FY3/16 Financial Statements [J-GAAP]May 13, 2016
Exchanges listed on: Tokyo Stock Exchange (First Section)
URL: http://www.matsuda-sangyo.co.jp
Yoshiaki Matsuda
Atsushi Kinoshita
TEL: +81-3-5381-0728
June 28, 2016
June 28, 2016

Company name: Matsuda Sangyo Co., Ltd.
Company code: 7456
Representative:
Representative Director/President
Inquiries:
Director in charge of IR
Date of regular shareholders’ meeting:Date of filing the financial report:

Expected dividend payment date:June 29, 2016
Supplementary materials for financial results prepared: Yes
Information meeting for financial results held: Yes (for institutional investors and analysts)(Figures are rounded down to the nearest million yen)
1. FY3/16 Consolidated results (April 1, 2015–March 31, 2016)(1) Consolidated operating results
Net Sales(millions of yen)

(Percentages are year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Operating income(%) (millions of yen)(%) (millions of yen)

FY3/16
162,065(9.7)
3,125 (42.2)
FY3/15
179,523
8.5
5,410
20.2
(Note) Comprehensive income: FY3/16 1,761 million yen (-61.1%)
Earnings per
share

Diluted earnings
per share(yen)(millions of yen)(%)

3,782 (35.1)
2,573
5,832
19.2
3,342
FY3/15 4,534 million yen (+9.3%)(23.0)
4.7

Return on equity

(yen)

(%)

Ordinary income /total assets(%)

FY3/1697.23―
FY3/15125.61―(Reference) Equity in earnings or losses of affiliates: FY3/16

5.0
6.8
605 million yen

Operating margin

(%)

(%)

5.3
8.3
FY3/15 443 million yen

1.9
3.0

(2) Consolidated financial position
Total assets

Shareholders’ equity
ratio

Net assets(millions of yen)(millions of yen)

Net assets per share

(%)

(yen)

69,926
51,83474.1
73,42751,176
69.7(Reference) Shareholders’ equity: FY3/16 51,815 million yen FY3/15 51,173 million yen

1,967.65
1,923.86

FY3/16
FY3/15(3) Consolidated cash flows
Cash flow fromoperating activities
FY3/16
FY3/15

Cash flow frominvesting activities

Cash flow fromfinancing activities

Cash and cash
equivalents at end of
period(millions of yen)(millions of yen)(millions of yen)(millions of yen)

8,593
(1,413)(1,421)(2,263)(3,274)
2,426

9,524
5,861

2. Dividends
Dividends per share
Q1

Q3

(yen)

(yen)

Q4
(yen)

(yen) (millions of yen)

(%)

(%)

―
―

12.00
14.00

―
―

13.00
14.00

25.00
28.00

19.9
28.8

1.3
1.4

―

14.00

―

14.00

28.00

(yen)

FY3/15
FY3/16
FY3/17(projections)

Q2

Total dividends Payout ratio Dividends/
net assets(consolidated)(annual)Annual(consolidated)
664
739

Breakdown of interim dividend for FY3/16: ordinary dividend ¥13.00, commemorative dividend ¥1.00
Breakdown of year-end dividend for FY3/16: ordinary dividend ¥13.00, commemorative dividend ¥1.00

28.4

3. FY3/17 Consolidated earnings projections (April 1, 2016–March 31, 2017)
Net sales

1H FY3/17
FY3/17(Percentages are year-on-year changes)
Profit attributable to Earnings per
Ordinary income
owners of parent
share

Operating income(millions of yen)(%)

86,000180,000

0.7
11.1(millions of yen)(%)(millions of yen)

1,600 (21.9)
3,500 12.0(%)

(millions of
yen)

(%)

(yen)

1,800 (23.6)
3,900
3.1

1,200
2,600

(23.5)
1.0

45.56
98.73

* Notes(1) Material changes in subsidiaries during the fiscal year (changes in specified subsidiaries resulting fromchanges in scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates and restatement of revisions
1) Changes in accounting policies with revision of accounting standards:
Yes2) Changes in accounting policies other than the above:No3) Changes in accounting estimates:
No4) Restatement of revisions:No(3) Number of issued shares (common shares)
1) Number of issued shares(including treasury shares)
2) Number of treasury shares
3) Average number of shares during the period

FY3/16 28,908,581 shares FY3/15 28,908,581 shares
FY3/16 2,574,801 shares FY3/15 2,308,999 shares
FY3/16 26,461,984 shares FY3/15 26,612,878 shares(Reference) Summary of non-consolidated results
1. FY3/16 Non-consolidated results (April 1, 2015–March 31, 2016)(1) Non-consolidated operating results
Net sales
Operating income(millions of yen)

FY3/16
FY3/15

159,116
177,386(%) (millions of yen)

(10.3)
8.8

Net income per share
FY3/16
FY3/15(Percentages are year-on-year changes)
Ordinary income
Net income(%) (millions of yen)

