Head office: Meisan Takahama Bldg. 8F,
2-12-23 Konan, Minato Ward, Tokyo 108-0075, Japan
Phone: +81-3-3474-8007 Fax: +81-3-3471-8100
http://www.punch.co.jp/english/

Supporting product manufacturing
around the world

Customercentric

Toward a global
Punch Industry

Directsales
CONTENTS

Integrated
production

We aim to become theleading brand in the moldand die components
industry and achieve
high profitability
by leveraging ourcompetitive advantage
as a comprehensive
manufacturing and sales
company.

Management 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 considerationand compliance and promoting sound corporate activities that are appreciated by society.

Corporate Vision
We aim to become the leading brand in the mold and die components industry and achieve highprofitability by leveraging our competitive advantage as a comprehensive manufacturing andsales company.

1

1 ｜ Management Principles and			 Corporate Vision
3
5
7
9｜ To Our Stakeholders｜ The Punch Group’s Businesses｜ History｜ Our Strengths

11 ｜ Performance Highlights
13 ｜ Executive Message

21 ｜ Special Feature: Asian Market Presence —			 Driving the Punch Group’s Globalization
27 ｜ CSR Initiatives

31 ｜ Corporate Governance

34 ｜ Directors and			 Audit & Supervisory Board Members
35 ｜ Management’s Discussion and Analysis
36 ｜ Business Risks

39 ｜ Financial Statements
44 ｜ Company Profile

45 ｜Punch Industry and Group Companies
46 ｜ Investor Information

To Our Stakeholders

Toward a global Punch Industry:
Seeking to be the top brand in themold and die components industry

3

4

The Punch Group’s Businesses
Automobiles, electronic devices (such as smartphones and tablets), and consumer electronics (such as
refrigerators and washing machines) fulfill indispensible functions in our daily lives. Dies are tools thatare essential in the manufacture of these items. A die is a metal mold that enables the fast, uniform, andhigh-volume manufacture of products.
Punch Industry makes high-quality components that are needed to make molds and dies, whichplay an important supporting role in the activities of manufacturers worldwide.
Leveraging our technological capabilities, quality, and high level of services built up in Japan, we
have continued providing mold and die components to manufacturing sites 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.
Products

Components

Dies

Mold and die components

A wide range of familiar
products we use every
day, such as automobiles,
smartphones, andconsumer electronics

A variety of parts madeof metal, plastic, andother materials that are
put together to make aproduct

Dies are molds made ofmetal that are required
for the fast, mass
production of highquality components

A wide variety of precision parts are needed tomake diesThis is what Punch Industry does!

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.

［Key product］ Ejector pins
Ejector pins are used to eject and release the molded bodyfrom a mold［Key product］ Punches
As components used in press dies, punches are used tomake holes in sheet metalStandard Products

Special-Order Products

To further improve the manufacturing
efficiency of our customers, wedeliver Japanese quality and services
on a global scale.

Business Process(Domestic automaker)
Punch Industry［Dies］Mold manufacturer
Note: Both catalogs are Japanese-language editions, published in 2012.

［Components］Maker of body, exterior, seats, connectors, etc.

［Products］Automaker5

Punch Industry’s catalogs feature products withstandardized
specifications,
includingsuchdimensions as length and depth. “Components for
Plastic Molds” features approximately 26,000 items,
and “Components for Press Dies” features around
24,000 items—a total of some 50,000 products listed.

Punch Industry also makes components customized
to individual orders, not listed in the product catalogs,
on the basis of its technological capabilities, throughfully leveraging an integrated production system andcustomer-focused sales system to make parts thatmeet customers’ particular specifications.

6History
Since its founding in 1975 as a company that manufactures and sells mold and die
components, the Punch Group has consistently supported manufacturing activities both inJapan and overseas.

Established sales office in China

Celebrated the 40th (Billions of yen)anniversary of
our founding30
in March 2015

Commenced sales of moldcomponents in China

Spun off plant in Dalian Wafangdian, Liaoning
Province, and established PUNCH INDUSTRY(Wafangdian) CO., LTD.
■ Established PUNCH INDUSTRY (Wuxi) CO., LTD. in
Wuxi, Jiangsu Province, China■

Succeeded in mass production of highspeed steel ejector pins for plastic molds

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

Established Kitakami Plant in KitakamiCity, Iwate Prefecture, and began
nationwide sales of mold components■■

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

20

Made Pintec Corporation a Group company
Established PUNCH INDUSTRY DALIAN TAMA SPRING CO., LTD. in Dalian,
Liaoning Province, China (now PUNCH SPRING (Dalian) CO., LTD.)

Overseas Sales

Net Sales Since Fiscal 1975
Domestic Sales

Foundation to Business Expansion

Commenced operations as KAMBA SHOKAI
CO., LTD. in Shinagawa Ward, Tokyo, by founder
Yuji Morikubo (currently honorary chairman) to
manufacture punching pins for printed boards

Changed company name to PUNCH INDUSTRY
CO., LTD.

Business Operations Established in China

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

TSE Listings and Global Expansion

Established PUNCH INDUSTRY INDIA PVT. LTD.
in Chennai, India■

Published comprehensive catalog
of components for plastic molds
and press dies

Established a plant in Dalian Wafangdian,Liaoning Province, China

10■

Established Hyogo Plant in Kasai City, Hyogo Prefecture
Commenced sales of mold components in India

Formed capital and business alliance with PANTHER PRECISIONTOOLS SDN. BHD. in Malaysia■ Listed stocks on the Second Section of Tokyo Stock Exchange (TSE)■

Established Chongqing Plant in Chongqing, China for production andlogistics■ PANTHER PRECISION TOOLS SDN. BHD. (now PUNCH INDUSTRY
MALAYSIA SDN. BHD.) became a Group company■ Established PT. PUNCH INDUSTRY INDONESIA in Jakarta, Indonesia■

Assigned to the First Section of TSE

PUNCH INDUSTRY (Dalian) CO., LTD. acquired AS9100 certification

7

8

Our Strengths
The Punch Group has an integrated manufacturing and sales system, which reflects its
basic style of handling both production and sales. This system is underpinned by three
key strengths, described below.

resilient to economic impacts on specific industries
We have around 6,000 customers in Japan and approximately 8,000 in China, covering a wide spectrum of sectors. In
addition to our two main markets—the automotive and electrical/electronics industries—in recent years we haveworked to expand and entrench sales in new fields, such as the food and beverage and medical sectors.

Advanced

technological capabilities

Strength I

Diversified portfolio

Strength II

We constantly strive to reinforce the manufacturing skills and know-how we have amassed over the 40 years since ourfounding. We are also advancing the Punch Group’s technological capabilities through collaboration between Japanand China, spearheaded by the R&D Headquarters. These capabilities form the cornerstone of our integrated
production system and customer-focused sales and marketing system. Handling a wide array of both standard andspecial-order products, our greatest strength is our ability to respond meticulously to the diverse needs of customers.

Sales by Industry(Year ended March 2015)

Other

Consumer electronics &precision equipment

Delivering a high level of customer satisfaction

23％
Automotive

13％

Electronic devices &semiconductors

45％

19％

Quick
solutions
Special-orderproducts

Standard products
Abundant lineup of versatile
standard products

network

We consider business from a global perspective by linking our activities in Japan, China, Southeast Asia, India, Europe,and the Americas. Under this model, we are actively expanding into Southeast Asia and India from key bases in Japanand China, while opening up sales channels in Europe and the Americas.

Customer-focused sales andmarketing system

Integrated production
Extensive capabilities using
1,700 pieces of equipment

GlobalStrength III

Responding flexibly
to customers’ needs

Meticulous solutions

Advanced technological capabilities

China

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

Integrated manufacturing system from process design and material procurement to final delivery
Process for making special-order products

India

Cuttingwork

Heat
treatment

Grinding
workElectric
discharge
machining

Surfacetreatment

PUNCH INDUSTRY INDIA PVT. LTD.

Final
inspection(mass
production)

Shipment(7–14 days)

Customer

Customer

Material
procurement

Sales agent

United States

Japan
PUNCH INDUSTRY CO., LTD.
Pintec Corporation

South Korea

Integrated manufacturing system

ProcessdesignUnited Kingdom
Germany
TurkeyGroup company

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.

ThailandTaiwanPhilippines
Vietnam

Malaysia

PUNCH INDUSTRY VIETNAM CO. LTD.

PUNCH INDUSTRY MALAYSIA SDN. BHD.

Australia
Singapore

Indonesia
PT. PUNCH INDUSTRY INDONESIAPUNCH INDUSTRY SINGAPORE PTE. LTD.

9

10

400
400

7,000
7,000

0
0

0
0

Performance Highlights

2012
2012

We posted significant increases in revenue and earnings, thanks to strong growthoverseas and a solid performance in Japan.

2013
2013

2014
2014

2015
2015

2012
2012

Ordinary
Ordinary Income
Income

2013
2013

2014
2014

2015
2015

Net
Net Income
Income(Millions(Millions ofof yen)yen)(Millions(Millions ofof yen)
yen)

2,000
2,000

1,500
1,500

1,600
1,600

1,200
1,200

1,200
1,200

900
900

(Millions of yen)

2012

2013

2014

2015

23,801

25,041

29,43634,392

800
800

600
600

Operating income

946

707

1,161

1,724

400
400

300
300

Ordinary income

805

822

1,047

1,617

0
0

0
0

Net income

394

213

720

1,188

Earnings per share (yen)

67.36

34.30

99.58

130.91

Total assets

18,895

20,57324,471

29,623

Total net assets

4,296

5,726

9,362

14,20515
1535,00035,000Net assets per share (yen)734.40800.87

1,043.83

1,283.75

12
12

28,00028,000Return on equity (ROE) (%)

9.5

4.3

9.6

10.1

9
9

21,00021,000

Net worth ratio (%)

22.7

27.8

38.2

47.9

6
6

14,00014,000

3
3

7,000
7,000

0
0

0
0

Years ended March 31

Net sales

Note: We conducted a 10-for-1 stock split in the fiscal year ended March 2013; however, the above figures are based on the assumption that the split occurred at the
beginning of the fiscal year ended March 2012, and net income per share and net assets per share have been calculated accordingly for each period.

