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Annual Report 2015

THE MARK OF LINEAR MOTION
3-11-6 Nishi-Gotanda, Shinagawa-ku, Tokyo 141-8503, Japan Annual Report

2015
Tel: +81-3-5434-0351 Fax: +81-3-5434-0353

URL : http://www.thk.com/

THK PROFILE CORPORATE DATA
As of March 31, 2015

Company Profile
Head Office 3-11-6 Nishi-Gotanda, Shinagawa-ku, Tokyo 141-8503, Japan
Telephone +81-3-5434-0351
Established April 1971

ABOUT THK
Number of Employees 9,494 (consolidated); 3,353 (parent company)
Month of Ordinary
June
General Meeting of Shareholders
URL http://www.thk.com/
Independent Auditors Grant Thornton Taiyo LLC.
THK CO., LTD. manufactures and supplies vital machinery components around the world. THK products help to convert slippage
into controlled rotary motion, enabling parts of machinery to move smoothly, easily and precisely in a straight line. Driven by a Stock Information
business philosophy that emphasizes the Company’s business philosophy, which is “providing innovative products to the world Common Stock: Authorized 465,877,700 shares
Issued 133,856,903 shares
and generating new trends to contribute to the creation of an affluent society,” THK has continued to focus on the development
Stock Exchange Listing Tokyo Stock Exchange (1st Section)
of a variety of products including LM guides, as a creative development-driven enterprise since our establishment in 1971. Stock Transfer Agent Mitsubishi UFJ Trust and Banking Corporation
Number of Shareholders 17,223

Main Products
Major Shareholders
Shareholders Number of Issued Shares Held Shareholding Ratio (%)

Japan Trustee Services Bank, Ltd. (Trust Account) 10,486,000 7.83
THK CO., LTD. 7,263,364 5.42
The Master Trust Bank of Japan, Ltd. (Trust Account) 6,095,500 4.55
Akihiro Teramachi 3,646,610 2.72
MELLON BANK, N.A. AS AGENT FOR ITS CLIENT MELLON OMNIBUS US PENSION 3,373,389 2.52
JP MORGAN CHASE BANK 385632 2,847,772 2.12
LM Guide Ball Screw Electric Actuator
FTC CO., LTD. 2,774,000 2.07
LM guides are our main products, which incorporated a part Ball screws are high-efficiency feed screws with the balls Electric Actuators are hybrid products combining a guide
with linear rolling motion into practical usage for the first making a rolling motion between the screw and the nut. component such as an LM guide with a ball screw, linear THE BANK OF NEW YORK 132812 2,168,100 1.61
time in the world. They realize the development of high- Compared with conventional sliding screws, these products motor or other drive component. Reductions in the number JPMCB USA RESIDENTS PENSION JASDEC LEND 385051 1,897,400 1.41
precision, high-rigidity, energy saving, high-speed ma- have drive torque of one-third or less, making them most of parts and design man-hours can be realized by adopting RBC IST 15 PCT LENDING ACCOUNT—CLIENT ACCOUNT 1,651,155 1.23
chines with long service lives. suitable for saving drive motor power. the electric actuator.

Shareholder Composition
Shareholder Type Number of Shareholders Number of Issued Shares Held Shareholding Ratio (%)

Financial Institutions 66 35,074,700 26.20
Securities Companies 43 2,954,362 2.21
Other Corporations 254 5,140,116 3.84
Overseas Institutions 467 67,131,634 50.15
Individuals and Others 16,392 16,292,727 12.17
Ball Spline Cross Roller Ring Treasury Stock 1 7,263,364 5.43
Ball splines are rolling guide spline bearings. This is an in- Cross roller rings have orthogonally arranged cylindrical roll-
novative product with a ball rolling on a groove in the shaft, ers. They are roller bearings with high rotation accuracy
realizing allowable loads greater and enabling torque trans- capable of bearing loads in every direction. The rings are Stock Price and Trading Volume
mission while making linear movements. highly rigid despite their compact design, and are used in
(Yen) Stock Price (Left scale) Trading Volume (Right scale) (Thousands of shares)
the rotating parts of many different types of industrial ma-
chinery. 4,000 20,000

3,000 15,000

Contents
2,000 10,000
THK’s Challenge 02 Business Review: Geographic Business Review 12 Board of Directors and
Consolidated Performance Overview 04 Business Review: New Business Review 16 Audit & Supervisory Board Members 28
1,000 5,000
To Our Stakeholders 06 THK Products 19 Financial Section 30
Transfer of the L&S Business Research and Development 22 Corporate History 60
0 0
from TRW Automotive Inc. 11 Environmental Preservation 24 Subsidiaries & Affiliate 62 14/4 14/5 14/6 14/7 14/8 14/9 14/10 14/11 14/12 15/1 15/2 15/3 15/4 15/5 15/6 15/7

Corporate Governance and Internal Controls 26 Corporate Data 63

T HK ANNUAL R E POR T 2015 63

Key Characteristics

PIONEER
Originator of World-First Products
THK pioneered the development of the world’s first linear motion (LM) guide on the back of its original
concepts and innovative technologies. By providing the necessary components that help increase preci-
sion, rigidity and speed across such wide-ranging fields as machines tools and industrial robots, the
Company has consistently played a major role in the ongoing development of industry.

NO.1
Commanding a Leading Share of the Global Market
Since successfully developing the world’s first LM guide, THK has commanded a leading share of the
global market. LM guides that facilitate a controlled rolling motion so that parts of machinery will move in
a straight line has long been in demand from the industrial machinery sector for use in machine tools as
well as in semiconductor production and other equipment. Looking ahead, demand is expected to surge
in a broad spectrum of consumer-related areas, including seismic isolation and damping systems, med-
ical equipment, automotive parts and renewable energy-related products.

25 COUNTRIES
Expanding Our Global Sales, Production and Development Structure
THK has actively promoted the development of an integrated production and sales structure with facilities
and operations closer to centers of demand. The Company currently maintains a local production and
sales network that covers its four principal markets, Japan, the Americas, Europe and Asia. As a result of
this endeavor, we set up direct representation in 25 countries around the world. The Company is targeting
raising its overseas sales ratio, which already stands at 48% in fiscal 2014, and we are soundly on target
to reach 50%.

T H K A N N U A L R E P O R T 2 01 5 01

. Europe and Asia.. Full-Scale Globalization THK is building an integrated production and sales structure with facilities and operations closer to centers of demand to produce and sell locally in four areas: Japan. THK is also working to expand its sales network in a bid to steadily capture demand amid expansion in its user base. which is projected to enjoy demand growth over the medium-to-long-term. In developed countries. The Company is con- tinuing its trend. of upgrading and expanding its sales network while bolstering its production capabilities across newly emerging markets including China.3 billion Sales bases: 47 Production bases: 12 Development bases: 1 Asia and Other Net Sales ¥49. the Americas. the Company is working diligently to promote substantial additional growth.8 billion Production bases: 12 Sales bases: 9 Development bases: 1 Production bases: 3 02 T HK ANNUAL R EP O R T 2015 . Net Sales ¥20. THK’S CHALLENGE EXPANSION THROUGH.0 billion The Americas Sales bases: 58 Net Sales ¥34.4 billion Sales bases: 12 Production bases: 2 Japan Net Sales ¥113. Through these means. particularly over recent years. GLOBALIZATION Europe Note: Net sales by regional data is based on overseas sales for fiscal 2014.

the Company has embraced the dual growth strategies of focusing on Full-Scale Globalization and the Development of New Business Areas to increase its geo- graphical presence and expand the range of applications for which THK products are used. and renewable energy. aircraft. and the IMT Division. Fields with High Future Growth Potential · Medical equipment. the Company is honing its accumulated know-how and core linear motion system technologies nurtured over a long period and is accelerating the pace at which it develops new business fields. Expansion of Business Areas THK is contributing to the growth and development of custom- Full-Scale Globalization ers worldwide and helping to build a prosperous society by promoting the use of its products including LM guides. NEW BUSINESS Expansion from Capital Goods FAI Division (Future Automotive Industry) into Consumer Goods · Develops ‌ and supplies key automotive components that enhance automobile safety · Other transportation equipment-related businesses Capital Goods ACE Division (Amenity Creation Engineering) Machine Tools · Mainly ‌ develops and supplies seismic isolation and Chip Mounting Machines damping system that help ensure housing safety Injection Molding Machines · Support the home automation Industrial Robots Consumer Goods Semiconductor Production IMT Division (Innovation Mechatronics Technology) Equipment Automotive Parts FPD Production Seismic Isolation and · Supplies ‌ unit products customized to each customer’s needs Equipment Damping System ·D evelops and supplies electric actuator series that etc. Recognizing the vast potential that also exists in other areas within the consumer goods sector. Moreover. As a part of these endeavors. Medical Equipment address customers’ general-purpose needs Aircraft ·D eveloping next generation robot related products that are Renewable Energy projected to expand in the future Robots etc. THK has set up three specialist divisions: the ACE Division. aircraft. which handles such products as electric actuators and next-generation robot-related products. At the same time. the FAI Division. and energy-related fields T H K A N N U A L R E P O R T 2 01 5 03 . Development of New Business Areas Development of New Business Areas As a part of efforts to develop new business areas. use of THK’s products is expanding across a variety of fields including medical equipment. which is responsible for activities in transportation equipment-related fields. which handles seismic isolation and damping systems. the Company is working diligently to cultivate fields in close proximity to the consumer goods sector.

3 73.284 Net Income (Loss) 17.067.7 12.31 ¥ 148.407.6 billion.68 0.372.36 Net Income (Loss)—Diluted 130.27 = U. Outside Japan. demand in the Americas.272 189. and China was generally firm. ended March 31.9 Operating Margin (%) 17.5 3. CONSOLIDATED PERFORMANCE OVERVIEW Years ended March 31 2005 2006 2007 2008 2009 Net Sales* ¥147.158 ¥158.84 1.7 38.708 ¥179.8 Return on Equity (ROE) (%) 14. the improvement in earn- ings was due mainly to the success of various improvement activi.39 1.974 27. the approximate rate of exchange prevailing in Tokyo on March 31.6 34.606 57.350 Net Assets 127.520 Gross Profit 53.266 Europe 15.554 112.340 Operating Income (Loss) 25.05 137. 2015.000 Europe Under these circumstances.000 business structure that had been strengthened by various mea- sures.6 Equity Ratio (%) 58.710 ¥208. a cross-divisional initiative designed to bolster the business base.7 Return on Assets (ROA) (%) 12.000 Asia and Other increase in capital investment.566 The Americas 12.42 1.S.2 12.374 15.9 4.3 29. dollar amounts represent translation of Japanese yen. to ¥217. 2007.1 18. The upswing in earn.236 24.937 8.42 ¥ 158.861 19.269 Japan 105.484.584 21.323 1.524 26.079 31.107 16. This positive performance largely reflected the Company’s 100.150 21. Return on assets (ROA) represents operating income (loss) plus interest and dividend income as a percentage of average total assets. the fiscal year ended March 31.712 *Segments are based on where our customers are located.3 billion.000 In overall terms.1 31.74 — Book Value 1.72 0.0 68.280 264.649 26.266.953 177. for convenience only.321 109.845 30. 2015.71 Notes: 1. 2. Results were also buoyed by movements in foreign currency 0 exchange rates and the downturn in the value of the yen compared 2011 2012 2013 2014 2015 with the previous period.S. THK has applied the Accounting Standard for Presentation of Net Assets in the Balance Sheet (Accounting Standards Board of Japan (ASBJ) Statement No.244 119.198 19. Per Share Net Income (Loss)—Basic ¥ 145.649 168.8 11. 250.79 0.8 10.701 6.7 0. Europe.038 18.348 18.340 16.78 1. 20.007 244.000 10 ties. demand trended upward in Japan amid a robust 200. net sales (Millions of yen) increased 17. at the rate of ¥120.53 ¥ 9. In addition to the increase in net sales.204 Total Assets 220. 30.513 136. The Americas nue. THK reported an increase in reve.384 263.69 Cash Dividend 18 25 33 36 20 Overseas Sales Ratio (%) 28. 0 0 2011 2012 2013 2014 2015 04 T HK ANNUAL R EP O R T 2015 .1 72.000 efforts to aggressively expand sales while taking advantage of a Japan 50. 150.412 ¥174.7 17.69 0.36 ¥ 139.000 15 to ¥28. 5) and the Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet (ASBJ Guidance No. to enhance the efficiency of fixed costs and reduce the ratio of variable costs.97 157.344 25. $1. 8) in calculating net assets effective from fiscal 2006.4% year on year.000 23.8 9.8 12. 3.4% year on year.6 11.888 14. including the P25 Project.565 34.142 68.915 Asia and Other 13.229 240.921 65.203 21. 10.523 Income (Loss) before Income Taxes and Minority Interests 26.9 71. Net Sales In fiscal 2014.039 192. U. Operating Income/Operating Income Margin nn Operating Income (Left scale) Operating Income Margin (Right scale) (Millions of yen) (%) Operating income increased 63.4 Asset Turnover Ratio (Times) 0.052 48.815 26.000 5 ings was also attributable to the favorable flow-on effects of the year-on-year depreciation in the value of the yen.22 138.

590 22.000 20 0 0 0 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 T H K A N N U A L R E P O R T 2 01 5 05 .2 68.856 289.200 37.1 39.295 117. dollars 2010 2011 2012 2013 2014 2015 2015 ¥115.36 $ 1.145 336.900 34.000 10.441 23.508) 21.5) 8.0 6.498 2.S.427 20.082.0 (8.000 12 40 150 1.456 170.3 63.7 9.000 60 200.003 407.3 66.479.374 279.812 22.085 49.298 52.959 12.4 13.S.148 250.71 1.9 9.189 54.6 6 6 150.000 15 200 2.808 15.058 222.443 101.9 (8.783 236.366 ¥185.000 80 300.000 9 30 100 1.000 0.69 0.844 19.55 ¥ 98. Thousands of Millions of yen U.4 5.27 15 16 20 18 26 50 0.516 189.000 3 10 0 0 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Return on Assets (ROA) Return on Equity (ROE) Total Assets/Turnover Ratio Equity/Equity Ratio nn Total Assets (Left scale) Turnover Ratio (Right scale) nn Equity (Left scale) Equity Ratio (Right scale) (%) (%) (Millions of yen) (Times) (Millions of yen) (%) 10 10 400.74 0.442 53.9) 8.48 0.903 67.194 18.745 11.911 70.41 39.427 162.000 40 100.361 942.500 15.8 250.9 65.31 ¥ 76.737 24.3 0.7 8.641 9.052 113.370 28.937 175.797 Yen U.548 (14. dollars ¥ (111.024 557.48 16.768 288.000 0.000 0.59 0.866 ¥168.438 36.2 59.4 4 4 100.501 278.466 ¥217.520 14.106.330 ¥190.96 ¥ 123.2) 11.7 45.510) 21.352.296.300) 13.00 1.705 188.20) ¥ 108.552 20.975 44.554 14.304 117.004 33.035 (14.635 16.000 100 8 8 200.2 2 2 50.5 40.900 101.5 7.0 38.957.610 3.527 28.1 4.809.5 10.000 0.000 6 20 50 500 5.4 7.707 29.279 22.979 15.258 167.814 12.083 17.279 (9.49 — — — — — — — 1.61 Net Income/Net Income Margin Net Income per Share Net Assets per Share Cash Dividend per Share nn Net Income (Left scale) Net Income Margin (Right scale) (Millions of yen) (%) (Yen) (Yen) (Yen) 25.7 (3.333 293.388 236.58 0.16 ¥ 179.5 47.416 373.678 $1.846 36.000 50 20.41 1.692 17.106 19.2 5.6 60.52 1.51 1.6 7.252.661 ¥196.612 18.736.