2,623
4,600

(43.0)
24.5

2,973
4,779

(%) (millions of yen)

(37.8)
20.8

1,969
2,862

(%)

(31.2)
15.3

Diluted net income
per share

(yen)

(yen)

74.41
107.57––(2) Non-consolidated financial position
Total assets
FY3/16
FY3/15

Net assets

Shareholders’ equity
ratio

Net assets per share(millions of yen)(millions of yen)

(%)

(yen)

62,31365,41944,40943,702

71.3
66.8

1,686.39
1,642.98(Reference) Shareholders’ equity: FY3/16

44,409 million yen

FY3/1543,702 million yen*Presentation of implementation status for audit procedures
The audit procedure based on the Financial Instruments and Exchange Act does not apply to this report. At thetime of disclosure of this report, audit procedures for financial statements pursuant to the Financial Instruments andExchange Act had not been completed.
*Explanation of the proper use of earnings projections and other notes
This document contains earnings projections and other information that constitute forward-looking statements.
These statements are based on reasonable assumptions and information currently available to the Company andprovide no guarantee of future performance. Actual results may differ materially from forward-looking statements due
to a number of factors. For more information about earnings projections assumptions and notes regarding the use of
earnings projections, please refer to “1. Operating results (1) Analysis of operating results and financial position” onpage 2.

Contents
1. Operating results ....................................................................................................................................... 2(1) Analysis of operating results and financial position ...................................................................... 2(2) Analysis of financial position ......................................................................................................... 3(3) Basic policy on distribution of profits and dividends for FY3/16 and FY3/17 ............................... 4(4) Business and other risks .............................................................................................................. 5
2. Corporate group............................................................................................................................... 6
3. Management policy ......................................................................................................................... 7(1) Basic corporate management policy ............................................................................................ 7(2) Business indicators used as benchmarks .................................................................................... 7(3) Medium- to long-term business strategy ...................................................................................... 7(4) Issues faced by the Group............................................................................................................ 7(5) Other important corporate management issues ........................................................................... 7
4. Basic stance on selection of accounting standards.................................................................... 8
5. Consolidated financial statements ................................................................................................ 9(1) Consolidated balance sheet ......................................................................................................... 9(2) Consolidated statements of income and comprehensive income .............................................. 11(Consolidated statements of income)................................................................................................ 11(Consolidated statements of comprehensive income) ...................................................................... 12(3) Consolidated statements of changes in shareholders’ equity .................................................... 13(4) Consolidated statements of cash flows ...................................................................................... 15(5) Notes on consolidated financial statements ............................................................................... 16(Notes on premise of a going concern)............................................................................................. 16(Changes in accounting standards, etc.) .......................................................................................... 16(Segment information, etc.) .............................................................................................................. 171

1. Operating results(1) Analysis of operating results and financial position
Consolidated operating results
Net sales
Operating income
Ordinary income
Profit attributable to ownersof parent(millions of yen) [year-on-year comparison]
162,065 [(17,457)(9.7%) ]3,125 [
(2,285)(42.2%) ]3,782 [
(2,050)(35.1%) ]
2,573

(769)

[

(23.0%)]

During the consolidated fiscal year ended March 31, 2016, the Japanese economy continued to recover at amoderate pace, supported by improving employment conditions and an upturn in corporate earnings, centered on the
non-manufacturing sector. However, there were signs of weakness in production activity in the manufacturing sector
and in consumer confidence. The outlook for the economy also remained uncertain, partly due to concerns of aslowdown in China and other emerging economies in Asia.
Against this backdrop, the Matsuda Sangyo Group’s precious metals business segment worked hard to secure
precious metals materials, boost sales of products such as precious metal chemical products, and expand its
industrial waste treatment outsourcing business. The segment also actively upgraded business sites overseas,
including the preparations to start up full-scale operations of a new precious metals refining plant by the Group’s
subsidiary in Vietnam. The food business segment also reinforced its overseas business sites and worked to provide
products that address customer needs in order to expand sales volume.
As a result, consolidated net sales decreased 9.7% year on year to ¥162,065 million and operating income
dropped 42.2% to ¥3,125 million. Ordinary income was ¥3,782 million, down 35.1% year on year, and profit
attributable to owners of parent was ¥2,573 million, down 23.0% year on year, despite an increase in equity inearnings of affiliates under non-operating income.
The following is a summary of business by segment:

Consolidated results by segment
Segment
Precious metals business
104,164
segment
Food business segment
57,971Eliminations or corporate
(70)
Total
162,065(millions of yen) [year on year comparison]
Operating income

Net sales[(20,314)(16.3%)

]

2,347

[

(2,114)(47.4%)][+2,856

+5.2%

]

[

(171)

(18.1%)][(17,457)(9.7%)

]

777
―
3,125

[

(2,285)(42.2%)]

Precious metals business segment:
In the precious metals division, production at key customers in the semiconductor and electronics parts sectors
varied depending on market trends for smartphones, autos and other products, with production activity trending down
overall. The photosensitive materials sector continued to face a contracting market. Against this backdrop, the Grouphandled lower volumes in precious metal recycling and industrial waste treatment, sales volume for precious metals
products and electronic materials declined year on year, and the price of precious metals except gold fell. As a result,sales overall were lower than in the previous fiscal year.
As a result, net sales for the precious metals business segment decreased 16.3% year on year to ¥104,164 million,
and operating income declined 47.4% year on year to ¥2,347 million.

