Business Results for the Year Ended December 31, 2015
[Japan GAAP] (Consolidated)
February 10, 2016

Company:
The Pack Corporation
Listed on the TSE1
Stock code:
3950
URL: http://www.thepack.co.jp
Representative: Yoshikazu Nakao, President & CEO
Contact:
Keiji Kimori, Senior Managing Director, General Manager of Administration HQ
TEL: +81-6-6972-1221
Expected date of annual shareholders’ meeting:March 30, 2016
Expected starting date of dividend payment:
March 31, 2016
Expected date of filing of annual securities report:
March 30, 2016
Preparation of supplementary financial document:
Yes
Results briefing: Yes (for institutional investors and securities analysts)(Rounded down to million yen)

1. Consolidated business results for the year ended December 31, 2015
(January 1, 2015 through December 31, 2015)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Million yen

Year ended Dec. 31, 2015
Year ended Dec. 31, 2014
(Note) Comprehensive income

88,04385,809%Ordinary income

Million yen

%

2.6
6,232
13.8
6,468
13.4
1.8
5,478
4.3
5,703
5.8
Year ended Dec. 31, 2015: 4,502 million yen (down 2.8%)
Year ended Dec. 31, 2014: 4,632 million yen (up 17.8%)

4,067
4,322

(5.9)
30.9

Diluted net
income per share

Yen%

Million yen

Net income%

Net income pershare

Million yen

Return on
equityYen

Year ended Dec. 31, 2015
205.94
Year ended Dec. 31, 2014
217.26(Reference) Investment earnings/loss on equity-method

Ratio of ordinary
Ratio of operating
income to total assets income to net sales%

205.84
9.2
10.5
Year ended Dec. 31, 2015: - million yen
Year ended Dec. 31, 2014: - million yen

%

%

9.0
8.4

7.1
6.4

(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Dec. 31, 2015
As of Dec. 31, 2014
(Reference) Shareholders’ equity

Shareholders’ equity
ratio

Net assets per share%

Yen

Million yen

73,14245,41270,30442,926
As of Dec. 31, 2015: 45,365 million yen

62.0
2,312.73
61.0
2,156.41
As of Dec. 31, 2014: 42,898 million yen(3) Consolidated cash flows
Cash flows fromoperating activities
Year ended Dec. 31, 2015
Year ended Dec. 31, 2014

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen

Million yen

Million yen

4,882
4,930

(2,840)(2,599)(1,744)(1,797)

11,451
11,145

2. Dividends
Annual dividend
End of
1Q
Year ended Dec. 31, 2014
Year ended Dec. 31, 2015
Year ending Dec. 31, 2016
(forecasts)

Total
dividends(Total)Dividend
payout ratio(Consolidated)

Ratio of total
dividend to
net assets(Consolidated)

End of2Q

End of
3Q

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

25.00
25.00

-

25.00
25.00

50.00
50.00

994
982

23.0
24.3

2.4
2.2

-

25.00

-

25.00

50.00

Year-end

Total

3. Forecast of consolidated business results for the year ending December 31, 201 6(January 1, 2016 through December 31, 2016)(% change from the previous corresponding period)
Net salesFirst half
Fiscal year

Operating income

Profit attributable toowners of parent

Ordinary income

Net income per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

41,50090,500

3.1
2.8

2,400
6,400

6.3
2.7

2,500
6,600

5.2
2.0

1,600
4,200

12.8
3.3

81.56
214.11

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes inthe scope of consolidation): None
(2) Changes in accounting policies, accounting estimates and restatements
1) Changes in accounting policies associated with revision of accounting standards: Yes
2) Changes in accounting policies other than 1): None
3) Changes in accounting estimates: None
4) Restatements: None

(3) Shares outstanding (common shares)
1) Number of shares outstanding at the end of the period (treasury shares included)
As of Dec. 31, 2015:

19,900,000 shares

As of Dec. 31, 2014:

19,900,000 shares

As of Dec. 31, 2014:

6,672 shares

2) Number of treasury shares at the end of the period
As of Dec. 31, 2015:

284,512 shares

3) Average number of stock during the period
Year ended Dec. 31, 2015:

19,751,043 sharesYear ended Dec. 31, 2014:

19,892,954 shares(Reference) Summary of non-consolidated business results
1. Non-consolidated business results for the year ended December 31, 2015
(January 1, 2015 through December 31, 2015)(1) Non-consolidated results of operations(% change from the previous corresponding period)
Operating income
Ordinary income
Net income

Net sales
Million yen%

Million yen%

Million yen%

80,04378,784

1.6
2.0

5,661
5,003

13.2
4.3

5,993
5,375

11.5
5.3

3,682
36.3
2,701 (14.5)