THK CO. management plan. Europe. Turning to overseas markets. ended March 31. we anticipate market growth on the back of advances in factory Looking at fiscal 2015. network. variety of measures that are designed to improve the efficiency of fixed operating income increased 63. the external oper- automation (FA) in developing countries. ending March 31. and China was firm. With regard to Full-Scale Globaliza. tion. which were revised in November Amid these circumstances. From a profit perspective.6 billion. countries. 2016. net income grew 45. offerings amid the growing use of our products in such new fields as Taking into account these and other factors including movements in medical equipment. Based on the aforementioned. TO OUR STAKEHOLDERS TOP MESSAGE Pursuit of the two pillars of our growth strategy. demand in such boost sales not only of existing products.4% year on year. and renewable energy.7 billion. 2014. overall demand in Japan increased against the backdrop of ro. LTD. robots.3 billion while expenses as well as the ratio of variable expenses to total expenses. In order to steadfastly capture demand from emerging markets and developed Looking at the operating environment in fiscal 2014. we will work to increase profitability by vigorously promoting a the previous fiscal year. THK has made a solid opment of New Business Areas as a part of efforts to expand the market start toward achieving the objectives set out under its medium-term for its products including LM guides. the range of ating environment is shrouded in considerable uncertainty. In addition to exceeding plans. we will therefore work to upgrade and expand our global sales 2015. the THK Group continued to promote 2014. “Full-Scale Globalization” and the “Development of President and CEO New Business Areas” Akihiro Teramachi Looking Back on Fiscal 2014 users is also expected to widen in developed countries. we will strive to bust capital investment. the Company reported record high results in terms of net sales the two core growth strategies of Full-Scale Globalization and the Devel. This was largely attributable to Drawing on the fruits of these endeavors. to ¥217. In addition foreign currency exchange rates and the year-on-year downturn in the to activities aimed at expanding operations in each of these business value of the yen.4% compared with fields. but also of newly developed countries and regions as the Americas. to ¥22. and net income. aircraft. In the Development of New Business Areas.. consolidated net sales climbed 17. to ¥28.6%. At the same time. This reflects 06 T HK ANNUAL R EP O R T 2015 . THK was successful in the upswing in net sales as well as the impact of fluctuation in foreign securing a year-on-year increase in both revenue and earnings in fiscal currency exchange rates.

and ROE numerical targets of ¥250 billion. up 12. Net income is expected to reach lending a keen ear to and absorbing contact from customers. In specific terms.3% year on year. ¥40 cluding Southern Europe.0 er ROE Over 10% approx.0 ¥28. on net sales of listening to their feedback as a part of efforts to deliver THK’s value while ¥240 billion. In addition to developed countries. we are channeling our ener- gies toward expanding net sales. The basic strategies put forward to global economy is projected to benefit from continued positive condi. THK announced details of its medium-term management plan. rth h ! ¥65 billion ¥240.0 billion Net sales Operating Income ¥40. efforts to promote Full-Scale Globalization and the Development of New tus of current orders. sales network.0 billion yen. and billion ¥17. As a result. THK is reaching out to customers around the world and cord high operating income of ¥32 billion.0 Operating ¥40. Despite these uncertainties. THK announced details of its plan for fiscal 2015 Business Areas. we are ramping up tions in overall terms. Amid the ongoing upgrade and expansion of its global in May 2015. Over the three-year pe. Medium-term Management Plan by strengthening efforts to acquire a greater share of the volume zone and reinforcing the marketing and strategy functions. however. In May 2014.3 billion Operating Income Margin: 20% billion Development of New Business Areas a variety of factors including sovereign risk across certain regions in.8% on average Net Sales billion The market growth rate of 5% on average in the produc- tion goods industry ¥185. indications that these efforts are bearing fruit with the steady emer- gence of new demand.1 billion.0 billion Fu owt g r [Assumptions] billion Exchange rate $1= ¥100 ¥217. achieve the plan remain unchanged.7%. There are ¥23. up 10. the billion. and over 10%. commonly referred to as the top line. THK is placing considerable empha- riod of the fixed medium-term management plan.7%. Under this plan. we will work to achieve the more immediate consolidated net tries focusing mainly on China as a part of efforts to promote Full-Scale T H K A N N U A L R E P O R T 2 01 5 07 .0 billion increasing ¥250. an increase of 1. Accordingly. Construction of strong management foundation Long-term Medium-term Management Plan Medium-term Management Plan Management Target FY2013 FY2014 FY2015 FY2016 Numerical targets for FY2016 results results plan plan ¥300.0 billion toward the long-term management target Income ¥32. the Company identified the overarching goal of strengthening its management foundation together with the long-term Full-Scale Globalization management targets of ¥300 billion in consolidated net sales and a consolidated operating income margin of 20%. sales. the Company anticipates it will post re. and taking into consideration the sta.4 billion The point of medium-term management plan • Fixed plan with FY2016 as the final fiscal year • Break the past record-high net sales and record-high profits • Continue and further strengthen the basic strategy • Establishment of management foundation ¥60. respectively. operating income.6 IMF Global economic growth rate of 3.0 billion Full-Scale Globalization Consolidated Net Sales ¥250.3 billion Net sales: 300. At the same time. which ends in fiscal sis on upgrading and expanding its sales network in developing coun- 2016.

DALIAN THK CO. Sales and mar.. In China. and Ahmedabad. the media. This was following by a steady operations commenced at THK RHYTHM MEXICANA. production space. Philippines. we the medical equipment and aircraft fields. we set up the ASEAN Customer Support in page. catalogs. LTD. India is exhibiting signs of con. undertaking and Internet search.. and opened a sales base in Bangalore. port capabilities. DE C. the Company’s mation. With exhibitions held in each of are building a robust indirect sales network while striving to definitely the regions and countries throughout Asia. As the ing at new areas in which to participate and plan to increase our exposure trend toward FA continues to advance. and the Internet. Con- In addition to upgrading and expanding its sales network. exhibitions. we are strengthening our sup- capture demand. the THK Group has steadily expanded its presence with as machine tools. Chennai. In developed regions China is experiencing a growing trend toward the use of robots and auto- and countries including Europe and the United States. THK established a sales company tion structure as a part of efforts to increase its top line. Malaysia. S. Globalization. and the user base widens. look- the number of offices totaling 36 as of the end of March 2015. Working beyond efforts aimed at increasing the num- cover six countries. however. we will increase the scope of this coverage as local markets. In January 2014. THK is also taking progressive steps to bolster its home- In the ASEAN region. The scope of this support structure has broadened to and when required. The THK Group remains committed to expanding its global produc- siderable market growth. with succession of bases in Pune. Thailand. Our goal is to win over a more than four times the size of its previous location with three times the robust share of the increase in demand. We are. we will extend this coverage to other ber of countries. semiconductors. LTD. This is on the back of an increase in wages and a shortage of Expansion of Top Line: Full-Scale Globalization Asia Europe and Other The Sales bases: 12 Americas Sales bases: 58 Production bases: 2 Production bases: 12 Sales bases: 9 Development bases: 1 Production bases: 3 *Exclude Japan The most important area of enhancement of Sales Network China Sales bases: 36 India Production bases: 5 Development bases: 1 S ales bases established in 2014 New establishment plan of sales base ASEAN Sales bases: 2 Customer Support Sales bases: 4 Production bases: 3 Corresponding area: Sales networks Singapore.V. Moving ahead. we will place equal emphasis on reinforcing mecha- countries within the ASEAN region and take steadfast steps to garner nisms that allow customers to more easily access and use website when demand. and robotics. participation in exhibitions revolves mainly around specific sectors such In China.A. In 2012. Indonesia. Production commenced from February 2015. Following the path taken by China. Building on the extremely high 35 countries that our homepage can order to better assist the efforts of Japanese companies seeking to enter currently accommodate. the aim of bolstering the Group’s supply of automotive parts to North and keting personnel have already been assigned to our office in Delhi with South America. THK is struction on the Group’s sixth production facility in China has also com- working to boost sales by effectively applying a variety of tools including menced at THK MANUFACTURING OF CHINA (CHANGZHOU) CO. moved to a site that is plans to open sales bases in the near future. Vietnam Support Japanese companies to Sales bases expand into local in Japanese Production bases ASEAN Scheduled to deploy in other coun- Development bases tries in the future Enhancement of sales networks 08 T HK ANNUAL R EP O R T 2015 .

the ACE Division is experiencing an upswing Development of New Business Areas in demand for seismic isolation platforms that protect specific pieces of equipment. where the market sion is striving to expand linear motion related product applications is projected to experience growth. and car interiors. suspension. In the Americas. At the products. The THK gered increased awareness toward the dangers that earthquakes pres- Group will look to address these needs by enhancing its ability to newly ent. the division is promoting Full-Scale Globalization in In the FAI Division. brakes. we set up three specialist divisions: the Future Automo. the THK The IMT Division is upgrading and expanding its product lineup in Group is working diligently to not only expand sales through existing existing fields. and elec. Through each of these divisions. which han. building a local production and sales platform in Asia. precision equipment. goya. and Asia. which is engaged in efforts quiries from such wide-ranging fields as automated warehouses and aimed at expanding the Company’s unit products. which trig. Amenity Creation Engineering (ACE) Division. which is charged with the responsibility of mand. Under these circumstances. the Amenity Creation Engineering (ACE) Division. This reflects the corporate sector’s growing understanding In our second growth strategy pillar that entails the Development of New of the need to protect vital assets including servers and manufacturing Business Areas. THK is engaging vigorously in sales and marketing activities while expanding use of the Company’s transportation equipment-related promoting the competitive advantage of the Company’s products. we are receiving Following the Great East Japan Earthquake in 2011. we are working to develop new products that address mar- dles seismic isolation and damping systems that protect people’s lives ket needs. THK introduced a new mass and possessions from the threat of earthquakes. but also through the development of new products. Among the large number of visitors to showroom. we are increasing the number of applications for our products in the design businesses for set as opposed to single unit items. we opened a next-generation industrial robot showroom in Na- next-generation steering. To Our Stakeholders Expansion of Top Line: Development of New Business Areas Consumer Goods Automobiles Housing Next-Generation Renewable Robots Development of Energy New Business Areas THK’s products Medical Aircraft Equipment Electric Actuators LM Guides Ball Screws Ball Splines Cross Roller Rings Industrial Robots Semiconductor Production Equipment Capital Goods Machine Tools labor as well as growing demand for higher quality products. equipment. Against this backdrop. Awareness toward the importance of business continuity plans (BCPs) in particular continues to rise. product use is expanding steadily worldwide. equipment from the threat of earthquakes. With the increase in business in- Mechatronics Technology (IMT) Division. and the Innovation damper to the market in fiscal 2014. tric actuator businesses. Furthermore. a matter of course. same time. In addition to bolstering its business structure in Japan as products. numerous inquiries and attracting widespread interest. we are actively endeavoring to expand sales. the divi. In order to capture this de- tive Industry (FAI) Division. Europe. T H K A N N U A L R E P O R T 2 01 5 09 . Particular emphasis is being placed on areas outside existing businesses such as stabilizer link balls. in the robot-related across a variety of automotive mechanical components including field.

We are confident that As stated throughout this message to stakeholders. a manufacturer of automotive components based in the U.S. the final year of the medium-term man- technologies and the automotive-related technologies of THK RHYTHM agement plan. for automotive parts of THK RHYTHM. we will be better placed to address a complete range of automotive needs from compact to large vehicles. leap forward by putting in place a global supply structure that will help As we work toward achieving our established goals. In order to tap into this vast potential. THK anticipates that these efforts to strengthen all of its global-lev- nents. ness network by securing a business platform in Europe and North Turning to the return of profits to shareholders. The fifth objective is to strengthen our production technology platform.S. TRW. for example. which serve as critical automotive safety components. To Our Stakeholders The Company’s products including its lineup of LM guides and ball screws are being widely adopted across fields other than the aforemen- tioned three divisions. bile under-carriage components will enable the Group to gain further gies nurtured over a long period. we will accelerate the pace of Development of New Busi.S. in bringing together the core advantage. Several companies have adopted the Company’s shaft units in vertical shaft-type wind power generators. we plan to extend our business into areas that have traditionally remained untouched. By combining the technological expertise of both THK and THK CO. under the Company’s control. The first was to put in place a complete L&S global busi. use of the Company’s products as mechanical components is begin- ning to emerge. in Europe and North Amer- ica would be transferred to the Company. LTD. we will further enhance our earnings capabilities. The second objective was to combine the automobile-related to progressively lift its dividend payout ratio as a part of efforts to achieve technologies of TRW with the Company’s existing core linear-motion a target of 30% in fiscal 2016. we will continue to hone el competencies in the development. In addition to expand. latent demand for the Company’s products exists wherever there is a need for the linear motion of mechanical compo. our third objective is to take a major vance and secure a level of 30. the production technologies ness Areas. and the development capabilities of TRW. reclining seats.. Mean- while.. business (L&S business) of TRW Automotive Inc. manufacture. we kindly re- cultivate markets in such developing countries as China and India. guides. and sale of automo- our accumulated know-how and core linear motion system technolo. For aircraft. we plan to bring of linear products using innovative mechanisms. we are looking to review our long-term management targets and On April 22. This includes in the surgical and assisted-gait robot fields. the Company’s products offer a wide range of applications. and control sticks. the Company’s products are being increasingly applied in a variety of innovative ways. there were five objectives for carrying out this busi.. LTD. Accordingly. At the same time. By bringing commercial vehicle businesses in Eu- July 2015 rope and the U. In this manner.. THK has taken steps America. While taking into consideration the investment necessary CO. quest the continued support and understanding of all stakeholders. efforts will be made to ramp up research and development ac- tivities in order to expand the use of linear motion products including LM Transfer of the L&S Business from TRW Automotive Inc. This initiative is positioned as Toward Further Growth a key component in THK’s basic strategy to pursue Full-Scale Globaliza- tion and the Development of New Business Areas. Making the most of our competitive business opportunities. joint manufacturer. President and CEO Akihiro Teramachi 10 T HK ANNUAL R EP O R T 2015 . linear motion technologies of the Company. expenses as well as the ratio of variable expenses to sales in a bid to ness transfer. cockpit doors. In the medical equipment field. Equal emphasis will also be placed on improving the efficiency of fixed In broad terms. THK’s products in this field offer extremely high power generation efficiency prompting expectations that demand will grow in the future. In the field of renewable ener- gy. we are keen to strengthen our commitment to share- building a structure that is capable of expanding automotive applications holders and to boost shareholder returns. THK’s products can be found in table pullout mechanisms. strengthen the bottom line. (TRW). THK announced that the linkage and suspension medium-term management plan following the business transfer. Fourth. by bringing in TRW’s development base in Germany thereby to ensure growth.7% in fiscal 2015. 2015. forward our dividend payment ratio performance target one year in ad- ing sales in Europe and the U. the THK Group will in acquiring this business we have taken a major step toward further accelerate the pace of efforts to pursue Full-Scale Globalization and the growth and achieving our goal of also becoming the world’s leading ball Development of New Business Areas in order to increase its top line.

$550 million 1 Portland.S.S. 2015. a linear motion product. (TRW).TRANSFER OF THE L&S BUSINESS FROM TRW AUTOMOTIVE INC. which have been smoothly expanded. 280 Operating results and Assets of the business to be transferred Year ended December 31. As regards bases. in Europe and North America ness transfer will add approximately 2. Mainly involved Taking advantage of the opportunity presented by this business with the link balls. public. in addition to a development base in Germany. on this occasion.S. and the auto in addition to traditional customers.341 m2 3 10. Canada Head Office of L&S Business. 1 Gellep-Krefeld. Germany 1 Dacice.S. In North America. The transfer has been set for a ployees. three quarters is made up of date that falls within four months of April 21. amid moves to expand its business. the Company ac- Application of quired TRW’s Asia and Pacific L&S business. THK started business in 1971.170 to the number of THK em- would be transferred to the Company. Thus.$39 million.). Germany Net sales U.S. 2 Manufacturing 2 Manufacturing and R&D 2 2 Manufacturing Manufacturing and R&D 3 18. LTD. 370 4 Approx.000 m2 3 41. the Company has decided to partici- pate in the business transfer of TRW’s L&S businesses in Europe and LM Products for North America.A.$550 million and its earnings before interest and taxes (EBIT) U. To the Full-scale which possesses advantages in steel technologies.. THK aims to also become the world’s No. 2014 1 Dusseldorf. the Com.S. The busi- automotive components based in the U. 100 Net sales 4 Approx. THK will release information on the effect on its performance of mercial vehicles. Czech Republic 1 St. management targets and medium-term management plan as a result of As those covered are automakers with which THK has not previously had the business transfer (as of July 31. With regard to sales composition. Canada 1 Tillsonburg. In 2007. there are two manufacturing facilities in Europe. ness (L&S business) of TRW Automotive Inc. $39 million 2 Global Tech Center and R&D Total assets U. the business transfer will enable global customer development Having developed ball splines. $180 million 2 Manufacturing and R&D 3 — 3 17. the day the agreement was different applications for passenger automobiles.869 m2 4 Approx. the proportion of sales between Europe and the transfer once details have been determined in a timely manner.568 m2 4 Approx. THK announced that the linkage and suspension busi. U.S. The operating result details of the business being acquired are that Automotive Parts its net sales in fiscal 2014 were U. dealings. with the aim of expanding its marketing area in Southeast Asia. The customers associated with the Moreover. 260 Net sales by geographic by application area 1 Location 2 Function 3 Building area Europe Automobile 4 Number of employees Americas Commercial vehicle T H K A N N U A L R E P O R T 2 01 5 11 .. THK will work to secure the expanded application of Division in 1999.000 m2 3 32. one quarter for com- signed. its mainstay LM guides and other linear motion products as critical auto- pany acquired RHYTHM CORPORATION (now THK RHYTHM CO. By region. a manufacturer of there are two plants in Canada and one in the United States. parts known as link balls. 1 ball joint manufac- into one with the establishment of the Future Automotive Industry (FAI) turer. North America is about the same. the Company will revise its previously identified long-term business are primarily major automakers in Europe and North America. the Company’s auto parts businesses were combined transfer. Earnings before interest and taxes U. In 2011. 830 4 Approx. Beyond that. 330 4 Approx. Catharines. in Germany and the Czech Re- On April 22. 2015). motive safety components.