2

Food business segment:
Despite modest growth in the industrial production index in the food processing sector, the food business segment
continued to face a challenging operating environment amid signs of persistent weakness in consumer confidence.
Against this backdrop, although sales volume for agricultural products declined, sales in the segment increased year
on year due to higher sales volume for seafood products and livestock products and higher prices.
As a result, net sales for the food business segment totaled ¥57,971 million (up 5.2% year on year) and operating
income decreased to ¥777 million (down 18.1% year on year).

Outlook for the fiscal year ending March 2017
Consolidated earnings projections
Net sales
Operating income
Ordinary income
Profit attributable to owners of parent(millions of yen) [Comparison to FY3/16]
180,000 (+17,934+11.1% )3,500 (
+374
+12.0% )3,900 (
+117
+3.1% )
2,600 (
+26
+1.0% )

Although the outlook remains uncertain due to a potential negative impact from weaker growth in China and othermarkets overseas and from the Kumamoto earthquakes, we expect the economy to continue recovering at a modest
pace, supported by the government’s fiscal and monetary policies. Against this backdrop, in the precious metals
business segment, we plan to continue strengthening domestic and overseas operating sites and expand the scopeof our business by proactively cultivating new demand.
In the food business segment, we will work to secure steady earnings through marketing activities tailored tocustomer needs, supported by the use of our overseas operating sites.

(2) Analysis of financial position
1) Assets, liabilities and net assets
Assets:Total assets decreased ¥3,500 million year on year to ¥69,926 million. This mainly reflected decreases in notes
and accounts receivable – trade, inventories and other current assets, which outweighed an increase in cash anddeposits.
Liabilities:
Total liabilities decreased ¥4,159 million year on year to ¥18,091 million. This chiefly reflected decreases innotes and accounts payable – trade, loans and accrued income taxes.
Net assets:
Net assets totaled ¥51,834 million, an increase of ¥658 million from the previous fiscal year-end. This mainlyreflected an increase in net assets from profit attributable to owners of parent, which exceeded decreases in net
assets due to the payment of dividends, the acquisition of treasury shares, and declines in foreign currencytranslation adjustment and other items under accumulated other comprehensive income.

2) Cash flow status
As of March 31, 2016, the balance of cash and cash equivalents (hereafter, “cash”) stood at ¥9,524 million, an
increase of ¥3,663 million year on year. The followings are the cash flow status under review and the factors during
the fiscal period.
Cash flows from operating activities:
Operating activities provided net cash of ¥8,593 million, an increase of ¥10,007 million compared with net cashused of ¥1,413 million in the previous fiscal year. This mainly reflected the difference between cash provided fromincome before income taxes, depreciation, decrease in notes and accounts receivable－trade, and decrease ininventories, and cash used for income taxes paid.

3

Cash flows from investing activities:
Investing activities used net cash of ¥1,421 million, a decrease of ¥842 million compared with net cash used of¥2,263 million in the previous fiscal year. This was mainly due to the purchase of property, plant and equipment
related to the installation and upgrade of equipment at the Group’s plants and the purchase of shares ofsubsidiaries.
Cash flows from financing activities:
Financing activities used net cash of ¥3,274 million, a decrease of ¥5,700 million compared with net cash
provided of ¥2,426 million in the previous fiscal year. This primarily reflected a decrease in loans, a decrease in
cash due to dividends paid, and the purchase of treasury shares.
(Reference) Trend in cash flow indicators
FY3/12
Shareholders’ equity ratio
Shareholders’ equity ratio on a market value basis
Ratio of interest-bearing debt to cash flow
Interest coverage ratio

67.0
61.1
0.8
111.9

FY3/13

FY3/14

70.4
61.9
1.5
62.1

71.5
50.0
―
―

FY3/15

FY3/16

69.7
55.6
―
―

74.1
44.1
0.6
215.9

(Notes) Shareholders’ equity ratio: Shareholders’ equity/total assets
Shareholders’ equity ratio on a market value basis: Total market value of shares/total assets
Ratio of interest-bearing debt to cash flow: Interest-bearing debt/cash flow from operating activities
Interest coverage ratio: Cash flows from operating activities/interest paid
* All the indicators are calculated using consolidated financial figures.
* The total market value of shares is calculated as the product of the share price and the number of issued shares, excluding treasury shares,at the end of the fiscal year.
* Cash flows from operating activities is the cash flows from operating activities shown in the consolidated statements of cash flows.
Interest-bearing debt is the total amount of debt shown in the consolidated balance sheet on which interest is paid. In addition,interest paid is the amount of interest paid shown in the consolidated statements of cash flows.
* The ratio of interest-bearing debt to cash flow and the interest coverage ratio for FY3/14 and FY3/15 are not provided since cash flows fromoperating activities were negative.