Shareholders’ equity
ratio

Net assets per share%

Yen

Year ended Dec. 31, 2015
Year ended Dec. 31, 2014

Net income per share
Year ended Dec. 31, 2015
Year ended Dec. 31, 2014

Million yen%

Diluted net income per share

Yen

Yen

186.45135.81

186.37-(2) Non-consolidated financial position
Total assets

Net assets

Million yen

As of Dec. 31, 2015
As of Dec. 31, 2014
(Reference) Shareholders’ equity

Million yen

67,96543,18465,40940,907
As of Dec. 31, 2015: 43,164 million yen

63.5
2,200.51
62.5
2,056.34
As of Dec. 31, 2014: 40,907 million yen

2. Forecast of non-consolidated business results for the year ending December 31, 2016
(January 1, 2016 through December 31, 2016)(% change from the previous corresponding period)
Net salesFirst half
Fiscal year

Ordinary income

Net income

Net income per share

Million yen%

Million yen%

Million yen%

Yen

37,50082,000

2.9
2.4

2,400
6,300

9.9
5.1

1,500
3,900

16.6
5.9

76.47
198.82*Implementation status of auditing procedure
This financial summary is not subject to auditing procedure pursuant to the Financial Instruments and Exchange Act. At the ti meof disclosure of this report, the auditing procedure of financial statements pursuant to the Financial Instruments and Exchange Act
has not been completed.
*Explanation regarding appropriate use of business forecasts and other special instructions
Note concerning forward-looking statements
Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information available
to the Company’s management at the time the materials were prepared. These materials are not promises by the Company
regarding future performance. Therefore, actual results may differ significantly from the forecasts due to various factors. Pleaserefer to “1. Analysis of Results of Operations and Financial Position, (1) Analysis of Results of Operations” on page 2 for forecast
assumptions and notes of caution for usage.

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Contents of Attachments
1. Analysis of Results of Operations and Financial Position

2(1) Analysis of Results of Operations

2(2) Analysis of Financial Position

3(3) Basic Policy Concerning the Distribution of Profits and Dividend Distributions for the Fiscal Year
Under Review and the Subsequent Fiscal Year4(4) Business Risks

4

2. The Pack Corporation Group6

3. Management Principles

8(1) Fundamental Management Principles

8(2) Goals and Performance Indicators

8(3) Medium-term Business Strategy

8(4) Important Issues

8

4. Basic Approach for the Selection of Accounting Standards

8

5. Consolidated Financial Statements

9(1) Consolidated Balance Sheet

9(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income11(3) Consolidated Statement of Changes in Equity

13(4) Consolidated Statement of Cash Flows

15(5) Notes to Consolidated Financial Statements

17

Going Concern Assumption

17

Significant Changes in Shareholders’ Equity

17

Changes in Accounting Policies

17

Segment and Other Information

18

Per Share Information

21

Material Subsequent Events

21

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The Pack Corporation (3950) Financial Report for Fiscal Year 2015

1. Analysis of Results of Operations and Financial Position(1) Analysis of Results of Operations
In 2015, the Japanese economy was stagnant overall despite an improvement in corporate earnin gs. Consumer
sentiment rebounded, but actual consumer spending was lackluster due in part to the effect of warm winterweather. Furthermore, although the number of jobs increased, there was no growth in personal income. Japan’s
economy was supported by spending by foreign tourists in Japan, which remained strong even though the benefitof the weaker yen has come to an end. Overseas, the outlook is uncertain because of concerns about slowing
economic growth in China and other emerging countries, upcoming U.S . financial policy actions and otherevents.
During 2015, there were many activities to accomplish the goals of the medium-term management plan under theslogan of “with a positive attitude, speed and accuracy.” All group companies were focused on entering newmarkets and selling products at suitable prices, and engaged in activities such as proactive capital expenditures,developing new products and improving product quality in order to grow earnings.
Net sales increased 2.6% year-on-year to 88,043 million yen, operating income increased 13.8% to 6,232 million
yen, ordinary income increased 13.4% to 6,468 million yen, and net income decreased 5.9% to 4,067 million yen.
Business segment performance was as follows.
(Paper Products)
The paper products segment accounted for 59.3% of consolidated sales in 2015. Sales of paper bags, which
accounted for 32.1% of consolidated sales, increased 3.8% to 28,236 million yen. The main reasons were higher
sales of mass-produced paper bags, the inclusion of sales of NISHINIHON PRINTING CO., LTD., which becamea subsidiary in April 2014, and higher sales at THE PACK AMERICA CORP.
Sales of paper folding cartons, which accounted for 14.6% of consolidated sales, increased 1.7% to 12,850
million yen mainly because of higher sales of cartons for food products.
Sales of corrugated boxes, which accounted for 10.2% of consolidated sales, increased 2.4% to 9,002 million yen.
This increase was attributable to the recovery trend in sales in the manufacturing sector as well as the strong
sales in other market sectors.
Printing sales, which accounted for 2.4% of consolidated sales, decreased 4.3% to 2,096 million yen as orders
were weak at both Keihin Tokushu Printing Corp. and NIKKO PRINT CORPORATION.
Overall, sales in this segment increased 2.7% to 52,186 million yen. Operating income was up 15.6% to 4,535
million yen.
(Film Packaging)
The film packaging segment accounted for 22.2% of consolidated sales in 2015. Segment performance benefited
from strong orders for plastic bags for disposable diapers, supported in part by sales of these diapers to foreign
tourists in Japan. As a result, sales increased 5.9% to 19,575 million yen. Operating income was up 22.6% to 963
million yen.
(Other Businesses)
Other businesses accounted for 18.5% of consolidated sales. There was a decline in sales of products used inconjunction with the Pack Assortment Service system, which is a comprehensive outsourcing vendor system thatcovers everything from manufacturing and procuring packaging materials and ot her products to inventory control
and delivery. As a result, sales decreased 1.4% to 16,281 million yen and operating income decreased 1.8% to
1,651 million yen.

