CKD Corporation andConsolidated Subsidiaries
Consolidated Financial Statements
for the Years Ended
March 31, 2016 and 2015

［Consolidated Financial Statement, etc.］(1)［Consolidated Financial Statement］①［Consolidated Balance Sheet］(Unit：million yen)
Consolidated
Accounting Year(as of March 31, 2016)

Consolidated
Accounting Year(as of March 31, 2015)
ASSETS
Current Assets:Cash and deposits

11,7509,951

Notes and accounts receivable-trade20,577

21,186882

1,905

Operating accounts receivable

1,938

1,150

Short-term investment securities

3,499

2,000

Merchandise and finished goods4,363

4,673

Work-in-process

3,229

3,669

Raw materials and supplies

11,712

12,178Deferred tax assets

1,477

1,308

Other

1,109

1,049

Allowance for doubtful debts△ 33△ 103

60,50758,969Buildings and structures (net)10,537

12,304

Machinery, equipment and vehicles (net)

7,505

8,888

Tools, furniture and fixtures (net)

1,200

1,243

Land

4,486

4,472

36148

Electronically recorded monetary claims-operating

Total current assets
Noncurrent assets
Property, plant and equipment

Lease assets (net)
Construction in progress

1,085

655

Total property, plant and equipment

24,851

27,712817

755

Investment securities

6,913

7,864

Net defined benefit assets

1,984334

Intangible assets
Investment and other asset

Deferred tax assets

12889

Other845

716

Allowance for doubtful debts

△ 29

△ 31

Total Investments and Other assets
Total Noncurrent assets
Total ASSETS

9,842

8,974

35,51137,44296,01896,412

(Unit：million yen)
Consolidated
Accounting Year(as of March 31, 2016)

Consolidated
Accounting Year(as of March 31, 2015)
LIABILITIESCurrent Liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term loans payable
Current portion of long-term loans payable

11,924

11,873

443

920

1,151

901

770

770

Lease obligations

32

62

Accrued expenses

2,767

2,676

Income taxes payable

681

1,463

Provision for bonuses

138

178

Provision for product warranties

218

211

Provision for loss on order received

52

14

Other

4,990

4,580

Total Current Liabilities

23,17023,652

3,490

2,720

Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities

596

2,256

1,805

Provision for environmental measures－76

Net defined benefit liabilities

206

226

Asset retirement obligations

138147

Other

1,195

1,267

Total Noncurrent liabilities

7,292

6,339

30,46329,992

Capital stock

11,016

11,016

Capital surplus

12,737

12,372

Total LIABILITIESNet Assets
Shareholders' equity

Retained earnings

40,61144,445

Treasury stock△ 4,557△ 4,905

Total Shareholders' equity

59,80762,929

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment

2,453

3,105

3,371

1,808

Remeasurements of defined benefit plans△ 77△ 1,423

Total accumulated other comprehensive income
Total Net Assets
Total Liabilities and Net Assets

5,747

3,490

65,55566,41996,01896,412

②［Consolidated Statements of income and Statements of comprehensive income］［Consolidated Statements of income］

Net sales

83,379(Unit：million yen)
Consolidated
Accounting Year
(April 1, 2015 toMarch 31, 2016)
88,117

Cost of Sales

57,93961,382Gross Profit

25,43926,734

Consolidated
Accounting Year
(April 1, 2014 toMarch 31, 2015)

