Head office: Meisan Takahama Bldg. 8F,
2-12-23 Konan, Minato Ward, Tokyo 108-0075, Japan
Phone: 03-3474-8007

Fax： 03-3471-8100

http://www.punch.co.jp/

Supporting
product manufacturing
around the world

Executive Message

Aim to become the leading brand in
the mold and die components industry
To Our Stakeholders
FoundedManagement Principles■■■

Driven by the spirit of innovation, we will continue to develop and propose advanced
technologies in response to customer needs, for the benefit of society.
We will create a vibrant corporate culture that fulfills people's dreams, by placing
high value on vigorous energy and flexible ideas.
We will contribute to social development by embracing the spirit of environmental
consideration and compliance and promoting sound corporate activities that areappreciated by society.

in

1975,

Punch

in emerging markets, are also significantly impacting
the business activities of the Punch Group.
Industry

Co.,

Ltd.

The

Punch

Group

positions"globalization,"

manufactures and sells mold and die components,"expansion of new markets," and "conversion to a highmainly in Japan and China.

profitability business model" as three priority businessWe have been improving the business by pursuingchallenges, and it is working as one to expand sales inour corporate vision, "Aim to become the leading brandSoutheast Asia, India, Europe, and the United Statesin the mold and die components industry and achieve

and attract more orders from new businesses in Japanhighcompetitive

and China. At the same time, we will reevaluate ouradvantage as a comprehensive manufacturing and sales

manufacturing processes in our efforts to reduce costs.

profitability

byleveraging

ourcompany." We have made steady progress throughIn the fiscal year ending March 2015, we will

uncompromising manufacturing since our foundation

celebrate the 40th anniversary of our founding. We

and by building a total manufacturing system fromlook forward to the continued support of allmaterial procurement to final product delivery.

stakeholders in this milestone year.

We made a new start when the Company was
assigned to the First Section of the Tokyo Stock

Corporate Vision

Exchange (TSE) on March 14, 2014 —some 15 months

We aim to become the leading brand in the mold and die components industry andachieve high profitability by leveraging our competitive advantage as a comprehensive
manufacturing and sales company.

since the Company was listed on the Second Sectionof the TSE on December 20, 2012.
Today, the global socioeconomic environment isundergoing major changes at a frenetic pace. These
structural changes to the global economy, especially

C O N T E N T S

1

1

Management Principles and Corporate Vision23

Corporate Governance

2

Executive Message

25

Directors and Corporate Auditors

3

History

26

Management's Discussion and Analysis

4

Business Segments

27

Business Risks

5

Network

31

Financial Statements

7

Financial Highlights

36

Company Profile

9Interview with the President

37

Punch Industry and Group Companies

19

Environmental and Social Initiatives

38

Investor Information

Yuji Morikubo
Chairman

Masaaki Takeda
President

2History

Business Segments

Since its founding in 1975 as a company that manufactures and sells mold and die
components, Punch Industry has consistently supported manufacturing activities both inJapan and overseas. Below is a summary of our history through to the fiscal year ending
March 2015, when we celebrate the 40th anniversary of our founding.

Automobiles,

electronic

devices(suchassmartphones and tablets), and consumer

daily lives. Dies are tools that are essential

Established PUNCH INDUSTRY(Dalian) CO., LTD. in Dalian,
Liaoning Province, China

2011

Commenced sales of moldcomponents in India

1977

Changed company
name to PUNCH
INDUSTRY CO., LTD.

1982

Succeeded in mass production ofhigh-speed steel ejector pins forplastic molds

1983

Established Kitakami Plant in
Kitakami City, Iwate Prefecture, andbegan nationwide sales of moldcomponents

●

1995

Established a plant in Dalian
Wafangdian, Liaoning Province,
China

●

Established subsidiary
MIYAKO PUNCH INDUSTRY CO., LTD.
(now Miyako Plant) in Miyako City,
Iwate Prefecture, and commenced
production of press die components●

Commenced sales of moldcomponents in China

●

1989

●

2002

2003

Spun off plant in Dalian
Wafangdian, Liaoning Province,and established PUNCH INDUSTRY(Wafangdian) CO., LTD.

Listed stocks on the Second
Section of Tokyo Stock Exchange
(TSE)

2013

2001

Established sales office in China

Formed capital and businessalliance with PANTHER PRECISIONTOOLS SDN. BHD. in Malaysia●

Established production andlogistics operations in Chongqing,
China
PANTHER PRECISION TOOLS SDN.
BHD. (now PUNCH INDUSTRY
MALAYSIA SDN. BHD.) became awholly owned subsidiary of Punch
Industry

Industrymakes

high-quality

components that are needed to make molds
and dies, which play an important supportingPunrole in the activities of manufacturers worldwide.
Leveraging our technological capabilities,
quality, and high level of services built up in
Japan, we have continued providing moldA wide variety of precision parts
are needed to make diesmold anddie
components

around the world. Thanks to these strengths,
we work behind the scenes to support not
only manufacturing, but also the comfortable
lifestyles that people enjoy today.

To improvethe manufacturing
efficiency of dies,
we deliver Japanesequality and services on
a global scaleresom e exa mpl

Our Products
Components for Plastic Molds

Components for Press Dies

Plastic molds are used in the manufacture of many plastic
products, such as the outer casings of mobile phones anddigital cameras. Each product is made by heating resin until
it melts, injecting the melted resin into a die mounted on an
injection molding machine, and then allowing it to cool andsolidify. The Punch Group manufactures and sells
components used in these molds.

Upper and lower press dies are fitted to a press machine,which moves up and down. Sheet metal is inserted between
the two dies, which are then pressed together to form a
product that takes the same shape as the upper and lower
dies. The Punch Group manufactures and sells components
used in these press dies.

Established PT. PUNCH INDUSTRYINDONESIA in Jakarta, Indonesia

Key productKey productEjector pins are used toeject and release themolded body from a moldAs components used inpress dies, punches areused to make holes insheet metal

Ejector pins

2014

Assigned to the First Section of TSE

PunchesEstablished PUNCH INDUSTRY(Wuxi) CO., LTD. in Wuxi, Jiangsu
Province, China

2004

Established PUNCH INDUSTRY(Dongguan) CO., LTD. in Dongguan,
Guangdong Province, China

2006

Established PUNCH INDUSTRYDALIAN TAMA SPRING CO., LTD. in
Dalian, Liaoning Province, China(now PUNCH SPRING (Dalian) CO.,LTD.)

Standard Products

Special-Order Products

Punch Industry's catalogs feature productswith standardized specifications, including

Punch Industry also makes components
customized to individual orders, notlisted in the product catalogs, on thebasis of its technological capabilities,
through fully leveraging an integrated
production system and customeroriented sales system to make parts
that meet customers' particularspecifications.

such dimensions as length and depth.
"The Components for Plastic Molds"
features approximately 26,000 items,
and the "Components for Press Dies"features around 24,000 items —a total ofsome 50,000 products listed.
Note: Both catalogs are Japanese-language editions, published in 2012.

3

s is whThi ust at
Ind ry dhoc

and die components to manufacturing sites

a

●

Punch

e

2012

Dies are molds made ofmetal that are required forthe fast, mass production ofhigh-quality components

high-volume manufacture of products.

T h esCommenced
operations as KAMBASHOKAI CO., LTD. in
Shinagawa Ward,
Tokyo, by founder Yuji
Morikubo to
manufacture punchingpins for printed boards

1990

Established PUNCH INDUSTRYINDIA PVT. LTD. in Chennai, Tamil
Nadu, India

Diesmetal mold that enables the fast, uniform, and

!

1975

2010

A variety of parts made ofmetal, plastic, and othermaterials that are put
together to make a productesFoundation to
Business Expansion

TSE Listings andBusiness Operations Global Expansion
Established in China

Components

machines) fulfill indispensible functions in our

es

1975〜

1990〜

A wide range of familiar
products we use every day, suchas automobiles, smartphones,
and consumer electronics

electronics (such as refrigerators and washingin the manufacture of these items. A die is a

2010〜

Products

4

Network
The Punch Group's network of sales and manufacturing sites in Japan and overseas
provides solid support to customers worldwide.
Group company
Sales agent

China

PUNCH INDUSTRY (Dalian) CO., LTD.

PUNCH INDUSTRY (Wafangdian) CO., LTD.
PUNCH INDUSTRY (Wuxi) CO., LTD.

PUNCH INDUSTRY (Dongguan) CO., LTD.
PUNCH SPRING (Dalian) CO., LTD.

Germany
United States
TurkeyJapanSouth Korea

PUNCH INDUSTRY CO., LTD.
Pintec Corporation

TaiwanIndia

Thailand

PUNCH INDUSTRYINDIA PVT. LTD.

Philippines

Vietnam
PUNCH INDUSTRYVIETNAM CO. LTD.

Malaysia
PUNCH INDUSTRY
MALAYSIA SDN. BHD.

Indonesia
PT. PUNCH INDUSTRYINDONESIA

Singapore
PUNCH INDUSTRYSINGAPORE PTE. LTD.