(3) Basic policy on distribution of profits and dividends for FY3/16 and FY3/17
The Company’s basic policy on distribution of profits is to meet shareholder expectations by continuing to pay
stable dividends while ensuring sufficient internal reserves to invest in growth. In line with this policy, the Company
aimed to increase value per share for shareholders during the fiscal year under review by acquiring treasury shareson a flexible basis, taking into account market conditions.
Based on this policy, the Company plans to pay a year-end dividend of ¥14, comprising an ordinary dividend of ¥13
and a commemorative dividend of ¥1 to mark the 20th anniversary of the Company’s share listing. In combination
with the interim dividend of ¥14, dividends for the full fiscal year are expected to be ¥28 per share.
The Company expects to pay ¥28 per share in dividends for the fiscal year ending March 2017, consisting of ¥14
per share as an interim dividend and ¥14 per share as a year-end dividend. The Company will continue to distributeprofits to its shareholders in a comprehensive way according to the operating results.

4(4) Business and other risks
The main business risks recognized by the Group are described below. If these risks become reality, they may
have a major effect on the Company’s business performance and financial position. In recognition of these risks, ourTRM (Total Risk Management) Committee will develop a risk management system with the aim of avoiding risks andminimizing the effect of such risks if they occur.
1) Price fluctuations for core products and commodities
a. Products
The Group’s products mainly consist of the precious metals such as gold, silver, platinum and palladium; the main
raw materials used in their production are the recycled raw materials containing the various precious metals. As ageneral rule, the purchase price is based on the market price for precious metal bullion and the market prices areaffected by changes in the international commodities market and fluctuation in exchange rates. The prices of theseproducts are also determined based on the market price. The Group employs commodity futures to avoid pricing risk
attendant to fluctuating prices, but it is possible that changes in the price of precious metals could affect its operating
results.
b. Commodities
A large portion of the Group’s processed raw materials for food products, which consist mainly of surimi fish pasteand other seafood, livestock products, and agricultural products, come from overseas. Both the purchase and sales
price of these products are affected by fluctuations in commodity market prices and exchange rates. The Groupaddresses these changes by using forward exchange contracts and passing on price changes to customers; however,these price changes could affect its operating results.

2) Quality issues related to the Group’s food business segment
The Group purchases a wide range of products from overseas for the food business segment, including processedseafood ingredients comprised mainly of surimi fish paste, shrimp, crab, squid ,octopus, processed agricultural
products comprised mainly of fresh, dried, and frozen vegetables, and processed livestock products comprised
mainly of various types of meat of beef, chicken and others, and chicken eggs. The Group also sells these products
to food manufacturers of surimi fish paste, frozen food, prepared food, confectionery and other food products on awholesale basis. The Group carries out strict labeling of food products as specified by law, and make every effort tostrengthen its quality control training and contamination countermeasures for overseas food products. However, its
operating results could be affected if food safety problems occurred and measures such as a ban on imports were
imposed.

3) Addressing legal regulations
There is a trend towards stricter environmental laws as a result of growing societal concern over environmental
issues. If regulations of the precious metals business segment were tightened, various measures such as increasing
capital expenditures might become necessary. The Group also conducts various operations including collecting,transporting and disposing of waste as a business covered by the Waste Disposal and Public Cleaning Law, and thecontinuation of our business is based on the major assumption that the Group complies with the various laws.
In addition to establishing corporate ethics rules, which clearly state corporate ethics and legal compliance inwriting, the Group has created compliance rules to set forth how compliance is to be implemented, and is working toachieve compliance in all management activities.

4) Management of waste and other materials
The Group uses poisonous and toxic substances at the production stages but appropriately processes the waste
liquid and atmospheric emissions, taking the environment into consideration. However, operating results could be
affected if a problem occurred to the management of these materials for any various reasons, including an accident at
the plant.

