6) Accounts payable—other(7) Income taxes payable(8) Short-term bank loans(9) Long-term debt
(10) Derivatives—net

unquoted instruments. Estimated values can vary depending on the assumptions employed for the various factor
variables used in such calculations.

64 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201565

Financial Section

Thousands of U.S. Dollars

March 31, 2015
(1) Cash and cash equivalents(2) Time deposits(3) Notes and accounts receivable—trade
Less allowance for doubtful receivables(4) Investment securities(5) Notes and accounts payable—trade(6) Accounts payable—other(7) Income taxes payable(8) Short-term bank loans(9) Long-term debt
(10) Derivatives—net

Carrying Amount

Fair Value$ 151,273
13,178109,085(2,837)$ 151,273
13,178106,248
2,912
47,096
16,913
9,476
6,073
66,772

106,248
2,912
47,096
16,913
9,476
6,073
66,972

Unrealized Loss

2. Carrying amounts of financial instruments whose fair values cannot
be reliably determined
Thousands of
U.S. Dollars

Millions of Yen

Investment securities—unlisted securities

2015

2015

2014

¥ 12

¥ 18

$ 100

39

19

324

Investments in unconsolidated subsidiaries:
Unlisted securities
Investment in partnership$ (200 )(a) Derivatives to which hedge accounting
is not applied

3. Maturity analysis for financial assets and securities with contractual maturities
Millions of Yen(b) Derivatives to which hedge accounting
is applied
March 31, 2015
The amount of allowance for doubtful receivables is deducted from receivables.
The value of assets and liabilities arising from derivatives is shown at net value.

Notes:
1. Measurement of fair value of financial instruments(1) Cash and cash equivalents, (2) Time deposits, and (3) Notes and accounts receivable—trade
The fair values of cash and deposit and receivables approximate carrying values due to the short maturity of these instruments.
(4) Investment securities
The fair values of investment securities are measured at the quoted market price of the stock exchange for the equity instruments and at

Cash and cash equivalents
Time deposits
Notes and accounts receivable—trade
Government and corporate bonds

Due in One Yearor Less

Due after
One Year throughFive Years¥ 18,183
1,584
13,112

March 31, 2014
Cash and cash equivalents
Time deposits
Notes and accounts receivable—trade
Government and corporate bonds¥ 20,338
811
11,891
1

the quoted price obtained from the financial institution for certain debt instruments. Fair value information for investment securities byclassification is included in Note 4.

Thousands of U.S. Dollars(5) Notes and accounts payable—trade, (6) Accounts payable—other, (7) Income taxes payable, and (8) Short-term bank loans
The fair values of the above approximate carrying values due to the short maturity of these instruments.
(9) Long-term debt
For long-term debt with floating interest rates, the fair values approximate carrying value due to the variable interest rate which reflects
the market rate in a short period of time and the fact that the credit status of the Company has not changed drastically since theexecution of borrowings. For long-term debt with interest rate swap contracts to which hedge accounting is applied, the fair values arecalculated by discounting the total amount of principal and interest at interest rates based on the expected rate of new debts.
(10) Derivatives
Please see Note 14.

66 TAIYO HOLDINGS CO., LTD. Annual Report 2015

March 31, 2015
Cash and cash equivalents
Time deposits
Notes and accounts receivable—trade
Government and corporate bonds

Due in One Yearor Less

Due after
One Year throughFive Years$ 151,273
13,178109,085

Please see Note 8 for annual maturities of long-term debt.

TAIYO HOLDINGS CO., LTD. Annual Report 201567

Financial Section

14. DERIVATIVE FINANCIAL INSTRUMENTS

15. CONTINGENT LIABILITIES

Derivative transactions to which hedge accounting is not applied as of March 31, 2015 and 2014, were as follows:

The Group's contingent liabilities as of March 31, 2015 and 2014, were as follows:

Millions of Yen

March 31, 2015

Contract
AmountContract
Amount Dueafter One Year

Fair
Value

Thousands of
U.S. Dollars

Millions of Yen
Unrealized Gain
( Loss)Export bill discount

2015

2014

¥ 29

¥ 26

2015
$ 241

Foreign exchange forward contracts:
Selling U.S. dollar
Buying yen

¥ 745
39

16. BUSINESS COMBINATIONSMarch 31, 2014

Please see Note 20 for information about business combinations.