2012
2012

2015
2015

2012
2012

2013
2013

2014
2014

Total
Total Assets
Assets

2015
2015

Net
Net Worth
Worth Ratio
Ratio(Millions of yen)

28,000

1,600

40
40

1,200
1,200

21,000

1,200

30
30

900
900

14,000

800

20
20

600
600

7,000

400

10
10

300
300

0

0

0
0

0
0

2012

2013

2014

2015

2014
2014

2015
2015

(Yen)
(Yen)
1,500
1,500

2015

2013
2013

(Millions(Millions ofof yen)
yen)

(%)
(%)
50
50

2014

2015
2015

Net
Net Assets
Assets Per
Per Share
Share

2,000

2013

2014
2014

Total
Total NetNet Assets
Assets2012
2012

35,000

2012

2013
2013

Total
Total Assets
Assets // Total
Total NetNet Assets
Assets(%)(%)

Operating Income(Millions of yen)

11

2014
2014

ReturnReturn on
on Equity
Equity (ROE)
(ROE)

2012
2012

Net Sales

2013
2013

2012
2012

2013
2013

2014
2014

2015
2015

2012
2012

2013
2013

2014
2014

2015
2015

12

Executive Message

The Punch Group’s business centers on mold and die components,
which form the foundation of manufacturing. We take pride in theknowledge that all of our products, which reflect an uncompromising
President

Masaaki Takeda

commitment to quality, are supporting the efforts of manufacturers
worldwide. As the global market for mold and die components
continues to surge, we will aggressively develop new fields andmarkets and expedite global business development through the
manufacture and sale of mold and die components, in our quest to be
a company with a worldwide presence.

13

14

Fiscal Year in Review

In the fiscal year ended March 31, 2015, the world economy
continued showing moderate growth. In Japan, the economy
followed a recovery tone, buoyed by increased capital
expenditures and other factors, and the businessenvironment was generally healthy, indicating steady growthacross all regions and sectors.
Domestic demand for industrial machinery recovered
significantly amid robust capital spending, and conditions
were good for a broad range of sectors, including
automobiles, digital electronic components for smartphones,
and the like, as well as precision equipment. In the past
several years, we have targeted our sales activities in theautomotive sector and increased the number of business
partners. By broadening the variation of products delivered
to each company, we maintained a solid performance, eventhough domestic unit sales of automobiles declined in 2014
for the first time in four years. We regard this as a major
success. Meanwhile, we improved capacity utilization at ourfactories and pursued day-to-day cost-cutting activities,
which delivered good results. Moreover, the volume of ourhigh-value-added products targeting the food and beverage
sector—a focus of new market development in recent
years—is now significant and helped underpin our profits.
In China as well, we posted double-digit sales growthyear on year on the back of healthy expansion in theautomobile, electronic device, and semiconductor
industries. In particular, our range of high-value-addedofferings, positioned as strategic products, entered a growthtrajectory and made a contribution to profits.

Sales by Region (Year ended March 2015)

44.2%
China 47.1%
Asia, etc. 8.7%
Japan

15

PUNCH INDUSTRY MALAYSIA, which became a Group
company in 2013, posted solid export sales not only toSoutheast Asia but to Europe as well. The company’s fullyear contribution helped boost total overseas sales for theyear. In Vietnam, where Japanese companies are increasing
in number, we established a sales company in Ho Chi Minh
City and a sales office in Hanoi. Our business there has
exceeded our expectations, growing significantly in scalefrom the previous year.
The year in review was the second year of our mid-termbusiness plan, entitled “Value Creation 15.” Although somechallenges remain, it generally was a year of steady progress
and also marked the 40th anniversary of our founding. In
summary, we believe it was a year in which we set the tone
for our next stage of growth.

Second Year of “Value Creation 15”:
Progress Status and Future
Responses

Under “Value Creation 15,” our mid-term business plan, we
have identified three priority initiatives: globalization,
expansion of new markets, and conversion to a highprofitability business model. We will take both offensive
measures (growth strategies) and defensive measures(system reforms) to resolve issues and respond swiftly tochanging business conditions as we strive to build afoundation for renewed growth.

1

China
As customers enter markets in China’s interior regions, wesought to expand sales activities and achieved better results
than expected. Since commencing operations in 2013, theproduction and logistics operations in Chongqing, our corebase for these regions, have continued performing well, andwe are approaching the time to consider our next step.
Despite reports of a slowdown, the Chinese economy
has continued to post stable growth of around 7% per year.
The global market for mold and die components is estimatedat around ¥7 trillion, of which China represents about ¥2
trillion (based on data from mold/die associations in eachnation). Going forward, we expect the Chinese market for
mold and die components to continue growing in line withthe economy, and we look forward to even greater business
opportunities.
Meanwhile, we enhanced our existing lineup of strategic
products and launched efforts to enter new fields, such as
the aerospace industry. We already took the first step inJanuary 2015 when we acquired AS9100 certification, thequality management standard for the aerospace industry.
The aerospace industry has even higher barriers for entry
than the automotive sector, as well as having its own
distinctive business practices, including large-scale orders
for small-volume production, very long lead times, extremely
high safety standards, and stringent authentication systems.

Southeast Asia and India
In the year under review, we broadened the scope of ourbusiness and increased new orders in Southeast Asia,
especially Malaysia. Although our business in the region
does not greatly influence our consolidated results, we haveestablished sales channels in Southeast Asia through M&A
activities and also set up channels in Europe. Taking fulladvantage of these, we will strive to bolster the performanceof the entire Punch Group.
PT. PUNCH INDUSTRY INDONESIA, a joint venturecompany that commenced operations in April 2014, is on afavorable trajectory. It represents the Group’s first full-scale
foray into a joint business arrangement, and we initiallystruggled in coordinating with existing sales agents andcomplying with Indonesian laws, which required more timethan expected. Nevertheless, we are communicating well

“Value Creation 15”: Key Points of Our Strategy

Targeting Our Next Phase as “Value Creation 15” Concludes
Japan

Globalization
Customer-focused marketing structureWith respect to globalization, our first priority initiative, wewill expand our conventional business approach, centeredon Japan and China, to actively advance our business inSoutheast Asia and India and broaden sales channels to
Europe and the Americas. We are currently building
frameworks enabling us to address this global expansion.
In the year under review, the second year of “Value
Creation 15,” our efforts to tap new markets delivered goodresults as we increased sales mainly to the automotive andelectronic component sectors in Europe. By expanding
sales channels through agency agreements while deploying
the strengths of the China Group and PUNCH INDUSTRY
MALAYSIA, we broadened our sales network and increased
sales in Europe.

Once having entered the industry, however, there is great
potential for long-term business, and meeting the challengeof serving the aerospace industry, a highly demanding
sector, will enable us to further strengthen our services tocustomers in other industries. We believe the aerospacemarket will continue expanding in line with expedited
globalization. Here, the Punch Group will deploy its
technologies to develop products that deliver high levels ofadded value.

■

1 Globalization

China

Southeast Asia, etc.

Build a global management system with both offensive and defensive oversight■Devise strategies for markets in Europe and the Americas
Expand businesswith subsidiaries
in Southeast Asia
to form a coreregional base
■ Increase businessin India■

2 Expansion of newmarkets

3 Conversion toa high profitability
business model■

Tap new markets
and fields throughan alliance
between the R&D
Headquarters andthe Marketing
Headquarters■

Furtherdevelopment ofMidwest market■

Promote sales ofstrategic products■

Expand business in
carbide products

16with PT Somagede Indonesia, our joint venture partner, andotherwise laying the groundwork for a successful businesslaunch.
In Vietnam, we opened a sales office in Hanoi in April
2014. During the year, our two Vietnamese operations (theother being in Ho Chi Minh City) worked hard to expand
sales, and both are attracting steady orders. Going forward,
we will further reinforce our operations to make Vietnam oneof our core bases in Southeast Asia.
In India, where significant market growth is expected,
we are establishing a business foundation while optimally
allocating human resources. We are making steady progressin building a base for selling products imported from Japanand China.
Europe and the Americas
In Europe and the Americas, we have established a specialorder business targeting mainly the automotive sector. In
2013, Ford Motor Company in the United States designatedPunch Industry as an official supplier. In May 2014, weconcluded a sales agency contract for cam units (automobile
components) in Germany, followed by another in Septemberin the United Kingdom. In these and other ways, we areheading in the right direction. In other initiatives, PUNCH
INDUSTRY MALAYSIA is expanding its sales network in
Europe and strengthening relationships with existingcustomers in the United States, and has also started tapping
new markets.
Spearheaded by the new Marketing Headquarters,

17

established in April 2015, we will continue deploying the
Punch Group’s strengths and proposing effective solutions
in order to build a robust business position.
Establishing systems
In November 2013, we established our Global Business
Headquarters, which coordinates the activities of ouroperations in Japan, China, Southeast Asia, India, Europe,and the Americas from a global perspective. This new
structure is now functioning well, we believe. On the
management side, meanwhile, we have added four new
Group companies through M&A activities, which means weare dealing with multiple languages and financial currencies.
In this context, our Groupwide coordination function,
designed to bring together and manage all of these factors,
is still in its infancy, but we feel we have made good progressin establishing a foundation for Groupwide management.

2

Expansion of new markets
Deploying advanced technologies to tap
new fields and markets

We will continue focusing on developing business in new
fields where we can deploy our manufacturing strengths,
while broadening our business geographically to cultivate
new markets. In Japan, these efforts are producing steadyresults in several fields, including the food and beverage andmedical sectors. Going forward, we will also target theelectronic device and semiconductor sectors, and we will
embrace challenges in specialized fields that are new to theGroup, such as aerospace.
Meanwhile, in the 3D metal sector, technologicaldevelopment has been remarkable, exemplified by the
rapid development of 3D metal printers, the diversityof design, the wide range of metal powder that can beused for various applications, and the emergence ofmultifunction printers that can be synchronized with thefinal processing stage. These factors represent significant
technological advancements. Since 2010, we have beendeveloping technology applying metal powder for metal
photofabrication, so-called “3D metal printing” technology.
In light of recent market developments, however, we will
work to optimize our business model and otherwise takeour operations to the next level.
PUNCH INDUSTRY MALAYSIA specializes in carbide
products, a niche market, and we are considering ways toincrease the sale of these products in Japan and China.
Carbide products are extremely rigid and difficult to break
down—features that make them valuable in the productionof automotive components and the like. Going forward, we
will identify business fields in which the Group candemonstrate its unique strengths in order to establish a solid
position.