52. Corporate group
Matsuda Sangyo Group is composed of the Company, 15 subsidiaries and 1 affiliated company; the main
businesses of the Group are the precious metals business segment, which involves the recovery and refining of
precious metals, the sale of items such as precious metal bullion and electronic materials, and the collection,transportation, and processing of industrial wastes; and the food business segment, which involves selling processedfood ingredients and providing distribution services. The following subsidiaries support the Company regarding
business for regions and industries related to the precious metals business segment: Matsuda Ecology. Co., Ltd.,
Japan Medical Technology Co., Ltd., Hokkaido Aoki Kagaku Co., Ltd., Z.E.R.O.-Japan, Co., Ltd., Matsuda Sangyo(Thailand) Co., Ltd., Matsuda Sangyo (Philippines) Corporation, South Gate Realty Holding Inc., Matsuda Sangyo(Singapore) Pte. Ltd., Matsuda Resource Recycling (Suzhou) Co., Ltd., Matsuda Sangyo (Malaysia) Sdn. Bhd., andMatsuda Sangyo (Vietnam) Co., Ltd. The subsidiary Matsuda Ryutsu Co., Ltd., is responsible for distribution for theCompany’s food business segment, while Gulf Foods Co., Ltd., Matsuda Sangyo Trading (Qingdao) Co., Ltd. andMatsuda Sangyo Trading (Thailand) Co., Ltd. provide support regarding business for regions and industries related to
the food business segment. The affiliated company Nippon Micrometal Corporation handles the production ofelectronic materials, particularly gold bonding wires, the main product for the precious metals business segment.
The following is an organizational chart of the business:(Notes)1. Affiliated companies are all accounted for under the equity method.
2. South Gate Realty Holding Inc. owns land of Matsuda Sangyo (Philippines) Corporation.

63. Management policy(1) Basic corporate management policy
Matsuda Sangyo Group’s corporate ethics are rooted in “making effective use of the earth’s resources andcontributing to society through business,” and the Group has developed its business on the three pillars: the precious
metals business, in working to recycle and make effective use of precious metals which are limited resources; theenvironmental business, which aims to pass on a clean environment to the next generation; and the food business,
which aims to provide stable food resources, the abundant bounty from the earth.
The Group’s basic management policy is to “focus on customers” and “focus on shareholders.” The Group sees its
path to growth as understanding customer needs precisely and working for mutual survival and prosperity with its
customers. The Group’s goal is to contribute to securing resources through its resource recycling business, tocontribute to the development of cutting-edge technology through precious metal processing and sales, to contributeto environmental protection though its environmental business, and to contribute to culinary life and culture through its
food business while striving to expand the scope of its business and earn reasonable profits through sustained
marketing efforts.
(2) Business indicators used as benchmarks
The Group is using the ratio of ordinary income to total assets as a performance indicator, aiming to achieve a ratioof at least 10% over the medium term in order to increase corporate value. In the fiscal year under review, the ratio
was 5.3%, falling short of that target, but the Company will continue to work hard to increase profitability and enhance
management efficiency.
(3) Medium- to long-term management strategy
The Group has formulated a new medium-term management plan (from fiscal 2016 to fiscal 2018), starting in thefiscal year ending March 31, 2017. The plan has five medium- and long-term management strategies: boost earnings
in existing businesses, cultivate new sources of earnings, actively expand the business in East Asia, build an
optimum management framework, and nurture and hire human resources. Based on these strategies, the Company
will use the precious metals business segment to expand operations and drive growth, and the food businesssegment to generate stable growth, aiming to further increase corporate value.
Under the medium-term management plan (from fiscal 2016 to fiscal 2018), the Company is aiming forconsolidated net sales of ¥210 billion and consolidated operating income of ¥5 billion in the fiscal year ending March
31, 2019, the plan’s final year.
(Note) These performance targets are based on the current operating environment and may change due to a range of factors,
including developments in the operating environment.

(4) Issues faced by the Group
Precious metals business segment:
In the precious metals business, we will boost earnings potential by strengthening products and services in
response to global competition. Aiming to become East Asia’s leading refining company, we will upgrade domestic
operating sites and reinforce our regional strategy for overseas sites. In Japan, we will continue to improve our
precious metal recovery technology and actively conduct R&D to develop new precious metal chemical products thatmeet the needs in the electronics industry and other sectors. In addition, in overseas, we plan to increase sales of
products such as electronic materials and precious metal chemical products and expand the collection of recyclable
precious metals at all our local companies in Thailand, the Philippines, Singapore, Malaysia and China (Suzhou), andat our local company in Vietnam, which is ramping up operations at a new metal refining plant.
In the environmental business, we will continue to leverage the Group’s waste acid and alkali treatment facilities,
nationwide waste disposal licenses and distribution network, expanding the industrial fields we serve in response tochanging demand.
Food business segment:
In the food products business segment, we will leverage the Group’s track record of expertise in quality assurance
to supply safe, reliable, high-quality food products, aiming to expand the business by standing out in the market andaddressing the changing needs of client industries. Against this backdrop, we will work to be more profitable byresponding to rising prices of imported raw materials. We also intend to secure high-quality supply sources andcultivate new customers by utilizing two overseas subsidiaries: Matsuda Sangyo Trading (Qingdao) Co., Ltd. in
Qingdao, China, and Matsuda Sangyo Trading (Thailand) Co., Ltd. in Bangkok, Thailand.
(5) Other important corporate management issues
The Company engages in real estate lease transactions, non-life insurance transactions, and clerical work agency

7

with Matsuda Bussan, the Company’s main shareholder. The terms of the lease were determined in a fair manner bytaking into account the appraised value of the real estate as determined by a real estate appraiser and prices in theneighboring area. Payments of non-life insurance premiums are made based on the same terms that are commonlyused for insurance transactions.
4. Basic stance on selection of accounting standards
Many of the Group’s stakeholders are domestic shareholders, creditors, business partners and so on, and theGroup has limited need to procure funds from overseas. Consequently, the Group has adopted Japanese Generally
Accepted Accounting Principles (Japanese GAAP) as its accounting framework. However, the Group will look into thepossibility of adopting International Financial Reporting Standards (IFRS), taking into account conditions in Japan andoverseas and trends in accounting standard adoption by other companies listed on the First Section of the Tokyo
Stock Exchange.