-2-

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Outlook for 2016
In 2016, corporate earnings in Japan are expected to be generally firm. Howe ver, fiscal and monetary measuresby the Japanese government have not yet produced growth in personal income and consumer spending is stillsluggish. Furthermore, foreign exchange rates continue to be unstable. In the packaging industry, the operating
environment will probably remain challenging because of uncertainty about companies in the distribution andspecialty store sectors, where performance is greatly affected by changes in consumer spending.
Activities in 2016 are guided by the slogan “Growth and Innovation –Dedicated to progress with unity andvigor–.” We will proactively invest in equipment, strengthen production capacity and efficiency, and expand
businesses and enter into new markets in Japan and overseas for a new stage of growth. Furthermore, we arededicated to improving customer satisfaction by focusing on developing products and services and on quality
management. At the same time, we will further streamline our operations. The goal of all of these measures ismore growth in sales and earnings.
As we take these actions, we ask for the continued support and understanding of our shareholders.
(2) Analysis of Financial Position
1) Balance sheet position
Assets totaled 73,142 million yen at the end of the current fiscal year, up 2,838 million yen from the end of theprevious fiscal year. The main factors were increases of 1,341 million yen in cash and deposits and 923 million
yen in investment securities, and decreases of 87 million yen in merchandise and finished products and 294
million yen in construction in progress.
Liabilities increased 351 million yen to 27,729 million yen. The main factors were increases of 33 million yen innotes and accounts payable-trade and 692 million yen in net defined benefit liability.
Net assets increased 2,486 million yen to 45,412 million yen. The main factors were increases of 2,764 million
yen in retained earnings and 654 million yen in valuation difference on available-for-sale securities.
2) Cash flow position
The balance of cash and cash equivalents at the end of the current fiscal year increased 305 million yen, or 2.7%
from the end of the previous fiscal year to 11,451 million yen.
Cash flows from operating activities
Operating activities provided net cash of 4,882 million yen (down 1.0% from net cash provided of 4,930 million
yen in the previous fiscal year). The principal factor was a depreciation of 1,777 million yen, while there were an
increase of 637 million yen in notes and accounts receivable-trade and income taxes paid of 2,338 million yen.
Cash flows from investing activities
Investing activities used net cash of 2,840 million yen (net cash used of 2,599 million yen in the previous fiscal
year). The principal factors were 1,636 million yen in purchase of property, plant and equipment and 5,400
million yen in purchase of securities, while there were proceeds from sales of securities of 4,100 million yen.
Cash flows from financing activities
Financing activities used net cash of 1,744 million yen (net cash used of 1,797 million yen in the previous fiscal
year). This was mainly due to the cash dividends paid of 989 million yen.

-3-

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Reference: Cash flow indicators
Fiscal years ended

Dec. 31, 2011 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 Dec. 31, 2015

Shareholders’ equity ratio

53.8

55.8

60.7

61.0

62.0

Shareholders’ equity ratio based on market prices

35.2

44.0

57.1

64.8

81.7

Interest-bearing debt to cash flow ratio

1.1

0.3

0.2

0.0

0.0

157.5

340.1

237.6

561.9

5,259.7

Interest coverage ratio

Notes: 1. Cash flow indices are calculated, using consolidated financial figures, as follows:
Shareholders’ equity ratio: Shareholders’ equity / Total assets
Shareholders’ equity ratio based on market prices: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments
2. Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares issued and outstanding at the end of the period, net of treasury shares.
3. Interest-bearing debt includes all liabilities on the consolidated balance sheet that incur interest.
4. Operating cash flows and interest payments are taken from “Net cash provided by (used in) operating activities”
and “Interest expenses paid” on the consolidated statement of cash flows, respectively.

(3) Basic Policy Concerning the Distribution of Profits and Dividend Distributions f or the Fiscal Year
Under Review and the Subsequent Fiscal YearThe fundamental policy on dividend payments is to pay a stable dividend continuously while taking into
consideration each year ’s performance as well as the need to retain earnings to expand businesses and build asound base for growth.
Retained earnings are used to sustain and increase the dividend payments to shareholders by funding initiatives
that are expected to increase earnings in the future, such as strengthening the financial position and paying for
production facilities, R&D programs and other activities.
The Pack Group intends to pay a year-end dividend of 25 yen per share for Fiscal Year 2015. This will make thecompany’s total dividend distributions 50 yen per share for Fiscal Year 2015, as planned.
In Fiscal Year 2016, we plan to pay an interim dividend of 25 yen per share and a year-end dividend of 25 yen
per share, resulting in an annual dividend of 50 yen.
(4) Business Risks
The following risk factors could have a material effect on decisions by investors. Forward-looking statements inthis section are based on the judgments of management as of the end of 2015. The Pack Group is aware that thefollowing events may occur and has taken actions to avoid these problems or respond properly.
1) Decline in domestic demand or lower market prices
Since our operations rely mainly on demand within Japan, sales are greatly influenced by the health of theJapanese economy. If domestic demand shrinks or market prices fall due to a major recession in Japan, there
could be an adverse impact on the financial position or performanc e of the Group.
2) Impact of a disasterWe have done everything possible to minimize the impact of a disaster, but there is no guarantee that the effects
of a disaster can be prevented or minimized. If the Group is unable to prevent or minimize the effect s of adisaster, there could be an adverse impact on the financial position or performance of the Group caused by areduction in the Group’s production capacity or an increase in manufacturing costs.