Foreign exchange forward contracts:
Selling U.S. dollar
Buying yen¥ 3,340397¥ (10)(6)¥ (10)(6)

17. OTHER COMPREHENSIVE INCOME

Thousands of U.S. Dollars

March 31, 2015

Contract
AmountContract
Amount Dueafter One Year

Fair
Value

Unrealized Gain
(Loss)

Components of other comprehensive income for the years ended March 31, 2015 and 2014, were as follows:

Foreign exchange forward contracts:
Selling U.S. dollar
Buying yen

Thousands of
U.S. Dollars

Millions of Yen$ 6,198
324

$8

$8

2015

2014

2015

¥ (203)
78
(125)

¥ 156
(56)
100

$ (1,689)
649(1,040)

3,324

2,790

27,654

Valuation difference on available-for-sale securities:
Gain arising during the year
Income tax effect

The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
Derivative transactions to which hedge accounting is applied as of March 31, 2015, were as follows:

Foreign currency translation adjustments—
Gain arising during the year
Remeasurements of defined benefit plans:Millions of Yen

March 31, 2015
Interest rate swaps—Floating ratereceipt, fixed-rate payment

HedgedItem

Contract
AmountContract
Amount Dueafter One Year

Long-term
debt¥ 3,400¥ 3,060

Fair
Value

Interest rate swaps to which exceptional treatment is applied are accounted for together with long-term debt designatedas a hedged item. Therefore, their fair values are included in the fair value of long-term debt.

$ 26,856¥ 2,890

A reconciliation of the differences between basic and diluted net EPS for the years ended March 31, 2015 and 2014,
was as follows:

Thousands of U.S. Dollars

68 TAIYO HOLDINGS CO., LTD. Annual Report 2015

466
( 224)
242

18. NET INCOME PER SHARE

Millions of Yen

Thousandsof Shares

Year Ended March 31, 2015

Net Income

WeightedAverage Shares

Basic EPS—Net income available
to common shareholders¥ 6,667

25,249¥ 264.05¥ 4,931

25,438¥ 193.83

There were no derivative transactions to which hedge accounting is applied as of March 31, 2014

Interest rate swaps—Floating ratereceipt, fixed-rate payment¥ 3,228

Total other comprehensive income

Notes:March 31, 2015

56
( 27)
29

Gain arising during the year
Income tax effectHedgedItem

Contract
AmountContract
Amount Dueafter One Year

Long - term
debt

$ 28,286$ 25,458

Fair
Value

Yen

U.S. Dollars

EPS$ 2.20Year Ended March 31, 2014
Basic EPS—Net income available
to common shareholders

TAIYO HOLDINGS CO., LTD. Annual Report 201569

Financial Section

Notes:( Business Combination through Share Exchange )Diluted net EPS is not disclosed as there were no dilutive securities.
The Company's shares owned by the ESOP trust are included in treasury stock. The ESOP trust owned 84,474

a. Overview of Business Combination

weighted-average shares of the Company for the year ended March 31, 2015.

(1)

19. SUPPLEMENTAL CASH FLOW INFORMATIONName of acquired company and description of business

Name of acquired company:

CHUGAI KASEI CO., LTD. ("Chugai Kasei")

Description of business:

Manufacturing and distribution of dyes, pigments, chemical products and inks

There was no supplemental cash flow information to be disclosed for the year ended March 31, 2015.
The Company acquired and newly consolidated OTC and six companies during the year ended March 31, 2014.

(2)

In the third quarter of the year ended March 31, 2014, one subsidiary of OTC was liquidated.