85. Consolidated financial statements(1) Consolidated balance sheet(millions of yen)
FY3/15(March 31, 2015)

FY3/16(March 31, 2016)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade

6,003
19,2189,524
17,499Merchandise and finished goods
Work in process

16,576309

13,966314

Raw materials and supplies
Deferred tax assets

6,667
485

5,520
439

Accounts receivable – other
Others

653
3,501

330
1,742

(41)

(9)

53,37449,328

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

7,870

8,241

Accumulated depreciation(4,096)(4,319)Buildings and structures, net

3,773

3,922

Machinery, equipment and vehicles

7,199

7,748

Accumulated depreciation(5,115)(5,673)

Machinery, equipment and vehicles, net

2,083

2,074

7,852
150

7,682
334

(60)

(100)

Leased assets, net

89

233

Construction in progress

419

88

1,047
(772)

1,068
(844)

Land
Leased assets
Accumulated depreciation

Others
Accumulated depreciation
Others, net

274

224

14,494

14,226

Others188707

Total intangible assets

188

707

Investment securities
Deferred tax assets

3,911
-

4,131
11

OthersAllowance for doubtful accounts

1,605
(147)

1,589
(68)

Total property, plant and equipment
Intangible assets

Investments and other assets

Total investments and other assets

5,369

5,663

Total non-current assets

20,052

20,59773,427

69,926

Total assets

9

(millions of yen)
FY3/15(March 31, 2015)

FY3/16(March 31, 2016)

Liabilities
Current liabilities
Notes and accounts payable – trade

7,922

7,154

Short-term loans payable
Current portion of long-term loans payable

3,582
1,298

1,559
1,153

Lease obligations
Income taxes payable

33
1,401

64
403

Deferred tax liabilities
Provision for bonuses

627

1
601

Accounts payable - other
Others

856
2,779

537
2,515

Total current liabilities

18,502

13,990

2,546
56

2,592
169

Deferred tax liabilities
Provision for directors’ retirement benefits

408
599

400
664

Net defined benefit liability
Others

113
24

246
27

Total non-current liabilities

3,748

4,101

22,25018,091

Shareholders’ equity
Common stock

3,559

3,559

Capital surplus
Retained earnings

4,008
43,942

4,008
45,798Treasury shares(2,621)(3,008)

Total shareholders’ equity

48,88850,357543

473

Non-current liabilities
Long-term loans payable
Lease obligations

Total liabilities
Net assets

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

(79)

(76)

Foreign currency translation adjustments
Remeasurements of defined benefit plans

1,798
22

1,198
(138)

Total accumulated other comprehensive income

2,285

1,458

2

18

51,176

51,83473,427

69,926

Non-controlling interests
Total net assets
Total liabilities and net assets

10(2) Consolidated statements of income and comprehensive income(Consolidated statements of income)
FY3/15(April 1, 2014 –March 31, 2015)
179,523
162,703
16,82011,4095,410(millions of yen)
FY3/16(April 1, 2015 –March 31, 2016)
162,065
146,734
15,331
12,206
3,125

10
18

9
21

443

605

16
29
2
2
47
571

15
9
19
60
54
796

46
57
19
8
18
149
5,832
5,832
2,070
418

39
21
17
60
139
3,782
3,782
1,039
153

Total income taxes

2,489

1,192

Profit

3,343

2,589

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodPurchase discounts
House rent income
Insurance income
Subsidy income
OthersTotal non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Cost of lease revenue
Loss on retirement of non-current assets
OthersTotal non-operating expenses
Ordinary income
Income before income taxes
Income taxes – current
Income taxes – deferred

Profit attributable to non-controlling interests
Profit attributable to owners of parent

11

0

16

3,342

2,573

(Consolidated statements of comprehensive income)
FY3/15(April 1, 2014 –March 31, 2015)
3,343(millions of yen)
FY3/16(April 1, 2015 –March 31, 2016)
2,589

Valuation difference on available-for-sale securities

290

(69)

Deferred gains or losses on hedges

(165)

3

Foreign currency translation adjustment

860

(597)

Remeasurements of defined benefit plans
Share of other comprehensive income (loss) ofentities accounted for using equity method
Total other comprehensive income (loss)

37

(159)

167

(4)

1,191

(827)