Australia

Manufacturing Sites
Japan

Kitakami Plant

5

Miyako Plant

Hyogo Plant

Malaysia

PintecPunch Industry
Malaysia

China

Punch Industry
DalianPunch Industry
Wafangdian

Punch Industry
Wuxi

Punch Industry
Dongguan

Punch Spring

Chongqing Plant

6

Financial Highlights

30,0001,500

30,0001,500

25,00030,000

1,500
1,200

25,0001,200

20,00025,0001,200
900

20,000Net sales reached a record high amid strong automotive sectors and recovery in the
consumer electronics, precision equipment, electronic devices, and semiconductor
industries. Both revenue and earnings surged, with operating profit up ¥454 million
compared with the previous fiscal year.
Years ended March 31

15,00020,000900

15,000900
600

10,00015,000600

10,000

600
300

5,000
10,000

300

5,000

300
0

0
5,000

(millions of yen)

2012

2013

2014

0

2011

2012

2013

2014

2012

2013

2014

0

2011

2012

2013

2014

2011

2012

2013

2014

0

2011

0

2011
2011

2012

2013

2014

Ordinary Income (millions of yen)
2011

Net Sales2012

22,750Operating Income

23,801

1,281

Ordinary Income
Net Income
Earnings Per Share (Yen)
Total Assets
Total Net Assets

1,161

707

805

116

29,43625,041

946

995

2014

2013

1,047

822

394

720

213

19.96

67.36

34.30

99.58

20,797

18,895

20,57324,471

3,973

4,296

9,362

5,726

Net Income (millions of yen)

1,200

800

1,200

800

1,200

800

900

600

900

600

900

600

600

400

600

400

600

400

300

200

300

200

300

200

0

0

0

2011

2012

2013

2014

0

2011

2012

2013

2014

0

2011

2012

2013

2014

0

2011

2012

2013

2014

2011

2012

2013

2014

2011

2012

2013

2014

Return on Equity (ROE) (%)

Total Assets

12

25,00012

25,00010
1225,00020,00010

Net Assets Per Share (Yen)

679.24Return on Equity (ROE) (%)

734.402.8

1,043.83

800.87

9.5

9.6

4.3

20,0008
10

20,00015,0008
6
8

15,0006

15,00010,000

4
6

10,0004

10,0005,000

24Net Worth Ratio (%)

19.1

22.7

38.2

27.8

Note: We conducted a 10-for-1 stock split in the year ended March 2013; however, the above figures are based on the assumption that the split
occurred at the beginning of the year ended March 2011, and net income per share and net assets per share have been calculated accordingly
for each period.

Net Sales (millions of yen)

Operating Income (millions of yen)

30,00025,0001,200

20,000900
15,000600
10,000
300

5,000
0

2012

2013

2014

5,000
0

0
2
0

2011

2012

2013

2014

0

2011

2012

2013

2014

0

2011

2012

2013

2014

0

2011

2012

2013

2014

2011

2012

2013

2014

2011

2012

2013

2014

Net Worth Ratio (%)

Net Assets Per Share (yen)

1,200

40

1,200

40

1,000
1,200

30

1,000

30

800
1,000

30

800

20

600
800

20

600

20

400
600

10

400

10

200
400

10

200
0
200

0

0

2011

5,000

2

40

1,500

2011

2012

2013

2014

Total Net Assets (millions of yen)

0

2011

2012

2013

2014

0

2011

2012

2013

2014

0

2011

2012

2013

2014

0

2011

2012

2013

2014

2011

2012

2013

2014

2011

2012

2013

2014

Note:		We conducted a 10-for-1 stock split in the year ended March 2013;
however, the above figures are based on the assumption that the split
occurred at the beginning of the year ended March 2011, and net
assets per share have been calculated accordingly for each period.

7
1,200

800

8

Interview with the President
The mold and die components market is constantly growing asa cornerstone of the manufacturing sector.
Punch Industry has consistently supported manufacturing
since its founding. Going forward, we will aggressively develop
new fields and markets while continuing to make and sell mold andQA

die components. Our aim is to be a company whose presence is
indispensable to world manufacturing.

Please tell us about Punch Industry's businessresults for the year ended March 2014 andyour assessment of its performance.

markets. This, coupled with an increase in the

Our performance benefited fromfuture-oriented investment in
new fields, such as the food andbeverage and medical sectors.

¥14,386 million and overseas sales of ¥15,050 million,

production of new cars, resulted in higher-thanexpected revenue. We recorded domestic sales offor total consolidated net sales of ¥29,436 million, up
17.6% from the previous year. We were particularly
pleased with domestic sales, which surpassed ¥14.0
billion, a benchmark we tried to reach for some years.
If we had not made future-oriented investments in

Viewed on a global scale, the mold and die market is

new fields, perhaps sales would have increased only

making a steady recovery after reaching rock bottom

on a par with the market upturn. While it will take

immediately after the collapse of Lehman Brothers,

time to develop new markets, I genuinely believe thatwhich triggered the global financial crisis. With regard

the Company's solid performance is attributable toto our results for the year ended March 2014, in

the initial results of steady progress made in new

addition to a strong automotive industry, signs ofmarkets.

recovery

Masaaki Takeda

consumer

Several factors made significant contributions toelectronics, precision equipment, electronic devices,

were

also

evident

inthethe Punch Group's performance. One is the recovery

and semiconductor industries. Our two main sourcesof business in China, which had struggled over theof demand are manufacturers that supply thepast two years, particularly on the earnings side.

automotive and electrical/electronics industries. We

Another is higher production at the Hyogo Plant insupply around 6,000 customers in Japan and around

Japan owing to an improvement in domestic orders

8,000 in China, covering a wide spectrum of sectors.

received. Since starting production in January 2011,

In recent years, the Company has worked hard to

the plant had fallen behind schedule, due in part todevelop and expand sales in new fields outside these

the impact of the Great East Japan Earthquake.

two key markets, such as the food and beverage andDuring the year, cost structure "renovation activities"

medical sectors.

by the Company—referred to as "value creation

In the year under review, we began to see theactivities"—began to bear fruit. Operating income

positive effect of these efforts in new fields andincreased ¥453 million year on year, to ¥1,161 million,

Sales byIndustry

Sales byRegion（Year ended March 2014）（Year ended March 2014）

President & Representative Director

Automotive
Electronic devices & semiconductor
Consumer electronics & precision equipment
Other

9

45%
18%
12%
25%

49%
44%
Asia, etc.
7%
Japan
China

10

Interview with the President

and ordinary income and net income also roseQ

considerably.

Merger and acquisition activities in Southeast

Please tell us about the Punch Group's
progress under the medium-term businessplan, entitled "Value Creation 15."

year. Nonetheless, we recognize that M&A

We are stepping up initiatives byleveraging our competitive edge
as an integrated manufacturing
and sales company.

activities marked a quantum leap in the Punch

All aspects of the world economy and the social

Asia had a limited effect on our performance forA

the year, due to consolidation in the third quarterand the burden of investments made early in theGroup's pursuit of business expansion.

PUNCH INDUSTRYVIETNAM CO. LTD.
(Hanoi Office)

PUNCH INDUSTRYINDIA PVT. LTD.

PUNCH INDUSTRYVIETNAM CO. LTD.

environment relevant to Punch Industry's business arechanging at a very fast rate. As a result, the shift of

PUNCH INDUSTRYSINGAPORE PTE. LTD.

manufacturing from Japan to China and newly
emerging countries is gaining pace. Against thisbackdrop, the Punch Group has devised a medium-

PT. PUNCH INDUSTRYINDONESIA

term business plan entitled "Value Creation 15,"
covering the three-year period from April 2013 to
The Punch Group's
PUNCH INDUSTRYSoutheast Asian headquarters MALAYSIA SDN. BHD.

Value Creation: 15 Key Points of the Strategy
We will embrace both offensive measures (growth strategies) anddefensive measures (system reforms) to implement the three priority initiatives
Japan■

1 Globalization

China

Southeast Asia, etc.

Establishment of global business headquarters■

Americas strategy■

Europe strategy■

Southeast Asia new
structure in full-swing

Medical-related
products● Food and beveragerelated products● 3D metal printing●

2 Expansion of

new markets

3 Conversion

to high
profitability
business model

11

Marketing

■

R&D
●

R&D headquarters■

Furtherdevelopment ofMidwest market■

Promote sales ofstrategic products■

new

INDUSTRY MALAYSIA SDN. BHD., that company has

markets," and "transformation to a highly profitable

operations in Malaysia, Vietnam, and Singapore. It isbusiness model." The Punch Group is responding to

now a member of the Punch Group and will serve as

the frenetic pace of change in the operating

its Southeast Asian headquarters. The acquisition

environment by laying a solid foundation for global

marks an important first step toward building thebusiness expansion, while continuing its steadfast

Punch Group's direct sales structure, based on

support of manufacturing in Japan.

integrated manufacturing and distribution—a key

measures:"globalization,""developing(1) Globalization

strength—in the Southeast Asian market. The result is
a new framework enabling the Punch Group to provide

Customer-centric marketing structure

ongoing support to existing customers in Japan who

Until recently, Punch Industry had tended to view

have transferred operations offshore. Being able tothings in terms of domestic sales, with export sales asoffer local support in this way is generating a new shift

a bonus. However, we have altered the Punch

in thinking that has begun permeating Groupwide.

Deep cultivation of
automotive business● Consumer electronics
strategy

India
●

■

major impact on this shift in thinking. Renamed PUNCH

key

Establish a businessbase using Malaysia as
the core headquarters
for production and sales● Quick startup ofa joint venture inIndonesia●■

March 2016. Under the plan, we are working on three

Expand carbide
product businessGroup’s structure to encourage a new mindset that

In November 2013, PUNCH INDUSTRY MALAYSIA

considers business from a global perspective byformed a joint venture company with PT. Somagede

linking our activities in Japan, China, Southeast Asia,

Indonesia.