-4-

The Pack Corporation (3950) Financial Report for Fiscal Year 20153) Risks involving legal and regulatory requirements or litigation
Our business activities are subject to a variety of legal and regulatory requirements, including environmental
regulations and intellectual property law, and there could be a risk of litigation in connection with these legal andregulatory requirements.
There could be an adverse impact on the financial position or performance of the Group based on the outcome ofsuch litigation.
4) Product liability
In connection with its products, the Group is subject to claims for damages based on product l iability.
At present the Group has not received any major claim for damages, but there could be a claim in the future.
The Group has product liability insurance, but it is conceivable that this insurance could be insufficient to aliability payment that the Group may be required to make.
5) Procuring raw materials and merchandise
We constantly work on maintaining stable supplies and prices for raw materials and merchandise that we procure
by using a variety of Japanese and foreign manufacturers. Neverthele ss, if a surge in the price of oil upset thebalance of supply and demand, there could be an adverse impact on the financial position or performance of theGroup.
6) Impairment accounting
There may be asset impairment losses that result from how the Group uses non-current assets.
7) Counterparty credit risk
There are risks associated with the payments received by the Group from counterparties. We use commercial
credit insurance and other measures to manage credit risk. However, if the financial soundness of a major
customer deteriorated, there could be an adverse impact on the financial position or performance of the Group.

-5-The Pack Corporation (3950) Financial Report for Fiscal Year 2015

2. The Pack Corporation Group
There are eight companies in the Pack Group: the parent company and seven consolidated subsidiaries. T he
primary business activities are the manufacturing and marketing of paper products, film packaging and otherproducts, as well as research, distribution and services associated with these businesses.
The activities of the Group and information about each business segment are shown in the following table.

Name of businesssegment

Businesses

Company name

Paper products

Manufacturing, purchasing, and selling paperbags, printed paper folding cartons, corrugatedboxes and other products

Film packaging

Manufacturing, purchasing, and selling plastic
bags, garment bags and other products

Other businesses

The Pack Corporation
Keihin Tokushu Printing Corp.
NIKKO PRINT CORPORATIONPACK TAKEYAMA CO., LTDNISHINIHON PRINTING CO.,LTD.
THE PACK AMERICA CORP.
The Pack (Shanghai) Corporation
The Pack (Changshu) Co., Ltd.

The Pack Corporation
PACK TAKEYAMA CO., LTD
THE PACK AMERICA CORP.
The Pack (Shanghai) Corporation
Manufacturing, purchasing, and selling gifts,
The Pack Corporation
clothing, supplies, price tags, calendars,
PACK TAKEYAMA CO., LTD
designer creations, promotional goods and other NISHINIHON PRINTING CO.,products
LTD.
THE PACK AMERICA CORP.

THE PACK AMERICA CORP. is incorporated in the United States. Sales are mainly within the United States andCanada.
The Pack (Shanghai) Corporation mainly sells products to customers in China and the parent company in Japan.
The Pack (Changshu) Co., Ltd. manufactures paper bags for sale in China. Both companies are incorporated in
China.

-6-

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

(Purchasing and selling paper
products, film packaging, gifts andother products)* THE PACK AMERICA CORP.

Finished products(Manufacturing, purchasing andselling paper products, gifts andother products)

Outsourced production* NISHINIHON PRINTING CO.,LTD.

Purchase of finishedand semi-finishedproducts

Finished products

Outsourced
production

Outsourced production(Manufacturing, purchasing, andselling paper products, film
packaging, gifts and other products)

Purchase of finishedand semi-finishedproducts

Finished products* PACK TAKEYAMA CO., LTD
Purchase of
semi-finishedproducts

Outsourced
production
Outsourced production(Printing of paper products)
Finished products* Keihin Tokushu Printing Corp.
* NIKKO PRINT CORPORATION

Purchase of
semi-finished products(Selling paper products andfilm packaging)

Finished products

Finished products* The Pack (Shanghai) Corporation

Outsourced
production

Purchase of finishedproducts(Manufacturing paper
products)* The Pack (Changshu) Co., Ltd.