12 T HK H K ANNUAL R EP O R T 2015 . THK strove to build a business base that is capable of withstanding global competition. 2015 (FY2014) Operating Activities (Results) Year ending March 31. 2015) 120. At the same time. THK not only focused on showcasing the and sales information. As a result.. there were indications of a modest recovery in the economy during the second half. From the company’s perspective. At the porating a variety of factors including the attributes of regions in which cus- same time. • THK INTECHS CO. general machinery. In this manner. To this end. LTD.3 billion. but also worked to actively develop deavors to increased sales. Looking ahead. to ¥113. the Company will strive to link its en- unique characteristics of its products. uncover opportunities in such existing fields as machine tools and semicon- tion and damping systems as a part of its efforts to definitely link demand ductor production equipment. which aims to strength- en the Company’s earnings base. tablet PC. cultivate new business fields including medical equipment. and related markets. 2016 (FY2015) Operating Activities (Plan) Sales Sales THK increased its focus on aggressive sales and marketing activities while While continuing to strengthen “TAP 1” activities. THK worked proactively to further develop its business and cultivated new business fields in such markets as seismic isolation and damping systems. the Company THK will work to strengthen its marketing and strategic planning performance took steps to deepen relationships with existing customers and nurture new through a variety of measures including the effective application of customer customers.000 Japan Sales offices 45 • THK CO.000 30. THK will improve productivity by promoting a variety of measures including THK reviewed its existing sales network with a view to comprehensively incor- automation and the use of robotics across its production process. personnel in order to improve their skills. BUSINESS REVIEW: GEOGRAPHIC BUSINESS REVIEW Net Sales Bases Group Companies (Millions of yen) (As of March 31. Production General Overview In addition to building a production structure that is capable of both flexibly In order to increase the efficiency of its operations and improve the quality of and immediately addressing changes in demand.2% year on year. THK continued to adhere its services. aircraft. tween certain bases in the east Japan region in April 2015. In concrete terms. At the same time. production process. the Company will lift its cost competitiveness by promoting in- tomers operate. sales proposals inviting customers to apply THK products as an answer to Production specific issues. and sales con- house operations and engaging in various activities that help to improve the figurations. LTD. 2015) (As of March 31.. different industries as well as product fields. THK channeled its energies toward further enhancing operating skills and THK will increase sales and definitively improve profit margins by continuing boosting productivity in order to lift cost competitiveness.2% the downturn in personal consumption following the rush in demand in the lead-up to the consumption tax rate hike. de- mand increased for machine tools.. LTD. electronics-related products also enjoyed demand on the back of invest- ments in the smartphone. • NIPPON SLIDE CO.000 0 Japan 2011 2012 2013 2014 2015 Years ended March 31 Operating Conditions and Performance Overview Year-on-year Net Sales Sales in Japan increased 12. 90. the Company undertook a variety of improvement measures including the promotion of the P25 Project.. LTD. 60. Year ended March 31. the economy in Japan showed signs of weakness due to such factors as 12.. Under these circumstances. every effort will be made to with sales. and elec- tronics industries. Plants 12 • TALK SYSTEM CORPORATION Distribution centers 3 • THK NIIGATA CO. the THK UP Group recorded an increase in revenue owing mainly to the increase in sales to the machine tools. THK consolidated the operating and accounting function be- strictly to its policy of providing the highest quality. cost and delivery (QCD). Ltd. and 3D THK continued to promote the “TAP 1” skills development program for sales printers. THK will work diligently to cultivating such new business areas as automotive parts and seismic isola.000 • THK RHYTHM CO. LTD. to adopt a proactive stance toward various improvement activities and further General Overview strengthening its business base. On a positive note. • L Trading Co. During the first half of the fiscal year under review.. At the same time.

energy-related and other fields by integrating production and sales. the THK Group took steps to enhance productivity and its cost com. 2015 (FY2014) Operating Activities (Results) Year ending March 31. 2015) 40. Plants 2 • THK Manufacturing of America. the THK Group will review and re- tunities in fresh fields—such as the medical equipment. Inc. aircraft and ener. to ¥34. tomers and taking over the competition. operating skills of its employees and promoting the trend toward automation petitiveness by adhering strictly to a policy of inventory management. Canada. LTD.6% year on year. in other new business fields including 3D printers and humanoid robots. build its distribution and sales network.8 billion. UP Year ended March 31. • THK America.000 Mexico Plants 1 • THK RHYTHM MEXICANA. As a result.000 United States Sales offices 7 • THK Holdings of America.000 The 0 2011 2012 2013 2014 2015 Americas Years ended March 31 Operating Conditions and Performance Overview Year-on-year Net Sales Regional sales increased 20. Inc. where economies continued to expand on the back of increased capital investments supported by steady 20. S.V. across the production process. the THK Group strove to expand transactions with existing customers and develop new business areas in the medical equipment. At the same time. particularly to Asia. to maintain a production platform in North America. 30.C. Brazil Sales offices 1 20. DE C. the THK Group worked diligently to uncover oppor.000 10. THK will take full advantage of its position as the only company in its industry ing net sales.. L. revenue in this region increased with sales of electronic products. aircraft and en.A. the Company will expand its product lineup to match market needs. gy-related areas—and to cultivate new markets. Demand is also expected to grow of fields.6% personal consumptions. exhibitions and engaging in advertising and promotions across a wide range ergy-related areas is projected to be robust. including Mexico and Together with efforts to cultivate new markets in such areas as Mexico and Canada. Canada Sales offices 1 • THK RHYTHM NORTH AMERICA CO. In the Americas. Net Sales Bases Group Companies (Millions of yen) (As of March 31. the THK Group made every effort to aggressively un- dertake PR activities and participate in exhibitions while focusing on increas. In addition to expanding its market share by further cultivating existing cus- seas. The Group’s per- formance in the region was also buoyed by the continued downturn in the value of the yen compared with levels reported in the previous fiscal year. 2015) (As of March 31. aircraft. 2016 (FY2015) Operating Activities (Plan) Sales Sales With capital goods manufacturers shifting their production activities over. the THK Group will expand sales in new fields by participating in Demand in such new business fields as medical equipment. Production Against this backdrop.L. • THK BRAZIL INDUSTRIA E COMERCIO LTDA. machine tools and transportation equipment climbing. T H K A N N U A L R E P O R T 2 01 5 13 . Production The THK Group will work to enhance productivity as well as its cost competi- In addition to undertaking a variety of improvements across the production tiveness by undertaking a variety of improvements including improving the process.

0% year on year. to ¥20. the THK ular weight on uncovering business opportunities in such areas as the medi. Net Sales Bases Group Companies (Millions of yen) (As of March 31. In addition to deepening transaction with existing customers through PR ac- eral machinery. the THK Group will promote automation and the use of ro- Amid the growing entry into the European market by competitor manufactur. Amid signs of an ongoing recovery in Europe. which are projected to mainly on cultivating new distributors. the THK Group strove to increase its cost competitiveness by output and lower manufacturing costs.V.S. 2015) (As of March 31. 20. especially to the machine tools and general machinery industries. Sweden Sales offices 1 15. the THK Group worked diligently to deepen transactions with existing customers 11. the THK Group reported an upswing in revenue owing mainly to successful efforts to increase sales. aircraft. and the favorable effects of foreign currency exchange rate movements including the year-on-year depreciation in the value of the yen. and related fields. railway.000 Turkey Sales offices 1 Czech Republic Sales offices 1 Netherlands Sales offices 1 0 Europe Russia Sales offices 1 2011 2012 2013 2014 2015 Years ended March 31 Operating Conditions and Performance Overview Year-on-year Net Sales Regional sales increase 11. the Group will endeavor to expand production ers from Asia. railway-related. Group will work to upgrade and expand its indirect sales network focusing cal equipment. the THK Group worked including the aircraft. 2015 (FY2014) Operating Activities (Results) Year ending March 31. Italy Sales offices 1 • THK Manufacturing of Ireland Ltd. UP Year ended March 31. Through these means. which is expected to witness Production demand growth.000 France Sales offices 1 Plants 1 5. gen. FA. robotics. promoting increased automation across the production process and optimiz- ing product items.000 Ireland Plants 1 • THK Manufacturing of Europe S.000 Austria Sales offices 1 Spain Sales offices 1 10. the Group took steps to engage in inno- vative manufacturing. • THK GmbH United Kingdom Sales offices 1 • THK France S. The THK Group will focus its sales and marketing activities toward new areas In order to ensure that the Group captures demand. botics.A. 2016 (FY2015) Operating Activities (Plan) Sales Sales In addition to further cultivating existing customers in the machine tools. the THK Group placed partic. and household goods as well as the space and beyond Western Europe and upgraded and expanded its distribution and defense fields. tivities including various advertising and participation in exhibitions. sales network in Eastern Europe and Russia.0% through integrated production and sales while aggressively engaging in sales and marketing activities in an effort to cultivate op- portunities in a wide range of medical equipment. In addition to undertaking a variety of improvement activities across its pro- Production duction process.A. At the same time. 2015) 25.4 billion. experience robust demand going forward.S. aircraft and railway-related fields. As a result.000 Germany Sales offices 2 • THK Europe B. and other new business fields. 14 T HK ANNUAL R EP O R T 2015 .

pand sales networks and cultivate new customers.. T H K A N N U A L R E P O R T 2 01 5 15 . the Group will steadfastly work to capture demand. LTD. new plant at DALIAN THK CO.. efforts will be made in product development that reflects the local needs of developing countries. Other Years ended March 31 Operating Conditions and Performance Overview Year-on-year Net Sales Sales in Asia and other regions grew 32.. 2015) 50. the THK Group will ongoing progress being made in FA.. LTD.. tablet PCs.. Ltd. level. LTD. LTD. LTD. the THK Group introduced ASEAN Customer Support in example by ongoing extensions to the areas covered under ASEAN Customer April 2014 to build a system capable of providing support. LTD. Plants 4 • THK RHYTHM MALAYSIA Sdn. In India. LTD. including the promotion of the Group’s to cultivate new fields. the Group completed a new factory at DALIAN THK CO. Year ended March 31. the Group made progress in cultivating new customers and in upgrad. Driven by rising invest- 32. Covering an Other area approximately four times the size of the previous location. In While THK (CHINA) CO. LTD. to ¥49. • THK RHYTHM GUANGZHOU CO. Taiwan Sales offices 3 • THK MANUFACTURING OF CHINA (LIAONING) CO. 30. to commence development that reflects the local needs of developing countries.. for In the ASEAN region.. ing its production capabilities and enhancing its volume zone response.’s technical departments continue to collaborate with the Group’s R&D operations in Japan. amid widening areas of demand for the Group’s products in China. in addition to upgrading and expanding its sales network and In Taiwan. LTD.000 China Sales offices 36 • THK (CHINA) CO. most notably a weaker yen compared with the previous fiscal year. India. the plan is for the THK MANUFACTURING OF CHINA (CHANGZHOU) Group’s R&D operations in Japan. the THK Group cultivated new fields and work to expand its market share in ball screws through the completion of its new customers. LTD. In ad.’s technical departments collaborated with the addition. in addition to such initiatives as newly establishing sales language. revenue increased as the Group was able to bring about an upswing in net sales across a wide range of fields—including machine tools. and transportation equipment—due to the impact of move- UP ments in foreign currency exchange rates.. India Sales offices 2 • THK MANUFACTURING OF CHINA (CHANGZHOU) CO. offices in Chennai and Ahmedabad in April 2015. 2016 (FY2015) Operating Activities (Plan) Sales Sales In addition to working to upgrade and expand its sales network in China and In China. In Taiwan. In addition to these activities. Other While THK (CHINA) CO. 2015) (As of March 31. 20. the Group made progress in cultivating new to upgrade and expand its indirect sales network. 10. the Group engaged in aggressive sales and marketing activities.000 R&D Center 1 • THK MANUFACTURING OF CHINA (WUXI) CO. to those Japanese companies that are entering the region. which will move into the manufacture of unit products... increased demand centered on small machine tools. tiveness by enhancing operational skills and productivity and promoting the To respond to increases in demand over the medium-to-long-term at a global local procurement of component parts. taking full advantage of earlier efforts to bolster its sales network. Amid plans to enhance productivity by improving operational skills and promoting Production automation.000 South Korea Sales offices 13 • THK MANUFACTURING OF VIETNAM CO. 40. 2015 (FY2014) Operating Activities (Results) Year ending March 31. including that from the work and the cultivation of new areas and new customers. • THK (SHANGHAI) CO.1% year on year. Geographic Business Review Net Sales Bases Group Companies (Millions of yen) (As of March 31. general machinery.. LTD. LTD. Plants 1 • THK LM SYSTEM Pte. in addition to efforts to expand market share in existing fields and cultivating existing customers. we will upgrade and ex- dition.1% ments in smartphones. the Group will expand volumes and improve profitability by augment- The THK Group worked diligently in every region to bolster its cost competi. LTD. and related areas. LTD. the new plant has commenced operations. the THK Group is working fields through a variety of activities. LTD. In the ASEAN region. Plants 5 • DALIAN THK CO.. operations in the current fiscal year.. ongoing efforts were made in product CO. seismic isolation systems to semiconductor manufacturers. for example by opening a sales office in Production Pune. in the Japanese Support.. in October 2014..0 billion. The plant will capture automation demand that is expected to be robust in the years to come. where progress is being made in FA in the same way as in developed countries. LTD. Bhd. ing and expanding its sales network.000 Thailand Sales offices 1 • THK TAIWAN CO. • THK India Private Limited Asia and Vietnam Plants 1 0 2011 2012 2013 2014 2015 Malaysia Plants 1 • SAMICK THK CO. LTD. in addition to the ongoing upgrade and expansion of its sales net- put in place a structure to address robust demand. • THK RHYTHM (THAILAND) CO.000 Singapore Sales offices 1 • THK RHYTHM CHANGZHOU CO. Developing countries including China are experiencing a slowdown in their rates of economic growth. including 3D printers and seismic isolation systems.. with a produc- tion area three times the size. In addition.

Especially amid the increasing awareness of the importance of business continuity plans (BCPs) following the Great East Japan Earthquake of 2011. the guides in the shape of a cross. and works of art.” the ACE Division develops and markets seismic isolation and damping systems that protect human life and property from the threat of earthquakes. Furthermore. In fiscal 2014. including servers. They have been adopted for a wide range of applications. the divi- sion takes steps to promote increased use of its products and tech- nologies in home automation-related devices. Continuing to promote the considerable benefits of THK’s seis- mic isolation and damping technologies to architectural firms and homebuilders. the CLB smoothly and reduces the shaking in response to the ACE Division aims to support society in fields that are closely linked easily responds to a variety of shaking motions. In addition. precision instruments. this system supporting buildings. the ACE Division Seismic Isolation Table Model TSD made enterprising expansion efforts toward their adoption in such Model TSD isolation tables are seismic isolators that function by simply installing them on the floor. such A seismic isolation system that combines LM Absorbing the earthquake force transmitted as LM guides and ball screws. diffusion furnaces and works of art. for example in the systems integrator and medical fields. more widespread demand is expected for seismic isolation platforms to protect specific pieces of equipment and assets essential to business operations. including servers and a variety of manufacturing equipment. such as temples and shrines. earthquake’s speed. adding to the previous adoption of seismic isola- tion platforms for servers. the ACE Division will expand its sales network. In its seismic isolation and damping system business. to seismic isolation platforms for servers and a variety of Linear Re-circulating Guide CLB Viscous Damping System RDT manufacturing equipment—by leveraging basic technologies. the ACE Division achieved a significant year-on-year increase in their adoption for the protection of 3D mea- suring equipment. low-rise residences and historical structures. THK expects demand Model TGS isolation modules enable flexible for seismic isolation and damping systems to continue growing over layouts and are suitable for the partial isolation of heavy loads and seismic floor isolation. having recently entered the mass damper market. When to a building by using ball screws. In addition. the division provides a broad lineup Support Reduce of products—from seismic isolation devices for high-rise buildings. Analysis equipment Works of art 16 T HK ANNUAL R EP O R T 2015 . the ACE Division will also expand its product lineup and work to capture overseas demand. Seismic Isolation Module Model TGS ment disaster-related contingency measures. Amenity Creation Engineering Return ACE Division Overview Guided by the concept of “developing technology to realize creative living spaces for greater comfort. Amid such operating activities. the medium-to-long-term. while planning technological improvements in collaboration with oth- Microscopes Dialysis machines er divisions to steadily address the diversifying needs for seismic isolation and damping systems. to people’s everyday lives. BUSINESS REVIEW: NEW BUSINESS REVIEW Product Lineup: Building Seismic Isolation Systems ACE Division Laminated Rubber for Recovery Use ACE Serves to return a building to its original neutral position after following earthquake-in- duced movement. Operating Conditions and Product Lineup: Seismic Isolation Platforms Business Expansion Activities Amid a rapidly increasing general awareness of the need to imple. areas as automated warehouses and precision instruments. such as the sliding components of shelves in system kitchens.

