Consolidated Financial Results for the Fiscal Year Ended March 31, 2016
<under Japanese GAAP>May 10, 2016
Company name : NIKKO COMPANY
ID number: 5343 Stock listing : Nagoya Stock Exchange Second Section
URL: http://www.nikko-company.co.jp/
Representative : Mitsuru Mitani, Chairman and CEO
Contact: Kazuya Nunokawa, Managing Officer (Phone: +81-76-276-2121)
Scheduled date of general meeting of shareholders : June 24, 2016
Scheduled date to submit Securities Report: June 27, 2016
Scheduled date to begin dividend payments: Preparation of supplementary materials for financial results : None
Holding of financial results meeting: None(All amounts are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2016 (April 1, 2015 - March 31, 2016)(1) Consolidated operating results(Percentage figures represent changes from the same period of the previous year.)Net sales

Operating income％

Millions of yen％

Millions of yen

Profit (loss) attributableto owners of parent

Ordinary income％

Millions of yen％

Millions of yen

FY ended Mar. 31, 2016

13,643(12.5)

(407)

-

(383)

-

(554)

-

FY ended Mar. 31, 2015

15,591

(6.3)

(200)

-

(61)

-

(218)

-

Note: Comprehensive income (Millions of yen) :Net income per
share

Mar. 31, 2016 : (501) (-%)
Diluted net income
per share

Mar. 31, 2015 : (19) (-%)

Return on
equityOrdinary income
to total assets

Operating income
to net sales%%

FY ended Mar. 31, 2016

Yen
(23.79)Yen-(59.4)

(3.9)

(3.0)

FY ended Mar. 31, 2015(10.37)-(23.5)

(0.6)

(1.3)

%

Reference: Equity in earnings of affiliates (Millions of yen) : Mar. 31, 2016 : (2) Consolidated financial position
Total assets

Net assets

Millions of yen
9,317

As of Mar. 31, 2016

Mar. 31, 2015 :

10,395
As of Mar. 31, 2015
Reference: Shareholders' equity (Millions of yen) :-Equity ratio

Net assets per share

Millions of yen
683

7.3

Yen
29.29

1,184

11.4

50.80

Mar. 31, 2016: 683%

Mar. 31, 2015: 1,184(3) Consolidated cash flow position
Net cash provided by (used in)Operating activities

Investment activities

Financing activities

FY ended Mar. 31, 2016

Millions of yen(525)

Millions of yen(194)

Millions of yen
424

FY ended Mar. 31, 2015

163

197

449

Cash and cash equivalents
at end of period
Millions of yen
912
1,208

2. Dividends(Record date)

Dividend per share
1Q-endYen

2Q-end3Q-endYear-end

Yen

Yen

Yen Millions of yen

Yen

AnnualDividend on
Equity(consolidated)%%

Total dividends Payout ratio(annual)(consolidated)Year ended Mar. 31, 2015

-

0.00

-

0.00

0.00

-

-

-

Year ended Mar. 31, 2016

-

0.00

-

0.00

0.00

-

-

-

Year ending Mar. 31, 2017
(forecast)

-

0.00

-

0.00

0.00

1

-

NIKKO COMPANY

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2017 (April 1, 2016 - March 31, 2017)(Percentage figures represent changes from the same period of the previous year.)
Profit attributable
Net income
Net sales
Operating income
Ordinary income
to owners of parent
per share
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year

13,800

1.1

120

-

100

-

40

-

1.72

Note: Consolidated forecast for the six months ending September 30, 2016 have not been disclosed because the Company and its
subsidiaries track performance on an annual basis only.
※Notes(1) Changes in major subsidiaries during the period (Changes in specifies subsidiaries causing changes in scope of consolidation): None
(2) Changes in accounting policies, changes in accounting estimates, or restatement
1) Changes in accounting policies due to changes in consolidated accounting methods :2) Changes other than 1) above: None3) Changes in accounting estimates : Yes
4) Restatement: None(3) Number of shares outstanding (common shares)
1) Number of shares outstanding (including treasury stock) at the end of the period
Mar. 31, 2016 :24,172,000 sharesMar. 31, 2015 :2) Number of treasury stock at the end of the period
Mar. 31, 2016 :853,064 sharesMar. 31, 2015 :3) Average number of shares over period
Mar. 31, 2016 :23,320,037 sharesMar. 31, 2015 :Yes

