Consolidated Financial Results For the Fiscal Year Ending March 31, 2016 <Japanese GAAP> May 11, 2016

Transcription

1 Consolidated Financial Results For the Fiscal Year Ending March 31, 2016 <Japanese GAAP> May 11, 2016 Company Name: Nittobo (Registered as NITTO BOSEKI CO., LTD.) Stock Code: 3110 Stock Exchange Listing: Tokyo Stock Exchange URL: Representative: Yuichi Tsuji, Chief Executive Officer and Director Contact: Hisanobu Hayashi, General Manager, Corporate Planning Department Tel: Scheduled date of Ordinary General Meeting of Shareholders: June 28, 2016 Scheduled date of filing annual securities report: June 28, 2016 Supplementary information for financial results: Available Organization of financial results briefing: Yes (for institutional investors and analysts) Scheduled date of commencement of dividend payment: June 29, 2016 (Yen in millions, rounded down) 1. Consolidated financial results for the fiscal year ended March 31, 2016 (April 1, 2015 to March 31, 2016) (1) Consolidated results of operations (Percentage figures represent year on year changes) Net sales Operating income Ordinary income Profit attributable to owners of parent Million yen % Million yen % Million yen % Million yen % Fiscal year ended March 31, ,199 (4.5) 10, , , Fiscal year ended March 31, , , , , Note: Comprehensive income Fiscal year ended March 31, ,252 million [(69.5)%] Fiscal year ended March 31, ,675 million [61.5%] Basic earnings per share Diluted earnings per share Rate of return on equity Ratio of ordinary income to total assets Ratio of operating income to net sales Yen Yen % % % Fiscal year ended March 31, Fiscal year ended March 31, (Reference) Equity in earnings (losses) of affiliates Fiscal year ended March 31, million Fiscal year ended March 31, million (2) Consolidated financial position Total assets Net assets Equity ratio Net assets per share Million yen Million yen % Yen As of March 31, ,755 75, As of March 31, ,995 73, (Reference) Equity As of March 31, ,599 million As of March 31, ,385 million

2 (3) Consolidated status of cash flows Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Cash and cash equivalents at end of period Million yen Million yen Million yen Million yen Fiscal year ended March 31, ,677 (12,294) (2,276) 17,466 Fiscal year ended March 31, ,745 (5,318) (4,388) 15, Dividends First quarter-end Second quarter-end Annual dividends Third quarter-end Fiscal year-end Total Aggregate amount (Total) Payout ratio (Consolidated) Dividends/ net assets (Consolidated) Fiscal year ended March 31, 2015 Yen Yen 0.00 Yen Yen 5.00 Yen 5.00 Million yen 996 Fiscal year ended March 31, , Fiscal year ending March 31, 2017 (Forecast) Note: The forecasted dividend for fiscal year ending March 31, 2017 is undecided. % 21.7 % Consolidated forecast for the fiscal year ending March 31, 2017 (April 1, 2016 to March 31, 2017) Net sales Operating income Ordinary income (Percentage figures represent year on year changes) Profit attributable to owners of parent Basic earnings per share Million yen % Million yen % Million yen % Million yen % Yen First half 44, ,700 (16.6) 4,700 (17.5) 2, Full year 89, ,000 (8.2) 10,000 (8.9) 5, * Notes (1) Changes in significant subsidiaries during the period (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): None New: Excluded: None None (2) Changes in accounting policies, accounting estimates and retrospective restatements (a) Changes in accounting policies due to revision of accounting standards: Yes (b) Changes in accounting policies other than (a): No (c) Changes in accounting estimates: No (d) Retrospective restatements: No (3) Number of shares outstanding (common stock) (a) Number of shares outstanding at end of the period (including treasury stock) As of March 31, ,677,560 shares As of March 31, ,677,560 shares (b) Number of treasury stock at end of the period As of March 31, ,480,946 shares As of March 31, ,446,317 shares (c) Average number of shares outstanding Fiscal year ended March 31, ,215,038 shares Fiscal year ended March 31, ,265,600 shares

