CKD Corporation andConsolidated Subsidiaries
Consolidated Financial Statements
for the Years Ended
March 31, 2017 and 2016

［Consolidated Financial Statement, etc.］(1)［Consolidated Financial Statement］①［Consolidated Balance Sheet］(Unit：million yen)
Consolidated
Accounting Year(as of March 31, 2017)

Consolidated
Accounting Year(as of March 31, 2016)
ASSETS
Current Assets
Cash and deposits

9,951

13,336

Notes and accounts receivable-trade21,18623,758

Electronically recorded monetary claims-operating

1,905

3,693

Operating accounts receivable

1,150

263

Short-term investment securities

2,0001,000

Merchandise and finished goods

4,673

5,526

Work-in-process

3,669

3,956

Raw materials and supplies

12,17814,472

Deferred tax assets

1,308

1,521

Other

1,049

1,455

Allowance for doubtful debts

△ 103

△ 99

Total Current Assets

58,96968,883

Buildings and structures (net)12,304

11,517

Machinery, equipment and vehicles (net)

8,888

8,799

Tools, furniture and fixtures (net)

1,243

1,401

Land

4,472

4,570

Lease assets (net)

148

122

Construction in progress

655

651

27,712

27,062

755

1,756

7,864

7,229

334

454

Deferred tax assets

89223

Other716

782

Allowance for doubtful debts△ 31△ 31

Noncurrent Assets
Property, plant and equipment

Total property, plant and equipment
Intangible assets
Investment and other asset
Investment securities
Net defined benefit assets

Total Investments and Other assets
Total Noncurrent Assets
Total ASSETS

8,974

8,658

37,44237,477

96,412

106,361

(Unit：million yen)
Consolidated
Accounting Year(as of March 31, 2017)

Consolidated
Accounting Year(as of March 31, 2016)
LIABILITIESCurrent Liabilities
Notes and accounts payable-trade

11,87314,774

Electronically recorded obligations-operating

920

1,385

Short-term loans payable

901

882

Current portion of long-term loans payable

770

470

Lease obligations

6271

Accrued expenses

2,676

3,039

Income taxes payable

1,463

2,406

Provision for bonuses

178

227

Provision for product warranties

211

317

Provision for loss on order received

1429

Other

4,580

6,041

Total Current Liabilities

23,652

29,645

2,720

2,250

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

9658

1,805

1,626

Provision for environmental measures

7675

Net defined benefit liabilities

226258Asset retirement obligations

147190

Other1,267

1,298

Total Noncurrent Liabilities

6,339

5,758

29,99235,403

Capital stock

11,016

11,016

Capital surplus

12,372

12,372

Total LIABILITIESNET ASSETS
Shareholders' Equity

Retained earnings

44,44549,723

Treasury stock△ 4,905△ 4,906

Total Shareholders' Equity

62,92968,206

Accumulated Other Comprehensive Income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment

3,105

2,653

1,8081,323

Remeasurements of defined benefit plans△ 1,423△ 1,225

3,490

2,751

Total Accumulated Other Comprehensive Income
Total NET ASSETS
Total LIABILITIES and NET ASSETS

66,41970,957

96,412

106,361

②［Consolidated Statements of Income and Statements of Comprehensive Income］［Consolidated Statements of Income］

Net Sales

88,117(Unit：million yen)
Consolidated
Accounting Year
(April 1, 2016 to
March 31, 2017)
94,012

Cost of Sales

61,38265,284Gross Profit

26,73428,727

8,544

8,433

Consolidated
Accounting Year
(April 1, 2015 toMarch 31, 2016)

Selling, General and Administrative Expenses
Personal expenses
Retirement benefit expenses