India, the United States, and Europe. Under thisoperations in April 2014. In Vietnam, we complemented

model, we are actively expanding into Southeast Asia

our existing office in Ho Chi Minh City by establishing aand India from key bases in Japan and China, whilesales office in an industrial park for Japanese companies

opening up sales channels in the United States andin Hanoi. As a result of these activities, we have already

Europe. We have been able to achieve substantive

made good progress in expanding our business base.

progress on both fronts.

The

new

companybegan

full-scale

In November 2013, we established a Global

Our acquisition in August 2013 of Malaysian

Business Headquarters, which has begun implementing

company Panther Precision Tools Sdn. Bhd. had aa global business strategy. PUNCH INDUSTRY MALAYSIA

12

Interview with the President

has

been

delegated

responsibilityfor

We are seeking to open up new markets bystrategies covering Southeast Asia, and is in charge of

expanding the geographical reach of our businessaffiliated sales companies in Singapore, Vietnam, andactivities. In May 2013, we launched operations inIndonesia. At the same time, the Global Business

Chongqing, China in response to our customers'

Headquarters manages the coordination and allocation

business expansion. The new operation, with asales of high-value-added productsof duties for marketing in Japan, China, and Southeast

production and sales base and a logistics center, has

The Punch Group is employing two strategies as it

Asia. This new structure is beginning to function, thoughmade a solid start, with orders surpassing expectations.

endeavors to make the transformation to a highly

at a measured pace. The Global Business Headquarters

We will use the Chongqing operation as a strategic

profitable business. One is to build an optimal costhas overall control of the management of each Groupbase for market entry, targeting the rapidly growing

structure through value chain activities, which arecompany.

interior region of China. With sales already increasing

measures targeting ongoing "value creation activities."

at double-digit levels, we are developing a framework

The other is to increase sales of highly profitableto capture this growth market. Going forward, we willproducts by leveraging the competitive edge we havecontinue focusing on this promising area.

as an integrated manufacturing and sales company to

The Punch Group is also working to establish a
special-orderbusiness

centeringonautomotive

customers in the United States and Europe. Here, we
are widening and strengthening existing export sales

In India, the Punch Group is doing business with

Machining work

channels of Group members in China and PUNCH

an increasing number of local automotive companies.

INDUSTRY MALAYSIA. In 2013, Ford Motor Company inDrawing on an integrated production system andadvanced technological capabilities to expand

develop and manufacture high-value-added products
and develop new markets.

In addition to cultivating the automotive sector, we

In the year ended March 2014, we implemented

the United States designated Punch Industry as aprecision microfabrication technology and surface

have begun working to attract orders from makers

full-scale value creation activities with the aim ofsupplier of a standard component for an automobile

treatment technology, and both demand meticulous

of consumer electronics and electronic devices asenhancing our responses at the grassroots level. At

mold. We are using this opportunity as a foothold to

cutting-edge processes. In addition, they require awell. Until recently, we had concentrated on thepresent, 15 task forces, consisting mainly of young

obtain more business from Ford in the U.S. andmanufacturingmass

automotive sector with a view to swiftly launchingmembers, are tackling specific themes from the threeelsewhere overseas. We have identified the moldproduction. The needs of these sectors and the

new businesses. We have now reached the next

perspectives

market, centering on automotive parts, as a growthstrengths of the Punch Group are therefore quite

stage, which enables us to advance businessbusiness management. While some themes require aarea, and we will adopt an aggressive approach in thecompatible, which bodes well for future success. In

expansion while broadening our horizons.

considerable amount of time, others are already

U.S. market with its huge potential. We plan to establish

the food sector, our customer base continues toour own business model under which we gain market

expand, centering on the huge beverage market. In theentry through standard products, which we then will

medical sector, we are receiving increased orders for

expand to include special-order products.

high-value-added products from both new and existing(2) Developing New Markets

13(3) Transformation to a Highly
Profitable Business Modelmarketingcapability

that

can

handlecustomers. Going forward, we plan to enhancecooperation with operations in China spearheaded by

Leveraging advanced technological capabilities toopen up new fields and markets

our recently established R&D Headquarters in Japan.

The mold and die components business will remain

this way will enable us to capture new demand.

Raising the current level of technology even higher in

the Punch Group's central focus. At the same time,

Since 2010, we have been developing technology

we plan to develop business in new fields byapplying metal powder for metal photofabrication,leveraging our strengths in technical development

so-called "3D metal printing" technology, with aand manufacturing. We will also tap new markets

partner outside the Punch Group as part of athrough expansion of business segments.

commercial development project. Thanks partly to

These new markets are not on the same scale as

the popularity of 3D printers, this technology isthe automotive and electrical/electronics markets,

earning growing recognition, and we have been

which are the largest among the diverse range ofreceiving more inquiries as a result. Although metalindustries we supply. Nonetheless, we have madepowder for metal photofabrication is still in its infancy,

inroads by narrowing our focus on fields in which weit can form shapes, which is not possible using

can leverage our strengths to provide high-value-

conventional metal processing. We are working

added products. Adhering to this strategy, we have

harder than ever to seize the opportunities we believe

established a presence in the domestic food andwill emerge for applying metal photofabrication

beverage and medical sectors. Both sectors use high-technology in completely new areas.

beginning

Our Strengths
While the Punch Group's basic style isreflected in its integrated manufacturing
and sales system, it is its "technologicalcapabilities" that underpin this style.
We constantly strive to reinforce
the manufacturing skills and knowhow we have amassed over the 40
years since our founding. We arealso advancing the Punch Group's
technologicalcapabilities
throughcollaboration between Japan and China,
spearheaded by the R&D Headquarters.
These capabilities form the cornerstoneof our integrated production system andcustomer-centric sales and marketingsystem. Handling a wide array of bothstandard and special-order products, ourgreatest strength is our ability to respond
meticulously to the diverse needs ofcustomers.

toofmanufacturing,show

concretemarketing,results.

andGrowing

Delivering a high level of customer satisfaction

Standard
Products

Quicksolutions

Abundant lineup of
versatile standard
products

Integrated production
Extensive capabilities using
1,700 pieces of equipment

SpecialOrder
Products

Responding flexibly
to customers' needs

Customer-centric sales
and marketing system
Meticulous solutions

Advanced technological capabilities

Four decades of amassed know-how plus tireless research and development

14

Interview with the President

awareness concerning business management, mainly
among task force members, illustrates the effectivenessQof these activities. Of particular note is the progress
being made since we created a research anddevelopment structure that cuts across the Punch

AGroup. In April 2014, we began developing products
under a cooperative arrangement between Japan and
China spearheaded by our R&D Headquarters.
In China, the Punch Group has spent the past
three

or

four

years

undertaking

research

In the year under review, our performance benefited
significantly from solid growth in the automotive

development with a focus on manufacturing that

sector and new fields, as well as higher levels of

requires a high level of sophistication. In the year

operation at domestic plants and the recovery of ourended March 2014, sales growth in strategic products

business in China. Taking these factors into account,with high added value outstripped projections.

we have revised upward our original targets for the

Growth in this area was very strong, contributing toyear ending March 2015—the second year of thesales of over ¥1.0 billion in China.

plan (Value Creation 15). The new targets are netcomponents worldwide. However, only very few, suchsales of ¥31.5 billion and operating income of ¥1.4
billion.

as Punch Industry, offer a wide variety of both standard

With regard to the year ending March 2016, weand special-order products. Increasing our lineup of

have decided to wait a little longer to monitor thesuch strategic products is yet another strength we canprogress of economies in China and emerging

leverage that is directly linked to improving profitability.

countries, as well as domestic manufacturing.

Going forward, we plan to ramp up collaboration

Dividend Trends(millions of yen)

Year ended
March 31,2014
(Results)

Year ending
March 31,2015
(Forecast)DifferenceYear-onyear

29,43631,5002,063

107.0%Net Sales
Operating
Income

1,161

1,405

Operating
Income to Sales

3.9%

4.5%

Ordinary
Income

1,047

1,256

Ordinary
Income to Sales

3.6%

4.0%

Net Income

720

848

Net Income to
Sales

2.4%

2.7%

243

120.9%

208

119.9%

127

117.7%(yen)

Annualdividends(per share)

Year
ended
March 31,2014
(Results)

20

Year
endingMarch 31,2015
(Forecast)20

As for key initiatives, we will adhere steadfastly to

between Japan and China to raise our technological"globalization,"expertise. At the same time, we will expand our range"transformation to a highly profitable business model"of high-value-added products while skillfully marrying

as we strive to attain continuous growth.

our offerings with customers' needs.

Earnings Forecast for the Year Ending March 31, 2015

In light of our strong performance,
we have made upward revisionsof targets set under the
medium-term business plan.

andThere are numerous makers of mold and die

15

What is your business outlook for the year
ending March 2015, and what priority
initiatives will you pursue?

"developing

newmarkets,"andOn a regional basis, we recognize the shift that is

In Southeast Asia, we are working to expand

taking place from domestic to offshore production.

business base, we will seek to boost business

Shareholder Returnhighly profitable carbide items made at our Malaysian

Nevertheless, in Japan we will work to attract new

activities in fields other than the automotive sector.