3 Summary of non-consolidated financial results (for reference) Non-consolidated financial results for the fiscal year ended March 31, 2016 (April 1, 2015 to March 31, 2016) (1) Non-consolidated results of operations (Percentage figures represent year on year changes) Net sales Operating income Ordinary income Profit Million yen % Million yen % Million yen % Million yen % Fiscal year ended March 31, , ,551 (2.8) 7,001 (7.5) 4,199 (25.9) Fiscal year ended March 31, , , , , Basic earnings per share Yen Diluted earnings per share Yen Fiscal year ended March 31, Fiscal year ended March 31, (2) Non-consolidated financial position Total assets Net assets Equity ratio Net assets per share Million yen Million yen % Yen As of March 31, ,309 59, As of March 31, ,921 58, (Reference) Equity As of March 31, ,481 million As of March 31, ,131 million *Presentation of present status of audit procedures These Consolidated Financial Results are not subject to audit procedures pursuant to the Financial Instruments and Exchange Act, and as of the date of publication of these financial results, the audit procedures of the consolidated financial statements were in progress. *Explanation on the appropriate use of performance forecasts and other special notes (Cautions on forward-looking statements, etc.) 1. Forward-looking statements such as business prospects described in this material are based on information of which the Company is currently in possession and certain assumptions that are considered to be reasonable, and the Company does not intend to promise their achievement. Moreover, actual results may differ from these forecasts due to changes in business conditions and other factors. For matters related to the forecasts, please see 1. Analysis of Operation Results and Financial Condition (1) Analysis of operation results on page 2 of Supplementary Materials of the Consolidated Financial Results. 2. Forecasts for dividends for the fiscal year ending March 31, 2017 shall be announced, upon consideration of performance trends and other factors, as soon as they are available.

4 Index of Supplementary Materials 1. Analysis of Operation Results and Financial Condition...2 (1) Analysis of operation results...2 (2) Analysis of financial condition...3 (3) Fundamental policy concerning earnings distributions and dividend for the current and next fiscal year Situation of the Corporate Group Management Policies... 5 (1) Basic management policy... 5 (2) Tasks to be addressed and medium- to long-term management strategies Basic Views on Selection of Accounting Standards Consolidated Financial Statements... 6 (1) Consolidated Balance Sheet...6 (2) Consolidated Statement of Income and Comprehensive Income...8 (3) Consolidated Statement of Changes in Equity...10 (4) Consolidated Statement of Cash Flows...12 (5) Notes to Consolidated Financial Statements...13 (Notes regarding the going concern assumption)...13 (Changes in Accounting Policies)...13 (Segment information, etc.)...13 (Per share information)...16 (Significant subsequent events)

5 1. Analysis of Operation Results and Financial Condition (1) Analysis of operation results During the fiscal year ended March 31, 2016, the Japanese economy has seen weakening production and exports, and consumer spending and capital investment have also remained lacking in strength. Although the U.S. economy has continued to recover, the outlook for the global economy remained uncertain amid factors such as the weakness of the Asian economy. In such an environment, the Nittobo Group continued to work on strengthening the base of business through activities such as the further strengthening of production and marketing capabilities throughout the fiscal year under review. As a result, consolidated net sales for the full year reached 86,199 million (down 4.5% from the same period of the previous year), consolidated operating income was 10,893 million (up 22.6% from the same period of the previous year), consolidated ordinary income was 10,974 million (up 26.7% from the same period of the previous year), and profit attributable to owners of parent was 5,598 million (up 22.0% from the same period of the previous year). Operation results by the Group s business segments were as follows. [Textiles Division] As consumption of clothing continued to stagnate, the Group endeavored to reduce costs and develop new products. As a result, sales in this segment decreased by 6.8% year-on-year to 5,568 million, and operating loss was 483 million (operating loss of 133 million in the previous year). [Glass Fiber Yarn Division] The Group responded to strong demands mainly for high value-added products in the reinforced plastic fields and electronic materials. As a result, sales in this segment increased by 2.7% year-on-year to 26,806 million, and operating income increased by 65.3% year-on-year to 4,803 million. [Glass Fiber Cloth Division] In response to demands for products related to smartphones and communication infrastructures, the Group worked to secure stable supply of glass cloth products for use in electronic materials and industrial materials. As a result, sales in this segment decreased by 5.7% year-on-year to 17,792 million, and operating income decreased by 9.0% year-on-year to 2,959 million. [Glass Fiber for Industrial Materials Division] The Group worked to expand sales of glass fiber and glass wool products for industrial and civil engineering use. As a result, sales in this segment decreased by 1.3% year-on-year to 21,831 million, and operating income increased by 66.2% year-on-year to 1,821 million. [Environment & Health Division] The Group worked hard to extend the market for the products in the medical, beverage, and other business fields. As a result, sales in this segment decreased by 21.4% year-on-year to 12,386 million, and operating income increased by 22.6% year-on-year to 2,663 million. In Other Operations, the Group endeavored to secure revenue in the property management and services business. <Outlook for fiscal year ending March 31, 2017> As for the business environment for the coming years, although a gradual economic recovery trend is expected to continue in Japan, uncertainty in the outlook of the world economy is expected to remain high due to factors such as a slowdown in the Chinese economy and an economic downturn in resource-rich countries. In addition, our business environment is expected to remain difficult for us as we will be forced to be in even severer competitions amidst further globalization of economies and an accelerating commoditization of existing products. In such an environment, we will further step up our efforts to strengthen our production and marketing capabilities in order to - 2 -