4,534

1,761

4,533

1,745

0

16

ProfitOther comprehensive income

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests12(3) Consolidated statements of changes in shareholders’ equity
FY3/15 (April 1, 2014–March 31, 2015)(millions of yen)
Shareholders’ equity
Commonstock
Balance at the
beginning of period
Cumulative effects
of changes inaccounting policies
Restated balance

3,559

CapitalsurplusRetainedearnings

4,008

41,311

Treasuryshares(2,526)

(72)
3,559

4,008

41,238

Total
shareholders’equity46,353(72)(2,526)

46,280Change of items during
the period
Dividends fromsurplusProfit attributable toowners of parent
Purchase oftreasury shares

(639)

(639)

3,342

3,342
(95)

(95)

Net changes of
items other thanshareholders’ equity
Total change of items
during the period

―

―

2,703

(95)

2,607

Balance at the end of
the period

3,559

4,008

43,942(2,621)

48,888

Accumulated other comprehensive income
Valuationdifferenceonavailablefor-salesecurities
Balance at the
beginning of period
Cumulative effects
of changes inaccounting policies
Restated balance

252

Deferred
gains orlosses onhedges86

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

770

(14)

1,094

1

Total net
assets47,449
(72)

252

86

770

(14)

1,094

1

47,376

Change of items
during the period
Dividends fromsurplusProfit attributable toowners of parent
Purchase oftreasury shares
Net changes of
items other thanshareholders’ equity

(639)
3,342
(95)
290

(165)

1,028

37

1,191

0

1,192

Total change of items
during the period

290

(165)

1,028

37

1,191

0

3,799

Balance at the end of
the period

543

(79)

1,798

22

2,285

2

51,17613

FY3/16 (April 1, 2015–March 31, 2016)(millions of yen)
Shareholders’ equity
Commonstock
Balance at the
beginning of period
Cumulative effects
of changes inaccounting policies
Restated balance

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’equity

3,559

4,008

43,942(2,621)

48,888

3,559

4,008

43,942(2,621)

48,888Change of items during
the period
Dividends fromsurplusProfit attributable toowners of parent
Purchase oftreasury shares

(716)

(716)

2,573

2,573
(387)

(387)

Net changes of
items other thanshareholders' equity
Total change of items
during the period

―

―

1,856

(387)

1,469

Balance at the end of
the period

3,559

4,008

45,798(3,008)50,357

Accumulated other comprehensive income
Valuationdifferenceonavailablefor-salesecurities
Balance at the
beginning of period
Cumulative effects
of changes inaccounting policies
Restated balance

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets

543

(79)

1,798

22

2,285

2

51,176

543

(79)

1,798

22

2,285

2

51,176

Change of items
during the period
Dividends fromsurplusProfit attributable toowners of parent
Purchase oftreasury shares
Net changes of
items other thanshareholders’ equity

(716)
2,573
(387)
(69)

2

(600)

(161)

(827)

16

(811)

Total change of items
during the period

(69)

2

(600)

(161)

(827)

16

658

Balance at the end of
the period

473

(76)

1,198

(138)

1,458

18

51,83414

(4) Consolidated statements of cash flows(millions of yen)
FY3/16(April 1, 2015–
March 31, 2016)

FY3/15(April 1, 2014–
March 31, 2015)
Cash flows from operating activities
Income before income taxes

5,832

3,782

Depreciation

1,316

1,219

(59)

(111)

3

(28)

Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement
bonusesInterest and dividend income

(99)

(98)

3

37

(29)

(31)

Interest expenses
Share of (profit) loss of entities accounted for using equity
methodDecrease (increase) in notes and accounts receivable – trade

46

39

(443)

(605)

(2,580)

1,722

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

Decrease (increase) in accounts receivable – other

719

322

(3,906)

3,587

Increase (decrease) in accounts payable – trade

(356)

(738)

Increase (decrease) in accounts payable – other

(348)

(356)

Others

(424)

1,679

Subtotal(325)

10,420Interest and dividend income received

185

292

(Increase) decrease in inventories

Interest paid

(45)

(39)

Income taxes paid

(1,227)(2,080)Net cash provided by (used in) operating activities(1,413)

8,593

(124)

-

Cash flow from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits-

142

Purchase of property, plant and equipment(1,902)(954)

Proceeds from sales of property, plant and equipment-

47

Purchase of intangible assets

(31)

(78)

Purchase of investment securities

(9)

(9)

-

2

-

(481)

(195)

(88)

(2,263)(1,421)

Net change in short-term loans payable (‘-’ means decrease)

2,235(2,023)

Proceeds from long-term loans payable

1,600

1,200

Repayment of long-term loans payable(623)(1,298)Purchase of treasury shares

(95)

(387)

Cash dividends paid

(639)

(716)

Others

(51)

(49)

2,426

(3,274)

Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
OthersNet cash provided by (used in) investing activities
Cash flow from financing activities

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

314

(234)

Change in cash and cash equivalents (‘-’ means decrease)

(937)