At Punch Industry, we believe that earning trust andproduction operations. This product group requires

customers by approaching those we have previously

We realize that fostering human resources is

support from all shareholders forms the basis for

specialist processing machinery and a great deal ofoverlooked. We will also pursue further sales growth

important from the perspective of supporting thesecontinuous growth of corporate value, and thateffort. For these reasons alone, the market is not veryin new fields. In China, we will focus on increasing

initiatives. A key management priority is to create ameeting their expectations is a key management

large, but it demands a high level of added value. We

profitability through a sales offensive targeting interior

framework that enhances motivation of employees

priority. Under our dividend policy, we link dividends

will expand our product range by enhancing our

regional markets and increasing sales of strategicand enables them to show their full potential.

to performance by targeting a consolidated payoutprocessing technologies for carbide products. No

products.

Accordingly, we will bolster activities in this area inratio of at least 20% while also emphasizing stable

the year ending March 2015.

and continuous dividend payments.

Steadymanagement

of

the

R&D

longer bound by existing limitations, we will increase

Headquarters, established in Japan in April 2014, will

sales to encompass Japan, China, Southeast Asia, thebe a decisive factor in achieving these goals. Another

United States, and Europe. We will also boost sales

priority is to further bolster the Punch Group's

volumes so that both revenues and earnings willbusiness platforms in Japan and China. In Southeast

contribute to our consolidated business results.

Asia, meanwhile, there are markets with huge

Through these three initiatives, the Punch Grouppotential despite the risks inherent in some emerging

will become the leading brand in the mold and die

countries. Accordingly, we will act quickly to establish

component industry. Moreover, by leveraging oura stable business foundation in the region so that weadvantages as an integrated manufacturing and sales

do not miss opportunities. At the same time, we willcompany, we will make the transformation to a highly

target expansion into the United States and Europe.

profitable model.

As for India, in light of the increasing stability of our16Interview with the President

Q

Business results briefingbuilding a framework that provides solid support forcustomers wherever they may be, in our quest to

We will strive to achieve further
business expansion and improve
corporate value.

become a company that is indispensable to global

Mold and die components are absolutely essential

December 2012. In March 2014, the Company wasfor manufacturing. Indeed, there is not one mold orassigned to the First Section of the TSE. This realizes

die that does not use such components. Punch

the wish of Punch Industry's founder Yuji Morikubo

Industry takes pride in fulfilling this most basic role inand coincides with the 40th anniversary of the

manufacturing.

Company's founding. We have reached these twoA

Punch Industry booth at Stock World 13,
a Nikkei IR faircreate a structure that makes this possible. We are

Do you have a concluding message forstakeholders?

evolve from being powered by gasoline engines, toincluding shareholders and other investors. I would

hybrid systems, and on to electric systems. However,like to take this opportunity to express my sincere

automobiles

gratitude to you all.

themselves

willalwaysexist.

For

consumer electronics as well, though the major

Going forward, we will work tirelessly to realize

producing nations have changed, the products

our corporate vision and meet everyone's expectations.

themselves

have

We look forward to your ongoing support.

perspective,

therefore,not.

Viewedfrom

manufacturingaglobalwill

notresponsibility is to underpin global manufacturing. In

continue being necessary. At present, the mold andaddition, we implement green procurement as adie market is growing from strength to strength. It is

Punch Industry pursues
CSR-oriented managementthat continually supports
manufacturing worldwide.

means of avoiding the use of chemical substances

essential that we become part of this growth and

The Company's corporate vision is to "become theproactively to the sustainable development of society.

leading brand in the mold and die components

Since our public listing, we have introduced various

industry and achieve high profitability by leveraging

measuresour competitive edge as an integrated manufacturingholding company and business results briefings,

and sales company." In the nearly four decades since

exhibiting at investor relations events, and improving

its founding in 1975, Punch Industry has worked

our website. Going forward, we plan to intensify

steadily with integrated manufacturing as its linchpin.

these activities. As a corporate citizen, each office

To continue meeting people's expectations, weand plant takes part in community-based activities,

maintain a strong focus on the manufacture and salesuch as neighborhood cleanups, as well as collectingof mold and die components. To prevent this focus

plastic bottle caps as part of the Ecocap Campaign.

from restricting our activities, we also seek challenges

In 2016, we will support a national sports event thatin new fields and markets. Through global expansion,

will take place in Iwate Prefecture, the home of two

our aim is to become a beacon of light that supportsof the Company's plants.

Q
A

Please outline the Company's CSR policy.

manufacturing worldwide.

mostimportant

Section of the Tokyo Stock Exchange (TSE) in

milestones thanks to the support of all stakeholders,disappear, which means that molds and dies will

Company's

Punch Industry's stocks were listed on the Second

We are seeing changes in automobiles as theysocialThe

manufacturing.

that are harmful to our health and the global
environment. As a company we believe we must be
accountable to all stakeholders, including employees,
and as a corporate citizen we must contributetopromoteaccountability,

Corporate Vision

including

Customercentric
Directsales

Toward a global
Punch Industry
As the leading brand in the mold anddie component industry,Integrated
production

the Punch Group will leverage its
competitive edge as an integrated
manufacturing and sales enterprise to
become a highly profitable business.

17

18

Environmental and Social Initiatives
Environmental Principle

An Eco-Friendly Product According to Punch Industry

Punch Industry plays a significant part in social development by protecting
the Earth's natural resources and developing eco-friendly products.

Punch Industry considers an eco-friendly product as something that requires special attention and takes the leadin the mold and die components industry in the pursuit of such products.
We place top priority on reducing chemical substances that harm the environment. We continue marketing
eco-friendly products with minimal environmental impact based on our own standards, which are even stricter

Environmental Policy
Environmental Action Guidelines

than the RoHS Directive.
Manufacturing eco-friendly products has led to increased costs, but we do not plan to pass this increase on to
our customers. We adopt an environmentally responsible approach across diverse aspects of our business, which
include the adoption of eco-friendly packaging materials and the use of recycled paper and vegetable-based inks
for our catalogs.

It is imperative that environmental issues be addressed by the entire world, and corporate entities have a social
responsibility to undertake environmental initiatives. Based on this awareness, we engage in the following
environmental conservation activities on a continuing basis with the cooperation of all employees, to minimize
environmental burdens in all of our business activities, from the development and production to the sale of moldcomponents, and thereby contribute to the sustainable development of society.
1. We establish organizational and operational frameworks to ensure steady implementation of eco-friendly
business activities and enforce an environmental management system for their continuous maintenance andimprovement.

Green Procurement
Punch Industry believes that by striving to live in harmony with the Earth through the management of environmental
chemical substances and the effective utilization of resources and other initiatives, it is possible to change theglobal environment for the better. Adhering to our environmental principle, we have actively switched to the useof "green products" that pose minimal risk to the environment.
We also comply with the China RoHS.

2. We comply with laws, regulations, and ordinances concerning the environment, and strictly adhere toagreements with customers. Furthermore, we make every effort to prevent pollution to the greatest extent
possible in accordance with standards we have established, and to promote harmony with the local community.
3. We engage in green procurement practices and maintain a strong commitment to eco-friendly product designs
and product development (non-use of environmental chemical substances).
4. We strive to reduce environmental burdens that arise from our business activities in various regions and topromote the effective utilization of resources by setting forth and working toward environmental targets andgoals that emphasize the following perspectives. We also conduct a regular review of these targets and goals.
1. Promotion of resource savings and energy conservation
2. Reduction and recycling of waste materials

Eco-Friendly Mark
Punch Industry has established its own eco-friendly markas a means of informing customers that products meet theCompany's own environmental standards. The mark is used in
our product catalogs and other materials.

5. We thoroughly convey these environmental policies to all of our business partners to promote environmental
awareness and understanding among their personnel. We also disclose these guidelines to the public uponrequest.

■ RoHS
RoHS refers to the EU directive "Restriction of the Use of
Certain Hazardous Substances in Electrical and Electronic
Equipment," which came into force in July 2006 and restricts
the use of certain hazardous materials in the manufacturer ofvarious types of electrical and electronic equipment.
Accordingly, products containing any of the following six
chemicals cannot be marketed within the EU member states:
cadmium, chromium (hexavalent chromium), lead, mercury,
PBB (polybrominated biphenyls), and PBDE (polybrominateddiphenyl ethers)

19

20

Environmental and Social Initiatives
Basic Principles on Quality

Social Initiatives

The Punch Group shall enhance a basic policy that puts customers first and deliver
high-quality products and services that can be used with confidence, in fulfilling its
responsibilities as a listed company. At the same time, we shall pursue quality assurance
to further increase customer satisfaction, achieved through such efforts as employee
training, technical innovation, and new product development.

The Punch Group takes its social responsibility very seriously as a member of society,and contributes to the development of society and local communities through social
contribution activities.

Community Activities
Policies on Quality
Basic Policies
1. Customer-Centric
To enhance customer satisfaction, we shall endeavor to provide products and services that meet the
expectations of customers by valuing their opinions and our communication with them.
2. Quality Assurance System■ Cleanup and Beautification Campaigns
The Punch Group regularly performs cleanup activities on the premisesof its head office and plants and their surrounding areas as part of its
social contribution activities. As members of our local communities, we allundertake the activities together to contribute to the beautification of theenvironment and our communities.
■ Marathon Volunteers
Kitakami Plant employees and their families supported the Iwate Kitakami
Marathon in 2012 and 2013 by volunteering at water stations along the

To provide high-quality products and services, we shall continuously strive to improve our quality assurance

marathon route.

system based on our own quality standards by verifying and assessing the effectiveness of the system.