6 respond flexibly to the market and the diverse needs of our customers. (2) Analysis of financial condition 1) Status of assets, liabilities and net assets Total assets were 142,755 million at the end of the fiscal year under review, a decrease of 3,240 million from the end of the previous fiscal year. This was mainly attributable to decreases in notes and accounts receivable - trade. Total liabilities were 67,299 million, a decrease of 5,467 million from the end of the previous fiscal year, primarily due to a decrease in notes and accounts payable - trade. Net assets stood at 75,455 million. The equity ratio rose 2.7 points from the end of the previous fiscal year to 52.3%. 2) Status of cash flows Net cash provided by operating activities was 16,677 million. This was mainly attributable to increases mainly due to 8,737 million in profit before income taxes and 4,603 million in depreciation. Net cash used in investing activities was 12,294 million, which was primarily due to the 6,294 million for the purchase of investment securities and 5,456 million for the purchase of non-current assets. Net cash used in financing activities was 2,276 million. This was mainly attributable to 996 million of cash dividends paid. As a result, cash and cash equivalents at the end of period totaled 17,466 million, an increase of 1,985 million from the end of the previous fiscal year. (Reference) Changes in cash flow-related indicators Years ended March 31, Equity ratio (%) Equity ratio based on market cap (%) Interest-bearing debt to cash flow ratio (times) Interest coverage ratio (times) Notes: Equity ratio... Equity / Total assets Equity ratio based on market cap... Market capitalization / Total assets Interest-bearing debt to cash flow ratio... Interest bearing debt / Cash flow from operating activities Interest coverage ratio... Cash flows from operating activities / Interest expenses 1. Each indicator is calculated based upon consolidated figures. 2. Market capitalization is calculated by multiplying the closing stock price at the balance sheet day of each fiscal year by the number of shares outstanding (net of treasury stock) at the end of that fiscal year. 3. Cash flows from operating activities are based upon net cash provided by (used in) operating activities in the consolidated statement of cash flows. Interest-bearing debt is the sum of all liabilities shown on the consolidated balance sheet on which interest must be paid. Interest expenses are the amounts of interest expenses paid in the consolidated statement of cash flows. (3) Fundamental policy concerning earnings distributions and dividend for the current and next fiscal year The Company regards its policy of paying dividends to its shareholders as one of the top priorities, and it maintains a basic policy to improve stable dividend payment while giving consideration to a comprehensive range of matters including enhancement of internal reserves to strengthen the financial structure and for stable future growth. In line with this policy, the Company proposes to pay a 6 per share year-end dividend for the current fiscal year. Also in terms of the dividends for the following fiscal year and beyond, the Company intends to appropriately return profits to its shareholders based on the above dividend policy. However, dividends for the following fiscal year remain undecided at the current time