). Automobile undercarriage components that realize weight savings and are highly resistant to corrosion and abrasion. the THK Group will promote business Core technology Development capabilities cultivation in Asia. To the Full-scale Application of LM Products for Automotive Parts In fiscal 2014. reflecting greater global interest in environ- mental protection. including LM guides. As a result. RHYTHM CORPORATION (now THK RHYTHM CO. was included in THK’s scope of Stabilizer consolidation as a subsidiary company. the Group will be redoubling its R&D efforts to bring about the wider Production technology adoption of its linear motion products. In 2007. where particularly robust demand is expected. Moreover. hybrid and electric vehicles are ex- pected to gain in popularity. sales. including next-generation steering. and will work to capture further business opportunities. production and sales. The division is now working to expand applications of its linear motion-related products in a variety of automobile mech- anisms other than automobile undercarriage components. Suspension Ball Joint Business Environment and Business Expansion Activities Expected in the global automotive market over the medium-to-long- term are expansion in the number of production regions and signifi- cant growth in automobile demand within emerging markets. production and technology levels. T H K A N N U A L R E P O R T 2 01 5 17 . Product Lineup: Transportation Equipment FAI Division Aluminum Height Sensor Joint Suspension Link FAI Future Automotive Industry FAI Division Overview While engaging in the development and supply of the automotive components that support the basic functions of automobiles. adding to THK’s New Products linear core technologies. the Company will benefit from the global-level strengthening of all its competencies in development. of linear motion for automotive parts Following the transfer of the European and North American link- age and suspension (L&S) business from TRW Automotive Inc. which for automotive parts are regarded as critical automotive safety components.. efforts were made to Steering Tie Rod Steering Linkage (Rack And Pinion Type) expand business. LTD. and TRW’s development capabilities TRW L&S Business and manufacturing technologies for automotive components. the FAI Division worked aggressively in unison with THK RHYTHM to expand sales across the world and was able to bring about an increase in the number of adoptions for its products compared with fiscal 2013. which boasts superior forging technologies.. In addition to uncovering opportunities with existing customers on an ongoing basis. THK RHYTHM’s automotive component for automobile manufacturing technologies. Anoth- er key change is an ongoing trend to make automobiles lighter and more energy efficient. brakes. suspensions and interiors. the FAI Division is responding rapidly and precisely to changes in the global automotive market and targeting a global presence as an automotive parts supplier. the FAI Division’s mainstay link ball products are attracting keen interest from major automobile manufacturers in Japan and overseas. While working to draw out Connection Rod synergies between THK RHYTHM and THK at each of the manage- ment.

Linear Motor Series Precision Stage Series hanced productivity and diverse functionality of industrial machinery as Optimized for high speed. the heavy loads time operations IMT Division works to expand business in electric actuators. In fiscal 2014. NEXTAGE Works In the robot field. Europe and Asia. Side by Side we will enterprisingly encourage developments. the IMT Division is planning to develop and supply Press Series Controller Series optimal components for next-generation robots. the mar- ket for which is expected to expand in the years ahead. and worked on new business development in the community and general living environment areas. A pioneer in Optimized for clean Optimized to reduce LM guides and the manufacturer that leads the world in terms of the environments the number of know-how accumulated in these products. pneumatic and electric—it is expected that demand for the particularly energy-effi- cient electric actuator will rise from the environment-friendliness point of view. it high acceleration/ mission-critical parts is believed that the significant increases in demand for actuators will deceleration. In the years to ideal forms out of ideal forms come. 18 T HK ANNUAL R EP O R T 2015 . Optimized for press fitting Operating Conditions and Business Expansion Activities Against the backdrop of the advances made in recent years in en.” our showroom for next-generation industrial robots lored to various applications. such as the April 2015 opening of “Risokata. where market expansion is an- ticipated. and THK Group unit products. as THK electric actuators are made up of those same high-quality LM guides and ball screws. Moreover. we will work on full-scale globalization in the Americas.” our showroom for next-generation in- With People dustrial robots. we will continue to focus on the development of electric actu- ators capable of fulfilling ongoing market needs. one of the elements that make up an electric actuator. we developed new electric actuator products tai- “Risokata. Optimized for well as the developing trend toward automation on production lines. we will vigorously work to build the foundations of a local production and sales system. which are THK’s core products. New Business Review Product Lineup: Electric Actuator IMT Division Economy Series Compact Series IMT Optimized for air cylinder Compact. THK possesses signifi. high rigidity replacement Innovation Mechatronics Technology IMT Division Overview Universal Series Super FA Series Ideal for transport of Optimized for high takt Leveraging THK’s original concepts and innovative technologies. Particularly in Asia. The base technologies in the mechanical slider unit. processes cant advantages in the market. made deeper inroads into the capital goods industry by enterprising sales activities that integrated tech- Creating even more nologies and sales. of equipment multisliders continue. In addition to these products. Of the three types of actuator—hydraulic. are LM Clean Series Multi-Axis Series guides and ball screws. naturally reinforcing our business systems in Japan. where growth is expected in the coming years.

including ball splines and ball screws. produces and supplies to the world a range of other vital machinery components. the Company introduced to the market LM guides with caged rollers. They have provided major contributions to the machine tool. in 2001. semi- conductor production equipment and related sectors. easily and precisely in a straight line.THK PRODUCTS INNOVATIVE PRODUCTS As a global pioneer. THK developed the linear motion (LM) guide. Later. rigidity and speed of a wide range of industrial machinery. THK became the first compa- ny in the world to successfully develop the next generation of LM guides featuring caged ball technology. LM guides are used as a vital ma- chinery component and have varied industrial applications. THK also develops. As a result. The ball cages are resin parts that keep the balls in place and guide them. In 1996. low noise and long-term maintenance-free operation. eliminat- ing noise and friction. LM Guides LM guides are critical elements in many types of machinery. Since then we have striven to expand the usage of these improved LM guides. Compared with first-generation LM guides. they enable parts of machinery to move smoothly. Within the mechatronics sector. which is based on an original con- cept and innovative technology. An example of use as a machine tool (machining center) T H K A N N U A L R E P O R T 2 01 5 19 . LM guides help to enhance the precision. By con- verting slippage into a rolling motion. This stops direct contact between the balls or rollers. LM guides based on caged technology are now vital components of many types of equipment. the use of caged ball technology achieves long service life.

ball splines play a number of highly functionalized roles in a variety of machines. Today. resulting in a revolutionary linear motion sys- tem. This critical advance boosts the load that the device can tolerate and permits the transmission of torque. ball splines boost the tolerable load by a factor of 13 and service life by a factor of 2. Other ball screws supplied by THK are designed to support high loads. This mechanism of action efficiently converts rotary motion into lin- ear motion. THK has developed ball screws featuring caged ball technology. Electric actuators are used in medical equipment such as CT scanners Ball Splines Developed in 1971. making them ideally suited for replacing the hydraulic cylin- ders used in capital equipment such as injection molding machines. these of- ferings are now essential elements in the machine tools. In industries such as electronics. Such advanced electric actuators have become indispensable parts in equipment used in the manufacture or inspection of semiconductors and flat-panel displays. Ball Screws Ball screws are machinery parts that function by causing a large number of balls to circulate between the screw shaft and the nuts. thus helping to realize longer life with lower noise and provide an extended maintenance-free period. linear motor or other drive component. As a result. industrial robots. medical equipment and chip mounters. An example of use as a semiconductor production presses and die-cast machines. there is an in- creasing need to shorten development and manufacturing lead- times. which does not con- tain such grooves. THK supplies a varied lineup of electric actuators ranging from basic. Balls roll along an R-shaped groove machined into the spline axle. semiconductor production equipment and related sectors. ball splines were the precursor to the LM guide. Usage examples include industrial robots. the same year that the Company was estab- lished. Compared with the existing configuration. Modularization allows electric actuators to realize benefits such as simplified design and fewer assembly components. low-priced units to high-end components designed to operate at high speed or perform to clean-room specifications. thus helping to meet such requirements. (Dicing saw) Electric Actuators Electric actuators are hybrid products combining a guide compo- nent such as an LM guide with a ball screw. Used in bathing assistance equipment 20 T HK ANNUAL R EP O R T 2015 .200.

Usage of link balls in automotive parts facture of steel ball joints. Usage in industrial robots Link Balls. Cross roller rings are used in the rotating parts of many different types of industrial machinery. the rotating parts of industrial manipulators and precision rota- ry tables. They are also considerably lighter than the steel parts traditionally used. THK RHYTHM Products A product that THK has manufactured along with LM guides since the time of the Company’s foundation is the link ball.. These rings are highly rigid despite their compact structure. engine and transmission compo- nents. these products must meet the highest standards of quality and perfor- mance. developed business as an automotive parts manufacturer covering the full gamut of ball-joint products. was included in THK’s scope of consolidation as a subsidiary in 2007 and. In addition to its mainstay cold-forged ball joints. suspension. Manufactured by a proprietary process. measuring instruments and semiconductor production equipment. Usage of THK RHYTHM products in automotive parts T H K A N N U A L R E P O R T 2 01 5 21 . such as the joint sections connecting stabilizers to the suspension and ground clearance sensors. After molding a die-cast holder.). brake. RHYTHM CORPORATION (now THK RHYTHM CO. As critical automotive safety components. including the joint areas and swiveling parts of industrial robots. with aluminum links that are integrated ball joints with aluminum suspension links. Playing an important role in automobile safety and comfort. more comfortable automobiles. machining center swivel ta- bles. LTD. The incorporation of the spacer cages between these or- thogonally arranged rollers prevents roller skew and reciprocal abra- sion between the rollers. such as steering. THK RHYTHM is contrib- uting to the production of safer. THK RHYTHM is currently expanding operations in the component field. THK Products Cross Roller Rings Cross roller rings are roller bearings that feature internal cylindrical rollers arranged orthogonally so as to facilitate load bearing in every direction. As adoption of link balls shifted into high gear. an automobile undercarriage component made from aluminum. THK RHYTHM manufactures and sells related products. Other applications include medical equipment. link balls have been adopted by leading automakers in the world for a number of undercarriage mechanisms. as a company that was primarily involved in the manu. Using an integral molding process for the aluminum die-cast makes the link balls highly resistant to corrosion and wear due to abrasion. the shank portions are specially welded. Responding to market demands by offering guarantees of zero defects and zero delivery problems. link balls are spherical joints in which a high-precision steel ball bearing forms the spherical surface.

RESEARCH AND DEVELOPMENT

Guided by the business philosophy of “providing innovative products to the world and generating new trends to contribute to the
creation of an affluent society,” THK continually strives to create original products as a creative development-driven enterprise.

THK Product Development as a Contributor to in the head office of THK (CHINA) CO., LTD. in Dalian, Liaoning Province in
Industrial Development April 2010 and operates a designated R&D Center opened in April 2012. THK
is building a global development system that has already completed several
THK’s concept toward business is based on the philosophy of “providing in- projects and is engaging in product development to meet diversified global
novative products to the world and generating new trends to contribute to the needs in tandem with the Engineering and Development Division in Japan.
creation of an affluent society.” This thinking has guided our drive to be a
creative development-driven enterprise, enabling us to develop a varied
stream of products since our establishment in 1971. Besides contributing to Product Development in Fiscal 2014:
industrial development, these efforts have also resulted in THK steadily accu- Realizing the “cubic E” Concept
mulating technical expertise that has been a primary source of growth.
THK developed the world’s first linear motion (LM) guide. For the first 10 Leveraging creative ideas and the Group’s unique technologies, the main
years after we started production and sale of these products in 1972, LM theme of THK’s current R&D activities is the “cubic E” concept, which em-
guides were primarily used in machine tools. During this period, we devel- braces the three keywords “Ecological,” “Economical” and “Endless.” Based
oped a series of new products to fulfill our customers’ needs for increased on this theme, we continued throughout fiscal 2014 to speed up develop-
precision and lower cost. In the 1990s, other industries—such as manufac- ment with the aim of extending the range of applications for our technologies
turers of semiconductor production equipment and industrial robots—began while at the same time seeking to develop highly original and attractive prod-
to adopt THK products. We responded by developing various new products ucts for launch 5–10 years in the future. Major achievement in fiscal 2014
that were optimized for customer-specific applications and operating envi- included the development of products for a number of original applications.
ronments in these sectors. In the industrial machinery field, and with an emphasis on ball screws and
In 1996, we pioneered the development on the world’s first-ever LM roller rings, we developed electric actuator-related new model products for
guide using caged ball technology, an advance that enabled LM guides to use in areas where demand is projected to increase in line with the ongoing
operate without maintenance for much longer periods. Although such tech- progress toward electric-powered living.
nology was already common in rotary bearings at that time, the problem was With regard to our endeavors in new business areas, the Group focused
the need to cope with both linear and circular movements. This made it ex- on further raising competitiveness particularly from the perspective of costs
tremely difficult to develop ball cages with sufficient durability to move along in the transportation equipment field. In this context, steps were taken to
straight lines or curves. THK successfully took steps to overcome this issue. develop new crafting techniques, more compact and lightweight products as
LM guides based on caged ball technology not only provide the benefit of well as products for use in electric vehicles. The Group also focused attention
long-term maintenance-free use, but have also made a significant contribu- on product development aimed at entering new markets and increasing sales
tion to the development of high-speed, low-noise industrial machinery with in other fields including renewable energy, aircraft, robotics, construction
longer productive lives, in such sectors as machine tools and semiconductor equipment, and welfare/nursing/rehabilitation. In the renewable energy field,
production equipment. The advance also paved the way for the development THK used running data from existing wind and hydroelectric power generators
of LM guides for additional applications. Today, we continue to develop prod- to develop and commence mass production/sales of optimal low-torque shaft
ucts that use caged ball technology. Besides LM guides, this range has ex- units for wind power generators. In hydroelectric generation, we continued con-
panded to include ball screws, ball splines and hybrid units, which combine ducting demonstration experiments overseas and commenced such experi-
LM guides and ball screws. ments at agricultural ditches in Japan. In the aviation field, THK engaged in joint
development of airplane interiors with major aircraft manufacturers as well as
developed rotating/sliding components for seat reclining mechanisms and table
A Global R&D System for the Next Generation sliding components, both of which utilize the characteristically smooth move-
ments of THK products. In the robotics field, we upgraded and expanded the
Operating primarily out of the Technology Center located in Tokyo, THK’s lineup of “SEED Solutions,” the element/components of a robotics technology
R&D activities are undertaken by the elite minds working at the ACE, FAI and system for next-generation robots, releasing SEED drivers, SEED small-sized
IMT divisions, with a particular focus on the Engineering Division. In addition electric actuators, and robotic hands in such fields as factory automation (FA)
to mainstay LM systems, a task force composed of members of these divi- and education. Moreover, we are working to expand into the industrial robotics
sions is making every effort to develop innovative products targeting the field by developing peripheral technologies for upper-body humanoid robots.
mechatronics and consumer markets. Drawing on its core linear motion sys- “Extra-Vehicular Activity (EVA) Support Robot Experiment on JEM (REX-J)” con-
tem technologies and know-how, THK is therefore ramping up its product ducted in 2012 on the International Space Station included small ball-screw
development activities in such wide-ranging fields as seismic isolation and actuator-equipped robotic hands developed by THK. In recognition of its contri-
damping systems, transportation equipment, medical equipment, aircraft, butions to the success of this mission, THK received a certificate of appreciation
and renewable energy in a bid to expand into new fields. from the Japan Aerospace Exploration Agency (JAXA) in July 2014.
Turning to activities outside Japan, THK established an R&D facility with-

22 T HK ANNUAL R EP O R T 2015

Fiscal 2015 Policies and Initiatives can quickly generate commercial returns. Complementing these endeavors,
and while strengthening our global development capabilities, the R&D base
We plan to continuously focus our efforts in fiscal 2015 on the efficient de- within THK CHINA will serve at the center of efforts to actively promote prod-
velopment of new products with the aim of expanding applications for THK uct development that addresses local market needs. The THK Group boasts
technology further. Specifically, we will pursue themes such as customer a wide variety of proprietary technologies. Looking ahead, we will actively
convenience while promoting designs that incorporate the potential for en- promote technological interaction between Group companies in an effort to
hanced productivity and quality. Moreover, by conducting in tandem basic stimulate maximum synergies through the mutual rerouting of technologies
and applied development activities, we will focus on developing products that thereby leading to new product development.