■ Cosponsor of 2016 National Sports Festival

3. Technological Improvements
To meet the needs of the market, we shall work constantly to improve innovative technologies and skills while
making ongoing improvements to quality, delivery, cost, and safety (QDCS).
4. Risk Management
To become a company that is trusted, we shall strive to promote risk management by complying with thevarious laws, regulations, treaties, and standards required of products and services supplied to the market.
5. Full Participation in Quality Assurance
To provide high-quality products and services that customers can use with confidence, we shall ensure thateach individual employee fulfills our quality targets.

Punch Industry is an official supporter of the 2016 National Sports Festival
in Iwate Prefecture. With two of our main production plants located in
the same prefecture, we decided to provide assistance for this upcoming
national sports event.

Eco-Cap Campaign
Punch Industry has taken part in the Eco-Cap Campaign run by the nonprofit organization (NPO) Ecocap Movement since 2012. The aim of thecampaign is to collect and sell plastic bottle caps that would normally bethrown out, and use the proceeds to purchase vaccines. Participation in thisactivity not only raises employee awareness concerning the environmentand recycling, but also helps save the lives of children around the world.
As of March 2014, we had sent around 23,000 bottle caps to Ecocap
Movement, equivalent to providing vaccines for about 27 children.

Collection of Bell Marks and Used Postage Stamps
Since 2012, we have put collection boxes in several of our offices for employees to contribute"Bell Marks" found on product packaging, as well as used postage stamps. The Bell Marks aresent to the Bell Mark Foundation, which uses the proceeds to help schools buy textbooks andequipment, and to provide support to schools in remote areas, special schools, and education
programs in developing countries. The used postage stamps are sent to a foundation thatprovides medical assistance overseas. The foundation funds health programs mainly in Asia andAfrica to improve the health of people living in areas with inadequate healthcare.

21

22

Corporate GovernanceTo continue being an entity that is highly regarded by society, the Punch Group willfurther improve the transparency and soundness of management by reinforcing corporate
governance and maintaining rigorous compliance.

Basic Policy

Compliance

As a corporate entity that is active on a global scale, the Punch Group strives to reinforce corporate governance,
which it regards as its most important management priority. We recognize that complying with laws and regulations,faithfully fulfilling social responsibilities, and improving the transparency and soundness of management help
protect earnings for shareholders, customers, and other stakeholders, and underpin the continuous enhancementof corporate value.

Recognizing that rigorous compliance is absolutely essential for improving corporate value, the Punch Group has
established a code of corporate ethics. Through extensive dissemination of the code, all officers and employees
are aware that their conduct must comply with laws and regulations and meet the highest ethical standards.
The Company develops internal regulations governing risk management, as well as a risk management system.
The system comprehensively identifies and assesses management and business risks that may affect our operations.
We have established a Risk and Compliance Committee, which is chaired by the president. The Committee
identifies and assesses risks, while serving as a framework that ensures the thorough dissemination ofcompliance information throughout the entire Group through the implementation of ongoing employee

General Meeting of Shareholders
Appoint/Dismiss

Appoint/Dismiss

education programs and training. The Company's Risk Management Guidelines contain provisions to be

Appoint/Dismiss

implemented in the event of an unforeseen occurrence that could impact our operations.

Audit

Board of Directors
Coordination

Accounting
Auditors

Board ofAuditors
Coordination

Coordination

Issue
instructions

Internal
Audit Office

Select/RemoveMessage from an External Director

ReportI have an extensive background in the financial industry. My fields of expertise are

President
ReportAudit
Internal
audit

Issue
instructions

ReportExecutive
Conference
Issue
instructions

ReportExecutive departments(Executive officers)

Group companies

corporate finance based on financial and securities analysis, as well as audits ofReportbusiness operations, which include management audits.

Risk and Compliance
Committee

through supervision over management. Additionally, I can draw on my previous

Reportof business, such as global strategies, internal control systems, and risk management. I

I believe that the key duty of an external director is to improve corporate value

Punch Hotline

Coordination

experience and expertise to give advice on areas not related directly to the execution

Shigeru Yokoyama

External Director

hope to make even a small contribution to the continuous growth and development of Punch Industry.
At Board of Directors' meetings, I adopt an independent, neutral, and objective stance that is always
conscious of the diversity of stakeholders associated with the Company and is not influenced by internal
undercurrents. I strive to make judgments on whether the current management team should continue managing
the Company by determining their managerial effectiveness and the appropriateness of outcomes.
When considering items on the agenda of Board of Directors' meetings, I try to ask questions and makecomments from core perspectives: if there is a conflict of interest between management and the Company, if
there is a compliance-related issue, or if a decision made by the internal directors is biased or unreasonable.

Internal Audits and Auditing by Corporate Auditors
The Internal Audit Office, under the direct control of the Company's president, consists of three internal auditors,
and the Office cooperates with corporate auditors through the exchange of audit information and other activities.
The Board of Auditors consists of four corporate auditors, two of whom are external auditors. The corporate
auditors conduct audits in accordance with the audit policy established by the Board of Auditors. Corporate auditors
carry out a comprehensive range of audit activities, including attending Board of Directors' meetings and executive
conferences and holding direct hearings with directors and executive officers regarding the execution of duties.
The establishment, maintenance and management, and assessment of the Company's internal control system
are largely the responsibility of the Internal Audit Office.

23

HotlineWe have set up the "Punch Hotline" as an internal reporting system that enables officers, employees andtheir families, business partners, and anyone and everyone who has some involvement with the Company's
businesses to report problems, such as the discovery of a compliance-related matter. Adhering to a set ofrules on whistleblowing, we strive to uphold internal controls and improve the system of in-house checks andbalances. Reports are lodged anonymously to ensure the whistle-blower is not placed at a disadvantage.

24

Directors and Corporate Auditors

Management's Discussion and Analysis(As of June 24, 2014)

Performance Overview

Earnings

In the fiscal year ended March 31, 2014, the U.S. economy

Operating income jumped 64.1% year on year, to ¥1,161

industry. Consumption was sluggish due to a severe

partly to a reduction in manufacturing costs stemming

stemming from rising interest rates. In Europe, economic"renovation activities" by the Company.

and reductions in liabilities of banks. In China, meanwhile,to the absence of a reversal of deferred tax assets, which

was flat despite favorable conditions in the automotive

million. This was mainly due to an increase in sales andwinter and growth in the housing market was weak,from improved factory operations as well as cost structure

recovery was weakened by fiscal enhancement measuresthe economy tended to slow down. It appears, therefore,

Net income surged 238.0%, to ¥720 million, owing

affected net income in the previous fiscal year.

that full-scale recovery of the world economy will takeYuji Morikubo
Chairman &Representative Director

Masaaki Takeda
President &Representative Director

some time.

Susumu Sugita

In Japan, the economy showed a recovery trend,

Senior Managing Director,
General Manager of R&D
Headquarters

buoyed by favorable conditions for exporters as the yen

Financial Position

consumption tax hike on April 1, 2014.

At March 31, 2014, total assets amounted to ¥24,471

remained weak, as well as a spur in demand ahead of aIn the molds and dies industry, demand turned aroundafter a slowdown in the summer months, thus remaining
mostly unchanged from the previous fiscal year.

Under these circumstances, the Punch Group worked

actively to further penetrate the automotive market while

tapping new markets and sectors. We also strove tobolster our results by pursuing ongoing cost reductions.

In August 2013, we acquired a company in Malaysia,
renaming it PUNCH INDUSTRY MALAYSIA SDN. BHD.

as a wholly owned subsidiary. With this acquisition, thePunch Group now has a solid footing in Southeast Asia
to complement its operations in Japan, China, and India,
providing impetus to its globalization plans.

million, up ¥3,897 million from a year earlier. This stemmed

mainly from an increase in notes and accounts receivableand the inclusion of a new consolidated subsidiary.

Total liabilities stood at ¥15,108 million, up ¥261

million from a year earlier. This was mainly due to anincrease in notes and accounts payable.

Total net assets jumped ¥3,636 million year on year,to ¥9,362 million. Major factors were an increase incapital stock and capital surplus due to a public offeringand private placement, an increase in retained earnings

stemming from higher net income, and a rise in foreign
currency translation adjustments.

Owing to the above factors, our financial results for the

fiscal year ended March 31, 2014, are discussed below.

Yasuhiro Sanada
Director,
General Manager of Global
Business Headquarters

Takao Murata

Director,
General Manager of Finance
Headquarters

Hiroyuki Yagi

Director,
General Manager of
Administration Headquarters

Shigeru Yokoyama
Director (External)

Revenue

Corporate Auditor (Full-time)

25

Corporate Auditor

Ryoichi Ando

Corporate Auditor (External)

million, down ¥234 million from a year earlier.