7 2. Situation of the Corporate Group The Nittobo Group (as of March 31, 2016) comprises NITTO BOSEKI CO., LTD. (the Company), its 29 subsidiaries and 4 affiliates. The Group engages in the Textiles business, the Glass Fiber business, the Environment & Health business, etc. The following diagram represents the Nittobo Group in terms of its various business segments: Glass Fiber Yarn business Textiles business (7 companies) (5 companies) Sell finished products Purchase finished products - Nittobo Interlining Co., Ltd. - Fuji Fiber Glass Co., Ltd. Purchase raw materials/ - Nitto Glass Fiber Manufacturing - Nittobo Niigata Co., Ltd. finished products Consign processing Co., Ltd. - Bunkyo Seiren Co., Ltd. Purchase raw materials/ finished products - NITTOBO ASIA Glass Fiber Co., Purchase finished products - Nittobo (China) Co., Ltd. Ltd. Others (3 companies) Others (2 companies) - Nitto Beverage Co., Ltd. Others (2 companies) Outsource operations - Nittobo Ecology Co., Ltd. - Nittobo America Inc. Other Operations (4 companies) NITTO BOSEKI CO., LTD. (the Company) Sell raw materials, Glass Fiber Cloth business purchase raw materials/ (4 companies) Environment & Health business finished products (4 companies) - Nittobo Macao Glass Weaving Purchase raw materials Sell finished products Co., Ltd. - Nittobo Medical Co., Ltd. - SOYO Co., Ltd. - Nittobo Allied Service Co., Ltd. Others (3 companies) Outsource operations Sell raw materials, purchase finished products Contract work Sell raw materials, purchase raw materials/ finished products Glass Fiber for Industrial Materials business (9 companies) - Paramount Glass Manufacturing Co., Ltd. - Nittobo Techno Co., Ltd. - Nitto Glasstex Co., Ltd. Others (6 companies) Note: - indicates consolidated subsidiaries

8 3. Management Policies (1) Basic management policy True to its management philosophy, the Nittobo Group, as a corporate citizen contributing to healthy and comfortable lifestyles, endeavors to raise its value within society through consistent effort to realize a more affluent society for everyone. By responding to the demands of the times and continuously creating and providing new value that would be of use to society, the Group aims to share in the joy and fulfillment with its stakeholders including its shareholders, investors, the government and the local communities, while at the same time enhance its enterprise value. (2) Tasks to be addressed and medium- to long-term management strategies The Nittobo Group has made a medium range business plan for the three-year period from April 2014 to March 2017 and has been endeavoring to execute our plans steadily. Our business environment for the coming years is expected to remain difficult for us as we will be forced to be in even severer competitions amidst further globalization of economies and an accelerating commoditization of existing products. In such an environment, we will aim to carry on our operations so that we will be continuously trusted by providing stable supplies of products and services that meet the needs of clients and societies. 4. Basic Views on Selection of Accounting Standards The Nittobo Group has been preparing consolidated financial statements in accordance with the Japanese GAAP and our policy is to continue to prepare them in accordance with it. As for the adoption of International Financial Reporting Standards (IFRS), it is our policy to take appropriate actions taking into account future circumstances within Japan and overseas

9 5. Consolidated Financial Statements (1) Consolidated Balance Sheet Assets As of March 31, 2015 As of March 31, 2016 Current assets Cash and deposits 15,722 17,891 Notes and accounts receivable - trade 26,399 23,898 Merchandise and finished goods 5,788 4,787 Work in process 2,693 2,828 Raw materials and supplies 14,502 13,579 Deferred tax assets 2,279 1,884 Other 2,006 1,016 Allowance for doubtful accounts (28) (27) Total current assets 69,363 65,859 Non-current assets Property, plant and equipment Buildings and structures, net 14,126 13,245 Machinery, equipment and vehicles, net 8,501 9,579 Land 18,696 17,396 Leased assets, net 4,784 4,086 Other, net 1, Total property, plant and equipment 47,601 45,072 Intangible assets 2,112 1,891 Investments and other assets Investment securities 23,282 26,599 Net defined benefit asset Deferred tax assets 2,019 1,695 Other 1,438 1,464 Allowance for doubtful accounts (44) (36) Total investments and other assets 26,917 29,932 Total non-current assets 76,631 76,895 Total assets 145, ,

10 Liabilities Current liabilities As of March 31, 2015 As of March 31, 2016 Notes and accounts payable - trade 8,759 7,424 Short-term loans payable 4,953 4,636 Current portion of long-term loans payable 9,289 8,855 Lease obligations Income taxes payable Provision for bonuses 1,342 1,267 Other 7,962 5,611 Total current liabilities 33,487 29,221 Non-current liabilities Long-term loans payable 14,311 14,439 Lease obligations 4,792 4,104 Provision for repairs 4,575 4,861 Net defined benefit liability 13,937 12,879 Other 1,662 1,793 Total non-current liabilities 39,279 38,078 Total liabilities 72,767 67,299 Net assets Shareholders equity Capital stock 19,699 19,699 Capital surplus 23,107 23,107 Retained earnings 30,893 35,495 Treasury shares (8,939) (8,954) Total shareholders equity 64,760 69,347 Accumulated other comprehensive income Valuation difference on available-for-sale securities 8,025 6,177 Foreign currency translation adjustment 1,708 1,315 Remeasurements of defined benefit plans (2,109) (2,241) Total accumulated other comprehensive income 7,624 5,251 Non-controlling interests Total net assets 73,228 75,455 Total liabilities and net assets 145, ,