MAJOR NEW PRODUCTS

Caged Roller LM Guide Caged Ball Screw DIN Standard Compliant Ball Screw High-Speed Roller Ring
Model SRG ultra-long block type Model SDA-V Model EP/EB-V Model RHB/RHE
In connection with its SRG caged roller LM Aiming to expand its global market share in The EP/EB-V is ball screw compatible with The RHB/RHE is capable of higher speeds
guide, the Company introduced an ul- ball screws, THK offers the SDA caged ball DIN specifications. It enables high-speed thanks to its redesigned rolling element
tra-long block version model. This initiative screw compatible with DIN specifications, motion thanks to improved processing contact configuration. Incorporating the
is aimed at addressing the need for higher an industry standard in Germany. It en- technology and features a wider array of RHB as an inner-ring as well as an RHE
load capacity. ables high-speed motion with low noise shaft diameters. outer-ring rotation configuration, the RHB/
levels and can be operated without mainte- RHE realizes greater rigidity and precision
nance for long periods. than conventional models.

Electric Actuator Compact Series Electric Actuator Linear Motor Electric Actuator Clean Series Electric Actuator Universal Series
KSF Series GLM20AP CKRF USW-L
The KSF features a large shaft diameter The GLM20AP features additional high- Retaining the KRF’s basic configuration, A new addition to the USW series, the
ball screw, enabling high speeds and quick speed specifications. Coil optimization in- the CKRF features a redesigned structure USW-L is compatible with long-stroke,
acceleration/deceleration with the same creases the GLM20AP’s maximum power suitable for clean rooms. The upper sur- high-speed, higher load capacity convey-
body size using a large rated-output motor. output. face’s strip seal keeps surface areas free ance. Adopting a full-cover configuration,
from contamination. the USW-L is designed to prevent intrusion
of foreign matter from outside.

Network Unit Robotic Hand Simple Actuator
TNU TRX SEED + Picsel
The TNU is easy for customers to use, fea- The TRX is an all-in-one general-use grip- The SEED + Picsel is a simple actuator that combines small-sized wireless
turing specifications that meet telecommu- per able to hold various work pieces. Light- control driver SEED Driver with compact actuator Picsel. Applying robot
nication standards compatible with all ma- weight and compact, the TRX features both technologies, this model reduces wiring, enables multiple axis control, is
jor networks used in Japan. high efficiency and high rigidity. easy to operate, and is more space saving than existing systems.

T H K A N N U A L R E P O R T 2 01 5 23

ENVIRONMENTAL PRESERVATION

As a pioneering global manufacturer of vital machinery components, the THK Group has
contributed to society and economic activity via the development of linear motion systems.
At the same time, we recognize our corporate social responsibility in terms of contributing
to global environmental preservation efforts so that future generations inherit a healthy
planet. To this end, we are engaged in various activities aimed at continuously reducing the
impact on the environment as well as trying to protect and improve the natural environment.

The THK Group’s Basic Policy Regarding the Environment

1.
Conservation of the environment is considered a major management concern, and we are striving to accurately grasp the impact on
the environment produced by the Group’s business activities, products and services. Every division participates by setting relevant en-
vironmental goals.

2. In addition to following environmental laws, we set self-imposed standards for Group companies and regularly review them to improve
the efficiency and effectiveness of our environmental management.

3. We will continually promote the development of products that help reduce environmental burdens.

4. We will decrease energy use associated with our business activities, while continually promoting reductions in per units of energy con-
sumption and greenhouse gas emissions.

5. In addition to continually promoting conservation and the recycling of resources, with particular attention to reducing and recycling
waste from our manufacturing divisions, we will strive to prevent pollution.

6. To promote greater unity in our environmental activities, we will provide guidance and support to our affiliates and business partners,
and strive to work in cooperation and harmony with local communities.

7.
This basic policy regarding the environment shall be disseminated to all divisions in the Group through education, training and activities
designed to improve awareness. We will disclose information concerning the environment to parties within and outside the Group in a
timely manner.
Revised on June 3, 2013

Environmental Activities and Targets

Area Objectives and Goals Main Activities

1. Energy diagnostics
Energy conservation, prevention of
Cut greenhouse gas emissions 2. Energy conservation
global warming
3. Use of clean energy

1. Input controls on materials, parts and by-products
Materials conservation, Reduce environmental impact
2. Controls on emissions and final waste disposal
zero emissions Achieve zero emissions
3. Material reuse/recycling

Eliminate and control harmful substances
1. Substitution of PRTR-designated substances
Harmful substance controls in THK Group production and
2. Green procurement and purchasing
distribution activities

Environment-friendly products Develop products and supply services 1. Cage-embedded product series development
and services using LCA (Life Cycle Assessment) methods 2. Extension of service life and maintenance-free periods

24 T HK ANNUAL R EP O R T 2015

. including electric power.S. LTD. and THK RHYTHM CHANGZHOU CO. commenced the operation of its new plant. ISO 14001 Certified Business Locations ronmental management systems at its production sites in Japan Business Location Date of Certification Certifying Body and overseas. 2008 CQC (zero emissions rate against a reduction target of less than DALIAN THK CO. administrative offices and dormitories. INASA Plant December 20..50%)... 2010 URS THK RHYTHM GUANGZHOU CO. 2011 DQS GmbH THK INTECHS CO. 2005 JQA (CO2 basic unit emissions for a year-on-year reduction target of THK RHYTHM CO. to the flow lines within the plant site. 2010 To promote Group-wide environmental activities. LTD. (TRCC) YAMAGATA Plant in China became the latest to receive certification in fiscal 2014. (Thailand) July 9. (Malaysia) October 25.. 2004 AFAQ the energy conservation and global warming prevention field THK NIIGATA CO. From the standpoint of saving energy. 2001 JIA With regard to the previously cited environmental targets.. From the environmental preservation standpoint. where it gets very cold in winter. but was able to achieve the targets in THK Manufacturing of Europe S. LTD. Inc. 2006 JIA 1%) and in the material conservation and zero emissions field THK MANUFACTURING OF CHINA (WUXI) CO. the latest inverter air-conditioning systems have been installed in preparation for the weather in Dalian. water and types of gas.A. These ranged from the hard aspects. the working environment is kept clean.. (France) February 3. 2010 SGS THK RHYTHM MALAYSIA Sdn. 2015 VERITAS Environment-friendly Plant Commences Operations Having come on stream in 1996 as THK’s first production base in China.. the plant was painstakingly designed with full consid- eration given to environmental aspects. in February 2015. built to keep pace with business expansion.. Environmental Management Systems THK is working to acquire ISO 14001 certification for the envi. LTD. (China) January 12.. 2001 SQA divisions.. the plant reduces environmental impact on the local air and soil to the LPG-fired steam boilers greatest extent possible by the installation of such facilities as LPG-fired steam boilers and large-scale water purification tanks. 2010 TUV THK RHYTHM (THAILAND) CO. KOFU Plant December 17. (USA) July 14. (USA) June 13. LTD. THK RHYTHM CO. (China) January 7. LTD. LTD. ancillary and pro- duction facilities. (China) March 17.. DALIAN THK CO. THK Manufacturing of America. making the plant a pleasant and comfortable workplace for its employees. Bhd. LTD. and is working on the efficient utilization of resources. THK MANUFACTURING OF CHINA (LIAONING) CO. and by following an environment-friendly plant concept. 2008 TUV 0. the pro- duction control methods and the impact the plant places on the local area. October 21. LED Lights (Plant) T H K A N N U A L R E P O R T 2 01 5 25 . LTD. the company has installed a range of environment-friendly facilities. 2003 QMI ed substances handled). and LED lighting equipment has been fitted throughout almost all the plant. LTD. (China) December 9. administrative and distribution THK RHYTHM NORTH AMERICA CO. 2002 JIA the Group did not achieve that for environmental risk substanc- es (3% year on year decrease in the amount of PRTR-designat. THK has YAMAGUCHI Plant (Registration JQA its Risk Management Division’s Environmental Management renewal date) MIE Plant Department advance efforts to reduce environmental impact by GIFU Plant collaborating with production. including the plant’s buildings. In addition. LTD.. can ascertain the operational status of equipment throughout the plant thanks to a central monitoring system. MISHIMA / SENDAI Plants March 21. (China) December 18. In addition. the new plant brings improvements in productivity. LTD. Headquarters / HAMAMATSU Plant December 20. Naturally. 2013 ClassNK BUREAU THK RHYTHM CHANGZHOU CO. LTD. THK RHYTHM KYUSHU Plant December 20.

as part of the Company’s efforts to ensure A company with a Board of Auditors. the Com- maximizing shareholder returns. dismissal Election. Also cy of management to shareholders while at the same time striving to achieve with effect from June 21. working to improve management oversight functions by having the opinions Comprising a total of nine directors—a president. dismissal Election. release. the number of independent outside directors proper and efficient management. As seen from the above. accountants and other third-par- Through this move. and the opinions of the two outside direc- directors—the Board of Directors make decisions on important management tors. who possess sufficient insight and a wealth of experience reflected in its General Meeting of Shareholders Election. respective. who have a third-party perspective. tors’ meetings with the opinions of lawyers. supervision supervision supervision Global Management Strategy Meeting Supervision The Board of Divisions and Departments Cooperation Other Divisions and Departments Audits Executive Cooperation Cooperation Officers Cooperation Affiliated Companies Other Affiliated Companies Audits Audits Group Audit & Supervisory Board 26 T HK ANNUAL R EP O R T 2015 . of experts. supervision Independent Auditors Report Advisory Compliance Committee President and CEO Report Cooperation Cooperation Internal Audit Division Selection. 2014. reflected in the Board of Di- cial titles. To this end. hears and acts upon necessary information from officers and relevant internal ly. four directors who also serve as executive officers. two directors with spe. Having introduced an outside director who has inde- THK’s basic stance on corporate governance is that. Selection. are based on a Board of Directors and a Audit & Supervisory Board that in. the Company is introducing an executive departments. and two outside rectors’ decision-making process. the Board of Directors clude outside directors and Audit & Supervisory Board Members. The Board of Directors then holds dis- function carried out by the Board of Directors. Discussions and debate are undertaken during Board of Direc- officer system in conjunction with a reduction in the number of its directors. With effect from June 21. Report Report Report release. In order to make rapid and appropriate decisions. clarify roles and responsibilities cussions on the basis of the gathered information and makes decisions on with regard to operational execution. dismissal Cooperation Report Audit & Supervisory Board Cooperation ( Outside Audit & Supervisory Board Member (2) ) Audit & Supervisory Board Member (2) Audits The Board of Directors Report ( President (1). Basic Stance on Corporate Governance matters and carry out oversight of directors and executive officers in the ex- ecution of their duties. and validity of management. risk management and other internal control systems. THK is planning to enhance the management oversight ty professionals sought as required. THK is working to strengthen corporate governance while upgrading compliance. the Company is operational execution. and accelerate decision making and important management matters. THK’s management organizations the neutrality. legality. CORPORATE GOVERNANCE AND INTERNAL CONTROLS THK’s aim as an enterprise is to maximize the generation of stable returns for shareholders over the long term. Audits Audits release. Instruction. the Company aims to boost the transparen. from the perspective of pendence from the members who make up the Board of Directors. 2014. pany is working to further improve management oversight functions. Vice Presidents (2) Executive Officer and Directors (4) Outside Directors (2) ) Cooperation Report Selection. was increased from one to two.

including business compliance at the sites and in the regions for which they are responsible. In 2008. variety of measures. actively committed to maintaining fair and proper disclosure of corporate in. The Internal Audit Division ing financial reporting. The working group mem- Shareholders on a Saturday in mid-June every year since 1998. At the same time. partners. to further execution of directors’ and executive officers’ duties and of business execu. gain a greater understanding of the Company. Japan’s Financial Instruments and Exchange Law. the Committee reports and considers responses to any cases where employees are in Active Disclosure of Corporate Information breach of statutory requirements or cases of reported compliance violations. With regard any to newly arisen risk. In addition. organized educational and training programs as well as compiled and distributed manuals. executive officers will be (the Kanto Local Finance Bureau) in June 2015 and then disclosed.corporate management. the Company will promptly designate a director or executive director to be placed in charge of Concentrating on comprehensive compliance. Each was attended to in an appropriate manner in collab- oration with the relevant department. initiatives are implemented within the Internal Control Depart- es. The Company is working to accelerate business execution by clarifying roles and responsibilities related to the exe. THK has held its General Meeting of members being selected from each site and region. After a large-scale earthquake to reinforce internal controls as a part of efforts to strengthen its manage. and as such the Company is propriate response. information security. export controls and new forms of influenza. The entire THK Group including its subsidiaries and conducts audits of the risk management system. Further. the Internal Control Audit Department was established ing function by strengthening the functions of Audit & Supervisory Board it. to observe the proceedings and makes efforts so that more people while fulfilling an advisory function covering compliance issues. improve operations and performance. The Company has established the THK Help Line to prevent executive officers and employees from committing violations and to help ensure that swift corrective measures can be taken even in the event of a serious com- pliance-related problem. including the holding of voluntary study workshops on more. working group With a view to open meetings. THK established the Compliance Committee in 2005 as a permanent body ment responsibilities. thereby bers play an important role in maintaining the compliance system through a avoiding the period when many shareholder meetings are clustered. In fiscal 2014. that is well known to its officers and employees. that required disclosure. The conclusions from these evaluations were sub- versant. the Company provides seating for stakeholders. The Compliance Committee coordinates with designated legal counsel in the THK has consistently regarded active communication with all stakeholders as latter’s capacity as observer to the Committee and provides a legal and ap- an extremely important part of management. ed annually. time and two part-time—Audit & Supervisory Board works to improve audit. As well as determining all policies relating to the establishment of an in-house compliance framework. The monitoring of and Companywide re- Construction and Reinforcement of a sponse to cross-organizational risk is the responsibility of the Risk Manage- System of Internal Controls ment Division. porate structure that ensures the reliability of its financial reporting based on Comprising a total of four Audit & Supervisory Board Members—two full. chaired by the President and CEO. Promotion of a Framework for Compliance cution of executive officers’ duties. THK introduced an internal control regulation regard. The outside Audit & Supervisory Board Members conduct legitimate nal control systems did not detect any flaws or serious outstanding issues and pertinent audits in each of the respective fields with which they are con. the environ- ment. each responsible department within THK has formulated regula- tions and guidelines. Thorough Risk Management With regard to the risks related to such areas as compliance. In addition to attending Board of Directors’ meetings and other important formance of internal control systems. namely financial accounting and corporate legal affairs. working groups reporting to the Compliance Committee. set up as a secretariat within the Risk Management Division. quality. has occurred. It should also be noted that a director’s term of office affiliates is thus endeavoring to engage in ongoing efforts to facilitate a cor- has been set at one year to clarify his or her management responsibilities. granted authority as officials responsible for the comprehensive execution of business affairs in specific matters. within the Internal Audit Division to evaluate the operational status and per- self. mitted in a statutory filing on internal control to the Prime Minister of Japan Appointed by decision of the Board of Directors. each Audit & Supervisory Board Member works on effective audits of the ment. THK is implementing initiatives the response at a Board of Directors’ meeting. disasters. the Company will put in place a business continuity plan (BCP) ment platform. It should be noted that an executive offi- cer’s term of office has also been set at one year to clarify his or her manage. Based on evaluations that are conduct- meetings. and having examined the Company’s business affairs and financ. tion through the exchange of views and information at Audit & Supervisory In-house evaluations undertaken during fiscal 2014 on the Group’s inter- Board. THK’s operating divisions have all established compliance formation. T H K A N N U A L R E P O R T 2 01 5 27 . seven inquiries were fielded through the THK Help Line.

LTD. 2015 Directors Akihiro Teramachi Toshihiro Teramachi Hiroshi Imano President and CEO Executive Vice President Executive Vice President Nobuyuki Maki Takashi Okubo Junichi Sakai Takashi Teramachi Director and Managing Executive Officer Director and Managing Executive Officer Director and Executive Officer Director and Executive Officer Senior Manager of Executive Vice Chairman of General Manager of Deputy General Manager of L&S General Promotion Office THK (CHINA) CO. BOARD OF DIRECTORS AND AUDIT & SUPERVISORY BOARD MEMBERS As of June 20. LTD... Quality Assurance Division IMT Division General Manager of ICB Center Representative Director and President of THK INTECHS CO. Masaaki Kainosho Masakatsu Hioki Outside Director Outside Director 28 T HK ANNUAL R EP O R T 2015 .