Purpose of the business combination
The Company believes that it can leverage management resources in a complementary and effective manner with the
combination of Chugai Kasei's basic technology related to organic compounds and the Company's well established

The details of assets and liabilities of these companies at the date of consolidation and reconciliation between

sales network by making Chugai Kasei its wholly owned subsidiary.

acquisition costs of the shares and net payment for the acquisition are as follows:This combination will enable the Company to respond faster and more flexibly to customer needs by offering options for
new business development, strengthening competitiveness, and deploying its product in new markets.
Millions of Yen

Current assets¥ 4,998

Noncurrent assets

(3)

414

Goodwill

3,330

Current liabilities(1,359)Noncurrent liabilities(4)

Legal form of the business combination
Share exchange(118)

Minority interests in consolidated subsidiaries

Date of the business combination
April 30, 2015 (acquisition date for the purpose of the consolidation)(1,943)

Valuation difference(24)

Subtotal

(5)

5,298

Acquisition costs before consolidation

Name of the company after the business combination
TAIYO HOLDINGS CO., LTD.

(2,669)Valuation by equity method before consolidation(73)

Loss on step acquisition73

Total acquisition costs

(6)

2,629

Cash and cash equivalents held by acquired companies(1,767)Purchase of investments in subsidiaries resulting inchange in scope of consolidation¥ 862

Acquired voting rights
100%

(7)

Grounds for determination of the acquiring company
The Company was selected as the acquiring company by comprehensively considering several factors, such as arelatively large percentage of voting rights of its shareholders, the difference in the scale of the business and so on, as
well as the fact that the Company became a wholly owning parent company.

20. SUBSEQUENT EVENTSThe appropriation of retained earnings as of March 31, 2015, approved at the Company's shareholders' meeting held on
June 19, 2015, is as follows:

Year-end cash dividends, ¥45 ($0.37) per share

70 TAIYO HOLDINGS CO., LTD. Annual Report 2015

Millions of Yen

Thousands of
U.S. Dollars¥ 1,037$ 8,627b. Acquisition Cost and Breakdown

Consideration for acquisition—Acquisition costs—
ordinary shares of Taiyo Holdings Co., Ltd.

Millions of Yen

Thousands of
U.S. Dollars¥ 491$ 4,085TAIYO HOLDINGS CO., LTD. Annual Report 201571

Financial Section

c. Exchange Ratio and the Calculation Methods by Type of Shares andNumber of Shares Issued(1)of Chugai Kasei is set at 1:

Exchange ratio by type of shares

1 ordinary share of Chugai Kasei:(2)

The following shows the share exchange ratio ranges calculated by KPMG when the share value per ordinary share

Method Adopted

0.12 ordinary shares of Taiyo Holding

Ap p r a is a l Re s u lt s o f
Share Exchange

The Company

Chugai Kasei

Average market price analysis

Comparable companies analysis
DCF analysis

0.068 – 0.230
0.083 – 0.152

Calculation method of share exchange ratio(c) Number of Shares Issued(a) Reason and Rationale for Allotment Ratio of Shares

118,800 shares

In order to ensure the fairness and appropriateness of the share exchange ratio for the Share Exchange, the Company and
Chugai Kasei decided to each obtain valuation of the share exchange ratio by KPMG FAS KK ("KPMG" hereafter), an independent
third-party valuation institution, in determining the share exchange ratio. The Company carefully considered the share exchange
ratio, referring to the calculation concerning the share exchange ratio conducted by the third-party valuation institution. The
Company and Chugai Kasei negotiated and consulted with each other on the share exchange ratio, considering various factors,

21. SEGMENT INFORMATION

including each party's financial condition, operating performance, and the market level of the share price of the Company. As aresult, the Company and Chugai Kasei came to the conclusion that the share exchange ratio (as described in c.(1) above) is fair
and the Share Exchange with such share exchange ratio will not undermine the interests of each party's respective shareholders.