Selling, General and Administrative Expenses
Personal expenses

7,548

8,544

Retirement benefit expenses

263

219

Packing and transportation expenses

982

968

1,108

1,225

Business consignment expenses

986

1,030

Depreciation

427

437

Provision of allowance for doubtful accounts

―

81

2,927

2,857

Rent expenses

Research and development expense

134

216

Other

Enterprise tax

2,698

3,046

Total Selling, General and Administrative Expenses

17,076

18,627

8,363

8,107

Operating Income
Non-operating Income
Interest income

3239

Dividends income

92118

Foreign exchange gains

132―

Office work fee

108

61

Dividends income of insurance3745

Other

193

181

Total Non-operating Income

596

446

Non-operating Expenses
Interest expenses

4447

Sales discounts

135139193

Foreign exchange losses

―

Other

45

78

Total Non-operating Expenses

225

459

8,735

8,094
125

Ordinary Income
Extraordinary Income
Gain on sales of noncurrent assets

30

Compensation for transfer

392―

Subsidy income

82

283

Other―

35

Total Extraordinary Income

504

444

Extraordinary Loss
Loss on sales of noncurrent assets

138

Loss on retirement of noncurrent assets

249

143

Loss on reduction of noncurrent assets

41213

Environmental expenses

159

83

Total Extraordinary Loss

464

447

Income before Income Taxes

8,775

8,091

Income taxes-current

2,120

2,500

Income taxes-deferred

643

131

Income taxes

2,764

2,631

Net Income

6,010

5,459

Profit (loss) attributable to owners of parent

6,010

5,459

［Consolidated Statement of Comprehensive Income］
Consolidated
Accounting Year
(April 1, 2014 toMarch 31, 2015)
Net Income

6,010(Unit：million yen)
Consolidated
Accounting Year
(April 1, 2015 toMarch 31, 2016)
5,459

Other comprehensive income
Valuation difference on available-for-sale securities1,206652

Foreign currency translation adjustment

1,523△ 1,563

Remeasurements of defined benefit plans363△ 1,345

3,093△ 2,257

9,104

3,201

9,104

3,201

―

―

Total Other Comprehensive Income
Comprehensive Income(Details)
Comprehensive income attributable to owners of theparent
Comprehensive income attributable to non-controllinginterests

③[ Consolidated Statement of Changes in Net Assets]
Consolidated Accounting Year (April 1, 2014 to March 31, 2015)(Unit：million yen)
Shareholders' equity
Capital stock
Balance at the beginning of current period

Capital Surplus

11,016

12,737Retained earnings

Treasury Stocks

Total Shareholders'equity

35,913△ 4,609

55,057

Changes of items during the period△ 1,311

Dividends from surplus
Profit (loss) attributable to owners of parent
0

Disposal of treasury stock
Employee encouragement and welfare
fund
Net changes of items other thanshareholders'equity

Balance at the end of current period

6,010
△0

Purchase of treasury stock

Total changes of items during the period△ 1,3116,010
52△1△052△1―04,698

51

4,749

11,016

12,73740,611△ 4,557

59,807

Accumulated other comprehensive income

Balance at the beginning of current period

Valuation difference
Foreign currency Remeasurements
Accumulated
on available-for-saletranslationof defined benefit
othersecurities
adjustment
planscomprehensive
1,247
1,848
△ 440
2,654

Total Net Assets

57,712

Changes of items during the period△ 1,311

Dividends from surplus
Profit (loss) attributable to owners of parent

6,010
△0

Purchase of treasury stock
Disposal of treasury stock
Employee encouragement and welfare
fundNet changes of items other thanshareholders'equity

52△11,206

1,523

363

3,093

Total changes of items during the period

1,206

Balance at the end of current period

2,453

3,093

1,523

363

3,093

7,843

3,371

△ 77

5,747

65,555

Consolidated Accounting Year (April 1, 2015 to March 31, 2016)
Shareholders' equity
Capital stock
Balance at the beginning of current period

Capital Surplus

11,016

12,737Retained earnings

Treasury Stocks

Total Shareholders'equity40,611△ 4,557

59,807

Changes of items during the period△ 1,616

Dividends from surplus
Profit (loss) attributable to owners of parentBalance at the end of current period

5,459
△ 712

Purchase of treasury stock
Disposal of treasury stock
Employee encouragement and welfare
fund
Net changes of items other thanshareholders'equity
Total changes of items during the period△ 1,616

5,459
△ 364

364
△8△ 712―
△8―

△ 364

3,834

△ 347

3,121

11,016

12,37244,445△ 4,905

62,929

Accumulated other comprehensive income

Balance at the beginning of current period

Valuation difference
Foreign currency Remeasurements
Accumulated
on available-for-saletranslationof defined benefitothersecurities
adjustment
planscomprehensive
2,453
3,371
△ 775,747