11 (2) Consolidated Statement of Income and Comprehensive Income (Consolidated Statement of Income) For the fiscal year ended March 31, 2015 For the fiscal year ended March 31, 2016 Net sales 90,223 86,199 Cost of sales 62,632 57,049 Gross profit 27,590 29,149 Selling, general and administrative expenses 18,705 18,255 Operating income 8,885 10,893 Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method 41 Rent income Foreign exchange gains Other Total non-operating income 1, Non-operating expenses Interest expenses Amortization of net retirement benefit obligation at transition 447 Other Total non-operating expenses 1, Ordinary income 8,658 10,974 Extraordinary income Gain on sales of non-current assets 28 Gain on sales of investment securities 20 Gain on sales of shares of subsidiaries and associates 182 Reversal of provision for repairs 788 Total extraordinary income Extraordinary losses Loss on disposal of non-current assets Impairment loss 59 2,059 Loss on step acquisitions 417 Other 162 Total extraordinary losses 1,156 2,468 Profit before income taxes 8,290 8,737 Income taxes - current 1,154 1,590 Income taxes - deferred 2,499 1,521 Total income taxes 3,653 3,112 Profit 4,637 5,625 Profit attributable to non-controlling interests Profit attributable to owners of parent 4,588 5,

12 (Consolidated Statement of Comprehensive Income) For the fiscal year ended March 31, 2015 For the fiscal year ended March 31, 2016 Profit 4,637 5,625 Other comprehensive income Valuation difference on available-for-sale securities 4,031 (1,847) Foreign currency translation adjustment 1,388 (392) Remeasurements of defined benefit plans, net of tax 241 (132) Share of other comprehensive income of entities accounted for using equity method 377 Total other comprehensive income 6,038 (2,372) Comprehensive income 10,675 3,252 Comprehensive income attributable to Comprehensive income attributable to owners of parent 10,627 3,225 Comprehensive income attributable to non-controlling interests

13 (3) Consolidated Statement of Changes in Equity For the fiscal year ended March 31, 2015 (April 1, 2014 to March 31, 2015) Balance at beginning of current period Cumulative effects of changes in accounting policies Capital stock Capital surplus Shareholders equity Retained earnings Treasury shares Total shareholders equity 19,699 23,107 27,082 (8,915) 60, Restated balance 19,699 23,107 27,301 (8,915) 61,192 Changes of items during period Dividends of surplus (996) (996) Profit attributable to owners of parent 4,588 4,588 Purchase of treasury shares (24) (24) Net changes of items other than shareholders equity Total changes of items during period Balance at end of current period 3,592 (24) 3,568 19,699 23,107 30,893 (8,939) 64,760 Balance at beginning of current period Cumulative effects of changes in accounting policies Valuation difference on available-forsale securities Accumulated other comprehensive income Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets 3,993 (57) (2,350) 1, ,371 Restated balance 3,993 (57) (2,350) 1, ,590 Changes of items during period Dividends of surplus (996) Profit attributable to owners of parent Purchase of treasury shares (24) Net changes of items other than shareholders equity Total changes of items during period Balance at end of current period 219 4,588 4,032 1, , ,070 4,032 1, , ,638 8,025 1,708 (2,109) 7, ,

14 For the fiscal year ended March 31, 2016 (April 1, 2015 to March 31, 2016) Balance at beginning of current period Cumulative effects of changes in accounting policies Capital stock Capital surplus Shareholders equity Retained earnings Treasury shares Total shareholders equity 19,699 23,107 30,893 (8,939) 64,760 Restated balance 19,699 23,107 30,893 (8,939) 64,760 Changes of items during period Dividends of surplus (996) (996) Profit attributable to owners of parent 5,598 5,598 Purchase of treasury shares (15) (15) Net changes of items other than shareholders equity Total changes of items during period Balance at end of current period 4,601 (15) 4,586 19,699 23,107 35,495 (8,954) 69,347 Balance at beginning of current period Cumulative effects of changes in accounting policies Valuation difference on available-forsale securities Accumulated other comprehensive income Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets 8,025 1,708 (2,109) 7, ,228 Restated balance 8,025 1,708 (2,109) 7, ,228 Changes of items during period Dividends of surplus (996) Profit attributable to owners of parent Purchase of treasury shares (15) Net changes of items other than shareholders equity Total changes of items during period Balance at end of current period 5,598 (1,847) (392) (132) (2,372) 13 (2,359) (1,847) (392) (132) (2,372) 13 2,227 6,177 1,315 (2,241) 5, ,