(1)

At the board of directors' meeting held on April 20, 2015, the Company and Chugai Kasei determined to implement the share

Description of Reportable Segments
The Group's reportable segments are those for which separate financial information is available and regular evaluationexchange at the share exchange ratio and entered into the share exchange agreement on the same date.

by the Company's management is being performed in order to decide how resources are allocated among the Group.
The Group made the transition to a holding company system on October 1, 2010. The business of the Group consists

In the event any material change occurs with respect to the conditions that constitute the basis of the share exchange

mainly of one activity, the manufacture and distribution of solder resist for printed wiring boards, among others. Eachratio, the Company and Chugai Kasei may consult with each other and change such ratio pursuant to the terms of theGroup company formulates comprehensive strategies and deploys business activities, operating under a holding

share exchange agreement.

company system, whereby the Company is the holding company.
The Group is composed of four reportable segments divided by geographic area, namely "Japan," "China," "Taiwan,"and "Korea," based on our manufacturing and marketing system.
On February 20, 2015, one of OTC's five subsidiaries which was included in the "Taiwan" reportable segment(b) Basis for Calculation

w as l i qui dated.

1. Name of valuation institution and its relationship with the Company and Chugai Kasei
KPMG, a third-party valuation institution of the Company and Chugai Kasei is independent of the Company and
Chugai Kasei. KPMG is not a related party to either the Company or Chugai Kasei and does not have any
material interest in connection with the Share Exchange.

2. Calculation methods(2)

Method of Measurement for Information for the Amounts of Sales, Profit (Loss),
Assets, Liabilities, and Other Items by Reportable Segments
The accounting policies of each reportable segment are consistent with those disclosures in Note 2," Summary of Significant Accounting Policies."

KPMG appraised the Company's share value based on the average market price analysis given that there is amarket price of the ordinary shares of the Company due to it being listed on a stock exchange. The appraisal
for Chugai Kasei is based on (a) the comparable companies analysis (given that there are multiple listedcompanies that are similar to and comparable with Chugai Kasei and it is therefore possible to infer the sharevalue based on that method) and (b) discounted cash flow analysis ("DCF analysis") (so as to reflect the stateof future business activities of Chugai Kasei in the appraisal). Substantial increase or decrease in the profit andsignificant changes in assets and liabilities compared to recent financial statements are not anticipated in
Chugai Kasei's business plan, on which KPMG relied in appraising Chugai Kasei's share value based on the
DCF analysis.

72 TAIYO HOLDINGS CO., LTD. Annual Report 2015

TAIYO HOLDINGS CO., LTD. Annual Report 201573

Financial Section(3)

Notes:

Information about Sales, Profit (Loss), Assets, Liabilities, and Other Items
by Reportable Segments(a) The "China" segment covers local subsidiaries in China and Hong Kong.

Millions of Yen

Year Ended
March 31, 2015

Reportable Segments

Japan

China

Taiwan

Korea

Total

Other

Total

Reconciliations Consolidated¥ 9,411¥ 18,837¥ 7,142¥ 8,836¥ 44,226¥ 4,034¥ 48,260¥ 48,260