Total Net Assets

65,555

Changes of items during the period△ 1,616

Dividends from surplus
Profit (loss) attributable to owners of parent

5,459

Purchase of treasury stock△ 712

Disposal of treasury stock
Employee encouragement and welfare
fund
Net changes of items other thanshareholders'equity
Total changes of items during the period
Balance at the end of current period―△8652△ 1,563△ 1,345△ 2,257△ 2,257652△ 1,563△ 1,345△ 2,2578643,105

1,808△ 1,423

3,490

66,419

④ [Consolidated Statement of Cash Flow](Unit: million yen)
Consolidated
Accounting Year
(April 1, 2015 toMarch 31, 2016)

Consolidated
Accounting Year
(April 1, 2014 toMarch 31, 2015)
Net Cash Provided by Operating Activities
Income before income taxes

8,775

8,091

Depreciation and amortization

3,188

4,060

2455

Increase (decrease) in provision for bonuses
Increase (decrease) in accounts payable-bonuses

64

△ 31

Decrease (increase) in net defined benefit assets
Decrease (increase) in notes and accounts
receivable-tradeDecrease (increase) in inventories

△ 904

△ 286

△ 344

△ 1,550△ 2,329△ 1,615

1,361941

Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in advances received

3942Other△ 10024Sub-total

10,1309,692

122158Interest and dividends income received
Interest expenses paid
Income taxes paid

△ 44△ 48

△ 3,982△ 1,7750―6,226

8,027

Payments into time deposits

△ 301

△ 480

Proceeds from withdrawal of time deposits
Net decrease (increase) in short-term investment
securities
Purchase of property, plant and equipment

1,024279

500

1,498

△ 5,783△ 7,284

Income taxes refund
Net cash provided by operating activities
Net Cash Provided by Investing Activities

△ 261

△ 272

Purchase of investment securities△5△ 206

Proceeds from sales of investment securities―

151

Purchase of intangible assets

Other
Net Cash Provided by Investing Activities

73131△ 4,755△ 6,183

△ 444

△ 191

Net Cash Provided by Financing Activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

3,000―

Repayment of long-term loans payable

△ 640

△ 770

Purchase of treasury stock△0△ 700

Proceeds from sale of treasury stock62―△ 1,309△ 1,614△ 48△ 52618△ 3,329368

△ 461

2,458

△ 1,947

Cash and cash equivalents at beginning of period

9,831

12,290Cash and cash equivalents at end of period

12,29010,342

Cash dividends paid
OtherNet cash provided by financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

[Segment Information]
1.Outline of Reporting Segments
The reporting segments of the CKD Group refers to the constituents of CKD and its subsidiaries that financial
statements separated from consolidated one is available and that are the scope of regular discussion by the Boardof Directors of CKD to determine how corporate resources are to be allocated and to evaluate businessperformance.
The constituents of the CKD Group consist of product segments, which include two reporting segments of‘Automatic Machinery Products’ and ‘Component Products’ separated based on the type, properties and sales
method of products.
In Automatic Machinery Products, automatic packaging system, lithium ion battery manufacturing system andother large-scale facilities are manufactured and sold. They are produced upon receiving an order. In Component
Products, functional parts that can be applied to semiconductor-related businesses, automobilerelated industries
and other markets of diversified kinds are manufactured and sold. They are produced by forecasting demands ofeach items.
2. Calculation Methods of Sales, Profit/Loss, Assets, Liabilities and other Accounting Items for each Reporting Segment
The profits in each reporting segment are based on operating profit. Internal gains and amount of transfer amongsegments are based on current market prices.
3. Information on Reporting-Segment-Wise Sales, Profit/Loss, Assets, Liabilities and other Accounting Items
Consolidated Accounting Year (April 1, 2014 to March 31, 2015)
Amountadjusted(Note 1)

Reporting segment
Automatic
Machineries Products

Component
Products(Unit: million yen)Amount shown in the
consolidated financialstatement(Note 2)Total