219

375

Packing and transportation expenses

968

1,033

Rent expenses

1,225

1,178

Business consignment expenses

1,030

1,158

Depreciation

437

369

Provision of allowance for doubtful accounts

81

8

2,857

3,348

216

408

Research and development expenses
Enterprise tax
Other

3,046

2,832

Total Selling, General and Administrative Expenses

18,627

19,146

8,107

9,580

Operating Income
Non-operating Income
Interest income

3925

Dividends income

118

119

Office work fee

6171

Dividends income of insurance

4540Other181

239

Total Non-operating Income

446

496

Interest expenses

4739

Sales discounts

139

142

Loss on valuation of derivatives

32

43

Foreign exchange losses

193

38

Other

46

41

Total Non-operating Expenses

459

305

8,094

9,771

Non-operating Expenses

Ordinary Income
Extraordinary Income
Gain on sales of noncurrent assets

1253Gain on sales of investment securities

35

182

Subsidy income

283

206

Total Extraordinary Income

444

392

Extraordinary Losses
Loss on sales of noncurrent aasets

87

Loss on retirement of noncurrent assets

143

31

Loss on reduction of noncurrent assets

213

205

Environmental expenses

83－

Total Extraordinary Losses

447

244

Income before Income Taxes

8,091

9,919

Income taxes-current

2,500

3,360

Income taxes-deferred

131

△399

Income taxes

2,631

2,961

Net Income

5,459

6,958

Profit (loss) attributable to owners of parent

5,459

6,958

［Consolidated Statement of Comprehensive Income］

5,459(Unit：million yen)
Consolidated
Accounting Year
(April 1, 2016 toMarch 31, 2017)
6,958

Consolidated
Accounting Year
(April 1, 2015 toMarch 31, 2016)
Net Income
Other Comprehensive Income652△ 452

Foreign currency translation adjustment△ 1,563△ 484

Remeasurements of defined benefit plans△ 1,345

197

Total Other Comprehensive Income△ 2,257

△ 739

3,201

6,219

3,201

6,219

―－Valuation difference on available-for-sale securities

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, 2015 to March 31, 2016)(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△ 4,557

59,80740,611

Changes of items during the period△ 1,616

Dividends from surplus
Profit (loss) attributable to owners of parent△ 1,616

5,459

Purchase of treasury stock△ 364

Disposal of treasury stock
Employee encouragement and welfare
fund5,459
△ 712

△ 712

364―

△8△8―

Change of scope of consolidation
Net changes of items other thanshareholders' equity
Total changes of items during the period
Balance at the end of current period

―

△ 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
on available-for-salesecurities

Foreign currencytranslation
adjustment

2,453

3,371

Accumulated
othercomprehensive
income△ 77
5,747

Remeasurementsof defined benefit
plans

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
fundChange of scope of consolidation
Net changes of items other thanshareholders' equity
Total changes of items during the period
Balance at the end of current period―△8―652△ 1,563△ 1,345△ 2,257△ 2,257652△ 1,563△ 1,345△ 2,257

864

3,105

1,808

△ 1,423

3,490

66,419

Consolidated Accounting Year (April 1, 2016 to March 31, 2017)(Unit：million yen)
Shareholders' equity
Capital Stock
Balance at the beginning of current period

Capital Surplus

11,016

12,372Retained Earnings Treasury Stocks

Total Shareholders'Equity△ 4,905

62,92944,445

Changes of items during the period△ 1,671

Dividends from surplus
Profit (loss) attributable to owners of parent
Purchase of treasury stock
Employee encouragement and welfare
fundChange of scope of consolidation
Net changes of items other thanshareholders' equity
Total changes of items during the period
Balance at the end of current period△ 1,671

6,958

6,958
△0

△0

△3△3△6△6－－

5,277

△0

5,276

11,016

12,372

49,723△ 4,906

68,206Accumulated other comprehensive income

Balance at the beginning of current period

Valuation difference
on available-for-salesecurities

Foreign currencytranslation
adjustment

3,105

1,808

Accumulated
othercomprehensiveincome△ 1,423
3,490

Remeasurementsof defined benefit
plans

Total Net Assets

66,419Changes of items during the period△ 1,671

Dividends from surplus
Profit (loss) attributable to owners of parent
Purchase of treasury stock
Employee encouragement and welfare
fundChange of scope of consolidation
Net changes of items other thanshareholders'equity
Total changes of items during the period
Balance at the end of current period