24,172,000 shares
850,499 shares
21,029,919 shares(Reference) Non-consolidated financial results
Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2016 (April 1, 2015 - March 31, 2016)(1) Non-consolidated operating results(Percentage figures represent changes from the same period of the previous year.)Net sales

Operating income

Millions of yen％

Millions of yen

Ordinary income％

Millions of yen

Net income％

Millions of yen％

FY ended Mar. 31, 2016

12,676(13.8)

(507)

-

(460)

-

(752)

-

FY ended Mar. 31, 2015

14,707

(7.1)

(257)

-

(93)

-

(276)

-

Net income per
share

Diluted net income
per share

Yen

Yen

FY ended Mar. 31, 2016(32.29)-FY ended Mar. 31, 2015

(13.13)-(2) Non-consolidated financial position
Total assets
Millions of yen
As of Mar. 31, 2016

10,772As of Mar. 31, 2015

11,805

Reference: Shareholders' equity (Millions of yen) :Net assets

Equity ratio

Net assets per share

Millions of yen
435
1,189
Mar.31, 2016: 435

%

Yen

4.0

18.68

10.1

51.01

Mar.31, 2015: 1,189*Information regarding the implementation of quarterly review procedures
The current quarterly financial statements are exempted from quarterly review procedures based on the Financial Instruments andExchange Law. At the time of disclosure, we have not completed the review process for these consolidated statements.
*Appropriate use of business forecasts, other special items
Forecasts regarding future results in these materials are based on information available to the Company at the time the materials werecreated. Actual results may differ significantly from these forecasts for a number of reasons.

2

NIKKO COMPANY
Consolidated Financial Statements
FY03/2015(As of Mar.31,2015)(Millions of yen)
FY03/2016(As of Mar.31,2016)

1,285
2,469
1,407
582
224
259
1
119
(11)
6,336

982
1,992
1,200
632
282
228
1
145
(4)
5,460

6,729
(4,660)2,068
4,660(4,433)226
1,190(1,129)
61
1,145
462
(318)
144
62
3,708

6,730
(4,783)
1,946
4,600(4,296)304
1,222(1,101)
121
1,121
251
(173)
78
5
3,576

4
82
87

3
106
109

139

55

494

490

―
123
(494)
263
4,058
10,395

2
112
(491)
170
3,856
9,317

2,729
1,765
369
79
49
51
276
1,184
6,504

2,387
2,540
382
46
45
44
242
870
6,559

851
77
8
44
1,581
142
2,706
9,210

565
37
6
48
1,282
133
2,075
8,634

3,470
1,584
(3,224)
(336)
1,494

3,470
1,584
(3,778)
(336)
939

1
(115)
(195)
(309)
1,184
10,395

0
(112)
(143)
(256)
683
9,317

(1) Consolidated Balance Sheet

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Costs on uncompleted construction contracts
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Lease assets
Other
Total intangible assets
Investments and other assets
Investment securities
Claims provable in bankruptcy, claims provable in rehabilitationand other
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Provision for product warranties
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax ｌiabilities
Provision for directors' retirement benefits
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

3

NIKKO COMPANY(2) Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income
FY03/2015(Apr.1, 2014-Mar. 31, 2015)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Rent income
Commission fee
Gain on sales of wastes
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Sales discounts
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary Income
Gain on sales of noncurrent assets
Gain on liquidation of subsidiaries and affiliates
Gain on sales of investment securities
Reversal of provision for loss on lead trouble measures
Total extraordinary Income
Extraordinary loss
Loss on sales of noncurrent assets
Loss on retirement of noncurrent assets
Loss on valuation of stocks of subsidiaries and affiliates
Loss on sales of investment securities
Business structure improvement expenses
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent(Millions of yen)
FY03/2016(Apr.1, 2015-Mar. 31, 2016)

15,591
11,149
4,442
4,643
(200)

13,643
9,850
3,792
4,200
(407)

1
41
13
20
83
49
210

1
50
26
15
―
16
110

39
10
―
21
71
(61)

35
9
24
16
86
(383)

2
7
―
36
46

0
17
1
9
28

19
6
―
123
―
150
(165)
45
6
52
(218)
―
(218)