3

Conversion to a high profitability
business model
Increase sales of high-value-added
products through an integrated
production system and advanced
technological prowess

In addition to increasing sales of high-value-added products,
we are steadily implementing cost structure “renovation
activities,” also known as “value creation activities.” Throughthese activities, undertaken over the past three years, wehave entrenched widespread cost-consciousness andencouraged conversations and debates about “how tomake better products more efficiently.” We have also seentrial-and-error efforts throughout the workplace aimed at
improving manufacturing methods and processes. In short,
we feel that our employees’ mindsets have changed
dramatically.
Our R&D aspirations have also changed significantly. In
April 2014, we established the new R&D Headquarters andmade investments in cutting-edge technologies. By tacklingthe challenge of practically applying new technologies andprocesses and passing them on to our manufacturing
teams, we are laying the groundwork for a repeated cyclethat will lead to the next round of orders. Moreover, we areenhancing the alliance between our Japanese and Chinese
operations on the R&D front. If cultures and approaches aredifferent, then concepts of product manufacturing will alsovary. By forging an alliance, we are reaping major synergistic
benefits and fostering an alliance-oriented corporate culture.
Going forward, we will step up these initiatives to include
capital expenditures and personnel investments.

Priority activities in the fiscal year
ending March 2016

In the fiscal year ending March 2016, the final year of “Value
Creation 15,” we will focus on three priority areas as wetarget our next stage of growth.
The first priority is to tap new fields and markets byforging an alliance between the Marketing Headquarters
and the R&D Headquarters. Here, our plan is to further
solidify our unified manufacturing and sales system, a key
Punch Group strength, and build a foundation for entering
the aerospace industry, which has high expectations for
growth.
The second priority is to broaden and enhance oursales channels through alliances with Punch Group
companies, driven by our Marketing Headquarters. In
Southeast Asia, in particular, we will expand sales channels
in Vietnam, which is earmarked to become a core regionalbase, while reinforcing our joint business arrangement inIndonesia. In short, we plan to establish solid positions inmarkets expected to deliver continued growth. We hope totransfer the “Punch DNA,” acquired over 40 years, tocompanies based in Southeast Asia that have joined theGroup through M&As or been newly created as joint
ventures. These initiatives are designed to improve our levelsof reliability, manufacturing, and marketing as a corporate
entity and establish a Punch-style global operation in orderto build a highly profitable business foundation. We also plan
to deploy the strengths of various Group companies. This
includes increasing exports from the China Group and
PUNCH INDUSTRY MALAYSIA—both of which are
performing well—to Europe and the Americas, whilestrengthening alliances with sales agencies.
Our third priority is to attract and foster global humanresources. Although this will take some time, we will devise
various techniques as we move steadily to both foster inhouse personnel and recruit others who will spearhead
Punch’s globalization efforts.

18

production of automobiles and smartphones to increase, wewill target double-digit sales growth by stepping up efforts
to sell strategic products and expand into interior regions. In
other regions, we will steadily broaden our business scopeby increasing sales in Southeast Asia and India while
expanding exports to Europe and the Americas. Ourconsolidated forecasts are net sales of ¥37 billion andoperating income of ¥2 billion. To achieve these targets, wewill solidify our foundation to ensure further major progressin the next fiscal year and beyond.

Performance outlook for the fiscal
year ending March 2016

Placing particular emphasis on profitability, in our domestic
business we will strive to maximize earnings by focusing on
the food and beverage, medical, electronic device, andsemiconductor sectors. In China, where we expect

Earnings Forecast for the Year Ending March 31, 2016
(Millions of yen)

Year ended
March 31, 2015
(Results)

Year ending
March 31, 2016
(Forecast)

Net sales

34,39237,0002,607

107.6%

Operating income

1,724

2,000

275

116.0%

Operating income to net sales

5.0%

5.4%

Ordinary income

1,617

1,900

282

117.5%

Ordinary income to net sales

4.7%

5.1%

Net income

1,188

1,300

111

109.4%Net income to net sales

3.5%

3.5%

Return on equity (ROE)

10.1%

8.8%

DifferenceYear-on-year

Message for stakeholders

Although increasing topline sales is a necessary part ofoperating a business, we believe the key to our future
growth lies in the conversion to a high profitability businessmodel.
The Punch Group acknowledges that its business isdifficult for many people to understand, because it does not
manufacture items that we can see directly, such as
automobiles and smartphones. Without a doubt, however,each and every one of our products is created with anuncompromising commitment to quality and supports theefforts of manufacturers worldwide. This uncompromisingcommitment enables us to fulfill our social responsibilities as
a company and undertake CSR-oriented management. Ourconversations with individual shareholders and otherindividual investors reveal that they understand how strongly
we support the manufacturing efforts of our customers.
Going forward, we will pursue proactive communication,
including by holding company information meetings andfinancial results briefings, exhibiting in IR events, andenhancing our corporate website. Here, our aim is to get
feedback from all stakeholders so that we can continue
meeting their expectations.

In April 2015, we merged the Administration
Headquarters and the Finance Headquarters, unifying ouradministrative systems under one structure while retaining
the name of the former, “Administration Headquarters.”
Meanwhile, strengthening corporate governance has
evolved into a national policy, and we will reinforce ourgovernance systems and IR functions so that we do not lag
behind worldwide trends. At the same time, we will adopt a
proactive approach to communication and build favorable
relationships with all stakeholders.
The formulation of the Corporate Governance Code has
directed the spotlight on return on equity (ROE) in recent
years. The Punch Group uses the ratio “operating income to
net sales” as the evaluation standard for its business andROE as the standard for its management. We also placehigh emphasis on free cash flow, reflecting our cash flow
management approach.
At Punch Industry, we believe that earning the trust andsupport of all shareholders forms the basis for continuous
growth of corporate value, and that meeting their
expectations is a key management priority. Our basic policy
is to pay stable and continuous dividend payments while
making proactive investments for future growth. Under thispolicy, we link dividends to performance by targeting a
consolidated payout ratio of at least 20%.
Going forward, we will work tirelessly as a united Groupto meet everyone’s expectations. We look forward to yourongoing support.

-1.3 percentage
pointsDividend Trends( Yen)

Annual dividends(per share)

19

Year ended March 31, 2015 (Results)

25

Year ending March 31, 2016 (Forecast)

25

20

ChinaSpecial Feature

Asian Market
Presence:

Driving
the PunchGroup’s
Globalization
The Punch Group is steadily expanding its
presence to Southeast Asia and India fromits existing operations in Japan and China.
In the following pages, we discuss market
conditions and the Group’s initiatives ineach region.

India
PUNCH INDUSTRY INDIA PVT. LTD.

Yasuhiro Sanada

Vietnam PUNCH INDUSTRY VIETNAM CO. LTD.

Director© Yuta Fukitsuka

In addition to Japan, the Punch Group has a basic policy of
attracting overseas orders through its customer-focused
activities. Based on this policy, the Group supplies mold and die
components to more than 10,000 companies in a diversity of
sectors, including the automobile and consumer electronics
industries. With an integrated manufacturing and sales system—
where our manufacturing department, with enhanced production
facilities, works in unity with our customer-focused sales
department—we are advancing our worldwide manufacturing anddirect sales business, which is a feature of the Group. Here, we
supply a broad range of items, from standardized products tospecial-order products customized to individual orders.
A look at the world market for molds and dies reveals thatmature markets like Japan and Europe are generally flat or
showing moderate growth, while China, India, and other emerging
markets are expanding significantly. This indicates that demand
for molds and dies is shifting from mature markets to emerging
markets, and a major priority for the Punch Group is to expand its
business in such emerging markets. We are also focusing on North
America, where demand is growing, especially for automobiles,
despite it being a mature market. To address these issues, we haveidentified “globalization” as a core priority of our current mid-termbusiness plan. Accordingly, we are establishing frameworks toactively advance our business in Southeast Asia and India andexpand sales channels in Europe and the Americas, in addition to
our business in Japan and China.
Measures implemented to date have produced some goodoutcomes. As we approach the next phase, we undertook areorganization in April 2015, which marked the start of the final
year of the mid-term business plan. The reorganization is aimed atbuilding management and business strategies for the medium andlong terms.
At our Global Business Headquarters, we merged the Global
Business Planning Department (responsible for management
systems) and the Corporate Planning Office (the Head Office
Management Department) to create the Global Business Planning
Office. Within the Global Business Headquarters, we also establishedthe new Marketing Headquarters, whose aim is to enhance theGroup’s marketing capabilities. In this way, we will strengthen ourframework for implementing full-scale global marketing strategies.
Going forward, we will pursue strategies to address specificregional issues in our businesses in China, Southeast Asia, andIndia. At the same time, the newly formed Marketing Headquarters
will spearhead efforts to advance and expand our businesses in
Europe, the Americas, and elsewhere while forming bonds
between our operations in Japan, China, and Southeast Asia.

21

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.

Malaysia

PUNCH INDUSTRY MALAYSIA SDN. BHD.

Singapore
PUNCH INDUSTRY SINGAPORE PTE. LTD.

Indonesia
PT. PUNCH INDUSTRY INDONESIA

ChinaSoutheast Asia and India

Mold and Die Market(Billions of yen)

Punch Industry
estimates

2,500

Mold and Die Market

2,000

800

1,500

600

1,000

400

500

200

0

Southeast Asia

1,000(Billions of yen)

Punch Industry
estimates

India

0

(Fiscal year)

2008

2009

2010

2011

2012

2013

2014

2015

(Fiscal year)

2008

Sources: Mold/die industry associations in each nation

Industry Trends

Production volume:
Automobiles 23.72 million units (2014)25.38 million units (2015)
Electronic
devicesOther

The smartphone market expanded
significantly in 2014 and is expected
to continue growing through 2015
Firm demand for semiconductor
devices, consumer electronics,
precision equipment, etc.