For the fiscal year under review, net cash provided byoperating activities amounted to ¥1,194 million, compared

million, due to healthy conditions in the automotive

boosting cash flows included ¥997 million in income

Group has been focusing.

million in depreciation and amortization. By contrast,

In China, favorable conditions in the automotive andreceivable and ¥339 million in income taxes paid.

in the value of the Chinese yuan, led to a significant year-

million, compared with ¥1,773 million in the previous

Asia increased, buoyed by the consolidation of PUNCH

of property, plant and equipment and ¥1,155 million in¥29,436 million. Sales in Japan rose 5.2%, to ¥14,386

with ¥1,690 million in the previous fiscal year. Factors

market and growth in new businesses on which the Punch

before income taxes and minority interests and ¥1,170

Overseas sales jumped 32.4%, to ¥15,050 million.

there was a ¥312 million increase in notes and accounts

Yoriatsu Matsue

Corporate Auditor (External)

Net cash used in investing activities totaled ¥1,252

on-year performance improvement. Sales in Southeast

fiscal year. Main factors included ¥460 million in purchase

INDUSTRY MALAYSIA, and sales in Europe were also up.

purchase of shares in PUNCH INDUSTRY MALAYSIA.

tapped new customers, particularly in the automotive

compared with ¥41 million in the previous fiscal year. ThisIn India, as well, we enjoyed growth in demand, as we

Shinya Sasaki

Cash and cash equivalents at fiscal year-end totaled ¥1,506

Consolidated net sales increased 17.6% year on year, toconsumer electronics markets, together with an increase

Norio Kitsui

Cash Flows

market.

Net cash used in financing activities was ¥370 million,

was mainly due to ¥1,846 million in repayment of shortterm debt, which outweighed ¥1,783 million in proceedsfrom issuance of common stock.

26

Business Risks

The following statements contain
important issues with regard to theoutlook of the Punch Group's businessand operations, and may have a material
effect on the decisions of investors.
Please note that such forward-looking
statements in this report are based on
the judgments made by the Punch Groupas of June 24, 2014. Undue relianceshould not be placed on these or any
other projections made by the Group.

(1) Trends in customers' industries

Any factors that cause problems for the production

environment could impact the Punch Group's business

an impact on the Punch Group's business performance.

performance due to a loss from goodwill impairment.

industries encompass a wide range of products including(4) Undeveloped and new business fields(7) Overseas business development outside of China

consumer electronics, and precision equipment. It is

In addition to its existing business supplying components

The Punch Group does business with more than 10,000

customers at home and abroad, and we believe that ourcustomer structure, which does not depend on any specificcustomer group, is well-balanced. The major customer
automobiles, electronic devices and semiconductors,

therefore probable that the market trends, price structures,and intensifying competition in these industries will
determine trends in production and capital expenditure,
and will impact the Punch Group's business performance.

It is also anticipated that Japanese manufacturers willcontinue to relocate their production facilities overseas (aso-called "hollowing-out"). To address this phenomenon,
the Punch Group has been actively developing its businessoverseas, including in China, but if such relocation
affect the Group's business performance.

In addition to China and Southeast Asia, the Punch

businesses in fields where it can leverage its core

India, Europe, and the United States. If these businesses

planned due to changes in the economic situation, trends

political and economic situations or trends in customers'

our competitors, the Punch Group's business performance

be affected.

set its future growth strategies focusing on undevelopedGroup has been engaged in developing businesses instrengths. However, if these efforts do not progress as

fail to progress as planned due to changes in the local

in related technological innovations and developments byindustries, the Punch Group's business performance could

may be affected.

manufactures

facecompetition

in

terms

of

technology, price, delivery, etc. For standard products, weare concentrating our efforts in reducing manufacturingcosts to enhance our competitive edge, while focusing
on special-order products manufactured at a wide rangeof production facilities using advanced technologicalskills to differentiate us from our competitors. However, if
these business strategies do not work according to plan,or we encounter unexpected developments from ourcompetitors, or to a greater degree than we anticipated,
this could impact the Punch Group's business performance.

For domestic distribution, the Company operates abusiness

centralized control system from its Tokyo Logistics Center

faced a withdrawal or major employment adjustmentcompanies, and an overnight shipping system has beenof business practices and employment systems. Our

However, if any problems occur at TLC, or if the deliveryof the Punch Group's consolidated operating income.

calamity, this could have an impact on the Punch Group's

The

The components for molds and dies that the Punch
Group(8) Domestic logistics system(5) Business risks in China(2) Competition

and Southeast Asia

for plastic molds and press dies, the Punch Group has

increases to a level greater than we anticipated, this could

Punch

Group

has

been

engagedinactivities in China since 1990, and to date has never(hereinafter, "TLC"), outsourced to external logistics

in an environment that is different from Japan's in terms

implemented except for deliveries to some regions.

business in China now represents an important foundation

service is interrupted by a natural disaster or some other

Although we anticipate stable business expansion in thebusiness performance.

management relationships, any major changes to thisincreases in production at our Hyogo Plant, exceed theanti-Japanese sentiment, removal orders due to urban

system, additional investment would likely be needed tofuture in line with economic growth and amicable labor–

If logistic volumes in western Japan, including any

business environment, including political unrest, mounting

current assumptions and cause problems for the logistics

development policies, higher labor costs, among others,

establish a new logistics base in the region.

could affect the Punch Group's business performance.

(6) Business risks in Southeast Asia

(9) Information systems
The Punch Group's sales management system and(3) Purchase of principal raw materials

The Punch Group converted PUNCH MALAYSIA to a

production management system form the basis of its

The Punch Group depends on a specific trading company

PT. Punch Industry Indonesia in November 2013. Whileadequate stability and security. However, unpredictable

While we have maintained a good business relationshipprojected growth in Southeast Asian markets and soundhardware and communications, or computer viruses

supply system, any change in the management strategies,

if there are any major changes in the business environment

business performance.

performance fluctuations in the relevant supplier couldin economic conditions, or uncertainty over currencies,

wholly owned subsidiary in August 2013, and establishedbusiness, and we believe that these systems operate withfor massive purchases of steel, its principal raw material.

stable business expansion is anticipated on the back ofevents including natural disasters, failures in systemwith this trading company for many years with a stable

management, the Group's performance could be affectedcausing system failures could affect the Punch Group's

significant revisions to trade terms and conditions, ordue to political unrest, a tightening of regulations, changes

impact the Punch Group's business performance. A similar

among other factors.

for our carbide products, which are handled by PUNCH

the wake of the consolidation of our new subsidiary

MALAYSIA"), a subsidiary.

deterioration in the profitability of this subsidiary caused

impact can be expected from our supplier of materials
INDUSTRY MALAYSIA SDN. BHD. (hereinafter, "PUNCH

27

by substantial changes in management or the businessprocesses at these special steel manufacturers could have

While we believe that the goodwill generated inappropriately reflects its future earnings capacity, any

28

Business Risks(10) Management of customer information(13) Interest-bearing debt

The Punch Group conducts transactions with more than

The Punch Group has procured the funds necessary forlarge volumes of customer information through electronic

institutions. The ratios of interest-bearing debt to total

However, if these measures fail to function effectively,

10,000 customers in Japan and overseas, and manages

business expansion by borrowing mainly from financial

media and print media. If information leaks were to occur

assets are shown below.

information system, etc., the Punch Group would face a							

due to a failure of management or problems with theserious loss of credibility, which would impact its business(11) Noncurrent assets
The Punch Group holds a number of noncurrent assets,

including production facilities, to meet a wide variety ofcustomer needs. By applying the "Accounting Standards

for Impairment of Fixed Assets" to these noncurrent

assets, we endeavor to ensure that these assets remainsound by testing for impairment. However, depending on
the profit and loss or cash flow situation of the Company's

plants and offices and Group companies, these assets

could have an impact on the Punch Group's operating
results and financial position.

Balance of interestbearing debt
Total assets

7,743,960

20,573,648(thousands of yen)(Consolidated)

At fiscal year-end
under review(March 31, 2014)

8,953,285(thousands of yen)

to the situation in the human resources market, the Punch
Group's performance could be affected.

(17) Disasters
The Punch Group has 4 manufacturing sites and 14 sales
offices in Japan, 6 manufacturing sites and 30 sales offices

in China, one manufacturing site and 6 sales offices inSoutheast Asia, and one sales office in India. If natural
disasters such as earthquakes and typhoons, or accidents

At previous fiscal
year-end(March 31, 2013)

performance.

or the required personnel cannot be secured in time due(15) Lawsuits and other actions

including fires occur, or if serious failures in the supply

While the Punch Group exerts its utmost efforts tooccur due to unexpected problems at power generating

it is conceivable that the Group, through the course ofplace in the areas where these business operations area lawsuit concerning intellectual property rights due toresult, its business performance could be affected.

of electricity or the telecommunications infrastructure

maintain and protect its intellectual property rights,

facilities, etc., or if wars or acts of terrorism, etc., takeconducting business overseas, become embroiled inlocated, the Group's operations in these regions and, as adifferences in legal systems between countries.

24,471,415

Although the Punch Group has taken all possible

precautions to ensure the quality of its products, if a

Dependence oninterest-bearing debt

43.5

(%)

lawsuit were brought to claim damage from a serious

31.6

accident due to product failure or complaints, the Group

Notes: 1. Balance of interest-bearing debt is the total of short-term loans
payable, current portion of long-term loans payable, and long-termloans payable.
2. Dependence on interest-bearing debt is the balance of interestbearing debt divided by total assets x 100.

may incur huge costs involving heavy compensation
payments.