(Note) * Consolidated subsidiaries-7-

Customers

The Pack Corporation(Manufacturing, purchasing, and selling paper products, film packaging, gifts and other products)

Finished products

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

3. Management Principles(1) Fundamental Management Principles
With “management that values and nurtures people” as our guiding principle, we aim to create “a management
culture that is capable of adapting to any type of change in our markets.” Furthermore, while keeping in mind our
responsibilities to society, such as addressing global environment issues, as an integrated packaging company wewill strive to achieve even better performance and meet the expectations of our shareh olders while contributing
to the development and prosperity of society.
(2) Goals and Performance Indicators
We are committed to building a sound financial base in order to increase profitability in each business andmaintain stable relationships with all of our stakeholders, including business partners, employees and, foremost,shareholders. For this reason, our current goal is to increase our shareholders ’ equity ratio and return on equity.
We also place emphasis on the dividend yield and dividend payout ratio.
(3) Medium-term Business Strategy
The Pack Group has established a medium-term management plan with the goals of raising consolidated sales to100 billion yen, ordinary income to 10 billion yen and the shareholders’ equity ratio to 70%. To accompl ish thesegoals, we are pursuing the 3S Vision, which consists of Scale, Speed and Sav e. All employees have establishedtheir own targets in order to contribute to reaching the overall goals of the medium -term management plan.
(4) Important Issues
The packaging industry is viewed as a mature industry that has no prospects for major growth in sales andearnings just by relying on the current customer base and product lineup. Due to this situation, we have been
taking numerous actions to expand operations beyond our traditional core products. We have entered newmarkets and added more products. Examples include rice bags, products for disposable diapers and cartons forfood products. We will continue to target new markets and develop products where there is a potential for solid
demand and will make substantial investments in the equipment required to achieve this growth.
Prices of raw materials and imported materials have continued to rise during the past few years in Japan due tothe weaker yen and other reasons. In response, we have been working on selling products at adequate prices byimproving customer satisfaction. This involves using sales activities that include offering ideas to customers andmaking quality management even more rigorous. At the same time, we plan to build a more powerful profit
structure by using reforms to further streamline operations. By taking these actions, we are determined to makesteady progress in line with our medium-term management goals and to continue increasing sales and earnings.
4. Basic Approach for the Selection of Accounting Standards
The Pack Group will continue to prepare consolidated financial statements using Japanese accounting standards
for the time being to permit comparisons with prior years and with the fi nancial data of other companies. We willtake suitable actions with regard to the application of International Financial Reporting Standards (IFRS) by
taking into account associated factors in Japan and other countries.

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The Pack Corporation (3950) Financial Report for Fiscal Year 2015

5. Consolidated Financial Statements(1) Consolidated Balance Sheet
Previous fiscal year
(As of December 31, 2014)(Million yen)
Current fiscal year
(As of December 31, 2015)

AssetsCurrent assets
Cash and deposits

7,248

8,589

Notes and accounts receivable-trade22,91423,506

Securities

6,199

6,399

Merchandise and finished goods

5,232

5,145

Work in process

688

713

Raw materials and supplies

749

748

Deferred tax assets

192

205

Other

453

639

Allowance for doubtful accounts

(11)

(11)

43,66745,936

Buildings and structures, net

7,699

7,709

Machinery, equipment and vehicles, net

5,109

5,261

Total current assets
Non-current assets
Property, plant and equipment

Tools, furniture and fixtures, net

231

185

8,066

8,066

525

231

21,632

21,453178

143

Investment securities

3,637

4,561

Deferred tax assets

521

419

Land
Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets

Other

732

688

Allowance for doubtful accounts

(66)

(60)

Total investments and other assets
Total non-current assets
Total assets

-9-

4,825

5,608

26,63627,20570,304

73,142

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

(Million yen)
Current fiscal year
(As of December 31, 2015)

Previous fiscal year
(As of December 31, 2014)
Liabilities
Current liabilities
Notes and accounts payable-trade

19,398

14,940-4,115

Income taxes payable

1,408

1,305

Provision for bonuses

181

186

Electronically recorded obligations-operating

Provision for directors’ bonuses

35

43

Other

2,794

2,879

Total current liabilities

23,81823,471

322

348

3,034

3,727

202

182

3,559

4,258

27,377

27,729

Capital stock

2,553

2,553

Capital surplus

3,167

3,167

Retained earnings

36,33039,095(6)(739)

42,04544,077

1,108

1,763

Non-current liabilities
Deferred tax liabilities
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

39

(5)

Foreign currency translation adjustment

(74)

(114)

Remeasurements of defined benefit plans

(220)

(355)

852

1,287

-

20

Total accumulated other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets- 10 -

27

27

42,92645,41270,304

73,142

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income

Net sales
Cost of sales

Previous fiscal year
(from January 1, 2014 toDecember 31, 2014)
85,80966,442(Million yen)
Current fiscal year
(from January 1, 2015 to
December 31, 2015)
88,04367,836Gross profit

19,367

20,207

Selling, general and administrative expenses

13,88913,975

Operating income

5,478

6,232

95
77
49
12
43

100
83
62
48

278

294

8
5
3
35

0
9
3
15
29

Non-operating income
Interest income
Dividend income
Rent income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Cost of lease revenue
Loss on sales of accounts receivable
Foreign exchange losses
Other