2010

2011

2012

2013

2014

2015

Sources: Mold/die industry associations in each nation

Industry Trends

Overall, a year-on-year decline inproduction due to a decrease in
Automobiles Thailand, reflecting the end of taxrelief measures, despite higher
production in Indonesia and Malaysia
Electronic
devices
Other

Priorities

Promote strategic products and high-valueadded products for the medical sector
while also tapping the aerospace sector

2009

Remained firm owing tobrisk demand for low-priced
smartphones
Solid demand for semiconductor
devices and home appliances

Priorities

Expand business and establish positions ingrowth markets

22

Special Feature

The Punch Group’s Overseas Network
Initiatives

I

Market Environment

I

PUNCH INDUSTRY(Dalian) CO., LTD.

n the fiscal year ended March 2015, the China business benefited
from an ongoing healthy automobile market, where production incalendar 2014 exceeded 23 million vehicles. This achievement was
realized despite concerns over the outlook for economic growth in the
short term.
In addition to an expanding smartphone market, growth wassustained across a broad range of sectors, including electronic
components, semiconductors, consumer electronics, and precisionequipment. We believe these trends will continue and look forward toongoing growth of the market for molds and dies.
Any kind of growth in such a huge market, even stable growth, isa positive sign for the Punch Group.

n our China business, we currently have six production
facilities and 32 sales offices, dealing with around
8,000 customers. In 2015, we will celebrate 25 years sincecommencing production of mold components in China
with the establishment of PUNCH INDUSTRY (Dalian)CO., LTD. in 1990. During that time, we have leveraged
technologies amassed in Japan to actively advance ourbusiness in China. Under the guidance of Japanesesupervisors, we have built a stable business operation
based on a management system consisting mostly ofChinese staff. In short, we have achieved consistent
growth while addressing dramatically changing social
conditions.
Going forward, we will build a solid businessfoundation for each Group company based in China.
From this foundation, we will focus on increasing sales of
products for the food and beverage and medical sectors,
as well as high-value-added products, which we havepositioned as strategic products. In addition, we will enter
the aerospace sector, where market growth is expected.
In addition to ISO 9001 certification for quality
management systems, we obtained AS9100 certification,a special quality management standard required to serve
the aerospace industry. While this may not necessarily
lead to instant orders, we will take our time and move
forward with firm resolve.
Leveraging our Chongqing Plant, completed in
January 2013, we will target business expansion by
tackling China’s interior regions, where double-digit
growth continues. At the same time, we will work toincrease sales of high-value-added products as we strive
to further enhance the income base of our China business.

PUNCH INDUSTRY (Dalian) was founded in October 1990
and this year celebrates its 25th year of operation. As weapproach our next quarter-century, we have declared apolicy calling for the “transformation to a highly profitablebusiness model.” As a corporate entity, our employees areworking as one to embrace any challenge and deliver
sustained growth. Specifically, we strive to further increase
sales of high-value-added products to the food andbeverage, medical, and other sectors. We will also target
areas outside the mold and die market and endeavor toactively enter new fields, such as the aerospace sector.
To achieve these objectives, we will return to our roots
as an integrated manufacturing and sales company, which
is our key strength. Together, our six production facilitiesand 32 sales offices in China will work as one (through the23* There are five “China Group” companies: PUNCH INDUSTRY (Dalian) CO., LTD.,
PUNCH INDUSTRY (Wafangdian) CO., LTD., PUNCH INDUSTRY (Wuxi) CO., LTD.,
PUNCH INDUSTRY (Dongguan) CO., LTD., and PUNCH SPRING (Dalian) CO., LTD.

reintegration of manufacturing and marketing) as we
progress toward a new stage in our next quarter-century.
A key factor in delivering growth will be ouruncompromising commitment to product quality, which
we have always maintained, as well as our ability toconstantly resolve the problems of customers and offer
them better services as a loyal business partner. Goingforward, we will target continued corporate growth bycoexisting and advancing in harmony with customers,
local communities, shareholders, and employees.
As we approach our 25th anniversary, PUNCH
INDUSTRY (Dalian) will advance toward its next stage ofdevelopment. We appreciate your continued support as
we actively work toward that goal.

Akira Takanashi
Executive Officer, Chairman of China Group* companies
General Manager, PUNCH INDUSTRY (Dalian) CO., LTD.

Special Feature

The Punch Group’s Overseas Network
Market Environment“M
Market Environment

ake in India” is a new initiative of the Modi government
aimed at attracting foreign manufacturers to thatnation. Under this initiative, the Indian economy is said to be
growing at more than 7% annually. As this government-led
campaign attracts more participants, we expect economic
growth to accelerate and a market for molds and dies togradually take shape.

A

Initiatives

PUNCH INDUSTRY MALAYSIA SDN. BHD.

lthough economic trends in emerging nations varyby country, Southeast Asia has strong expectations
for high economic growth and increased consumer
spending. In 2014, the entire Southeast Asian market formolds and dies is estimated to have grown by around 5%,
driven mainly by Indonesia, Vietnam, Malaysia, and thePhilippines. Overall, the market is around ¥900 billion inscale and we believe that it still has major growth potential
and will remain a promising market.

I

In 2015, we will celebrate five years since establishing
PUNCH INDUSTRY INDIA PVT. LTD., a local subsidiary
based in Chennai through which we have built a solid
business foundation based on selling automotive products
imported from Japan and China.
Going forward, we will expand our geographicalcoverage to include India’s northern region while further
deepening our presence. We will also obtain stronger
support from the Marketing Headquarters and otherwise
seize the future growth potential of India. In addition toautomobiles, we will carefully expand our business domains
in tandem with economic growth.

InitiativesO

ur business in Southeast Asia is focusing on
expanding our carbide product business,spearheaded by PUNCH INDUSTRY MALAYSIA
SDN. BHD., which became a Group member in 2013,
as well as its three sales subsidiaries. In Southeast
Asia, where concentrations of industry vary
according to country, we will target further growthby accurately grasping the needs of customers inorder to establish a solid position in the region.
Recognizing Vietnam as a nation with great
potential, we will step up the business expansion
activities of our Hanoi sales office, which opened in
April 2014. In Indonesia, we will continue focusing on
the automotive sector while maximizing synergies
with our joint venture there. In Singapore, where
many European and North American companies
have their regional headquarters, there is aconcentration of people from diverse sectors andmultiple nations. We are emphasizing the importanceof Singapore as an information-intensive hub related
to the manufacturing sector.
Going forward, we will deploy our integrated
manufacturing and sales system and build abusiness model based on manufacturing and direct
sales. We will also instill our manufacturing-relatedDNA, acquired over 40 years, in each and every
Punch Group employee in Southeast Asia. To help
them share this DNA, we will reinforce our sales
system by promoting cross-border alliances anddeveloping our business beyond national boundaries,
in order to expand our operations in Southeast Asia.

25

PUNCH INDUSTRY MALAYSIA serves as the Punch Group’s
most important production base outside of Japan and China
and also spearheads the Group’s sales activities in Southeast
Asia. As a production base, it is working to improve productquality with the aim of remaining the world leader in carbide
products. In addition to Southeast Asia, we sell carbide
products in Europe, Japan, the Americas, and elsewhere, andwe will further broaden our geographical coverage. We alsoplan to expand and upgrade our product lineup. Regarding our
responsibility for sales in Southeast Asia, we will sell not only
products manufactured by PUNCH INDUSTRY MALAYSIA but
Punch Group products in general via our sales subsidiaries andagents. Through rigorous quality control, we will advance ourbusiness by delivering lower-priced products to customers
more quickly and thus earning their trust.

PUNCH INDUSTRYINDIA PVT. LTD.

India is a huge nation with 1.2 billion people and territorynine times the size of Japan. In targeting the Indian market,
we have advanced our business with constant emphasis onconcentration and selection of managerial resources. Under
this policy, we now specialize in the automotive market, thefastest-growing segment of India’s manufacturing industry.
By pursuing customer-focused sales activities in theautomotive sector and taking full advantage of the Punch

Group’s procurement network, we undertake globally
optimized procurement activities. We have also built asystem enabling our top-quality products to be delivered
swiftly at low prices, and now deal with more than 200
customers. In addition to expanding in parallel with theautomotive sector, we will strive to tap new markets,
including electronic components and consumer electronics,
that will form the pillar of our sales activities in India.

Masahiro Kobayashi

Takeshi Nakano

Representative Director and President
PUNCH INDUSTRY MALAYSIA SDN. BHD.

Representative Director and President
PUNCH INDUSTRY INDIA PVT. LTD.

CSR Initiatives
The Punch Group pursues CSR-oriented
management that continually supports
manufacturing worldwide.

Punch Group
Stakeholders

2016 National Sports
Festival
Next year, we will serve as official supporter of the 2016 National

Participation in Challenge Day 2015

In May of this year, Punch
Industry participated in
Challenge Day 2015, anevent
sponsoredbyKitakami City to mark 500
days before the start ofSports Festival Iwate.
Challenge Day is acommunity participation type of event held around theworld on the last Wednesday of May each year.
Municipalities with similar populations compete against
each other, from 12:00 midnight until 9:00 p.m. thefollowing evening, and the percentage of population
participating in certain activities continuously for 15
minutes or longer determines the winner. The competition
also has a unique rule that calls for the losing team to hoist
the official flag of the opposing municipality on the main
flagpole of its government office building, for one week
starting the day after the event.
This year, Kitakami City competed against Ishigaki
City, Okinawa Prefecture, and Punch Industry employees
in Kitakami devoted their normal cleanup time to activities
in the event. There were five activities to choose from:“WANKO dancing” with Sobatchi (the official Iwate
mascot) and a PR caravan group, walking while picking

27

In February 2015, the Kitakami Plant received letters of appreciation from Kitakami City and the Kitakami
City Cooperative Citizens’ Council. The letters reflected high evaluation of local cleanup activities andthe plant’s support for various events, such as Iwate Kitakami Marathon and the Kitakami Geto Hill
Climb. The city’s public information newsletter also introduced the community contribution activities of
the Kitakami Plant. Going forward, we will continue such activities to help build better communities.