Net sales
15,92067,45883,379―83,379―160160△ 160―

Total

15,92067,61983,540△ 160

83,379Profit for segment

2,182

8,842

11,025△ 2,661

8,363Asset of segment

15,44765,87981,327

14,69196,018

Sales to external customers
Internal sales amount or amounttransferred among segments

Other items
Depreciation

468
2,480
2,948
239
3,188
Increase of tangible and
1,271
4,024
5,295
158
5,454
intangible fixed assets
Note 1: Details of the amount adjusted（1） The amount of adjustment for ‘Net sales’ i.e. △160 million yen is derived from elimination of transactions among segments.
（2） The amount of adjustment for ‘Profit for segment’ i.e. △2,661 million yen includes 31 million yen for elimination oftransactions among segments and △2,693 million yen as the total company expenses that aren’t allocated to each reportingsegment. The total company expenses mainly refers to expenses related to administration of CKD, long-term R&D expenses andcosts related to CKD Global Service Co., Ltd.
（3） The amount of adjustment for ‘Asset of segment’ i.e. 14,691 million yen is the total company assets not allocated to eachreporting segment. This mainly consists of working surplus funds (cash and deposits) and long-term investment funds(investment securities).
（4） The amount adjusted for depreciation i.e. 239 million yen mainly consists of depreciation related to head office building.
（5） The amount adjusted for increase of tangible/intangible assets, i.e. 158 million yen mainly consists of the amount of system
investment for the entire company.
Note 2: ‘Profit for segment’ has already been adjusted with operating income shown in the consolidated statement of income.

Consolidated Accounting Year (April 1, 2015 to March 31, 2016)
Amountadjusted(Note 1)

Reporting segment
AutomaticMachineries Products

ComponentProducts(Unit: million yen)Amount shown in the
consolidated financialstatement(Note 2)Total

Net sales
16,954

71,163

88,117―

88,117

―

146

146

△ 146―

Total

16,95471,31088,264△ 146

88,117

Profit for segment

2,364

8,663

11,028△ 2,920

8,107

Asset of segment

21,88064,72286,602

9,809

96,412

675

3,206

3,881

179

4,060

3,070

4,445

7,516

285

7,801

Sales to external customers
Internal sales amount or amounttransferred among segments

Other items
Depreciation
Increase of tangible andintangible fixed assets
Note 1: Details of the amount adjusted（1） The amount of adjustment for ‘Net sales’ i.e. △146 million yen is derived from elimination of transactions among segments.
（2） The amount of adjustment for ‘Profit for segment’ i.e. △2,920 million yen includes 32 million yen for elimination oftransactions among segments and △2,953 million yen as the total company expenses that aren’t allocated to each reporting
segment. The total company expenses mainly refers to expenses related to administration of CKD, long-term R&D expenses
and costs related to CKD Global Service Co., Ltd.
（3） The amount of adjustment for ‘Asset of segment’ i.e. 9,809 million yen is the total company assets not allocated to eachreporting segment. This mainly consists of working surplus funds (cash and deposits) and long-term investment funds(investment securities).
（4） The amount adjusted for depreciation i.e. 179 million yen mainly consists of depreciation related to head office building.
（5） The amount adjusted for increase of tangible/intangible assets, i.e. 285 million yen mainly consists of the amount of system
investment for the entire company.
Note 2: ‘Profit for segment’ has already been adjusted with operating income shown in the consolidated statement of income.
4. Change in the reporting-segment
As before, 5 overseas consolidated subsidiaries which ended the fiscal year on December 31 were consolidated by using thefinancial statements on the date and were adjusted the significant transactions between the date and consolidated closing date.
CKD THAI CORPORATION LTD., CKD USA CORPORATION, and M-CKD PRECISION SDN.BHD changed the fiscalyear from December 31 to March 31. CKD (China) Co. and CKD (Shanghai) Co. did not change the fiscal year but madeprovisional settlement of accounts and consolidated on March 31.
As a result, the group consolidated the 5 companies for 15 months (from January 1, 2015 to March 31, 2016) in thisconsolidated account year.
In addition, the amount of 'Net sales' of component segment from January 1, 2015 to March 31, 2015 was 3,019 million yen,and the amount of 'Profit for segment' of componet segment was 149 million yen.