52

58

Ordinary income

Total non-operating expenses

5,703

6,468

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on bargain purchase

2
1,064

6
20
-

1,067

26

57
2
175
-

1
16
0
44

Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on valuation of investment securities
Impairment loss
Loss on valuation of membership rights
Compensation expenses

235

63

Income before income taxes and minority interests

Total extraordinary losses

6,536

6,432

Income taxes-current
Income taxes-deferred

2,275
(63)

2,246
117

Total income taxes

2,212

2,364

Income before minority interests

4,323

4,068

1

0

4,322

4,067

Minority interests in income (loss)
Net income- 11 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Consolidated Statement of Comprehensive Income(Million yen)
Current fiscal year
(from January 1, 2015 to
December 31, 2015)

Previous fiscal year
(from January 1, 2014 toDecember 31, 2014)
Income before minority interests

4,323

4,068

Valuation difference on available-for-sale securities

141

654

Deferred gains or losses on hedges

31

(44)

Foreign currency translation adjustment

136

(41)

-

(134)

Other comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income

309

434

4,632

4,502

Comprehensive income attributable to owners of parent

4,628

4,503

Comprehensive income attributable to minority interests

4(0)Comprehensive income
Comprehensive income attributable to- 12 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

(3) Consolidated Statement of Changes in Equity
Previous fiscal year (from January 1, 2014 to December 31, 2014)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

Capital surplus

2,553

Retainedearnings

3,165

Treasury shares

Total shareholders’equity(6)

38,71633,003

2,553

3,165

33,003(6)

38,716

Changes of items during
periodDividends of surplus

(994)

(994)

Net income

4,322

4,322

Change of scope of
consolidation
Purchase of treasury
shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

2

(8)

(8)

(0)

(0)

8

10
-

-

2

3,327

(0)

3,329

2,553

3,167

36,330(6)

42,045(Million yen)

Accumulated other comprehensive income
Valuation
RemeasureTotal
Subscription
Deferred Foreign
Minority Total net
difference onments ofaccumulated
rights to
gains or currencyinterests assets
availabledefined
othershareslosses on translation
for-salebenefit comprehensive
hedges adjustment
securities
plans
incomeBalance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

967

7

(207)

-

766

-

23

967

7

(207)

-

766

39,507--23

39,507

Changes of items during
periodDividends of surplus

-

(994)

Net income

-

4,322

-

(8)

-

(0)

-

10

Change of scope of
consolidation
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

141

31

133

(220)

85

-

4

89

141

31

133

(220)

85

-

4

3,419

1,108

39

(74)

(220)

852

-

27

42,926- 13 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Current fiscal year (from January 1, 2015 to December 31, 2015)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

Capital surplus

2,553

Retainedearnings

3,167

Treasury shares

Total shareholders’equity(6)

42,04536,330
(314)

2,553

3,167

(314)

36,016(6)

41,731

Changes of items during
periodDividends of surplus

(989)

(989)

Net income

4,067

4,067

Change of scope of
consolidation
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

(732)

(732)

0

0
-

-

0

3,078

(732)

2,345

2,553

3,167

39,095(739)

44,077(Million yen)
Accumulated other comprehensive income
Valuation
RemeasureTotal
Subscription
Deferred Foreign
Minority Total net
difference onments ofaccumulated
rights to
gains or currencyinterests assets
availabledefined
othershareslosses on translation
for-salebenefit comprehensive
hedges adjustment
securities
plans
incomeBalance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

1,108

39

(74)

(220)

852

-

27

1,108

39

(74)

(220)

852

42,926
(314)

-

27

42,612

Changes of items during
periodDividends of surplus

-

(989)

Net income

-

4,067

-

-

-

(732)

-

0

Change of scope of
consolidation
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

654

(44)

(40)

(134)

435

20

(0)

454

654

(44)

(40)

(134)

435

20

(0)

2,800

1,763

(5)

(114)

(355)

1,287

20

27

45,412- 14 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

(4) Consolidated Statement of Cash Flows
Previous fiscal year
(from January 1, 2014 toDecember 31, 2014)(Million yen)
Current fiscal year
(from January 1, 2015 to
December 31, 2015)

Income before income taxes and minority interests

6,536

6,432

Depreciation

1,852

1,777

Impairment loss

175

-

0

-

(5)

(5)

3

5

Cash flows from operating activities

Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses

58

Increase (decrease) in net defined benefit liability

39

23

(173)

(183)

Interest and dividend income
Interest expenses
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets

8

0

(2)

(4)

57

16

(1,064)-

Loss (gain) on sales of investment securities

-

(20)

Loss (gain) on valuation of investment securities

2-

Gain on bargain purchase

Compensation expenses-

44

Decrease (increase) in notes and accounts receivable-trade

(965)

(637)

Decrease (increase) in inventories

(527)

58

Increase (decrease) in notes and accounts payable-trade

(58)

(261)

Other, net

466

(164)

Subtotal

6,349

7,089

Interest and dividend income received

170

177

Interest expenses paid

(8)

(0)

-

(44)

(1,580)(2,338)

4,930

4,882

Compensation expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits

(27)

-

-

57

(3,300)(5,400)

2,400

4,100

(1,331)(1,636)4

8

Purchase of intangible assets

(38)