Providing opportunities for local students to consider their career paths

Sports Festival (Sports Festival Iwate). This event will be held in
Iwate Prefecture, home of two Punch Industry plants.

Letters of appreciation received from Kitakami City

Punch Industry is providing support toSports Festival Iwate.

up trash, futsal, table tennis, and badminton. A total of 311
Punch Industry employees, or 80% of its local workforce(including those on holiday and night shift), took part.
In the end, Kitakami City (with a participation rate of
34.3%) lost to Ishigaki City (47.5%), but the event
represented one more enjoyable occasion in the lead-up
to Sports Festival Iwate in 2016.

Registered as volunteers forSports Festival Iwate,
representing Kitakami CityIn June 2015, the Kitakami Plant was registered as amember of Kitakami Supporters, a local volunteer groupsupporting Sports Festival Iwate. A group of some 50
individuals from the general public had registered asvolunteers, but this time Punch Industry and two othercompanies registered as corporations—a first for this event.
The Kitakami City Preparation Committee has set thefollowing targets for attracting volunteers: 100 people foreach of the rehearsal events for soft tennis and badminton,
1,800 for the opening and closing ceremonies, and 1,000
for competitions held in Kitakami City. At the registration
ceremony, Deputy Mayor Yoshiaki Oikawa offered thefollowing words: “I want all of you, even those with different
responsibilities, to understand the event and provide
cooperation.
Pleaseemphasize this whensoliciting volunteers fromthe general public.” With
this in mind, Punch
Industry will contributetomaking
SportsFestival Iwate a highly
Kitakami Supporters registration ceremony
successful event.

Punch Industry seeks to provide opportunities for local
students to consider their personal career paths throughlearning about their local communities. With this in mind, we
provide workplace tours and offer internships to students. In
2014, the Miyako Plant held one tour in July and two in
October, with 20 participants from Tsugaruishi Junior HighSchool, 32 from Miyako Technical High School, and 17 from
Miyako Junior College, respectively. We also welcomed threeinternships from Miyako Vocational Training Center in June,
two from Miyako North High School in July, and three from
Miyako Technical High School in October. The interns gained
first-hand experience at dispatching, picking, and other tasks.
In 2015, we plan to introduce new internships at our systems

department on a trial basis. We will also actively embrace
initiatives for recruiting disabled people.

Dispatching lecturers to high schools
Punch Industry dispatches employees to local high schools togive students practical training related to taking qualification
exams and give lectures aimed at fostering occupationalawareness among students. In June and July 2014, we sent
people to Kuji Technical High School to provide guidance on“Eco-friendly products”
according to Punch Industry
We think very seriously about the meaning of “eco-friendly
products” and take the lead in the mold and die components
industry in the rigorous pursuit of such products. We place
top priority on reducing chemical substances that harm theenvironment and will continue making and delivering ecofriendly products with minimal environmental impact basedon our own standards, which are even stricter than the RoHS
Directive. We also embrace an environmentally responsible
approach across diverse aspects of our business. This
includes using eco-friendly packaging materials and recycled
paper, as well as vegetable-based inks for our catalogs.

mechanical system maintenance work, one of the selective
items in the national trade skills test. Also in June of last year,
we sent occupational awareness instructors to Miyako
Technical High School.

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

■

RoHS

RoHS refers to the EU directive “Restriction of the Use of Certain
Hazardous Substances in Electrical and Electronic Equipment,” whichcame into force in July 2006 and restricts the use of certain hazardous
materials in the manufacturer of various types of electrical and electronicequipment.
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 (polybrominated diphenyl ethers).

28

CSR Initiatives
Tree-planting activities

Quality-enhancement initiatives

Seeking to become a global entity, the Punch
Group engages in diverse CSR initiatives, notonly in Japan but also in its overseas
operations, as it strives to fulfill its mission asa corporate citizen.
In China, we promote broad-ranging
contribution activities rooted to local
communities. In the spring of each year, forexample, employees and their families
participate in a tree-planting event hosted by
the Dalian Forestry Bureau.

“With our customers as our top priority, Punch Industry shall fulfill
its responsibilities as a listed company by delivering high-quality
products and services that can be used with confidence. We
shall also emphasize quality assurance to further increasecustomer satisfaction and trust by fostering human resources,
innovating technologies, and developing new products.”
Accompanying these basic principles are our own quality
management systems, named Punch Quality Management
Systems, based on which we verify our quality assurance
framework and assess its effectiveness in our efforts to deliver
high-quality products and services.

IR activities
Financial results briefings for analysts andinstitutional investors
For analysts and institutional investors, Punch Industry holds
twice-yearly financial results briefings, as well as small
individual meetings.
Company briefings for individual investors andparticipation in IR events
We participate in a variety of IR events in our quest to informas many individual investors as possible about our business.
In the year ended March 2015, we held company briefings forindividual investors in Tokyo, Osaka, Nagoya, and Sapporo,attracting many attendees.
We also participated in the Nikkei IR Fair at Tokyo Big
Site. There, our president hosted a company briefing held ona specially erected stage. We also operated our own booth,
where we displayed information about the Company and held
“mini” briefings of around 10 minutes in duration. These
activities attracted many people over the two-day event.
Information disclosure via corporate website and IR tools
In 2015, we revamped our corporate website, giving it a moreinnovative design and framework to make it more visuallyappealing, more search-friendly, and easier to understand. To
enhance understanding of our company, we have included an
introduction to our business activities, results briefing
materials, financial data, and various other materials, in ourefforts to disclose information in a swift and fair manner. We
will continue improving the content of our website going
forward.
Punch Industry also distributes its own IR newsletter via
e-mail, and people who have registered their details also
receive mailings of financial results, press releases, IR-related
information, and other relevant materials.

29

Company briefing for individual investors

Participation in NPE2015
In March 2015, PUNCH INDUSTRY (Dalian) CO., LTD. operated abooth at NPE2015: The International Plastics Showcase, one of
the world’s largest plastics exhibitions, in Orlando, Florida. It was
the first time the Punch Group exhibited in the United States. At
our booth, we displayed a broad range of products, fromstandard plastic mold components to special-order items,
highlighting the Punch Group’s responsiveness and appeal of its
services. Many people visited our booth, including frommanufacturers of plastic molding machines and dies, travelingfrom North America, Central America, South America, andelsewhere. It was an excellent opportunity for us to attract
interest in the Punch Group.

“Punch+” in-house newsletter

Nikkei IR Fair 2014

We publish our in-house newsletter,
Punch+, on a regular basis with the aims of
conveying our management policies,
sharing information, and stimulating
communication among personnel. The
newsletter features a variety of content,such as management policies, financial
highlights, and employee introductions,
including from Group companies. Since weare advancing our operations globally, we
publish versions in English and Chinese, as
well as Japanese. We will continueenhancing the content of Punch+ going
forward.

30

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

■ Basic Policy

1. Board of Directors and framework of Board members

The Punch Industry Group, as a globally active corporate
entity, makes dedicated efforts to strengthen corporate
governance practices with conscious awareness thatcomplying with laws and regulations, faithfully fulfillingsocial responsibilities and ensuring soundness andtransparency of management are not only the keys toprotecting the interests of all shareholders, customers andother stakeholders, as well as continually increasing
corporate value, but are the most important management
obligations of the entire Group.

General Meeting of Shareholders

Appoint/
Dismiss

Accounting Auditor

Coordinate

Appoint/
Dismiss

Board of Directors

Audit & Supervisory Board

Determine
proposalforappointment
anddismissal

Appoint/
Dismiss

Audit
ReportInquire, Report

President
Issue
instructions,
ReportIssue instructions,
ReportCoordinate

Accounting audit

Internal control
Internal Audit Office

Coordinate

31

Select/Dismiss/Supervise, Report

Risk Management
Committee
Internal
audit

Internal Control
OfficeNomination
andCompensation
Advisory
Committee

Issue instructions,
ReportOperating sections
Internal
controlsupportExecutive
Conference
Departments
Group companies

Punch Industry’s Board of Directors is composed of four
directors (including one external director), and is vested withthe authority to make decisions concerning the execution of
the Company’s business matters and to supervise theexecution of duties by the directors. This business execution
promotes speedy decision making by appointing andempowering executive officers to run the organization andcreating a framework that clarifies the responsibility andauthority of the directors’ function of overseeing management
and the executive officers’ function of executing business
operations.
2. Audit & Supervisory Board and its members
The Audit & Supervisory Board is presently in place,composed of four members (including two external members).
The body monitors the Company’s governance practices andimplementation status, and conducts an audit of daily
activities, including the execution of duties by the directors.
The external members include a certified attorney, who is
responsible for monitoring management practices from theperspective of compliance.
Audit & Supervisory Board members attend general
meetings of shareholders and meetings of the Board of
Directors and exercise legal rights in regard to reports
submitted by directors, executive officers, employees, and
the Accounting Auditor company. In addition to these tasks,
full-timemembers
attendimportantmanagement
conferences, conduct visiting audits at branch offices andplants, and otherwise implement effective monitoring
activities.

3. Executive Conference
Composed of managing directors, executive officers, ageneral manager, and the chief of the Global Business
Planning Office, the Executive Conference discusses andmakes decisions concerning important management issues,
excluding those submitted to the Board of Directors.
4. Risk Management Committee
Composed of directors, executive officers, a generalmanager, the chief of the Global Business Planning Office,the chief of the Internal Control Office, the manager of theGeneral Affairs Department, and Group company
representatives, the Risk Management Committee oversees
the development, maintenance and improvement of risk
management and legal compliance frameworks andimplements employee training and education.
5. Remuneration of Board members, etc.
The method of deciding on the remuneration of directors andauditors is approved by unanimous resolution of all membersof the general meeting of shareholders. The Board of
Directors decides the specific amount of remuneration foreach director upon the examination of appropriateness by thenon-statutory Nomination and Compensation Advisory
Committee, and the Audit & Supervisory Board decides the
specific amount of remuneration for each auditor.