6,375

1,584

2,472

364

10,795107

10,902¥ 15,786¥ 20,421¥ 9,614¥ 9,200¥ 55,021¥ 4,141¥ 59,162 ¥ (10,902)¥ 48, 260

¥ 2,467¥ 3,508¥ 1,763¥ 1,212¥ 8,950¥ 555¥ 9,505¥ ( 250 )¥ 9,255

12,61815,07914,683

8,613

50,993

2,419

53,412

7,830

61,242

399

238

207

154

998

15

1,013

399

1,412

2,034

414

99

108

2,655

17

2,672

649

3,321

Total

Sales:
External customers
Intersegment
Total sales
Se gme nt p rofit
Se gme nt a ssets
Other items:
Depreciation
Increase in property,
plant, and equipment
and intangible assets¥ (10,902)(b) The "Other" segment is not included in reportable segments and covers the business activities
of local subsidiaries in the U.S. and other Asian countries.
(c) Depreciation does not include goodwill amortization.
(d) The " Taiwan " and " China " segments include sales and operating income of OTC (including OTC's four subsidiaries).
As one of its subsidiaries is not engaged in any business activities, the subsidiary is not included in thesegments above.
(e) Segment profit of "Reconciliations" includes unallocated segment loss of ¥65 million ($541 thousand) andunallocated segment income of ¥133 million, which is mainly composed of the income or loss concerning theholding company in 2015 and 2014, respectively.
(f) Segment assets of "Reconciliations" include unallocated segment assets of ¥17,141 million ($142,604 thousand)and ¥23,714 million, which are mainly composed of the assets concerning the holding company in 2015 and 2014,
respectively.

Millions of Yen

Year Ended
March 31, 2014

Reportable Segments

Reconciliations Consolidated

Japan

China

Taiwan

Korea

Total

Other

¥ 8,698
5,307¥ 16,203
1,588¥ 5,575
2,824¥ 10,312
288¥ 40,788
10,007¥ 3,43788¥ 44,225
10,095 ¥ (10,095)¥ 44,225¥ 14,005¥ 17,791¥ 8,399¥ 10,600¥ 50,795¥ 3,525¥ 54,320 ¥ (10,095)¥ 44,225¥ 1,906
7,897¥ 2,617
12,369¥ 1,428
13,000¥ 1,074
7,625¥ 7,025
40,891

¥ 453
2,053

¥ 7,478
42,944¥ 91
15,425¥ 7,569
58,369

243

210

194

203

850

15

865

317

1,182

1,267

275

171

444

2,157

10

2,167

389

2,556

Other

Total

Sales:
External customers
Intersegment
Total sales
Seg men t pro fit
Seg men t asse ts
Other items:
Depreciation
Increase in property,
plant, and equipment
and intangible assets

22. RELATED-PARTY DISCLOSURES
Transactions of the Company with related parties for the fiscal year ended March 31, 2015, were as follows:

Nature of related party:
Name:
Location:
Capital amount:
Business:
Voting shares of the Company:
Description of transaction:
Transaction amount:

Other related entity (shareholder)
KOWA CO., LTD.
Tokyo, Japan¥ 27 million ($225 thousand)
Investments in securities and real estates
17.6%
Purchase of treasury stock¥ 9,195 million ($76,498 thousand)Thousands of U.S. Dollars

Year Ended
March 31, 2015

Reportable Segments

Japan

China

Taiwan

Korea

Total

Reconciliations Consolidated

Sales:
External customers
Intersegment
Total sales
Segment profit
Segment assets
Other items:
Depreciation
Increase in property,
plant, and equipment
and intangible assets$ 78,294$ 156,714$ 59,417$ 73,511$ 367,936$ 33,562$ 401,498

53,037

13,17820,566

3,028

89,809889

90,698$ (90,698)$ 131,331$ 169,892$ 79,983$ 76,539$ 457,745$ 34,451$ 492,196$ (90,698)$ 401, 498$ 20,524$ 29,185$ 14,667$ 10,083$ 74,459$ 4,618$ 79,077$ (2,080)$ 76, 997

104,975

125,449

122,155

71,656424,235

20,124444,359

65,142509, 501

3,320

1,980

1,722

1,281

8,303

125

8,428

3,319

11,747

16,922

3,444

824

898

22,088142

22,2305,399

27,62974 TAIYO HOLDINGS CO., LTD. Annual Report 2015

$ 401, 498

Notes:The Company determined the per share value of the Company's stock, taking into consideration certain discount factors, basedon the average closing price of the Company's ordinary shares traded on the first section of the Tokyo Stock Exchange for thethree-month-period up to the business day proceeding the day on which the resolution by the board of directors of theCompany was made.