Representative Director and President of THK Manufacturing of Ireland Ltd. President of THK (CHINA) CO.V..S... Executive Officer Sakae Ito General Manager of Risk Management Division Managing Takanobu Hoshino Executive Officer General Manager of IMT Division Executive Officer Hitoshi Muramoto Director and Executive Vice Chairman of THK INTECHS CO. Representative Director and President of THK America. LTD. LTD. Representative Director and President of THK RHYTHM CO. LTD. Executive Officer Junichi Kuwabara General Manager of ACE Division Managing Junji Shimomaki Executive Officer Senior General Manager of Sales Division Executive Officer Yukio Yamada General Manager of Sales Division Managing Masato Sawada General Manager of International Sales Department Executive Officer General Manager of FAI Division Director and Executive Vice Chairman of THK RHYTHM CO. T H K A N N U A L R E P O R T 2 01 5 29 . Managing Akihiko Kambe *Exclude concurrently serving as director Executive Officer Senior General Manager of Production Division Senior General Manager of Sales Support Division Managing Kaoru Hoshide Executive Officer Senior General Manager of Engineering Division Managing Masaki Sugita Executive Officer Representative Director and President of THK Holdings of America.A. L. LTD.S.A. Executive Officer Nobuaki Sugahara Representative Director and President of THK Manufacturing General Manager of Corporate Strategy Division of Europe S. Audit & Supervisory Board Members Hideyuki Kiuchi Kazunori Igarashi Shizuo Watanabe Masatake Yone Audit & Supervisory Board Member Audit & Supervisory Board Member Outside Audit & Supervisory Outside Audit & Supervisory Board Member Board Member Executive Officers Managing Tetsuya Hayashida Executive Officer Naoki Kinoshita Executive Officer Representative Director and President of THK Europe B..C.L. Representative Director and President of THK GmbH Representative Director and President of THK France S. Inc.

Contents Management’s Discussion & Analysis 31 Risk Factors 35 Consolidated Financial Statements Consolidated Balance Sheets 36 Consolidated Statements of Income 38 Consolidated Statements of Comprehensive Income 38 Consolidated Statements of Changes in Net Assets 39 Consolidated Statements of Cash Flows 40 Notes to Consolidated Financial Statements 41 Independent Auditor’s Report 59 FINANCIAL SECTION 30 T HK ANNUAL R EP O R T 2015 .

aircraft. the Group implemented various measures economy. Making the most this busi. the ratio of SG&A expenses to net global sales network to capture demand from the growing markets in sales declined by 1. operating income wider-spread use in such new fields as medical equipment.388 million. signs of a modest improvement were seen in the Japanese From a cost perspective. Meanwhile. the value of the yen remained lower than a year earlier. to ¥217. n Non-Operating Income and Expenses chine tools as well as the increase in electronics-related demand driven Turning to non-operating income and expenses. which are enjoying Accounting for each of the aforementioned factors.000 10 150. improved by 2. ended March 31. In fiscal 2014. to 17. Under n Selling. to 69. ness structure. under the “Development of New Business Ar- eas” strategy. net non-operating in- by brisk investments in such mobile devices as smartphones and tablet come was ¥5. and the operating margin rose 3.000 5 50. Project. compared with the previous year. we were able to link the growth in demand to a steady penses of ¥404 million in non-operating expenses and a foreign ex- Net Sales Operating Income/Operating Income Margin nn Operating Income (Left scale) Operating Income Margin (Right scale) (Millions of yen) (Millions of yen) (%) 250.678 million. Those measures included the P25 prior to the consumption tax rate hike. General and Administrative (SG&A) Expenses the “Full-Scale Globalization” strategy. fiscal year.3 percentage points compared with the previous fiscal The Group has identified “Full-Scale Globalization” and the “Devel. the Group is endeavoring to increase sales from not only n Operating Income existing products.000 100.000 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Years ended March 31 Years ended March 31 T H K A N N U A L R E P O R T 2 01 5 31 . In addition.4%. This was mainly due to successful efforts to re- tion (FA) is under way. a cross-sectional initiative designed to reinforce the Group’s which had essentially remained stagnant. the cost of sales to sales ratio emerging countries slowed compared with the prior high levels.000 15 200. and in developed countries where the user base duce various expenses and increase the efficiency of operations.212 mil- n Net Sales lion. which helped to successfully streamline fixed costs and prove.MANAGEMENT’S DISCUSSION & ANALYSIS Analysis of Operating Results increase in sales. Major components comprised interest ex- PCs. In contrast. increased ¥11. Among developed n Cost of Sales countries. the Group aggressively expanded sales throughout the fiscal year under review in response to the upswing in demand for ma. helping to push up consolidated net sales by ¥32.018 million. compared with the previous fiscal botics and renewable energy. the rates of economic growth in China and other lower the variable cost ratio. earnings base.6 percentage gently to strengthen its business structure.4%. is expanding.0%.2%. year.000 20. despite a drop in demand following the surge immediately aimed at improving productivity. opment of New Business Areas” as cornerstones of its growth strategy aimed at expanding markets for its products including LM guides.000 10. year.000 30. the global economy continued to experience a moderate recovery led by the U.5 percentage points compared with the previous emerging countries where among other developments factory automa.7%. or 17. ro. but also newly developed products. As a result. conditions continued to im. the Group is striving to expand its Despite an increase in net sales. Turning to economies in Europe. 2015. to ¥28. To date the THK Group has worked dili.112 million. points to 13. As a result.S. or 63.

705 million. damping. an in- crease of ¥14.857 million. As a result. sales in this geographic segment came to ¥121. Taking these factors into consideration. compared with the previous fiscal year. compared with the previous fiscal year.” a cross-sectional initiative aimed at reinforc- ing our business base.4%.000 15 10 ROE ROA 20. This resulted in an increase in net sales in such areas as ma- chine tools.8%. improving the efficiency of fixed expenses and lowering the ratio of variable expenses to sales. to ¥25.000 6 4 5. THK undertook aggressive sales activities to meet the increased demand for electronics products. change gain of ¥4. due mainly to the drop in de- up ¥7. or 45. The Americas In the Americas. or 13.111 million. and other systems. driven by brisk investments in smartphones and tablet PCs.114 million. where regional economies continued to expand on the back of an increase in capital investments supported by steady personal consumption. compared with the previous fiscal year.089 million and equity in earnings of affiliates of Segment Information ¥599 million in non-operating income. or 52.421 million. the value of the yen re- mained lower compared with the levels reported during the previous fis- cal year. In addition to the effects of various cost-improvement measures such as the “P25 Project.677 million. first half of the fiscal year under review. The Company also strove to develop new markets for seismic isolation. general machinery and electronics products.6%. operating income (segment income) rose ¥8. as well as the upswing in demand for machine tools. a moderate recovery was seen in the second half.000 9 6 10. mand following the surge immediately prior to the consumption tax rate hike. Japan n Net Income Although the Japanese economy showed signs of weakness during the Net income for the fiscal year under review amounted to ¥22.000 3 2 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Years ended March 31 Years ended March 31 32 T HK ANNUAL R EP O R T 2015 .000 12 8 15. the THK Group strove to expand transactions Net Income/Net Income Margin Return on Assets (ROA)/Return on Equity (ROE) nn Net Income (Left scale) Net Income Margin (Right scale) (Millions of yen) (%) (%) 25.

equipment fields. tronics. to While automobile production continued to progress favorably. India and the ASEAN businesses. which continued to weaken compared vestments related to smartphones and tablet PCs. general machinery and transportation year on year. stances. region. aircraft and railway train–related fields by unifying production and sales.3%. the rate ¥12. which the Group has continued to strengthen over of ¥6.170 million.500 100 1. which helped to secure a positive ers and to develop aggressive sales activities in a bid to explore new turnaround into profitability. sales in the Americas amounted to ¥34. Europe compared with the previous fiscal year. million.448 million. Under these circum- with the previous fiscal year.4%. come) rose ¥1. resulting in an increase in sales across a wide range of areas Operating income (segment income) climbed ¥367 million.417 million. business opportunities in such areas as the medical equipment. compared with the previous fiscal aimed at expanding transactions with existing customers while cultivat- year. or 10. Benefiting also from the year-on-year downturn in the value of the yen. where signs of an ongoing economic recovery were evident. driven by brisk investments in smart- production and sales. sales in this geographic region were ¥20.1%.534 million. sales in the elec. which has broadened the demand for THK products.350 million. In addition.642 million. As a Other result. or 91.024 million.899 ting up ASEAN Customer Support for Japanese companies that are million. or 31. to ¥1. Operating income (segment income) advanced ¥616 of economic growth slowed in China compared with the high levels re. the Group’s performance was buoyed by move. an increase ing its sales network. Accounting for each of the aforemen. phones and tablet PCs.4%. up ¥1. driven by in- ments in the value of the yen. including the machine tools. or 42. sales in the other geographical segment climbed China ¥1. the past.9%. Taking into consideration these factors. Moreover.293 million. sales in China came to ¥28. As a result of these efforts. ing new customers. mainly due to the increase in sales. sales increased in the machine tools and general machinery In other countries and regions including Taiwan.071 million year on year.000 50 500 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Years ended March 31 Years ended March 31 T H K A N N U A L R E P O R T 2 01 5 33 . to ¥1. we undertook aggressive sales activities. compared with the previous fiscal year. compared with the previous fiscal year. to ¥1. to ¥456 million.710 million. aircraft and energy-related fields by unifying cially for small machine tools. Management’s Discussion & Analysis with existing customers and to develop new business in such areas as corded in the past. demand improved mainly for small machine tools. These initiatives were grew ¥1. which included set- tioned. Operating income (segment in- In Europe.000 150 1. year on year. or 650. with the progress of FA in China. Coupled with the year-on-year decline in the value of the channeled toward engaging in aggressive sales activities while optimiz- yen.5%. Demand for the Group’s products improved espe- the medical equipment. or 21. energies were creased. Operating income (segment income) expanding their businesses in the ASEAN region.275 million. This was the THK Group took steps to expand transactions with existing custom. or 12. an increase of ¥8.1%.191 million. Net Income per Share Net Assets per Share (Yen) (Yen) 200 2. machine tools and transportation equipment businesses in.

000 million. 2015.208 mil- lion.790 million in the previous fiscal year.498 million as of March 31. fore income taxes and minority interests of ¥33. 2015.670 million year on year.010 million ences. the Company re.430 million. ¥4.587 million compared with the balance as of the pre.893 million and growth in investments and other assets.000 0.000 million.414 million as of March 31.350 million compared with the previous fiscal year-end.524 million compared with the end of the previous ¥28. the increase in inventories of ¥2. the previous fiscal year. deprecia- vious fiscal year-end. which fall due for redemption within one year. In addition fiscal year.896 million compared with the balance as of the end of redeemed bonds totaling ¥10. During the fiscal year under cash equivalents as of March 31. THK undertook long-term borrowings of ¥10. tion and amortization of ¥11. both trade accounts and notes re. pared with ¥9. Moreover.742 million compared Total liabilities came to ¥123.000 million and increase of ¥16. Total Assets/Turnover Ratio Equity/Equity Ratio nn Total Assets (Left scale) Turnover Ratio (Right scale) nn Equity (Left scale) Equity Ratio (Right scale) (Millions of yen) (Times) (Millions of yen) (%) 400.2 50.000 0. Liabilities Net cash used in financing activities was ¥4.000 0.009 million. plant and equip. 2015 stood at ¥155.8 250. plant and equipment.000 0.6 150.553 million in the previous fiscal year. Cash and cash equivalents climbed ¥16. paid of ¥10. this increase was largely attributable year. compared with ¥23.159 million. and income taxes ment of ¥2. year on year. and notes payable of ¥2.643 million. ceivable as well as inventories grew ¥10. The major cash outflow compared with the end of the previous fiscal year. an increase of ¥8. an review. n Assets.000 60 200. Liabilities and Net Assets Assets Net Assets Total current assets stood at ¥260. and the increase in accounts ment was attributable to capital investments of ¥9.384 million. respectively. THK undertook long-term borrowings liabilities included an increase in trade accounts and notes payable of of ¥10.196 million as of March Net cash provided by operating activities came to ¥23. The higher balance of property. 31. n Cash Flows Total non-current assets stood at ¥113.605 million.239 million. plant and equip.000 million and redeemed bonds totaling ¥10. Major cash uting to the movement in non-current assets included an upswing in outflows were the increase in accounts and notes receivable of ¥8. and an increase in Accounting for each of the aforementioned activities. depreci. an increase of ¥4. and exchange differences on assets Net cash used in investing activities totaled ¥8. Meanwhile.664 million in the previous fiscal year.714 million com- denominated in foreign currencies.501 million.491 fixed assets. as current liabilities from long-term liabilities. 2015.893 million and ¥4.844 million with ¥2.705 million. to foreign currency translation adjustments.112 million. cash and income taxes payable of ¥1. The primary com- ponent was purchase of property. Management’s Discussion & Analysis Financial Position classified bonds totaling ¥7.157 million. which grew ¥10.142 million. due mainly to the increase in property. reflecting the upswing in net sales. Total net assets stood at ¥250. Major movements in was cash dividends.000 40 100.000 80 300. ation expenses of ¥11. Reflecting higher net sales. The principal cash inflows included income be- which climbed ¥1.000 million.000 20 0 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Years ended March 31 Years ended March 31 34 T HK ANNUAL R EP O R T 2015 .567 million. million.896 million year on to net income of ¥22. owing mainly to free cash flow and the effect of exchange differ.000 100 200.4 100. Factors contrib. up an increase of ¥32.

the potential exists for the THK Group’s business could also have a similar effect. in turn could result in a deterioration in the Group’s business results duction levels in these specific industries. ment and the aircraft industry. As a result. the The THK Group procures some raw materials and parts from external items outlined in the following discussion. ball screws and oth.RISK FACTORS Risk factors and uncertainties that could affect the THK Group’s busi. However. business partners and in its business domains. seismic dizes the position of linear motion systems as a critical machinery com. Nonetheless. social conditions foreign currency exchange and other instruments. political unrest due to acts of terrorism or war. as other countries and regions. natural disaster or other unforeseen incident. thereby exerting a negative impact on the business results and fi- these products are companies that make industrial machinery and nancial position of the THK Group. Any unexpected technical revolution that jeopar. Dependence on Linear Motion Systems Incidence of Defective Products The principal business of the THK Group is the manufacture and sale of THK Group products are widely used in industrial machinery including linear motion systems. Any and fire. nancial position could be negatively affected in the event of a shortfall in lating to the future are based on the best judgment of THK Group man. for the THK Group’s business results and financial position to be nega- tively impacted. Europe. T H K A N N U A L R E P O R T 2 01 5 35 . Under these circumstances. While the THK Group is striving through Full-Scale Global. ous areas related to consumer goods. 2015. Asia as well where the THK Group manufactures or sells products that result in re. the performance of the THK Group is influ. Against the backdrop of unanticipated sharp hikes in the prices of raw Accordingly. suspension ball joints substantial unexpected costs or a loss of trust among the general pub- and other transportation equipment components. industrial robots and semiconductor production equip- count for the majority of sales and are expected to continue to do so for ment. raw materials and parts owing to such factors as a drop in the produc- agement as of this date. of representation are affected by natural disasters. the costs associated with the manufacture of the Group’s potential to exert a negative impact on the business results and finan. the business results and financial position of the THK negative impact on the Group’s reputation. Economic downturns in countries sales and marketing offices in Japan. maintains and manages personal information ization and Development of New Business Areas to realize expansions as well as trade secrets relating to its customers. tion capacity of suppliers. Exchange Rate Fluctuations Sharp Hikes in the Prices of Raw Materials The THK Group conducts a portion of its business in foreign currencies. equipment including machine tool. including earthquakes pact on the THK Group’s business results and financial position. The THK Group maintains and operates manufacturing facilities as well as cas. results and financial position to be negatively impacted. Asia and other regions. The principal users of lic. other stakeholders in the ongoing conduct of its business activities. Acts of Terrorism. Europe. machine tools. Infectious Diseases and Other Maladies The THK Group has manufacturing and sales operations in the Ameri. credibility and standing. and financial position. Please note that information supply sources. the loss or well as other transportation equipment that form the THK Group’s major leakage of a part or all of this information due to a computer virus. This Group could be affected negatively in the future by a downturn in pro. the Americas. enced by production trends within industrial sectors such as machine While every effort is made to ensure that this information is stored and tools. Linear motion systems ac. notably LM guides. In the event that any of the Group’s points duced demand for the Company’s products could have a negative im. formation system defect or other factors have the potential to exert a As a result. general machinery and semiconduc- tor production equipment as well as manufacturers of transportation Information Security equipment. the Group attempts to hedge currency risk using forward materials due to such factors as high crude oil prices. the THK Group’s business results and fi- provided on this page was accurate as of June 22. medical equipment. amusement equip- ponent could have a negative impact on the business results and finan. Any items re. Reliance on Specific Sources of Supply ness results and financial position include. including automobiles. isolation and damping systems. or the outbreak of unexpected legal and regulatory changes in countries other than Japan an infectious disease. in- customers. Applications for THK products have also expanded to include vari- the foreseeable future. the THK Group is working to build quality assurance systems to ensure that high product quality is main- Effect of Changes in Production Trends within Specific Industries tained across all product sectors. products can be expected to increase. Overseas Business Expansion Disasters. cial position of the THK Group. any incidence of defective The THK Group manufactures and sells LM guides. general machinery and semiconductor production equipment as stringently managed in a secure and appropriate manner. As a result. the potential exists cial position of the THK Group. products that arises in any of these markets could potentially result in er machinery components as well as link balls. any in raw material supplying countries and rising demand in newly emerg- significant unexpected fluctuations in foreign exchange rates have the ing nations. The THK Group collects. but are not limited to.