Compliance
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 areaware that their conduct must comply with laws andregulations 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 Management Committee,
which is chaired by the president. The Committee identifies
and assesses risks, while serving as a framework that ensures
the thorough dissemination of compliance information
throughout the entire Group through the implementation of
ongoing employee education programs and training. The
Company’s Risk Management Guidelines contain provisions
to be implemented in the event of an unforeseen occurrence
that could impact our operations.

Internal audit

32Corporate GovernanceDirectors and Audit & Supervisory Board Members(As of June 24, 2015)

Punch Industry is a company with an Audit & Supervisory
Board that is currently under development, two-and-ahalf years since its public listing. Nevertheless, we areupgrading our corporate officer system and otherwise
working to strengthen the separation between the
management oversight and business execution functions.
We have also established the Nomination andCompensation Advisory Committee, a discretionary
body that aims to preserve the transparency and fairnessof various decision-making processes related toconsideration of director candidates and remuneration
for directors. In these and other ways, the Company isworking independently to enhance and reinforce theeffectiveness of its corporate governance frameworks.
Demonstrating strong leadership, our top
management team endeavors to strengthen corporate
governance, establish and operate sound internal control
systems, and build appropriate risk management
frameworks. Seeking to be a “global Punch Industry,” wepractice “offensive (proactive) governance” that boldly
addresses risk and emphasizes appropriate returns. On
such occasions, I will be assertive in providing
recommendations, proposals, and advice.
Corporate governance is not an absolute science,
and Punch Industry should engage in repeated PDCA
cycles to improve its systems between best practice andminimum standard depending on the Company’ssituation, on a day-to-day basis. At present, I am the sole
independent external director of Punch Industry. In theinterest of maximizing diversity in the composition of theBoard of Directors, I believe the Company should appointat least one more independent external director as amanagement priority.
Corporate governance is one of the three importantpillars underpinning corporate management, together
with internal control and risk management. Accordingly,
when addressing Board of Directors’ meetings and thelike, I keep the three pillars at the forefront of my mind as

Message froman External Director
Shigeru Yokoyama,
External Director

I offer my recommendations, proposals, advice, opinions,and impressions, while also asking incisive questions. In
these ways, I hope to build a “relationship of trust with asense of impartiality and fairness” between Punch
Industry’s executives and employees.
In my opinion, corporate value consists of various
elements, including corporate ethics and corporate
culture. As a long-serving member of the financial
services sector, I am acutely aware of corporate value
from economic and monetary perspectives, and, like top
management, I am constantly thinking about expected
rate of return, cost of capital, return on equity (ROE), andother indicators of capital efficiency. With these
performance indicators in mind, I intend to closely
monitor the Company’s situation to determine whether or
not management is effectively implementing its capital,
financial, investment, and other strategies.
Naturally, I will also work toward “defensive
governance,” to prevent corporate scandals and such
scenarios by strengthening ties between full-time Audit &Supervisory Board members, external Audit &Supervisory Board members, and other non-executive
corporate officers.
Going forward, I will work daily, even in my limited

Masaaki Takeda
President &Representative Director

Yasuhiro Sanada

Takao Murata

Shigeru Yokoyama

Director

Director

Director (External)

Norio Kitsui

Susumu Sugita

Ryoichi Ando

Yoriatsu Matsue

Audit & Supervisory Board Member(Full-time)

Audit & Supervisory Board Member(Full-time)

Audit & Supervisory Board Member(External)

Audit & Supervisory Board Member(External)

capacity, to support the efforts of employees and address
the needs of shareholders and all other stakeholders. To
this end, I will strive to maintain Punch Industry’s dignified
status as a publicly listed company and help it respondflexibly to dramatically changing business conditions, inorder to achieve healthy and sustained growth and raise
corporate value over the medium and long terms.

Executive Officers
Kazuhiro Natsuzaka
33

Makoto Kume

Akira Takanashi

Hiroshi Fujisawa

Hirohisa Morikubo
34

Management’s Discussion and Analysis■ Performance Overview■ Earnings

In the fiscal year ended March 31, 2015, the pace of economic
recovery in the United States slowed down somewhat, while
the European economy languished and the Chinese economy
posted stable growth of around 7%. Accordingly, the global
economy continued growing moderately despite lacking any
real momentum. In Japan, the economy continued showing a
recovery trend, buoyed by sustained yen depreciation andlow crude oil prices, as well as an increase in capital
expenditures.
Under these circumstances, the Punch Group worked
actively to globalize its operations while tapping new markets
and sectors. At the same time, we strove to bolster our results
through ongoing cost-cutting efforts.
In Japan, the Group reported a year-on-year increase insales due to various factors. These included flourishing capital
investment demand, a significant recovery in the industrial
machinery sector, and solid performances by the automotive,
consumer electronics, and precision equipment sectors. In
China, we also enjoyed year-on-year sales growth thanks tohealthy results across broad-ranging sectors, including
automobiles, electronic devices, and semiconductors. Sales
in Southeast Asia and Europe also increased, benefiting fromthe full-year contributions of PUNCH INDUSTRY MALAYSIA
SDN. BHD. and its subsidiaries, which joined the Group in
August 2013.

Operating income jumped 48.4% year on year, to ¥1,724
million. In addition to higher revenue, this was due to lower
purchasing costs, a reduced cost of sales ratio stemmingfrom improved factory operations, and cost structure“renovation activities” by the Company. Net income grew
64.9% year on year, to ¥1,188 million.

■ Revenue
Consolidated net sales increased 16.8% year on year, to¥34,392 million. Sales in Japan reached the highest level inrecent years, underpinned by increasing orders amid recovery
in capital expenditures across a wide range of industries, both
domestically and overseas.
For the year, we posted record-high overseas sales,
benefiting from healthy results in China across manyindustries, especially automobiles, consumer electronics, andprecision equipment. Group sales were bolstered by the fullyear contribution of the Southeast Asia group (PUNCH
INDUSTRY MALAYSIA SDN. BHD. and its subsidiaries).

Business Risks
The following statements contain important issues with regard to the outlook of the Punch Group’sbusiness and operations, and may have a material effect on the decisions of investors. Please note thatsuch forward-looking statements in this report are based on the judgments made by the Punch Groupas of June 24, 2015. Undue reliance should not be placed on these or any other projections made by theGroup.

(1) Trends in customers’ industries■ Financial Position
At March 31, 2015, total assets amounted to ¥29,623 million,up ¥5,152 million from a year earlier. This stemmed mainly
from an increase in notes and accounts receivable.
Total liabilities stood at ¥15,418 million, up ¥310 million
from a year earlier. This was due mainly to an increase in notes
and accounts payable.
Total net assets jumped ¥4,842 million year on year, to¥14,205 million. Major factors were an increase in capitalstock and capital surplus due to a public offering and private
placement, an increase in retained earnings stemming fromhigher net income, and a rise in foreign currency translation
adjustments.

■ Cash Flows
Cash and cash equivalents at fiscal year-end totaled ¥3,302
million, up ¥1,795 million from a year earlier.
For the fiscal year under review, net cash provided byoperating activities amounted to ¥1,805 million. Factors
boosting cash flows included ¥1,612 million in income before
income taxes and minority interests and ¥1,316 million in
depreciation and amortization. By contrast, there was a¥1,142 million increase in notes and accounts receivable and¥392 million in income taxes paid.
Net cash used in investing activities totaled ¥1,180 million.
Main factors included ¥1,129 million in purchase of property,
plant and equipment.
Net cash provided by financing activities was ¥1,013
million. This was mainly due to ¥2,639 million in proceedsfrom issuance of common stock, which outweighed
repayment of debt.

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. Our major customers’
industries encompass a wide range of products, including
automobiles, electronic devices, semiconductors, consumer
electronics, and precision equipment. It is therefore probablethat market trends, price structures, and intensifying
competition in these industries will determine trends inproduction and capital expenditure, and may impact the
Punch Group’s business performance.
The relocation of manufacturing from Japan to production
facilities overseas (a so-called “hollowing-out”) has stopped
due to yen depreciation, but signs of a revival of Japanesemanufacturing bases remain limited. Accordingly, the Punch
Group has been actively developing its business overseas,
including in China, but if such relocation and/or hollowing-out
increase to a level greater than we anticipated, this could
affect the Group’s business performance.

any change in the management strategies, significant
revisions to trade terms and conditions, or performancefluctuations in the relevant supplier could impact the Punch
Group’s business performance. A similar impact can be
expected from our supplier of materials for our carbide
products, which are handled by PUNCH INDUSTRY
MALAYSIA SDN. BHD. (hereinafter, “PUNCH MALAYSIA”), a
subsidiary.
Any factors that cause problems for the production
processes at these special steel manufacturers could have an
impact on the Punch Group’s business performance.

(4) Undeveloped and new business fields
In addition to its existing business supplying components forplastic molds and press dies, the Punch Group has set its
future growth strategies focusing on undeveloped businesses
in fields where it can leverage its core strengths. However, if
these efforts do not progress as planned due to changes inthe economic situation, trends in related technologicalinnovations and developments by our competitors, the Punch
Group’s business performance may be affected.

(2) Competition
The components for molds and dies that the Punch Group
manufactures face competition in such areas as technology,
price, and delivery. For standard products, we areconcentrating on reducing manufacturing costs to enhance
our competitive edge. For special-order products, we aredifferentiating ourselves from our competitors by building an
integrated production system backed by advanced
technological skills and by creating a customer-focused sales
and market system. However, if these business strategies do
not work according to plan, or we encounter unexpecteddevelopments from our competitors, or such developments
occur to a greater degree than we anticipated, this could
impact the Punch Group’s business performance.

(5) Business risks in China
The Punch Group has been engaged in business activities in
China since 1990, and to date has never faced a withdrawal
or major employment adjustment in an environment that isdifferent from Japan’s in terms of business practices andemployment systems. Our business in China now represents
an important foundation of the Punch Group’s consolidated
operating income. Although we anticipate stable businessexpansion in the future in line with economic growth andamicable labor–management relations, any major changes tothis business environment, including political unrest, mounting
anti-Japanese sentiment, removal orders due to urban
development policies, or higher labor costs, among others,
could affect the Punch Group’s business performance.