There were no transactions of the Company with related parties for the fiscal year ended March 31, 2014.

TAIYO HOLDINGS CO., LTD. Annual Report 201575

Independent Auditor’s Report

Domestic and Global Network

Domestic Network
TAIYO HOLDINGS CO., LTD. Head Office

CHUGAI KASEI CO., LTD.

2-7-1 Hazawa, Nerima-ku, Tokyo 176-8508, Japan35-3 Akaizawa, Nihonmatsu-shi, Fukushima 964-0982, Japan

PHONE: 81-3-5999-1511 FAX: 81-3-5999-1501

PHONE: 81-243-22-6050 FAX: 81-243-22-6070

TAIYO HOLDINGS CO., LTD. Ranzan Facility
388 Ohkura, Ranzan-machi, Hiki-gun, Saitama 355-0222, Japan
PHONE: 81-493-62-7777 FAX: 81-493-62-2330

TAIYO GREEN ENERGY CO., LTD.
388 Ohkura, Ranzan-machi, Hiki-gun, Saitama 355-0222, Japan
PHONE: 81-493-62-9001 FAX: 81-493-62-2330

TAIYO INK MFG. CO., LTD.
900 Hirasawa, Ranzan-machi, Hiki-gun, Saitama 355-0215, Japan
PHONE: 81-493-61-2711 FAX: 81-493-61-2701

Global Network
Company

Voting Shares HeldBusiness Description

TAIWAN TAIYO INK CO., LTD.

99.8%

Manufacture and marketing of PWB materials

TAIYO INK MFG. CO., (KOREA) LTD.

90.4%

Manufacture and marketing of PWB and FPD materials

TAIYO INK (SUZHOU) CO., LTD.

100.0%

Manufacture and marketing of PWB materials

TAIYO AMERICA, INC.

100.0%

Manufacture and marketing of PWB materials

ONSTATIC TECHNOLOGY CO., LTD.

69.2%

Manufacture and marketing of PWB materials

ONSTATIC INK (SHENZHEN) CO., LTD.

＊1

Manufacture and marketing of PWB materials

TAIYO INK INTERNATIONAL(SINGAPORE) PTE LTD

100.0%

Marketing of PWB materials

TAIYO INK INTERNATIONAL(HK) LIMITED

100.0%

Marketing of PWB materials

TAIYO INK TRADING (SHENZHEN) CO., LTD

100.0%

Marketing of PWB materials

TAIYO INK (THAILAND) CO., LTD.

100.0%

Technical support for PWB materials＊1

ONSTATIC INK (SHENZHEN) CO.,LTD. is a wholly-owned subsidiary of ONSTATIC TECHNOLOGY CO., LTD.

Production and Marketing Subsidiaries
TaiwanChina

TAIWAN TAIYO INK CO., LTD.
No.7, Datong 2nd Rd., Guanyin Industry Park, Guanyin Dist., Taoyuan City
32849, Taiwan ( R.O.C.)
PHONE: 886-3-483-3230 FAX: 886-3-483-3240 http://www.taiyoink.com.tw

TAIYO INK (SUZHOU) CO., LTD.
No. 26 Taishan Road , Suzhou New District , Suzhou City, Jiangsu, P.R. China
PHONE: 86-512-6665-5550 FAX: 86-512-6665-5011 http://www.taiyoink.com.cn

ONSTATIC TECHNOLOGY CO., LTD.
7F., No.1, Ren’ ai Rd., Yingge Dist., New Taipei City 239, Taiwan, R.O.C.
PHON E: 886-2-26777481 FAX: 886-2-26777484 http:// www.otcink.com.tw

ONSTATIC INK (SHENZHEN) CO., LTD.
Building No. 38, Western Industrial Zone, Sha-Yi Village, Sha-Jing Town,
Shenzhen, Guangdong, China
PHONE: 86-755-8173-7288 FAX: 86-755-8173-7282