15 (4) Consolidated Statement of Cash Flows Cash flows from operating activities For the fiscal year ended March 31, 2015 For the fiscal year ended March 31, 2016 Profit before income taxes 8,290 8,737 Depreciation 4,692 4,603 Impairment loss 59 2,059 Increase (decrease) in net defined benefit liability 108 (788) Increase (decrease) in provision for repairs (287) 285 Interest and dividend income (458) (448) Interest expenses Loss (gain) on sales and valuation of investment securities 34 Share of (profit) loss of entities accounted for using equity method (41) Loss (gain) on sales and retirement of non-current assets Loss (gain) on step acquisitions 417 Decrease (increase) in notes and accounts receivable - trade 714 1,279 Decrease (increase) in inventories 1,614 1,548 Increase (decrease) in notes and accounts payable - trade (352) (618) Other, net 888 (313) Subtotal 16,765 16,997 Interest and dividend income received Interest expenses paid (459) (416) Income taxes paid (2,689) (1,459) Income taxes refund 666 1,106 Net cash provided by (used in) operating activities 14,745 16,677 Cash flows from investing activities Purchase of non-current assets (2,790) (5,456) Purchase of investment securities (1) (6,294) Purchase of shares of subsidiaries resulting in change in scope of consolidation (2,506) Other, net (20) (543) Net cash provided by (used in) investing activities (5,318) (12,294) Cash flows from financing activities Net increase (decrease) in short-term loans payable (285) (283) Proceeds from long-term loans payable 6,280 9,390 Repayments of long-term loans payable (9,248) (9,696) Repayments of finance lease obligations (435) (661) Cash dividends paid (996) (996) Other, net 297 (29) Net cash provided by (used in) financing activities (4,388) (2,276) Effect of exchange rate change on cash and cash equivalents 303 (120) Net increase (decrease) in cash and cash equivalents 5,342 1,985 Cash and cash equivalents at beginning of period 10,139 15,481 Cash and cash equivalents at end of period 15,481 17,

16 (5) Notes to Consolidated Financial Statements (Notes regarding the going concern assumption) Not Applicable (Changes in Accounting Policies) Effective from the fiscal year ended March 31, 2016 the Company has adopted the Accounting Standard for Business Combinations (ASBJ Statement No. 21, September 13, 2013), Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22, September 13, 2013) and Accounting Standard for Business Divestitures (ASBJ Statement No. 7, September 13, 2013), etc., and accordingly has changed the presentation of net income, etc., as well as the presentation of minority interests to non-controlling interests. In order to reflect such changes in presentation, reclassification of accounts has been made to the consolidated financial statements for the previous fiscal year. (Segment information, etc.) (Segment information) 1. Overview of reporting segments The Nittobo Group s reporting segments are components of the Group for which separate financial information is available, and that are evaluated regularly by the corporate manager in order to determine the allocation of resources and in assessing performance. The Nittobo Group basically operates through the five divisions of Textiles, Glass Fiber Yarn, Glass Fiber Cloth, Glass Fiber for Industrial Materials and Environment & Health, and each division formulates comprehensive domestic and overseas strategies and conducts their business activities accordingly. Consequently, the Nittobo Group has the five reporting segments the Textiles Division, the Glass Fiber Yarn Division, the Glass Fiber Cloth Division, the Glass Fiber for Industrial Materials Division and the Environment & Health Division. Textiles Division engages in the manufacture and sales of textiles products (core spun yarn, stretch products, interlining and other finished products, etc.). Glass Fiber Yarn Division engages in the manufacture and sales of glass raw fiber products (yarn, roving, chopped strands, etc.). Glass Fiber Cloth Division engages in the manufacture and sales of glass fiber functional products (glass cloth, etc.). Glass Fiber for Industrial Materials Division engages in the manufacture and sales of glass fiber products for use in industrial materials and the manufacture and sales of glass wool products (for use in thermal insulation materials). Environment & Health Division engages in the manufacture and sales of reagents for in vitro diagnostics, specialty chemical products and soft drinks, and the management of environmental improvement. 2. The methods of calculating the amounts of net sales, income (loss), assets and other items by reporting segment The accounting methods for the reporting segments are, in general, the same as those used to prepare consolidated financial statements. Income of each reporting segment is an amount based on operating income. Intersegment sales or transfers are based on prevailing market prices