(3) Purchase of principal raw materials
The Punch Group depends on a specific trading company for
massive purchases of steel, its principal raw material. While
we have maintained a good business relationship with thistrading company for many years with a stable supply system,

35(6) Business risks in Southeast Asia
The Punch Group converted PUNCH MALAYSIA to awholly owned subsidiary in August 2013, and established36

Business Risks
PT. PUNCH INDUSTRY INDONESIA in November 2013. Whilestable business expansion is anticipated on the back ofprojected growth in Southeast Asian markets and soundmanagement, the Group’s performance could be affected if
there are any major changes in the business environment due
to political unrest, a tightening of regulations, changes in
economic conditions, or uncertainty over currencies, among
other factors.
While we believe that the goodwill generated in the wakeof the consolidation of our new subsidiary appropriatelyreflects its future earnings capacity, any deterioration in the
profitability of this subsidiary caused by substantial changes
in management or the business environment could impact the
Punch Group’s business performance due to a loss fromgoodwill impairment.

(7) Overseas business development outside of China
and Southeast Asia
In addition to China and Southeast Asia, the Punch Group has
been engaged in developing businesses in India, Europe, and
the Americas. If these businesses fail to progress as planned
due to changes in the local political and economic situations
or trends in customers’ industries, the Punch Group’sbusiness performance could be affected.

(8) Domestic logistics system
For domestic distribution, the Company operates a centralized
control system from its Tokyo Logistics Center (hereinafter,“TLC”), outsourced to external logistics companies, and an
overnight shipping system has been implemented except fordeliveries to some regions. However, if any problems occur at
TLC, or if the delivery service is interrupted by a natural
disaster or some other calamity, this could have an impact on
the Punch Group’s business performance.
If logistic volumes in western Japan, including any
increases in production at our Hyogo Plant, exceed thecurrent assumptions and cause problems for the logistics
system, additional investment would likely be needed toestablish a new logistics base in the region.

(10) Management of customer information
The Punch Group conducts transactions with more than
10,000 customers in Japan and overseas, and manages large
volumes of customer information through electronic media
and print media. If information leaks were to occur due to a
failure of management or problems with the information
system, etc., the Punch Group would face a serious loss ofcredibility, which would impact its business performance.

37

At previous fiscal
year-end(March 31, 2014)

At fiscal year-end
under review(March 31, 2015)

Balance of interest							bearing debt

7,743,960

7,155,937

24,471,415

29,623,834

31.6

24.2

(Thousands of yen)

Total assets(Thousands of yen)

Dependence oninterest-bearing debt(%)

(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 remain sound by testingfor impairment. However, depending on the profit and loss or
cash flow situation of the Company’s plants and offices andGroup companies, these assets could have an impact on the
Punch Group’s operating results and financial position.

(12) Fluctuations in foreign exchange rates
In preparing its consolidated financial statements, theCompany faces systemic risks from foreign currency
fluctuations in the Chinese yuan, Indian rupee, Malaysian
ringgit, and others, when converting the currencies, used byoverseas Group companies, into Japanese yen.
An increase in the number of transactions in foreign
currencies is expected in line with the Company’s accelerated
global business development. The Company will protect its
financial structure against foreign currency fluctuations bymanaging the risk associated with foreign exchange, including
marrying exchange credits and debts, forward contracts, etc.
Chinese subsidiaries have foreign exchange risks forloans payable as some debts are in foreign currencies. The
Company monitors the medium- to long-term trends in thiscurrency, and reduces the risk by diversifying currencies
when borrowing.
However, significant foreign exchange fluctuations
exceeding the Company’s assumptions could impact the
Punch Group’s performance.

(9) Information systems
The Punch Group’s sales management system and production
management system form the basis of its business, and webelieve that these systems operate with adequate stability andsecurity. However, unpredictable events including natural
disasters, failures in system hardware and communications,or computer viruses causing system failures could affect the
Punch Group’s business performance.

(Consolidated)(13) Interest-bearing debt
The Punch Group has procured the funds necessary forbusiness expansion by borrowing mainly from financial
institutions. The ratios of interest-bearing debt to total assets
are shown below.

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 interest-bearing
debt divided by total assets x 100.

(15) Lawsuits and other actions
While the Punch Group exerts its utmost efforts to maintainand protect its intellectual property rights, it is conceivablethat the Group, through the course of conducting businessoverseas, become embroiled in a lawsuit concerning
intellectual property rights due to differences in legal systems
between countries.
Although the Punch Group has taken all possible
precautions to ensure the quality of its products, if a lawsuit
were brought to claim damage from a serious accident due to
product failure or complaints, the Group may incur huge costs
involving heavy compensation payments.
In addition to the above, if a material lawsuit were brought
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 capacityand generate its own funds by reducing its working capital.
We expect the dependence on interest-bearing debt to hoverat a relatively high level for a while.
Under these circumstances, if we find it impossible toprocure funds due to changes in the financial environment,
and therefore difficult to execute our investment plans, and if
the fund procurement costs increase amid the rising trend in
market interest rates, the Punch Group’s performance andfinancial position could be affected.
The Company’s commitment-line contracts with major
financial institutions contain financial covenants, and in theevent of any infringement of these covenants, the Company
could be required to repay the relevant loans, which could
affect the Punch Group’s financial position.

(16) Environmental measures
The Punch Group has established its “Environment Principles”
and “Environmental Actions Guideline” to actively addressenvironmental issues. However, if unexpected environmental
problems occur, or changes in production facilities and waste
treatment methods are required due to amendments to therelevant laws and regulations, the Punch Group’s performance
could be affected.
The Company has been tackling the problem of soil
contamination by volatile organic compounds at the site of theformer Kanegasaki Plant in consultation with specialized
advisors, in an effort to fulfill its corporate social responsibility.
However, if an unexpected situation arises, or significant
changes are made to the laws and regulations associatedwith environmental policies, the Punch Group’s performance
could be affected.

(14) Human resources
The Punch Group has placed its emphasis on securing anddeveloping capable human resources, and has implemented
a range of personnel measures based on its personnel systemwith the aim of bolstering employee motivation and morale
towards improving business performance. The Punch Groupalso recruits highly capable, talented personnel whennecessary.
However, if these measures fail to function effectively, or
the required personnel cannot be secured in time due to thesituation in the human resources market, the Punch Group’s
performance could be affected.

(17) Disasters
In addition to its headquarters, the Punch Group has four
manufacturing sites, one distribution center, and 14 sales
offices in Japan; six manufacturing sites and 32 sales offices
in China; one manufacturing site and six sales offices inSoutheast Asia; and one sales office in India. If natural
disasters, such as earthquakes and typhoons, or accidents
including fires, occur, or if serious failures in the supply ofelectricity or in the telecommunications infrastructure occur
due to unexpected problems at power generating facilities,
etc., or if wars or acts of terrorism, etc., take place in the areas
where these business operations are located, the Group’sbusiness performance could be affected.

38

Consolidated Balance Sheets
PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
March 31, 2014 and 2015
Thousands of U.S.
dollars

Millions of yen

2014

2015

Thousands of U.S.
dollars

Millions of yen

2015

ASSETSLIABILITIES AND NET ASSETS

Current assets:

Current liabilities:
Notes and accounts payable—trade

2014

2015

2015

¥ 3,426¥ 4,098$ 34,107

4,331

4,174

34,734¥ 1,527¥ 3,302$ 27,483

Notes and accounts receivable—trade

9,433

11,61396,644

Short-term loans payable

Merchandise and finished goods

1,820

2,107

17,537

Current portion of long-term loans payable

972

675

5,620

145

238

1,982

Cash and deposits

Work in process
Raw materials and supplies

395

516

4,300

Income taxes payable

1,125

1,368

11,386

Provision for bonuses

359

440

3,665

260

—

—

1,877

2,685

22,35011,372

12,312

102,459

Long-term loans payable

2,440

2,306

19,194

Net defined benefit liability

737

523

4,356

Others

558

275

2,296

3,736

3,105

25,847

Deferred tax assets

308

326

2,717

Provision for soil contamination

Others

172

239

1,991

OthersAllowance for doubtful accounts

(115)

(104)

(871)

14,66819,369161,188

Total current assets

Total current liabilities
Long-term liabilities:

Property, plant and equipment:
Buildings and structures

4,933

5,188

43,178

Machinery, equipment and vehicles

11,695

13,684

113,880

Tools, furniture and fixtures

1,695

1,818

15,137

Land

831

835

6,957

Construction in progress

32

132

1,103

Others529

3

27

19,71821,664

180,281(12,106)(13,495)(112,305)

7,611

8,168

67,976

Goodwill

913

879

7,319

Valuation difference on available-for-sale securities

1

1

16

Deferred tax assets

209

120

1,002

Foreign currency translation adjustments

1,432

2,489

20,719

1,163

1,178

9,808

Remeasurements of defined benefit plans

(47)

28

236

(95)

(93)

(778)

Accumulated depreciation
Property, plant and equipment, net
Investments and other assets:

OthersAllowance for doubtful accounts
Toatl investments and other assets

Total assets

39

Total long-term liabilities
Net assets:
Shareholders’ equity:
Capital stock

1,571

2,897

24,114

Capital surplus

1,300

2,626

21,858Retained earnings

5,096

6,155

51,221

7,968

11,67997,193

Total shareholders’ equity:
Accumulated other comprehensive income:

2,191¥ 24,471

2,085¥ 29,623

17,352$ 246,516

1,385

2,520

20,972

Minority interests

9

5

46

Total net assets

9,362

14,205

118,211¥24,471¥29,623$246,516

Toal accumulated other comprehensive income

Total liabilities and net assets

40

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 2015

PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2014 and 2015

2014

2015

2015

Net sales¥29,436¥34,392$286,202

Cost of sales

21,77625,030208,296

7,660

9,361

77,906Gross profit
Selling, general and administrative expenses

Millions of yen

Thousands of U.S.
dollars

Millions of yen

Shareholders’ equity

6,498

7,637

63,556

1,161

1,724

14,350Interest income

13

14

119

Dividend income

7

8

67

Dividends fromsurplusOperating income
Operating income (expenses):

Balance at
March 31, 2013
Issuance of newshares

22

32

267

Net income

Interest expenses

(140)