148 513.354 Less accumulated depreciation (170.097 Land 12.667 54.766 274. LTD.890 2.290.084 232.604 Intangibles: Goodwill 580 893 4.859 13. 36 T HK ANNUAL R EP O R T 2015 .017 22.917 Construction in progress 5.511.213 36.159) (1.581 Total property.968 664.206 544.062 9.194 106.707 2.770 Total intangibles 4.090 1.212) (157.335 28.106.338 545.416 $ 3.098 17.676 41.974 28.343 $ 1.163 1.649 4. vehicles and others 181.507 Total current assets 260.554 32. plant and equipment 97.755 Machinery.103 38.976 Property.822 Other 3.838 812.409 Other receivables 2.001 6.654 Net defined benefit asset (Note 7) 67 32 557 Long-term loans receivable— Unconsolidated subsidiaries and affiliates — — — Other 65 62 540 Deferred tax assets (Note 14) 1.590 250.408 14.992 Other current assets 2.427 The accompanying notes are an integral part of these statements.205) 65.153 —Unconsolidated subsidiaries and affiliates 1.573 13. CONSOLIDATED FINANCIAL STATEMENTS THK CO.733 1.732 94.592 Total assets ¥ 373. Plant and Equipment (Note 4): Buildings and structures 68.799 170. equipment.414 227.821 3.754 Receivables (Note 17): Trade accounts and notes receivable 61.367 9.661 1.320 31.660 Investments in unconsolidated subsidiaries and affiliates 4.401 4.171 1.128 2.037 567.284 62.244 Investments and Other: Investments in securities (Notes 5 and 17) 3.522 54.736 Other investments 1.717 51.968 3.079.984 —Unconsolidated subsidiaries and affiliates 53 683 440 65. dollars Millions of yen (Note 1) 2015 2014 2015 ASSETS Current Assets: Cash and cash equivalents (Note 17) ¥ 155.415.474 91.239 ¥ 138. and consolidated subsidiaries Consolidated Balance Sheets March 31.S.996 Less allowance for doubtful receivables (145) (131) (1. 2015 and 2014 Thousands of U.610 ¥ 336.447 2.249) 79.871 74..166 Short-term loans receivable— Unconsolidated subsidiaries and affiliates — 1.810 Total investments and other 11.790 Inventories (Note 3) 32.165.000 — Other 2 2 16 Deferred tax assets (Note 14) 3.

347 3.701 2.934) (115.086 13.000 50.083 41.814 Other accrued expenses 4.171 54.731 1.675 Reserve for directors’ and corporate auditors’ retirement benefits 110 127 914 Reserve for product warranty 156 149 1.699 Retained earnings 158.317.148 2.930) as of March 31.940 59.903 shares 34.808 61.230 25.073 Accumulated other comprehensive income: Net unrealized gain on available-for-sale securities 1.268 1.427 T H K A N N U A L R E P O R T 2 01 5 37 .606 287.584 370.737 Remeasurements of defined benefit plans (Note 7) (166) (632) (1.380) Total accumulated other comprehensive income 24.486 Other current liabilities 2.299 Long-term Liabilities: Long-term debt (Notes 6 and 17) 53.700 shares.970 Income taxes payable 7.490 500.225 2.861 27.317 22.877.036 —Unconsolidated subsidiaries and affiliates 323 327 2.463 141.084 243.257 43. 2015 and 2014.930 190.099 200.263.564 Total long-term liabilities 62.584 44.610 ¥336.266 Minority interests 2.957 26.307 Lease obligations 299 279 2.943) (13.416 $3.606 34.560 Treasury stock.474 1. 2015 and 2014 Additional paid-in capital 44.000 ¥ 10.807 290.711 206.263 34.457 Total net assets 250.269 shares (13.266.746 shares and 7.082.940 12.856. Thousands of U.030 1.289 1.498 222.860. dollars Millions of yen (Note 1) 2015 2014 2015 LIABILITIES AND NET ASSETS Current Liabilities: Current portion of long-term debt (Notes 6 and 17) ¥ 7.777 523.743 Net defined benefit liability (Note 7) 4.106.031 8.636 Accrued bonuses to employees 3.312 801 10.908 Foreign currency translation adjustments 22.995 26.968 7.000 $ 58.964 4.685 Other payables 5.202 Payables (Note 17): Trade accounts and notes payable 29.857 Total current liabilities 60.S.797 Total liabilities and net assets ¥373.413 5. at cost: 7.172 41.297 Long-term lease obligations 330 523 2.829 Other liabilities 1.735 as of March 31.273 Deferred tax liabilities (Note 14) 3.000 440.322 Commitment and Contingent Liabilities (Notes 8 and 9) Net Assets (Note 10): Shareholders’ equity Common stock Authorized: 465.976 —Unconsolidated subsidiaries and affiliates 152 137 1.464 18. Issued: 133. respectively Total shareholders’ equity 223.

493 96.708 5.184 The accompanying notes are an integral part of these statements.805 ¥15.193 33.290 Foreign currency translation adjustments 10.562 1.388 17.705 ¥ 15.758 $189.695 8.404 Attributable to: Shareholders of THK CO. 33.633 42.277 283.112 6.678 ¥185.758 189.504 Income before income taxes and minority interests 33.788 Comprehensive Income 34.370 236.903 557.519 93.701 35. LTD.280 20.924 Net income before minority interests 22.998 Equity in earnings of an affiliate 599 522 4.085 36.211 Minority interests 383 548 3.474) Total income taxes 10. dollars Millions of yen (Note 1) 2015 2014 2015 Net Sales ¥217.S. General and Administrative Expenses (Notes 11 and 12) 38.S.554 for under the equity method Total other comprehensive income 11. 38 T HK ANNUAL R EP O R T 2015 . net 446 525 3. Consolidated Statements of Income Years ended March 31.359) Foreign exchange gain.398 Share of other comprehensive income of an affiliate accounted 187 803 1.809.408 Deferred (899) (246) (7. 2015 and 2014 Thousands of U.520 Remeasurements of defined benefit plans 529 — 4.911 Cost of Sales (Note 12) 150.595 8.045 19.089 5.279 Selling.556 Interest expenses (404) (801) (3.035 Non-Operating Income (Expenses): Interest and dividend income 548 475 4.783 The accompanying notes are an integral part of these statements.246 88. dollars Millions of yen (Note 1) 2015 2014 2015 Net Income before Minority Interests ¥22.548 Income Taxes (Note 14) Current 11. net 4.623 Gross profit 67. Consolidated Statements of Comprehensive Income Years ended March 31.636 35.591) Subsidy income — 591 — Other.466 $1. 2015 and 2014 Thousands of U.590 $ 188.729 280.980 Rental income 363 331 3.615 Minority Interests in Net Income 99 167 823 Net income ¥ 22.004 278.018 Loss on sales and disposal of property. plant and equipment. net (97) (205) (806) Impairment loss (Note 4) (432) — (3.252.615 Other Comprehensive Income (Note 15): Net unrealized gain on available-for-sale securities 516 53 4.501 24..662 83.653 132.243 Operating income 28.533 321.024 52.805 15.

2014.584 140.176.380) $200. 2013 ¥ 740 ¥ (7.532) Net income — — — — — 15.737 $(1.855) $1.198 Cash dividends — — (36. as restated 6.240 83.797 The accompanying notes are an integral part of these statements.711 Millions of yen Accumulated other comprehensive income Net unrealized gain Foreign currency Remeasurements Total accumulated on available-for-sale translation of defined other comprehensive Minority interests Total net assets securities adjustments benefit plans income Balance at April 1.584 ¥141.718.783 Purchase of treasury stock — — — (74) (74) Net changes of items other than shareholders’ equity — — — — — Balance at March 31. Total shareholders’ Common stock Retained earnings paid-in capital at cost equity Balance at April 1.303 $(115.836.735 $370.457 $2. as restated 34.148 Cumulative effect of accounting changes — — — — — (1.061 (632) 19.660 107.735 370.463 ¥(13.370 Balance at March 31.678 Cash dividends — — (2.285) — (1.890 Cumulative effect of accounting changes — — (10.086 ¥2.708.498 Thousands of U.705 — 22.165.532) — (2. Consolidated Financial Statements Consolidated Statements of Changes in Net Assets Years ended March 31.606 ¥44.010 466 10.590 Purchase of treasury stock — — — (6) (6) Disposition of treasury stock — 0 — 0 0 Net changes of items other than shareholders’ equity — — — — — Balance at March 31.684) Balance at April 1.684) Balance at April 1. 2014. dollars (Note 1) Accumulated other comprehensive income Net unrealized gain Foreign currency Remeasurements Total accumulated on available-for-sale translation of defined other comprehensive Minority interests Total net assets securities adjustments benefit plans income Balance at March 31.833) — (36. dollars (Note 1) Shareholders’ equity Additional Treasury stock.930 (632) 13.606 ¥44. 2015 and 2014 Millions of yen Shareholders’ equity Additional Treasury stock.229 3.940 ¥(166) ¥24.908 $190.619 (115.606 ¥44.699 1. as restated 801 12.508 (5. 2015 ¥1.430) Net income — — 22.285) Balance at April 1.860.508 $(5.705 Purchase of treasury stock — — — (9) (9) Net changes of items other than shareholders’ equity — — — — — Balance at March 31.986 383 11.735 $370.S.537 Balance at March 31. 2015 ¥34.660 $107.390) ¥1.184 94.445 Cash dividends — — (4. 2014 $287.344 3. Total shareholders’ Common stock Retained earnings paid-in capital at cost equity Balance at March 31. 2014 ¥ 801 ¥12. 2015 $10.833) Net income — — 188.930 ¥(632) ¥13.073 Thousands of U.131) ¥ — ¥ (6.783 Purchase of treasury stock — — — — — (74) Net changes of items other than shareholders’ equity 4.254) $108.731 Cumulative effect of accounting changes — — (1.584 ¥128.489 548 20.701 ¥250.077 Cumulative effect of accounting changes — — — — — (10. as restated 287.705 Purchase of treasury stock — — — — — (9) Net changes of items other than shareholders’ equity 510 10. 2014 ¥34.684) — (10.254) 108.384 Cash dividends — — — — — (36.082. 2014.699 $1.783 — 188.317 220.430) Net income — — — — — 22.560 $(115.590 — 15.264 1.855) 1.416 ¥(13.934) 205.606 44.833) Net income — — — — — 188.928) ¥193.913 $19.584 ¥158.847.266 $22.058 Cash dividends — — — — — (2.S.038 Balance at March 31.930) $1. 2013 ¥34.264 $1. 2015 $287.099 2.769 ¥189.312 ¥22.317. 2014 $ 6.590 Purchase of treasury stock — — — — — (6) Disposition of treasury stock — — — — — 0 Net changes of items other than shareholders’ equity 61 20.317 ¥222.532) Net income — — 15.430) — (4.943) ¥223.913 19.099 ¥2.474 ¥(13.189 (13.862 Cash dividends — — — — — (4. 2014. T H K A N N U A L R E P O R T 2 01 5 39 .285) Balance at April 1.699 $1.934) ¥206.874 91.

548 Adjustments: Depreciation and amortization 11.083) Equity in earnings of an affiliate (599) (522) (4.790) (39.004 $ 278.S.896 22.353) Net cash used in financing activities (4. 40 T HK ANNUAL R EP O R T 2015 .012 Increase in net defined benefit liability 99 38 823 Other.221) Net cash provided by operating activities 23.146) Proceeds from long-term debt 10.427) Foreign Currency Translation Adjustments on Cash and Cash Equivalents 6.101 96.993 Interest and dividend income (548) (475) (4. Consolidated Statements of Cash Flows Years ended March 31.000) (83.531) Proceeds from sales of property.553) (72. unconsolidated subsidiaries and affiliates (427) (16) (3.491) (3. plant and equipment and intangibles (9. net (58) 0 (482) Net cash used in investing activities (8.239 ¥138.007 8.810) (70.445) (10. dollars Millions of yen (Note 1) 2015 2014 2015 Cash Flows from Operating Activities: Income before income taxes and minority interests ¥ 33.150.797) (78.317 28.000) (20.550) Increase in loans receivable (7) (7) (58) Collection on loans receivable 1.375 140.000 83.026 1.501 ¥ 24.343 115.460) (4.343 $1.754 The accompanying notes are an integral part of these statements.599) Increase in inventories (2.018 Interest and dividend received 524 626 4.009) (4. net (4.356 Interest paid (447) (765) (3.054 57.384 23.742) (2.000 20.714) (9. plant and equipment.530 Other.591 Amortization of goodwill 360 355 2. net 104 205 864 Changes in assets and liabilities: Increase in accounts and notes receivable (8.146 Cash dividends (4.567 11.975 21.478) (20.792) Cash dividends to minority shareholders (24) (3) (199) Purchase of treasury stock (9) (6) (74) Proceeds from sales of treasury stock — 0 — Repayment of lease obligations (283) (254) (2.425) (2.967 1. plant and equipment 198 260 1.525) (36.359 Foreign exchange gain.646 Increase in investments in securities.716) Income taxes paid (10.852) (83.936 Net Increase in Cash and Cash Equivalents 16. 2015 and 2014 Thousands of U.556) Interest expenses 404 801 3.656 277.082 Subtotal 33.204) Increase in accounts and notes payable 2.968 11.175 Impairment loss 432 — 3.643 1.430) (1.744) (37.664 194. net 491 859 4.453) Cash Flows from Financing Activities: Repayment of long-term debt (10.980) Loss on sales and disposal of property.290.429 Cash Flows from Investing Activities: Purchase of property.975 Increase in provisions 242 345 2.270 Cash and Cash Equivalents at End of Year ¥155.483 Cash and Cash Equivalents at Beginning of Year 138.

amounts of less than one million yen have been omitted. The excess of the cost of acquisition over the fair value of the net ments for the years ended March 31.V..V.A. although the accompanying consolidated different from that of the Company. These prepared in accordance with the provisions set forth in the Financial translations should not be construed as presentations that the yen Instruments and Exchange Act of Japan and its related accounting amounts actually represent or could be converted into U. 2015. those companies THK RHYTHM KYUSHU CO. Basis of Presenting Consolidated Financial Statements The accompanying consolidated financial statements of THK CO. herein as additional information. For the year ended March 31. December 31 are used after making necessary adjustments for con- dated financial statements would not have been significant. and THK RHYTHM MEXICANA ENGI- over which the Company is able to directly or indirectly exercise NEERING. LTD. is December 31. dollar amounts presented in the consolidated financial state- LTD. but which is provided dividual amounts. tain reclassifications and rearrangements to present them in a form As permitted by the Financial Instruments and Exchange Act. For this purpose. respectively. 2014.$ accepted in Japan (“Japanese GAAP”). because these companies are small in size and if ing these accounts. Such reclassifications have than one thousand dollars have been omitted.S. All significant inter-company transaction accounts and unre. DE C.S. the effect on the consoli. Under the effective control approach. the total been made solely for comparability of the consolidated financial amounts in Japanese yen and translated U. 2015 and for the The accompanying consolidated financial statements include cer. 2015 counts of the Company and its subsidiaries that are controlled by the Changes in the scope of consolidation Company. In addition. clude the operating results and cash flow activities through the date The Company had 33 subsidiaries as of March 31. 31. DE C. Certain amounts previ.. LTD.. In consolidat- stated at cost.S.S. Korea Corporation was liquidated during the year ended March 31. the rate of ¥120. alized inter-company profits are eliminated upon consolidation. assets of an acquired subsidiary (goodwill) at the date of acquisition counts of the Company and its 30 (33 in 2014) consolidated subsid. As a result. 2.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THK CO. U. S. were absorbed into THK RHYTHM CO..27 to U. The fiscal year closing date of other consolidated subsidiaries is March 31. have been used for the translation of the accompanying plication and disclosure requirements. Summary of Significant Accounting Policies (a) Consolidation (Changes in the scope of consolidation) The accompanying consolidated financial statements include the ac. excluding THK India Pvt. which are different in certain 1. Investments in the remaining three The fiscal year closing date of 23 overseas consolidated subsid- subsidiaries including THK Brasil LTDA are not consolidated and iaries. all majority-owned for the year ended March 31.A. dollars at regulations. certain adjustments necessary statements of income and consolidated statements of cash flows in- for consolidation have been made. and Beldex or less.. consolidated financial statements as of March 31. For 2015. dollars shown in the statements. that is more familiar to readers outside Japan. U. consolidated financial statements and notes to the consolidated fi- the notes to the consolidated financial statements include information nancial statements do not necessarily agree with the sum of the in- that is not required under Japanese GAAP. and accordingly. and do not affect net income or net assets. solidation to the significant intercompany transactions during the period between January 1 and March 31. Ltd. dollar ously reported may have been reclassified to conform to the current amounts are translated from such yen amounts and amounts of less year financial statement presentation. these three companies were deconsolidated consolidated subsidiaries and an affiliate whose closing dates are as of March 31. financial statements as of and for the year ended these companies had been consolidated. S. 2015 and 36 of termination. T H K A N N U A L R E P O R T 2 01 5 41 . year then ended. control are to be consolidated even if the holding ratio equals 50% and THK RHYTHM MEXICANA. Additionally. 2015 and 2014 include the ac. The consolidated financial state. and consolidated subsidiaries 1. 2015. subsidiaries as of March 31. (the “Company”) and its consolidated subsidiaries have been ments are included solely for the convenience of the readers. the approximate rate of exchange prevailing in Tokyo on March respects from International Financial Reporting Standards as to ap. 2015 were as follows: companies are to be consolidated. iaries (collectively. LTD. “the Group”).S. is amortized over 5 to 10 years by the straight-line method. and in conformity with accounting principles generally that or any other rate..