In addition to the above, if a material lawsuit werebrought against its business operations, the Punch Group's
performance could be affected.

The Punch Group will continue to aggressively invest in
the future and will secure profits by bolstering its earnings(12) Fluctuations in foreign exchange rates
In preparing its consolidated financial statements, thecapacity and generate its own funds by reducing its(16) Environmental measuresbearing debt to hover at a relatively high level for a while.

The Punch Group has established its "Environment

working capital. We expect the dependence on interestUnder these circumstances, if we find it impossible toCompany faces systemic risks from foreign currency

procure funds due to changes in the financial environment,

ringgit, and others, when converting the currencies, used

and if the fund procurement costs increase amid thefluctuations in the Chinese yuan, Indian rupee, Malaysian

and therefore difficult to execute our investment plans,by overseas Group companies, into Japanese yen.

rising trend in market interest rates, the Punch Group's

An increase in the number of transactions in foreign

currencies is expected in line with the Company's

performance and financial position could be affected.
The

Company's
loancommitment-line

agreements

withcontracts

major

and

accelerated global business development. The Company

syndicatedfinancial

fluctuations by managing the risk associated with foreignof any infringement of these covenants, the Company

forward contracts, etc.

affect the Punch Group's financial position.

will protect its financial structure against foreign currency

institutions contain financial covenants, and in the event

exchange, including marrying exchange credits and debts,

could be required to repay the relevant loans, which could

The Company monitors the medium- to long-term trends(14) Human resources

currencies when borrowing.

The Punch Group has placed its emphasis on securing

exceeding the Company's assumptions could impact theimplemented a range of personnel measures based onin this currency, and reduces the risk by diversifying

However, significant foreign exchange fluctuations

Punch Group's performance.

activelyaddress

environmental

issues.

However,

if

unexpected environmental problems occur, or changes

in production facilities and waste treatment methods are

required due to amendments to the relevant laws andregulations, the Punch Group's performance could be
affected.

The Company has been tackling the problem of soil

contamination by volatile organic compounds at thesite of the former Kanegasaki Plant in consultation withspecialized advisors, in an effort to fulfill its corporatesocial responsibility. However, if an unexpected situationarises, or the amount allocated as a provision for such

Chinese subsidiaries have foreign exchange risks forloans payable as some debts are in foreign currencies.

Principles" and "Environmental Actions Guideline" toand developing capable human resources, and has

an event proves to be insufficient, or the relevant amountis anticipated to increase due to significant changes in
the laws and regulations associated with environmental

policies, the Punch Group's performance could be
affected.

its personnel system with the aim of bolstering employee
motivation and morale towards improving businessperformance. The Punch Group also recruits highly
capable, talented personnel when necessary.

29

30

Consolidated Balance Sheets
PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
March 31, 2014 and 2013

Thousands of U.S.
dollars

Millions of yen

2014

2013

2013

2014

2014

¥ 2,966¥ 3,426$ 33,291

Short-term loans payable

5,762

4,331

42,082Current portion of long-term loans payable

1,371

972

9,448

Income taxes payable

177

145

1,409

Provision for bonuses

302

359

3,496

－

260

2,527

2014

ASSETSLIABILITIES AND NET ASSETS

Current assets:

Current liabilities:¥ 1,741¥ 1,527$ 14,846

Notes and accounts receivable−trade

7,270

9,433

91,655Merchandise and finished goods

1,336

1,820

17,687

271

395

3,838

1,068

1,125

10,938Deferred tax assets

160

308

2,997

Others

680

172

1,679

Allowance for doubtful accounts

(65)

(115)

(1,121)

12,463

14,668142,519

Cash and deposits

Work in process
Raw materials and supplies

Total current assets

Notes and accounts payable−trade

Provision for soil contamination
OthersTotal current liabilities

Provision for retirement benefits

Buildings and structures

4,543

4,933

47,937

Machinery, equipment and vehicles

10,154

11,695

113,635

Tools, furniture and fixtures

1,429

1,695

16,472

817

831

8,081

Lease assets

－

529

5,143

Construction in progress

0

32

319

16,946

19,718

191,588(10,292)(12,106)(117,627)

6,654

7,611

73,960Land

Accumulated depreciation
Property, plant and equipment, net

Net defined benefit liability
Provision for soil contamination
OthersTotal long-term liabilities

Goodwill
Deferred tax assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total assets

31

－

913

8,878

273

209

2,036

1,282

1,163

11,304

(99)

(95)

(925)

1,456

2,191

21,292¥20,573¥24,471$237,771

1,877

18,243

11,372

110,497

1,819

2,440

23,712

657

－

－

－

737

7,167

255

－

－

217

558

5,422

2,950

3,736

36,301674

1,571

15,270Net assets:
Shareholders' equity:
Capital stock
Capital surplus
Retained earnings
Total shareholders' equity

Investments and other assets:

1,316
11,897Long-term liabilities:
Long-term loans payable

Property, plant and equipment:

Thousands of U.S.
dollars

Millions of yen

403

1,300

12,636

4,572

5,096

49,516

5,649

7,968

77,422

Accumulated other comprehensive income:
Valuation difference on available-for-sale securities

20

1

13

Foreign currency translation adjustments

55

1,432

13,914Remeasurements of defined benefit plans

－

(47)

(464)
13,46376

1,385

Minority interests

－

9

88

Total net assets

5,726

9,362

90,973¥20,573¥24,471$237,771

Total accumulated other comprehensive income

Total liabilities and net assets

32

Consolidated Statements of Income

Consolidated Statements of Changes in Net Assets

PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013

PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013

Thousands of U.S.
dollars

Millions of yen

2013

2014

2014

¥25,041
18,9086,132¥29,436
21,776
7,660$286,016
211,584
74,432

Selling, general and administrative expenses
Operating income

5,424
707

6,498
1,161

63,145
11,288Non-operating income (expenses):
Interest income
Dividend income
Foreign exchange gains
Gain on sales of scrap
Insurance premiums refunded cancellation
Reversal of provision for soil contamination expenses
Interest expenses
Listing-related expenses
Provision for soil contamination expenses
Gain on sales of noncurrent assets
Loss on sales and retirement of noncurrent assets
Impairment loss
Loss on step acquisitions
Other, net
Total
Income before income taxes

13
36
62
20
77
61
(137)
(30)
－
0
(22)
(3)
－
9
88
796

13
7
47
22
－
－
(140)
－
(30)
12
(24)
－
(38)
(35)
(164)
997

133
74
459
220
－
－
(1,365)
－
(291)
123
(240)
－
(369)
(343)
(1,600)9,688

Net sales
Cost of sales
Gross profit

Income taxes:
Current
Deferred
Total
Income before minority interests
Minority interests
Net income

310
(32)
277
719

279
303
583
213
¥

－
213

¥

(0)
720

3,013
(319)
2,694
6,994
$

(8)
7,002

Millions of yen

Shareholders' equity

Capitalstock

Capitalsurplus

Valuation
Total
Foreigndifference
Treasury
Total
Remeasurements accumulated
Retainedcurrencyonstock, shareholders'of definedotherearnings
available- translation
at costequitybenefit plans comprehensive
for-sale adjustments
incomesecurities

Balance atApril 1, 2012

¥ 382

¥ 111

¥4,417¥(90)¥4,821¥ (0)¥ (524)¥ －¥ (525)¥－¥4,296

Issuance of
new shares

Income before minority interests
Other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

33

2013

2014

2014

¥213

¥ 719

$ 6,994

21
580
601
¥815

(19)
1,376
1,356
¥2,076(190)
13,371
13,182$20,176¥815－¥2,077(0)$20,184
(8)

Total
net
assets

291

291

−

−

583

−

−

−

−

−

583

−

−

(58)

−

(58)

−

−

−

−

−

(58)

Net income

−

−

213

−

213

−

−

−

−

−

213

Disposal oftreasury stock

−

−

−

90

90

−

−

−

−

−

90

Net otherchanges of
items during
the period

−

−

−

−

−

21

580

－

601

－

601

Balance at
March 31, 2013

674

403

4,572

－

5,649

20

55

－

76

－

5,726

Issuance of
new shares

897

897

−

−

1,794

−

−

−

−

−

1,794

Dividends fromsurplus

−

−

(196)

−

(196)

−

−

−

−

−

(196)

Net income

−

−

720

−

720

−

−

−

−

−

720

Net otherchanges of
items during
the period

−

−

−

－

−

(19)

1,376

(47)

1,308

9

1,317

Balance at
March 31, 2014

¥1,571¥1,300¥5,096¥ －¥7,968¥ 1¥1,432¥(47)¥1,385¥9¥9,362Thousands of U.S. dollars

Shareholders' equity

Accumulated other comprehensive income

Capitalstock

Capitalsurplus

Valuation
Total
Foreigndifference
Treasury
Total
Remeasurements accumulated
Retainedcurrencyonstock, shareholders'of definedotherearnings
available- translation
at costequitybenefit plans comprehensive
for-sale adjustments
incomesecurities

Balance atApril 1, 2013

$ 6,551$ 3,918$44,424$－$54,892$ 203

Issuance of
new shares

8,719

8,719

−

－

17,438

−

−

−

−

−

17,438Dividends fromsurplus

−

−

−

−

−

−

(1,910)−－(1,910)
7,002

−

−

(1,910)
7,002－

Net income

−

−

−

−

−

7,002

Net otherchanges of
items during
the period

−

−

−

－

−

(190)