16
0
2
―
133
153
(507)
48
(2)
46
(554)
―
(554)

FY03/2015(Apr.1, 2014-Mar. 31, 2015)(Millions of yen)
FY03/2016(Apr.1, 2015-Mar. 31, 2016)

Consolidated statements of comprehensive income

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

4

(218)

(554)

87
0
110
198
(19)

(0)
2
51
53
(501)

(19)
―

(501)
―

NIKKO COMPANY(3)Consolidated Statements of changes in equity(Millions of yen)

FY03/2015 (Apr.1, 2014-Mar. 31, 2015)
Shareholders' equity
Capital stock

Balance at the beginning of current period

Capital surplus

3,200

Retained earnings

1,321

Treasury stock(3,005)(335)

Total shareholders'equity1,179

Changes of items during the period
Net income (loss)

(218)

(218)

Purchase of treasury stock
Issuance of new shares

(0)
270

263

(0)
533

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

270

263

(218)

(0)

314

3,470

1,584

(3,224)

(336)

1,494

Remeasurementsof defined benefit
plans

Accumulated othercomprehensive
incomeTotal net assets

(305)

(508)

671

Accumulated other comprehensive income
Valuation difference
on available-forsale securities

Balance at the beginning of current period

Foreign currencytranslation
adjustment

(86)

(116)

Changes of items during the period
Net income (loss)(218)

Purchase of treasury stock(0)

Issuance of new shares533

Net changes of items other thanshareholders' equity

87

Total changes of items during the period

87

0

110

198

513

Balance at the end of current period

1

(115)

(195)

(309)

1,184

0

110

198

198

(Millions of yen)

FY03/2016 (Apr.1, 2015-Mar. 31, 2016)
Shareholders' equity
Capital stock

Balance at the beginning of current period

Capital surplus

3,470

Retained earnings

1,584

Treasury stock(3,224)(336)

Total shareholders'equity1,494

Changes of items during the period
Net income (loss)

(554)

(554)

Purchase of treasury stock

(0)

(0)

Issuance of new shares-

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

-

-

(554)

(0)

(555)

3,470

1,584

(3,778)

(336)

939

Remeasurementsof defined benefit
plans

Accumulated othercomprehensive
incomeTotal net assets

(195)

(309)

1,184

Accumulated other comprehensive income
Valuation difference
on available-forsale securities

Balance at the beginning of current period

Foreign currencytranslation
adjustment

1

(115)

Changes of items during the period
Net income (loss)(554)

Purchase of treasury stock(0)

Issuance of new shares-

Net changes of items other thanshareholders' equity

(0)

2

51

53

53

Total changes of items during the period

(0)

2

51

53

(501)

Balance at the end of current period

0

(112)

(143)

(256)

683

5

NIKKO COMPANY(4) Consolidated Statements of Cash Flows(Millions of yen)
(Millions of yen)
FY03/2015
FY03/2016(Apr.1, 2014-Mar. 31, 2015) (Apr.1, 2015-Mar. 31, 2016)
Net cash provided by (used in) operating activities
Income (loss) before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for product warranties
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Loss (gain) on sales of property, plant and equipment
Loss on retirement of noncurrent assets
Reversal of provision for loss on lead trouble measures
Gain on liquidation of subsidiaries and affiliates
Business structure improvement expenses
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in claims provable in bankruptcy, claims
provable in rehabilitation
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Payments for Business structure improvement expenses
Net cash provided by (used in) operating activities

(165)
534
(36)
(3)
37
(113)
(8)
39
(19)
―
123
17
6
(36)
(7)
―
247

(507)
388
(9)
(6)
(248)
(34)
(1)
35
10
2
(1)
16
0
(9)
(17)
133
472

21

3

105
(527)
28
246
8
(39)
(51)
―
163

125
(341)
(313)
(302)
1
(35)
(54)
(133)
(525)

Net cash provided by (used in) investment activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Proceeds from sales of investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Proceeds from liquidation of subsidiaries and affiliates
Other, net
Net cash provided by (used in) investment activities

―
30
397
(277)
31
7
7
197

(5)
12
51
(270)
7
47
(38)
(194)

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Repayments of lease obligations
Purchase of treasury stock
Proceeds from issuance of common stock
Net cash provided by (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)
500
(360)
(182)
(0)
528
449
2
813
394
1,208