Korea

USA

TAIYO INK MFG. CO., ( KOREA ) LTD.
166, Manhae-ro, Danwon-gu, Ansan-City, Gyeonggi-do, Korea
PHONE: 82-31-491-9250 FAX: 82-31-491-7671 http://www.taiyoink.co.kr

TAIYO AMERICA, INC.
2675 Antler Drive, Carson City, NV 89701, U.S.A.
PHONE: 1-775-885-9959 FAX: 1-775-885-9972 http://www.taiyo-america.com

Marketing or Technical Support Subsidiaries
Singapore

China

TAIYO INK INTERNATIONAL (SINGAPORE) PTE LTD.
133 New Bridge Road #09-08 Chinatown Point, Singapore 059413
PHONE: 65-6372-1141 FAX: 65-6372-1151

TAIYO INK TRADING (SHENZHEN) CO., LTD.
Rm1509, Office Tower, Shun Hing Square Di Wang Comm. Centre,
5002 Shen Nan Dong Road, Shenzhen city, Guangdong, PRC
PHONE: 86-755-2583-4787 FAX: 86-755-8207-0989

Hong Kong
TAIYO INK INTERNATIONAL (HK) LTD.
Room 2305, 23/F, The Metropolis Tower, 10 Metropolis Drive, Hunghom,
Kowloon, Hong Kong
PHONE: 852-2735-0636 FAX: 852-2375-7332

76 TAIYO HOLDINGS CO., LTD. Annual Report 2015

ThailandTAIYO INK (THAILAND) CO., LTD.
1199 Piyavan Tower, 14F/Room 14C Phaholyothin Rd, Samsen-Nai,
Phayathai, Bangkok 10400, Thailand
PHONE: 66-2-619-5670 FAX: 66-2-619-7527

TAIYO HOLDINGS CO., LTD. Annual Report 201577

Corporate Information

Company Overview
Name : TAIYO HOLDINGS CO., LTD.

Shares authorized: 50,100,000

Head office: 2-7-1 Hazawa, Nerima-ku, Tokyo 176-8508, Japan

Total number of issued shares: 27,464,000

Phone: 81-3-5999-1511

Stock listing: Tokyo

Established: September 29, 1953

Number of shareholders: 5,623

Capital: ¥6,135 million

Major shareholders
Shares ( thousands)

Investment Ratio (%)

Company's Treasury Stock

4,423

16.10

Kowa Co., Ltd.

4,054

14.76

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

1,399

5.09

Japan Trustee Services Bank, Ltd. ( Trust account )

1,390

5.06

Japan Trustee Services Bank, Ltd. ( shares retrusted to Sumitomo Mitsui Trust Bank, Limited,and shares entrusted to Sumitomo Mitsui Banking Corporation retirement benefit trust account )

1,116

4.06

Credit Suisse Securities (USA) LLC-SPCL. FOR EXCL. BEN

Name

1,004

3.65

SHIKOKU CHEMICALS CORPORATION

631

2.29

Toshin Yushi Co., Ltd.

538

1.96

Mellon Bank Treaty Clients Omnibus

511

1.86

Mitsuo Kawahara

500

1.82

Accessing Our Investor Information Site :An Introduction to Taiyo Holdings’s Website
Taiyo Holdings is committed to providing a full range ofi n f o r m a t i o n t o all sta ke h o ld e r s in clu d in g sh a r e h o lders,investors, c u s t o m e r s , a n d b u s i n e s s p a r t n e r s .

http : // www. taiyo -hd.co. jp / English

TAIYO HOLDINGS CO., LTD.

Investor Information

Stock Price and Trading Volume（ Thousands of shares）
5,000( Yen)
20,00016,0004,000

12,000

3,000

8,000

2,000

4,000

1,000

0

2011

Nikkei Stock Average ( left scale )

2012

2013
Stock Price ( left scale )(As of March 31, 2015)78 TAIYO HOLDINGS CO., LTD. Annual Report 2015

2014
Trading Volume ( right scale)2015

0