13,371(464)

12,71888

12,806

Balance at
March 31, 2014$15,270$12,636$49,516$－$77,422$ 13$13,914$(464)$13,463$88$90,973

PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013

Thousands of U.S.
dollars

Minority
interests

Dividends fromsurplus

Consolidated Statements of Comprehensive Income

Millions of yen

Accumulated other comprehensive income

$

542

$

－

$

Minority
interests

Total
net
assets745$－$55,63834

Consolidated Statements of Cash Flows

Company Profile

PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013

(As of March 31, 2014)

Thousands of U.S.
dollars

Millions of yen

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase in provision for retirement benefits
Increase in net defined benefit liability
Increase (decrease) in provision for bonuses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for soil contamination expenses
Interest and dividend income
Insurance premium refunded cancellation
Interest expenses
Foreign exchange losses (gains)
Loss on sales and retirement of noncurrent assets
Loss on step acquisitions
Increase in notes and accounts receivable−trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable−trade
Others, net
SubtotalInterest and dividend income received
Interest expenses paid
Insurance premium refunded cancellation received
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Net decrease (increase) in time deposits
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Collection of long-term loans receivable
Payments of long-term loans receivable
Purchase of investments in subsidiaries and affiliates resulting inchange in scope of consolidation
Others, net
Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of common stock
Proceeds from disposal of treasury stock
Proceeds from stock issuance to minority shareholders
Cash dividends paid
Others, net
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

35

2013

2014

2014

¥

¥

997

$ 9,688

1,072
3
－
13
－
(243)
(50)
(83)
(49)
(77)
137
304
21
－
(155)
85
24
113
1,912
42
(137)
77
(204)
1,690

1,170
－
46
－
6
52
21
5
(21)
－
140
(45)
12
38
(312)
(149)
(167)
(127)
1,666
28
(160)
－
(339)
1,194

11,369
－
450
－
60
508
213
49
(207)
－
1,365
(440)
117
369
(3,038)(1,454)(1,627)(1,235)
16,188281(1,562)－(3,298)
11,609

(967)
－
28
(64)
(276)
122
(618)

(460)
(16)
359
(113)
－
174
(46)

(4,478)(162)
3,497(1,103)
－
1,697
(453)

－
3
(1,773)(1,155)
5(1,252)(11,225)
58(12,169)

796

Company name

PUNCH INDUSTRY CO., LTD.

Established1975

Capital1,571.54 million yen

Number of employees

3,761 (consolidated)

Head office

Meisan Takahama Bldg. 8F, 2-12-23 Konan, Minato Ward,Business

Manufacture and sale of mold and die components

Main banks

The Bank of Tokyo-Mitsubishi UFJ, Ltd.;Tokyo 108-0075, Japan

Mizuho Bank, Ltd.;

Sumitomo Mitsui Banking Corporation;
Resona Bank, Limited;

Sumitomo Mitsui Trust Bank, Limited

Company Home Page
Click on Investor Relations

The Punch Industry website contains various information,
including Company Overview, Business Overview,
and Investor Relations information.

http://www.punch.co.jp/English/
Top page

1,084－(1,695)
585
77
－
(58)
(35)
(41)
119
(5)
1,746
¥ 1,741(1,846)1,500(1,550)
1,783
－
10
(196)
(71)
(370)
193
(234)
1,741
¥ 1,506(17,938)
14,574(15,061)
17,333－99(1,910)(695)(3,598)1,882(2,276)
16,917$14,642

Investor Relations

IR e-Magazine
We provide business results, press releases, and other IR-related information via e-mail.
Please subscribe to our e-Magazine using this QR code or URL. (Japanese language only)

https://fofa.jp/punch/a.p/102/ (Japanese language only)

36

Punch Industry and Group Companies

Investor Information(As of March 31, 2014)(As of March 31, 2014)

PUNCH INDUSTRY CO., LTD.

Stock Information

PUNCH INDUSTRY CO., LTD.
Meisan Takahama Bldg. 8F, 2-12-23 Konan, Minato Ward, Tokyo

Phone: 03-3474-8007

Kitakami Plant
21-26-17 Murasakino, Kitakami City, Iwate Prefecture

Phone: 0197-68-3087

Miyako Plant
29-1 Daiichi-chiwari, Matsuyama, Miyako City, Iwate Prefecture

Phone: 0193-62-8007

Hyogo Plant
922-202, Aza-Higashihata, Tsuneyoshi-cho, Kasai City, Hyogo Prefecture

Phone: 0790-47-8077

Group Companies
PUNCH INDUSTRY INDIA PVT. LTD.

2-2-26, Zao-Matsugaoka, Yamagata City,
Yamagata Prefecture

Phone: 023-688-1770

No:97/A-1, SIDCO Nagar,
4th Street Villivakkam Chennai 600049 India
Phone： +91-44-42699644

PUNCH INDUSTRY (Dalian) CO., LTD.

PUNCH INDUSTRY MALAYSIA SDN. BHD.

Liaoning Province, People's Republic of China
Phone: +86-411-8761-3087

Nagasari Industrial Park No. 3061
Jalan Nagasari1 Prai Industry Zone
Prai Penang 13600 Malaysia
Phone： +60-4-3984826

PUNCH INDUSTRY (Wafangdian) CO., LTD.

PUNCH INDUSTRY SINGAPORE PTE. LTD.

No. 153 North Gongji Street, Dalian Wafangdian,Liaoning Province, People's Republic of China
Phone: +86-411-8550-8785

33 Ubi Avenue 3 #06-10
Vertex Lobby B 408868 Singapore
Phone： +65-6533-4151

PUNCH INDUSTRY (Wuxi) CO., LTD.

PUNCH INDUSTRY VIETNAM CO. LTD.

No. 11 Chunhui West Road,
Xishan Economic Development Zone, Wuxi
Jiangsu Province, People's Republic of China
Phone: +86-510-8826-6287

8th Floor. PTS Office Building 118
Huynh Tan Phat Street., Tan Thuan Tay ward,
District 7 HCMC Vietnam
Phone： +84-8-38720087

PUNCH INDUSTRY (Dongguan) CO., LTD.

PT. PUNCH INDUSTRY INDONESIA

Tangxia Industry Area Block B, Youyi Rd.,
Yongtou Village, Chang'an Town, Dongguan,
Guangdong Province, People's Republic of China
Phone: +86-769-8507-0387

PUNCH SPRING (Dalian) CO., LTD.
No. 3 Xingcheng Road, Dalian Economy
and Technology Development Zone,
Liaoning Province, People's Republic of China

37

20,000,000

Total number of shares issued

8,961,200

Number of shareholders

3,391

Stock exchange listingFirst Section, Tokyo Stock Exchange

Security code

6165

Number of shares per trading unit

100

Transfer agent

Sumitomo Mitsui Trust Bank

Foreign companies

Accounting auditors

Deloitte Touche Tohmatsu LLC

Financial institutions

Komplek Griya Inti Sentosa Jl.
Griya Agung No. 3,
Sunter Agung Jakarta 14350 Indonesia
Phone： +62-21-641-0730

Name

MT Kosan Co., Ltd.

6,268,483 69.95%

Other domestic companies

1,220,700 13.62%

2.26%
1.90%
1,099,500 12.27%
202,500

Securities companies

170,017

Stock Prices and Trading Volumes
Number ofPercentage ofshares held shares held (%)

1,090,000

12.16

Yuji Morikubo

972,000

10.84

Punch Industry Employees' Stock
Ownership Scheme

656,700

7.32

Tetsuji Morikubo

650,000

7.25

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

443,700

4.95

Michiko Kamba

298,000

3.32

Nomura Trust and Banking Co., Ltd. (trust account)

205,000

2.28

Hirohisa Morikubo

128,000

1.42

Japan Securities Finance Co., Ltd.

116,400

1.29

Japan Trustee Services Bank, Ltd. (trust account)

Breakdownof
Shareholders

Individuals and others

Major Shareholders (Top 10)

Pintec Corporation

No. 5 Jinzhou Street, Dalian Economy
and Technology Development Zone,

Total number of authorized shares

1.10(thousand shares)
3,000

(yen)

Trading volumes (vertical axis) 1,500

2,000

1,000

1,000

500

0

* In the percentage of shares held, figures have been rounded to the nearest hundredth of a percent.

0

12/
2012

4/
2013

8/
2013

12/
2013

3/
2014

Inquiries
IR & PR Division, Administration Department PUNCH INDUSTRY CO., LTD.
Meisan Takahama Bldg. 8F, 2-12-23 Konan, Minato Ward, Tokyo 108-0075
Phone: 03-5460-8237 Fax: 03-3471-8100 E-mail: info-corp@punch.co.jp

Disclaimer Regarding Forward-Looking Statements
This annual report contains forward-looking statements regarding Punch Industry's future plans, strategies, and forecasts. Such statements
are not based on historical fact, but are expectations, estimates, and forecasts based on information currently available. These expectations,estimates, and forecasts involve many potential risks and uncertainties, including changes to the economy, exchange rate variations, changes in
the competitive environment, the outcome of current or future litigation, or the continued usefulness of capital procurement. As a result, actual
business results may differ materially from these statements. Accordingly, investors are cautioned not to place undue reliance on forward-looking
statements. Punch Industry is not obliged to amend these forward-looking statements based on new information or future events.

38