3,663

Cash and cash equivalents at beginning of period

6,798

5,861

Cash and cash equivalents at end of period

5,861

9,524

15

(5) Notes on consolidated financial statements(Notes on premise of a going concern)
There is nothing to report.
(Changes in accounting standards, etc.)(Application of Accounting Standard for Business Combinations, etc)
The Company has applied the “Accounting Standard for Business Combinations” (Accounting Standards Board ofJapan (ASBJ) Statement No. 21, September 13, 2013), the “Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, September 13, 2013) and the “Accounting Standard for Business Divestitures”(ASBJ Statement No. 7, September 13, 2013) from the fiscal year under review. As a result, the accounting method
was changed to record the difference arising from changes in the equity in subsidiaries under ongoing control of theCompany as capital surplus, and acquisition-related costs as expenses for the fiscal year in which they are incurred.
In addition, with respect to any business combination entered into on or after the first day of the fiscal year underreview, the accounting method was changed to reflect adjustments to the allocation of acquisition cost underprovisional accounting treatment on the consolidated financial statements of the financial period in which the relevantbusiness combinations became or will become effective. Furthermore, the presentation method for “net income” hasbeen changed, and references to “minority interests” have been changed to “non-controlling interests.” To reflect
these changes, the Company has reclassified its full-year consolidated financial statements for the previous fiscal
year.
The Company has applied the Accounting Standard for Business Combinations and the other standards inaccordance with transitional provisions in paragraph 58-2(4) of the Accounting Standard for Business Combinations,paragraph 44-5(4) of the Accounting Standard for Consolidated Financial Statements and paragraph 57-4(4) of the
Accounting Standard for Business Divestitures, prospectively at the beginning of the fiscal year under review.
The impact of this change on operating income, ordinary income, and income before income taxes for the fiscal
year under review and on capital surplus as of the end of the fiscal year under review is minimal.
In the consolidated statements of cash flows for the fiscal year under review, cash flows related to the acquisition orsale of shares in subsidiaries not resulting in change in scope of consolidation have been reclassified under “Cashflows from financing activities,” and cash flows related to costs arising from acquisition of shares in subsidiaries
resulting in change in scope of consolidation or costs associated with acquisition or sale of shares in subsidiaries not
resulting in change in scope of consolidation have been reclassified under “Cash flows from operating activities.”16

(Segment information, etc.)(Segment information by business)(Segment Information)
1. Overview of reportable segments
Reportable segments of the Company are structural units of the Company whose separate financial information isavailable, and are subject to regular examination by the Board of Directors so that they can decide on allocation ofmanagerial resources and evaluate business performance.
The Company (or Matsuda Sangyo) established operation divisions respectively for products, merchandise andservices in the head office. Each division formulates comprehensive domestic and foreign strategies to expand
business for the corresponding products, merchandise and services.
The Company thus comprises product, merchandise and service segments built around operation divisions, andthe precious metals business segment and food business segment are designated as reportable segments. In thisregard, business segments with essentially identical financial characteristics (i.e., the precious metals business andthe environmental business) are combined as the precious metals business segment.
The precious metals business segment recovers and refines precious metals, sells precious metal bullions,chemical products, and electronic materials, and collects, transports and disposes industrial wastes. The foodbusiness segment sells and transports seafood products, agricultural products, livestock products, and other raw
materials for food processing.
2. Calculation method for net sales, income /loss, assets/liabilities, and other items for each reportable segment
Accounting methods used for each reportable segment follow the accounting methods for the preparation of
consolidated financial statements. Income listed for each reportable segment refers to operating income. Intersegment sales/transfers are based on market value.
3. Information for net sales, income /loss, assets/liabilities, and other items for each reportable segment
FY3/15 (April 1, 2014–March 31, 2015)(millions of yen)
Reportable Segments
Precious
metalsbusinesssegment

Adjustments

Food businesssegment

Note1

Total

Amount recordedon consolidated
statements ofincome Note2

Net sales
124,474

55,049179,523―

179,523

4

64

69

(69)

―

Total

124,478

55,114

179,593(69)

179,523

Segment income

4,462

948

5,410

―

5,410

Net sales to external parties
Net sales & remittances
between segments(Notes)1. Adjustments correspond to the elimination of transactions and remittances between segments.
2. Total segment income matches operating income recorded on the consolidated statements of income.

17

FY3/16 (April 1, 2015–March 31, 2016)(millions of yen)
Reportable Segments
Precious
metalsbusinesssegment

Adjustments

Food businesssegment

Note1

Total

Amount recordedon consolidated
statements ofincome Note2

Net sales
104,159

57,905

162,065―

162,065

4

65

70

(70)

―

Total

104,164

57,971

162,136(70)

162,065

Segment income

2,347

777

3,125

―

3,125

Net sales to external parties
Net sales & remittances
between segments(Notes)1. Adjustments correspond to the elimination of transactions and remittances between segments.
2. Total segment income matches operating income recorded on the consolidated statements of income.

18