(25)

Purchase of investment securities

(55)

(48)

-

42

(238)

-

Proceeds from withdrawal of time deposits
Purchase of securities
Proceeds from sales of securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Other, net
Net cash provided by (used in) investing activities- 15 -(13)62(2,599)(2,840)

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Previous fiscal year
(from January 1, 2014 toDecember 31, 2014)(Million yen)
Current fiscal year
(from January 1, 2015 to
December 31, 2015)

Increase (decrease) in short-term loans payable

(230)

-

Repayments of long-term loans payable

(562)

-

Cash dividends paid

(994)

(989)

Other, net

(10)

(755)

(1,797)(1,744)

Cash flows from financing activities

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

31

9

Net increase (decrease) in cash and cash equivalents

564

305

Cash and cash equivalents at beginning of period

10,581

11,145

Cash and cash equivalents at end of period

11,145

11,451- 16 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Changes in Accounting Policies
Application of the accounting standard for retirement benefits
The Company has applied the “Accounting Standard for Retirement Benefits (Accounting Standards Board ofJapan (ASBJ) Statement No. 26, May 17, 2012)” and the “Guidance on Accounting Standard for Retirement
Benefits (ASBJ Guidance No. 25, March 26, 2015)” for provisions set forth in the main clauses of Paragraph 35of the Accounting Standard for Retirement Benefits and Paragraph 67 of the Guidance on Accounting Standard
for Retirement Benefits from the current fiscal year. Accordingly, the Company reviewed the methods forcalculating retirement benefit obligations and service costs, and revised the method of attributing estimatedretirement benefit obligations to periods from the straight-line basis to the benefit formula basis, and revised themethod of determining the discount rate from the method using the number of years approximate to the averageremaining service period of employees to the method using multiple discount rates set by the estimated period
benefit payment.
For the application of these accounting standards, etc. in accordance with the tr ansitional accounting treatments
set forth in Paragraph 37 of the Accounting Standard for Retirement Benefits, the adjustments associated with thechange in calculation methods of retirement benefit obligations and service costs are recorded in retained
earnings at the beginning of the current fiscal year.
The result was an increase of net defined benefit liability of 487 million yen, and a decrease of 314 million yen
in retained earnings at the beginning of the current fiscal year. The effect of this chang e on operating income,ordinary income and income before income taxes and minority interests for the current fiscal year isinsignificant.
Net assets per share for the current fiscal year decreased 16.01 yen. The effect of this change on net income pershare is insignificant.
As the effect of these changes on the segment information is insignificant, its description is omitted.

- 17 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Segment and Other Information
Segment Information
1. Segment overview
The reportable segments of the Pack Group are the smallest units for which separate financial information can beobtained and for which regular examinations are performed by the Board of Directors in order to allocate
resources and evaluate results of operations.
The Group is engaged primarily in the manufacture and sale of paper bags, paper folding cartons, corrugatedboxes and plastic bags.
Therefore, based on the nature of products, there are two reportable segments: “Paper products” and “Filmpackaging.”
The Group’s major products are paper bags, paper folding cartons, corrugated boxes and printing in the “Paper
products” segment and plastic bags and garment bags in the “Film packaging” segment.
2. Method to determine net sales, income or loss, assets, liabilities and other items by reportable segment
Accounting methods used for the reportable segments are generally the same as the methods used for the
preparation of the consolidated financial statements with the exception of the standard for the valuation of
inventories.
Profit for reportable segments is stated on an operating income basis.
3. Information concerning net sales, income or loss, assets, liabilities and other items by reportable segment
Previous fiscal year (from January 1, 2014 to December 31, 2014)
Reportable segment

Net sales
Sales to externalcustomerInter-segment sales andtransfers
Total(Million yen)Amount posted in
Adjustment the consolidated(Note) 2 financial statements(Note) 3

Paper
products

Film
packaging

Subtotal

Otherbusinesses(Note) 1

50,811

18,486

69,29816,51185,809-85,809

-

-

-

-

-

-

-

Total

50,811

18,486

69,29816,51185,809-85,809Segment income

3,922

785

4,707

1,682

6,390

(912)

5,478

Segment assets

36,5579,700

46,258

7,628

53,886

16,41770,304

Other items
Depreciation
1,565
222
1,788
43
1,832
21
1,853
Increases in property,
plant and equipment
1,341
176
1,518
98
1,616
2
1,618
and intangible assets(Notes) 1. “Other businesses” includes clothing, supplies and other goods.
2. The adjustments are as follows.
(1) The -912 million yen adjustment of segment income includes elimination of inter-segment transactions of 12 million
yen that are not allocated to reportable segments and -924 million yen in corporate expenses. Corporate expenses aremainly related to the parent company’s Administrative Department.
(2) The 16,417 million yen adjustment of segment assets is corporate assets that are not allocated to reportable segments.
Corporate assets mainly include the parent company’s surplus assets under management (cash and deposits of 5,813
million yen and securities of 6,199 million yen), long-term investments (investment securities of 3,637 million yen)and the parent company’s land of 766 million yen.
(3) The adjustment of depreciation and adjustment of increases in property, plant and equipment and intangible assets
are related to the parent company’s head office assets.
3. Segment income is adjusted for consistency with operating income in the consolidated statement of income.
4. Increases in property, plant and equipment and intangible assets do not include the amount increased from the newconsolidation.
- 18 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Current fiscal year (from January 1, 2015 to December 31, 2015)
Reportable segment(Million yen)Amount posted in
Adjustment the consolidated(Note) 2 financial statements(Note) 3