775
100
(372)
(77)
(0)
―
424
(0)
(295)
1,208
912

6

NIKKO COMPANY[Segment Information]
1. Overview of reportable segments
Segments used for financial reporting are the Nikko Group’s constituent units for which separate financial information is available andfor which the Board of Directors performs periodic studies for the purposes of determining the allocation of resources and evaluating
performance.
The Group has established business divisions that comprise of the company and its subsidiaries and affiliates, and each division
conducts business in line with the comprehensive strategies they have devised for products, merchandise and services in both
domestic and overseas markets.
Therefore, the Group consists of segments by products, merchandise and services on the basis of the business divisions, and the“Functional Ceramics Product”, “Housing & Environmental equipment” and “Tabletop” are three reportable segments.
Industry Segment
Major Products
Functional Ceramics Product
Alumina substrates, LTCC substrates, Dielectric ceramics
Septic tanks, Garbage disposal systems, System baths, Other FRP items,
Housing & Environmental Equipment
Water treatment facilities, Small wind turbine generator systems,
Multi-function interior boards
Tabletop
Fine bone china, Fine vitrified china, Fine porcelain, Oven ware
2. Information related to net sales and profit or loss for each reportable segment
FY03/2015(Apr. 1, 2014 - Mar. 31, 2015)
Functional
Housing &Ceramics
Environmental
Tabletop
Product
Equipment
Net sales
Sales to Outside Customers
2,450
9,887
3,254
Intersegment sales or Transfers
Total
2,450
9,887
3,254
Segment profit (loss)
233
253
3
(Operating income (loss))
Segment assets
1,630
3,337
3,129
Other Items
Depreciation and Amortization
91
262
126
Increase in Property, plant and71
83
35
equipment and Intangible assets
Impairment loss-

Segment
total(Millions of yen, rounded down)Amounts on the
Adjustment
consolidated(Note 2)
financial statements

15,591
15,591-

15,591
15,591

490

(691)

(200)

8,096

2,298

10,395

480

54

534

189

36

226

-

-

-

Notes: 1.The “Other” category of FY03/2014, was removed from reporting segment because there is no profit in FY03/2015.
2. Below is a description of adjustments.
（1） Segment income adjustment of 691 million yen consists of expenses related to departments that do not belong to the reportable segments.
（2） Segment assets adjustment of 2,298 million yen includes assets that do not belong to the reportable segments. The assets consists ofmainly surplus funds (cash and cash equivalents), long-term investment funds (investment securities).
（3） Depreciation and Amortization adjustment of 54 million yen consists of Depreciation and Amortization related to departments that do notbelong to the reportable segments.
（4） Increase in Property, plant and equipment and Intangible assets adjustment of 36 million yen consists of capital investments associatedwith departments that do not belong to the reportable segments.

FY03/2016(Apr. 1, 2015 - Mar. 31, 2016)
Functional
Ceramics
Product
Net sales
Sales to Outside Customers
2,358Intersegment sales or Transfers
Total
2,358
Segment profit (loss)
279(Operating income (loss))
Segment assets
1,611
Other Items
Depreciation and Amortization
104
Increase in Property, plant and118
equipment and Intangible assets
Impairment loss-

Housing &Environmental
Equipment(Millions of yen, rounded down)Amounts on the
consolidated
financial statements

Tabletop

Segment
total

Adjustment(Note 1)

8,848
8,848

2,436
2,436

13,643
13,643-

13,643
13,643

232

(293)

218

(625)

(407)

2,841

2,920

7,373

1,943

9,317

121

109

334

53

388

100

57

277

31

309

-

-

-

-

-

Notes: 1. Below is a description of adjustments.
（1） Segment income adjustment of 625 million yen consists of expenses related to departments that do not belong to the reportable segments.
（2） Segment assets adjustment of 1,943 million yen includes assets that do not belong to the reportable segments. The assets consists ofmainly surplus funds (cash and cash equivalents), long-term investment funds (investment securities).
（3） Depreciation and Amortization adjustment of 53 million yen consists of Depreciation and Amortization related to departments that do notbelong to the reportable segments.
（4） Increase in Property, plant and equipment and Intangible assets adjustment of 31 million yen consists of capital investments associatedwith departments that do not belong to the reportable segments.

7