17 Net sales 3. Information on net sales, income (loss), assets and other items by reporting segment Net sales to external customers Previous fiscal year (April 1, 2014 to March 31, 2015) Intersegment sales or transfers Textiles Glass Fiber Yarn Glass Fiber Cloth Glass Fiber for Industrial Materials Environment & Health Others (Note) 1 Adjustment (Note) 2 Operating income reported in consolidated statement of income (Note) 3 5,971 26,093 18,865 22,125 15,766 1,401 90, ,864 3,965 2, (13,951) Total 5,980 32,957 22,830 24,632 16,146 1,627 (13,951) 90,223 Segment income (loss) (133) 2,905 3,252 1,095 2, (661) 8,885 Segment assets 10,800 43,369 13,773 18,512 12,360 7,097 40, ,995 Other items Depreciation 197 2, ,692 Increase in property, plant and equipment and intangible assets 59 2, ,814 Notes: 1. Others consist of business segments not included in the reporting segments such as the property management and services. 2. Adjustment is described below. (1) The 661 million loss under Adjustment consists of corporate expenses that are not allocated to specific reporting segments. (2) The 40,081 million for Segment assets consists of surplus operating capital and assets relating to the administrative divisions of the Company that do not belong to specific reporting segments. (3) The 359 million for Increase in property, plant and equipment and intangible assets consists of corporate capital investment. 3. Segment income (loss) has been adjusted to the operating income reported in the consolidated statement of income

18 Net sales Net sales to external customers Current fiscal year (April 1, 2015 to March 31, 2016) Intersegment sales or transfers Textiles Glass Fiber Yarn Glass Fiber Cloth Glass Fiber for Industrial Materials Environment & Health Others (Note) 1 Adjustment (Note) 2 Operating income reported in consolidated statement of income (Note) 3 5,568 26,806 17,792 21,831 12,386 1,813 86, , , (8,823) Total 5,576 32,993 18,074 23,573 12,758 2,046 (8,823) 86,199 Segment income (loss) (483) 4,803 2,959 1,821 2, (955) 10,893 Segment assets 9,885 41,608 11,975 21,045 9,549 8,125 40, ,755 Other items Depreciation 176 1, ,603 Increase in property, plant and equipment and intangible assets 79 2, ,422 Notes: 1. Others consist of business segments not included in the reporting segments such as the property management and services. 2. Adjustment is described below. (1) The 955 million loss under Adjustment consists of corporate expenses that are not allocated to specific reporting segments. (2) The 40,566 million for Segment assets consists of surplus operating capital and assets relating to the administrative divisions of the Company that do not belong to specific reporting segments. (3) The 276 million for Increase in property, plant and equipment and intangible assets consists of corporate capital investment. 3. Segment income (loss) has been adjusted to the operating income reported in the consolidated statement of income

19 (Related information) Previous fiscal year (April 1, 2014 to March 31, 2015) 1. Information by product and service Information by product and service is omitted, because similar information is provided in Segment information. 2. Information by region Net sales Japan Asia North America Europe Others Total 63,576 20,325 4,394 1, ,223 Note: Net sales are based on the customer s location and are divided by country and region. Current fiscal year (April 1, 2015 to March 31, 2016) 1. Information by product and service Information by product and service is omitted, because similar information is provided in Segment information. 2. Information by region Net sales Japan Asia North America Europe Others Total 57,782 22,334 4,377 1, ,199 Note: Net sales are based on the customer s location and are divided by country and region. (Per share information) Previous fiscal year (April 1, 2014 to March 31, 2015) Current fiscal year (April 1, 2015 to March 31, 2016) Net assets per share Basic earnings per share Notes: 1. Diluted earnings per share is not presented, since there is no dilutive stock. 2. The basis for calculation of basic earnings per share is as follows: Profit attributable to owners of parent Amount not attributed to common shareholders Profit attributable to owners of parent related to common shares Average outstanding shares of common stock during the fiscal year (Thousand shares) Previous fiscal year (April 1, 2014 to March 31, 2015) Current fiscal year (April 1, 2015 to March 31, 2016) 4,588 5,598 4,588 5, , ,215 (Significant subsequent events) Not Applicable