Subtotal

Otherbusinesses(Note) 1

Total

19,57571,761

16,281

88,043-88,043

-

-

-

-

-

-

-

52,186

19,57571,761

16,281

88,043-88,043

Segment income

4,535

963

5,498

1,651

7,150

(917)

6,232

Segment assets

37,052

10,38847,4407,642

55,08318,05973,142

Net sales
Sales to externalcustomerInter-segment sales andtransfers
Total

Paper
products

Film
packaging

52,186

Other items
Depreciation
1,522
199
1,722
31
1,754
19
1,773
Increases in property,
plant and equipment
1,665
212
1,877
9
1,887
0
1,887
and intangible assets(Notes) 1. “Other businesses” includes clothing, supplies and other goods.
2. The adjustments are as follows.
(1) The -917 million yen adjustment of segment income includes elimination of inter-segment transactions of 12 million
yen that are not allocated to reportable segments and -930 million yen in corporate expenses. Corporate expenses aremainly related to the parent company’s Administrative Department.
(2) The 18,059 million yen adjustment of segment assets is corporate assets that are not allocated to reportable segments.
Corporate assets mainly include the parent company’s surplus assets under management (cash and deposits of 6,589
million yen and securities of 6,399 million yen), long-term investments (investment securities of 4,561 million yen)and the parent company’s land of 508 million yen.
(3) The adjustment of depreciation and adjustment of increases in property, plant and equipment and intangible assets
are related to the parent company’s head office assets.
3. Segment income is adjusted for consistency with operating income in the consolidated statement of income.

Information related to impairment losses on non-current assets for each reportable segment
Previous fiscal year (from January 1, 2014 to December 31, 2014)(Million yen)

Reportable segment
Paper products Film packaging
Impairment loss

13

Subtotal-

13

Other businesses(Note)

Elimination or
corporate

-

162

Total
175

(Note) Amount for “Elimination or corporate” represents impairment losses for corporate assets that are not attributable toreportable segments.
Current fiscal year (from January 1, 2015 to December 31, 2015)
Not applicable.

- 19 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Information related to goodwill amortization and the unamortized balance for each reportable segment
Previous fiscal year (from January 1, 2014 to December 31, 2014)(Million yen)

Reportable segment
Paper products Film packaging
Amortization forthe period
Balance at end of
periodOther businesses

Subtotal

Elimination or
corporate

Total

0

-

0

-

-

0

-

-

-

-

-

-

Current fiscal year (from January 1, 2015 to December 31, 2015)
Not applicable.

Information related to gain on bargain purchase for each reportable segment
Previous fiscal year (from January 1, 2014 to December 31, 2014)
In the segment of Paper products, the Company acquired shares of NISHINIHON PRINTING CO., LTD., making it a wholly
owned subsidiary in the second quarter. We have posted the resulting gain on bargain purchase of 1,064 million yen, but notallocated to the reportable segment as it is an extraordinary income.

Current fiscal year (from January 1, 2015 to December 31, 2015)
Not applicable.

- 20 -

The Pack Corporation (3950) Financial Report for Fiscal Year 2015

Per Share Information(Yen)
Current fiscal year
(from January 1, 2015 to
December 31, 2015)

Previous fiscal year
(from January 1, 2014 toDecember 31, 2014)
Net assets per share

2,156.41

2,312.73

Net income per share217.26205.94-205.84

Diluted net income per share(Notes) 1. Diluted net income per share for the previous fiscal year is not presented since the Company had no outstanding
residual securities.
2. The basis of calculating the net income per share and diluted net income per share is as follows.
(Million yen)Previous fiscal year
Current fiscal year
Item(from January 1, 2014 to(from January 1, 2015 to
December 31, 2014)
December 31, 2015)
Net income per share
Net income

4,322

4,067

-

-

Net income related to common shares

4,322

4,067

Average number of shares outstanding during
the period (thousand shares)

19,892

19,751

-

-

-

8

( -)

( 8)

Amounts unavailable to common shareholders

Diluted net income per share
Adjustment of net income
Increase in the number of common shares(thousand shares)(of which subscription rights to shares(thousand shares))
3. The basis of calculating the net assets per share is as follows.
Item(Million yen)
Current fiscal year
(As of December 31, 2015)

Previous fiscal year
(As of December 31, 2014)

Total net assets
Deduction on total net assets

42,92645,41227

47(of which subscription rights to shares)

( -)

( 20)

(of which minority interests]

( 27)

( 27)

Net assets applicable to common shares

42,89845,365

Number of common shares used in calculation of
net assets per share (thousand shares)

19,893

19,615Material Subsequent Events
Not applicable.

* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

- 21 -