(111)

(925)

Provision for soil contamination expenses

(30)

—

—

Soil contamination expenses

—

(35)

(291)

Net otherchanges of items
during the period

Gain on sales of noncurrent assets

12

7

63

Loss on sales and retirement of noncurrent assets

(24)

(12)

(104)

Loss on step acquisitions

(38)

—

—

Gain on sales of scraps

Other, net

11

(15)

(130)

Total

(164)

(112)

(933)

997

1,612

13,417

Income before income taxes
Income taxes:

Balance at
March 31, 2014

897

897

1,571

1,300

1,326

¥ 5,649

¥ 20

¥

55

¥ —

¥

76

¥—

¥ 5,726

1,794

1,794

(196)

(196)

(196)

720

720

720

(19)

1,376

(47)

1,308

9

1,317

1

1,432

(47)

1,385

9

9,362

5,096

7,968

72

72

72

2,652

2,652

1,326

1,188

1,188

1,188

480

3,996

Net income

(51)

(430)

Total

277

428

3,566

Net otherchanges of items
during the period

719

1,183

9,851

(0)

(4)

(36)

720

¥ 1,188$¥4,572

(201)

(32)

¥

¥ 403

Total
net assets

(201)

310

Net income¥ 674

Minority
interests(201)

Current

Minority interests

Capitalsurplus

Valuation
Total
difference
Foreign
Remeasurements accumulatedoncurrency
otherof defined
available- translation
benefit plans comprehensive
for-sale adjustments
incomesecurities

Dividends fromsurplusDeferredIncome before minority interests

Capital
stock

Total
Retainedshareholders’earnings
equityCumulative effects
of changes inaccounting policies
Issuance of newshares

Accumulated other comprehensive income

Balance at
March 31, 2015

¥2,897¥2,626¥6,155¥11,679

0

1,057

76

1,134

(3)

1,131

¥ 1

¥2,489¥ 28¥2,520¥ 5¥14,205

9,887
Thousands of U.S. dollars

Shareholders’ equity

Consolidated Statements of Comprehensive Income
PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2014 and 2015
Thousands of U.S.
dollars

Millions of yen

Income before minority interests

2014

2015

2015

¥ 719

¥1,183$ 9,851

Cumulative effects
of changes inaccounting policies
Issuance of newsharesOther comprehensive income:
(19)

0

(5)

Foreign currency translation adjustments

1,376

1,058

8,810

Remeasurements of defined benefit plans

—

76

633

1,356

1,135

9,448

¥2,076¥2,319$19,299

Valuation difference on available-for-sale securities

Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

41

Balance at
March 31, 2014

¥2,077¥2,322$19,328

(0)

(3)

(29)

Accumulated other comprehensive income
Valuation
Total
difference
Foreign
Remeasurements accumulatedoncurrency
otherof defined
available- translation
benefit plans comprehensive
for-sale adjustments
incomesecurities

Capitalstock

Capitalsurplus

Total
Retainedshareholders’earnings
equity$13,078$10,823$42,408$66,308

$603

$603

$603

22,072

22,072

11,036

11,036$11$11,917($397)$11,531

Minority
interests

Total
net assets$ 75$ 77,914

Dividends fromsurplus(1,678)(1,678)(1,678)Net income

9,887

9,887

9,887

Net otherchanges of items
during the period
Balance at
March 31, 2015

$24,114$21,858$51,221$97,193

5

8,803

633

9,441

(29)

9,412

$16

$20,719$236$20,972$ 46$118,21142

Consolidated Statements of Cash Flows

Company Profile (As of March 31, 2015)

PUNCH INDUSTRY CO., LTD. and Consolidated Subsidiaries
For the years ended March 31, 2014 and 2015
Thousands of U.S.
dollars

Millions of yen

2014

2015

2015

Company name997

¥ 1,612$ 13,417

Established

1,170

1,316

10,953

Capital2,897.73 million yen

46

97

811
Number of employees

3,833 (consolidated)

PUNCH INDUSTRY CO., LTD.

Cash flows from operating activities:
Income before income taxes and minority interests

¥

1975

Adjustments for:
Depreciation and amortization
Amortization of goodwill
Increase in net defined benefit liability

6

12

108

Increase in provision for bonuses

52

80

671

Increase (decrease) in allowance for doubtful accounts

21

(25)

(209)

Increase (decrease) in soil contamination expenses

5

(260)

(2,164)(186)

Interest and dividends income

(21)

(22)

Interest expenses

140

111

925

Foreign exchange losses (gains)

(45)

430

3,585

Loss on sales and retirement of noncurrent assets

12

4

41

Loss on step acquisitions

38

—

—

Increase in notes and accounts receivable—trade(312)(1,142)(9,510)

Increase in inventories

(149)

(356)

(2,967)

Increase (decrease) in notes and accounts payable—trade

(167)

182

1,517

Others, net

(127)

239

1,994

1,666

2,281

18,985

28

21

183

Interest expenses paid

(160)

(105)

(876)

Income taxes paid

(339)

(392)

(3,270)

1,194

1,805

15,022Sub-totalInterest and dividend income received

Net cash provided by operating activities

Head office

Meisan Takahama Bldg. 8F, 2-12-23 Konan, Minato Ward,
Tokyo 108-0075, Japan

Business

Manufacture and sale of mold and die components

Main banks

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Resona Bank, Limited■ Company Website

Click on Investor Relations

Cash flows from investing activities:
Net decrease (increase) in time deposits

(16)

21

177

Purchase of property, plant and equipment(460)(1,129)(9,397)

Proceeds from sales of property, plant and equipment

359

14

117

Purchase of intangible assets

(113)

(109)

(915)

Payments of long-term loans receivable

(46)

(41)

(349)

Collection of long-term loans receivable

174

46

388

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

(1,155)——

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

5

18

158

(1,252)(1,180)(9,821)(1,846)(743)(6,189)Purchase of investments in subsidiaries and affiliates resulting
in change in scope of consolidation
Others, net
Net cash used in investing activities

Top page

Cash flows from financing activities:
Net decrease in short-term loans payable
Proceeds from long-term loans payable

1,500

900

7,489

Repayment of long-term loans payable(1,550)(1,341)(11,165)

Proceeds from issuance of common stock

1,783

2,639

21,965

10——

Cash dividends paid

(196)

(201)

(1,678)Others, net

(71)

(238)

(1,988)

(370)

1,013

8,436

193

157

1,307

Proceeds from stock issuance to minority shareholders

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

(234)

1,795

14,943

Cash and cash equivalents at beginning of period

1,741

1,506

12,540¥ 1,506¥ 3,302$ 27,483

Cash and cash equivalents at end of period

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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)

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Punch Industry and Group Companies (As of March 31, 2015)■ PUNCH INDUSTRY CO., LTD.

■ Stock Information

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

Phone: +81-3-3474-8007

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

Phone: +81-197-68-3087

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

Phone: +81-193-62-8007

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

Phone: +81-790-47-8077

40,000,000 (As of June 24, 2015)

Total number of shares issued

11,061,200

Number of shareholders

5,211

Stock exchange listingFirst Section, Tokyo Stock Exchange

Security code

6165

Number of shares per trading unit

100

Transfer agent
Accounting auditors

2-2-26, Zao-Matsugaoka, Yamagata City,
Yamagata Prefecture
Phone: +81-23-688-1770

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

PUNCH INDUSTRY (Dalian) CO., LTD.

1,279,700

Financial institutions■ Stock Prices and Trading Volumes
Number ofshares held

Percentage ofshares held (%)

9.85

Yuji Morikubo

822,000

7.43

PUNCH INDUSTRY MALAYSIA SDN. BHD.

Tetsuji Morikubo

650,000

5.87

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

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

644,500

5.82

Punch Industry Employees’ Stock
Ownership Scheme

580,800

5.25

Japan Trustee Services Bank, Ltd. (trust account)

448,900

4.05

PUNCH INDUSTRY (Wafangdian) CO., LTD.

PUNCH INDUSTRY SINGAPORE PTE. LTD.

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

250,400

2.26

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

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG /JASDEC / FIM / LUXEMBOURG FUNDS

246,000

2.22

Michiko Kamba

243,000

2.19

PUNCH INDUSTRY (Wuxi) CO., LTD.

PUNCH INDUSTRY VIETNAM CO. LTD.

Kenji Sugimoto

129,000

1.16

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

No. 5 Yong ji Road,
Yongtou Village, Chang’an Town, Dongguan,
Guangdong Province, People’s Republic of China
Phone: +86-769-8507-0387

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

MT Kosan Co., Ltd.

7,047,478

Other domestic companies
Securities companies(Formerly known as Arata Audit Corp.)

63.71%
11.57%
458,000
4.14%
298,0222.70%
1,978,000 17.88%

Individuals and others
Foreign companies

PricewaterhouseCoopers Aarata

1,090,000

No. 3 Xingcheng Road, Dalian Economy
and Technology Development Zone,
Liaoning Province, People’s Republic of China

Breakdownof
Shareholders

Sumitomo Mitsui Trust BankPUNCH INDUSTRY INDIA PVT. LTD.
Name

PUNCH SPRING (Dalian) CO., LTD.

45

Total number of authorized shares■ Major Shareholders (Top 10)■ Group Companies

Pintec Corporation

Investor Information (As of March 31, 2015)(Thousand shares)
4,000

(Yen)
2,000

Trading volume (left axis)

3,000

1,500

2,000

1,000

1,000

500

Note: For the percentage of shares held, the figures have been rounded to the nearest hundredth of a percent.

0

0

12/
2013

4/
2014

8/
2014

12/
2014

3/
2015

■ Inquiries
IR & PR Division, Administration Department PUNCH INDUSTRY CO., LTD.
Meisan Takahama Bldg. 8F, 2-12-23 Konan, Minato Ward, Tokyo 108-0075
Phone: +81-3-5460-8237 Fax: +81-3-3471-8100 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 historicalfact, 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 thecontinued usefulness of capital procurement. As a result, actual business results may differ materially from these statements. Accordingly, investors are cautioned not toplace undue reliance on forward-looking statements. Punch Industry is not obliged to amend these forward-looking statements based on new information or future events.

46