6,958△0△3△6△ 452

△ 484

197

△ 739

△ 452

△ 484

197

△ 739

△ 739
4,537

2,653

1,323

△ 1,225

2,751

70,957

④ [Consolidated Statement of Cash Flow](Unit: million yen)
Consolidated
Accounting Year
(April 1, 2016 to
March 31, 2017)

Consolidated
Accounting Year
(April 1, 2015 toMarch 31, 2016)
Net Cash Provided by Operating Activities
Income before income taxes

8,091

9,919

Depreciation and amortization

4,060

3,9645553

Increase (decrease) in accounts payable-bonuses△ 31253

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

△ 286

164

△ 1,550△ 3,648△ 1,615△ 3,557

941

3,473

Increase (decrease) in advances received

21,117

Other

24898

Sub-total

9,692

12,639158

146

Increase (decrease) in provision for bonuses

Increase (decrease) in notes and accounts payable-trade

Interest and dividends income received

△ 48

△ 39

△ 1,775△ 2,584

8,027

10,163△ 480△ 237279

417

1,4981,000△ 7,284△ 4,067

Purchase of intangible assets△ 272△ 1,175

Purchase of investment securities

△ 206

△ 457

Interest expenses paid
Income taxes paid
Net Cash Provided by Operating Activities
Net Cash Provided by Investing Activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Net decrease (increase) in short-term investment
securities
Purchase of property, plant and equipment

Proceeds from sales of investment securities

151569Other131△ 130△ 6,183△ 4,081Net Cash Provided by Investing Activities
Net Cash Provided by Financing Activities
Net increase (decrease) in short-term loans payable△ 191△2Repayment of long-term loans payable

△ 770

△ 770

Purchase of treasury stock
Cash dividends paid

△ 700

△0△ 1,614△ 1,672△ 52△ 60

Net Cash Provided by Financing Activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents△ 3,329△ 2,505

△ 461

△ 14

△ 1,947

3,561

Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change of scope of consolidation
Cash and cash equivalents at end of period

12,29010,342－010,342

13,905

Other[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 Board ofDirectors of CKD to determine how corporate resources are to be allocated and to evaluate business performance.
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 andother markets of diversified kinds are manufactured and sold. They are produced by forecasting demands of eachitems.
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, 2015 to March 31, 2016)
Reporting segment
AutomaticMachineries Products

Component
Products(Unit: million yen)Amount shown in theconsolidated financialstatement(Note 2)

Amountadjusted(Note 1)

TotalNet 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 of transactions
among segments and △2,953 million yen as the total company expenses that aren’t allocated to each reporting segment. The totalcompany expenses mainly refers to expenses related to administration of CKD, long-term R&D expenses and costs related toCKD 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 each reporting
segment. This mainly consists of working surplus funds (cash and deposits) and long-term investment funds (investmentsecurities).
（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.
Note 3 : 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 fiscal year
from December 31 to March 31. CKD (China) Co. and CKD (Shanghai) Co. did not change the fiscal year but made provisional
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 this consolidated
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, andthe amount of 'Profit for segment' of componet segment was 149 million yen.

Consolidated Accounting Year (April 1, 2016 to March 31, 2017)
Amountadjusted(Note 1)

Reporting segment
AutomaticMachineries Products

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

Net sales
18,38075,631

94,012―

94,012―

9494

△94―

Total

18,38075,726

94,107△94

94,012

Profit for segment

2,103

11,18913,292△3,711

9,580

Asset of segment

21,93071,15493,085

13,276

106,361

867

2,910

3,777

186

3,964

1,027

2,542

3,569

1,294

4,864

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. △94 million yen is derived from elimination of transactions among segments.
（2） The amount of adjustment for ‘Profit for segment’ i.e. △3,711 million yen includes 34 million yen for elimination oftransactions among segments and △3,745 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
and costs related to CKD Global Service Co., Ltd.
（3） The amount of adjustment for ‘Asset of segment’ i.e. 13,276 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. 186 million yen mainly consists of depreciation related to head office building.
（5） The amount adjusted for increase of tangible/intangible assets, i.e. 1,294 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.