the differen- sive income of net assets section. net of applicable taxes. 2015 and 2014. changes in fair value are recognized as gains or losses. If the equity method had been applied to the investments in risks. 5) exclusion of minority available-for-sale securities is not readily determinable. includes policies and procedures for risk assessments and approval. (2) financial statements prepared by foreign subsidiaries in Securities accordance with either International Financial Reporting Standards Investments in securities are classified and accounted for. and reporting and monitoring of transactions involving derivative fi- nancial instruments. amounts arising from use of different rates are presented as foreign For interest rate swap contracts which qualify the required condi- currency translation adjustments in accumulated other comprehen. as follows: (1) trading securities. the following items should be adjusted in the term. etc. Net assets except for minority interest account at foreign currency exchange contracts qualify the required condition beginning of year are translated into Japanese yen at historical under the related Japanese accounting standards. includ- SAMICK THK CO. investments in subsidiaries as of March 31. actions and events under similar circumstances should in principle be unified for the preparation of the consolidated financial state. The Group does not hold or issue derivative fi- (b) Translation of Foreign Currency Financial Statements nancial instruments for speculative purposes. the hedged for- rates. which are expected to be held to maturity with the positive amortization of goodwill. with unrealized gains and losses. The Company had three affiliates and three unconsolidated For other than temporary declines in fair value. companies over which the Company directly or indirectly ence is charged to income. Assets and liabilities of foreign subsidiaries and an affiliate are Derivative financial instruments are stated at fair value and translated into Japanese yen at exchange rates prevailing at the bal. Plant and Equipment mined principally by the gross average method. eign currency assets and liabilities are translated at the contract ing the average exchange rate during the year. tion under the related Japanese accounting standards. (3) however. Unification of Accounting Policies Applied to Foreign specific identified cost method. ments would not have been significant. the carrying amount of such inventory Under Japanese GAAP. 3) expensing capitalized development costs of research and as either of the aforementioned securities. and (3) available-for-sale securities. Work in process Property. vestments are stated at cost. are stated at cost deter. and equipment and investment properties and in. (d) Financial Instruments ments. (2) held-to-maturity debt se- cordance with Japanese GAAP unless they are immaterial. (c) Inventories Inventories. 1) curities.) are stated at swap contracts to manage foreign exchange risks and interest rate cost. the Company has applied the equity method to investment in The Group uses a variety of derivative financial instruments. plant. are reported at fair val- development. ported as a separate component of net assets. has the ability to exercise significant influence are accounted for using the equity method. Profit and loss accounts are translated into Japanese yen us. Under the control securities are written down to the net realizable value and the differ- concept. if contained. which those companies. 2015 and Derivatives 2014. are reported at amortized gain or loss of pensions that has been directly recorded in net as. depend- or the generally accepted accounting principles in the United ing on management’s intent. (e) Property. and the related unrealized gains consolidation process so that net income is accounted for in ac. (1) the accounting policies and procedures is written down to its net selling value and the difference is applied to a parent company and its subsidiaries for similar trans. which are not classified sets. LTD. and losses are included in earnings.. If acquisition cost of an inventory Subsidiaries for the Consolidated Financial Statements exceeds its net selling value. 4) cancellation of the fair value model accounting for ue. plant and equipment of the Company and its domestic for ordered products is stated at cost determined principally by the consolidated subsidiaries are depreciated mainly using the declin- 42 T HK ANNUAL R EP O R T 2015 . The Company has established a control environment. For the years ended March 31. are reported at fair value. charged to income. cost. States of America tentatively may be used for the consolidation which are held for the purpose of earning capital gains in the near process. such in- interests from net income. the effect on the consolidated financial state. If forward ance sheet date. tial paid or received under the swap contracts are recognized and included in the interest income or expenses. re- property. If the fair value of corporation of the cost model accounting. Investments in the remaining affiliates and ing forward foreign currency exchange contracts and interest rate unconsolidated subsidiaries (THK Brasil LTDA. Differences in yen rates and no gains or losses are recognized. 2) scheduled amortization of actuarial intent and ability to hold to maturity. except for work in process.

“Accounting Standard for Asset Re- in the current year. is not reasonably determinable because the time of period with no residual value. c Application of the simplified method for small businesses For certain consolidated subsidiaries. and other factors of such obligations are un- certain. 1998 are depreciated using the straight-line method. Notes to Consolidated Financial Statements ing-balance method. Upon initial recognition of a liability. the ( j) Reserve for Product Warranty cost is capitalized as part of the related long-lived assets and depre- Reserve for product warranty is stated at amount based on the ciated over the remaining estimated useful life of the related asset. are charged to income as incurred. however. buildings and structures and from 4 to 12 years for machinery. (h) Accrued Bonuses to Employees Accrued bonuses to employees are stated at an estimated amount to (m) Asset Retirement Obligations be paid in the following year based on the employees’ compensation Under ASBJ Statement No. on the average remaining service years (from 5 to 18 years) of dated subsidiaries is amortized on a straight-line basis over a period the employees when incurred. and other cause the rent periods are uncertain. the estimated retirement obligation to be attributed to the report- The range of useful lives is principally from 5 to 50 years for ing period. buildings. Lease assets are mainly included in machinery. (f) Intangibles  Actuarial gains/losses are amortized pro rata in the years Intangible assets are amortized using the straight-line method. average remaining service years (Mainly 15 years) of the em- ployees when incurred. software. of five years. acquired by the tributed to the reporting period Company and its domestic consolidated subsidiaries on or after April The benefit formula is employed for the method of determining 1. a simplified method is ap- (g) Allowance for Doubtful Receivables plied for the calculation of retirement benefit obligations and re- Allowance for doubtful receivables is stated in amounts considered tirement benefit expenses whereby the necessary retirement to be appropriate based on the Group’s past credit loss experience benefit provisions for voluntary resignations at the end of the and an evaluation of potential losses in the receivables outstanding. (l ) Accounting for Employees’ Retirement Benefits ed methods are mainly applied to those of foreign subsidiaries. legal obligations ( i) Reserve ‌ for Directors’ and associated with the retirement of long-lived assets shall be recog- Corporate Auditors’ Retirement Benefits nized as the sum of the discounted cash flows required for future as- Reserve for directors’ and corporate auditors’ retirement benefits set retirement at the time that the obligations are incurred. The asset retirement obli- assets is computed using the straight-line method over the leasing gation. 18. from the following fiscal year by the straight-line method based Software for internal use of the Company and domestic consoli. “Guidance on Ac- counting Standard for Asset Retirement Obligations”. including minor renewals and following fiscal year by the straight-line method based on the improvements. the estimated useful life of the software. a Methods to determine the estimated retirement benefits to be at- However. tirement Obligations” and ASBJ Guidance No. 21. except for building attachments. Therefore. obligation shall be recognized as a liability in the period when it be- comes reasonably estimated. T H K A N N U A L R E P O R T 2 01 5 43 . The asset re- (k) Lease tirement obligation. whereas the straight-line method or accelerat. Prior service cost are amortized pro rata in the years from the Normal repairs and maintenance. equipment. The Group also has obligation assets. Group’s past experience in order to cover possible warranty liabilities. the Group is obliged to pay restoring costs at relocation. b Amortization of actuarial gains/losses and prior service cost equipment and vehicles. Depreciation of lease wastes and contamination survey on land. performance. If the as- represents the liability at amount that would be required if all eligible set retirement obligation cannot be reasonably estimated. consolidated fiscal year are recorded as retirement benefit obli- gations. the aforementioned obligations are not recog- nized in the accompanying consolidated financial statements. amount. Under rent agreements of the head office and other spaces. such directors and corporate auditors retired at each balance sheet date. equipment for disposal costs of PCB (polychlorinated biphenyl) -contained and others in the consolidated balance sheets. is not reasonably determinable be- The Group leases certain computers. however.

the ASBJ issued ASBJ Statements No. Cash and cash equivalents are composed of cash on hand. losses from translation are recognized in the consolidated state- ments of income to the extent that they are not hedged by forward (s) Accounting Changes foreign currency exchange contracts. net of tax. On September 13. on all domestic consumption of goods and services. using a single weighted average discount rate that reflects the esti- mated period and amount of benefit payments in each period. and full exercise at exchange rates prevailing at the balance sheet date. Share” and ASBJ Guidance No. net defined benefit liability increased by ¥1. As a result. 2. (p) Income Taxes In applying Accounting Standard for Retirement Benefits. (n) Foreign Currency Translation conversion of the outstanding convertible notes and bonds at the be- All monetary assets and liabilities denominated in foreign currencies. local in. The consumption taxes paid by the Com. and liability approach is used to recognize deferred tax assets and li. pany followed the transitional treatment prescribed in Paragraph 37 of habitants’ taxes and enterprise taxes.827 thousand) and retained earnings decreased by ¥1. “Guidance on Accounting Standard for Earn- common shares outstanding for the period. Deferred taxes are determined by applying currently income and income before income taxes and minority interests for enacted tax laws to the temporary differences.” and No. lion ($13. changes in the calculation methods for retirement benefit obligations come included in the consolidated statements of income. (r) Per Share Information 22. dards for Business Combinations and Business Divestitures” and utable to common shareholders by the weighted-average number of ASBJ Guidance No. The asset and service costs were reflected in retained earnings at April 1.” No. Diluted net income per share of common stock assumes full subsidiary that do not result in a loss of control in the additional 44 T HK ANNUAL R EP O R T 2015 . 25. 7. with on March 26. “Revised Accounting Standard for Business Combination. 2013.” Diluted net income per share reflects the potential dilution that These accounting standards were revised principally concern- could occur if securities were exercised or converted into common ing “Treatment for changes in parent’s ownership interest in a stock. method of using the discount rate based on the periods approximate The net balance of liability after offsetting against assets is included to the employees’ average remaining service years to the method of in “Other current liabilities” in the consolidated balance sheets. ing Standard for Retirement Benefits (ASBJ Guidance No. Accounting Standard for Retirement Benefits and the effects of the Provision for income taxes is computed based on the pretax in.285 ences between the carrying amounts and the tax bases of assets million ($10. “Accounting Standard for Earnings per standing at the year end.” No. 21.663 mil- abilities for expected future tax consequences of temporary differ. ginning of the year (or at the time of issuance) with an applicable whether long-term or short-term. The effects on operating and liabilities. Divestitures. 2015 and 2014. 2014.684 thousand) at April 1. the Company applied the provisions stated in the main clause of Paragraph 35 of the Accounting Standard for (o) Consumption Taxes Retirement Benefits (ASBJ Statement No. Effective March 31. 4. 26 issued on May 17. (t) New Accounting Standard in Issue Not Yet Adopted ments with original maturity of three months or less and which carry Accounting Standard for Retirement Benefits a minor risk of fluctuations in value. revised respectively. 2015. the year ended March 31. 10. the Com- Japanese income taxes consist of corporate income taxes. bank de- posits that can be withdrawn on demand and short-term invest. Japanese consumption taxes are levied at the flat rate of eight per. Accordingly. Statements. Gains and of outstanding warrants. ings per Share. 2015 were immaterial. “Revised Accounting Standard for Consolidated Financial Net assets per share is computed by dividing net assets except mi. “Revised Accounting Standard for Business nority interests at the year end by the number of common stock out. 2012) and the main clause of Paragraph 67 of Guidance on Account- cent and five percent for the years ended March 31. 2015). periods from a straight-line basis to a benefit formula basis and pany and domestic subsidiaries on purchases of goods and services changed the determination method of the discount rate from the are excluded from costs or expenses but are recorded as an asset. “Guidance on Accounting Stan- Net income per share is computed by dividing net income attrib. and domestic subsidiaries on sales are excluded from net sales but changed the method of attributing projected benefit obligations to are recorded as a liability. the Company has reviewed calcu- certain exemptions. 2014. The effects of this change on per share information were im- (q) Cash and Cash Equivalents material. The consumption taxes received by the Company lation methods for retirement benefit obligations and service costs. are translated into Japanese yen adjustment for related interest expense.

buildings and structures ¥215 $1.165 Carrying amount (fair value) does not exceed acquisition cost: Equity securities 2 3 (0) Total ¥2.858 Carrying amount (fair value) does not exceed acquisition cost: Equity securities 412 421 (9) Total ¥3. 2015 and 2014. Long-lived Assets The Group recognized an impairment loss on the following asset group: Location Use Type Millions of yen Thousands of U. dollars Adachi-ku.561 108. wrote down the book value to the recoverable amount and such 2014. Notes to Consolidated Financial Statements acquisitions of shares in a subsidiary.974 ¥28. 5. Tokyo Assets planned to be disposed of Land.” “Accounting for acquisition from April 1.019 $114.” The Company is currently in the process of measuring the ef- The Company expects to apply these standards and guidance fects of applying these revised accounting standards and guidance. Inventories Inventories as of March 31. available-for-sale securities with available fair value were as follows: Millions of yen 2015 Carrying amount Acquisition cost Net unrealized gain (loss) Carrying amount (fair value) exceeds acquisition cost: Equity securities ¥2. the Company No impairment loss was recognized for the year ended March 31.424 ¥1. amount was recognized as an impairment loss. the impairment loss was ¥394 million ($3. The recov- of Directors made a decision to dispose of and significant assets erable amount of the asset group is measured at net selling value planned to be disposed of treated as an individual grouping by item. 2015 and 2014 comprised of the following: Millions of yen Thousands of U. 3. and assessed by the estimated sales value.” and “Presen. dollars 2015 2014 2015 Merchandise and finished goods ¥13.273 ¥1.S. as. trolling interest.185 51.848 Millions of yen 2014 Carrying amount Acquisition cost Net unrealized gain (loss) Carrying amount (fair value) exceeds acquisition cost: Equity securities ¥2. related costs. The breakdown of sets are grouped basically based on managerial accounting units.161 ¥997 ¥1.158 ¥993 ¥1.164 T H K A N N U A L R E P O R T 2 01 5 45 .051 11.275 thousand) of land and Among rental properties. except for provisional accounting treatments. 2015. 2015.” “Transitional accounting treatments. For the asset group planned to be disposed of. idle assets. Nara Assets planned to be disposed of Land 216 1.738 ¥12.417 Raw materials and supplies 13.795 In assessing whether there is an impairment of long-lived assets.787 Ikoma.861 ¥1. Investments in Securities As of March 31.766 $274. which are expected to be applied to business combinations to be tation of net income and change from minority interest to non-con.003 ¥1.514 Total ¥32.226 Work in process 6. those properties which the Board ¥38 million ($315 thousand) of buildings and structures.S.166 4.184 5. implemented on or after April 1.

202 $— $108.000 — 0. dollars 2015 Carrying amount Acquisition cost Net unrealized gain (loss) Carrying amount (fair value) exceeds acquisition cost: Equity securities $23.850% Unsecured straight bonds due in 2018 10.519% due in 2019 ¥10.438 Unlisted equity securities These unlisted equity securities are not included in “Available-for.S.000 — Total ¥7. is determined by considering the financial positions as of the latest ducting impairment losses.000 58.000 83.S. 2015 and 2014. impairment losses would be recognized.339 $15.000 83.000 $498.350% Unsecured straight bonds due in 2014 — 10.000 Thousands of U.425 3.430% Unsecured straight bonds due in 2018 10.S. 2015 and 2014 consisted of the following: Millions of yen Thousands of U.877 Annual maturities of long-term debt as of March 31.090 0.000 10.146 0.202 0.S.365 As of March 31. When the fair value of each issue of securities declined more than There were no available-for-sale securities sold during the years 50% of the acquisition cost. 2015 are as follows: Millions of yen 2015 Due within 1 year Due after 1 to 2 years Due after 2 to 3 years Due after 3 to 4 years Due after 4 to 5 years Due after 5 years Bonds ¥7. When the fair value declined between 30% and 50% of the acquisi- securities” in the above table.000 ¥— ¥13. dollars 2015 2014 2015 Bank loans 0.000 7.000 ¥ — $ 83.000 108.000 Bank loans — — — — 10.461% Unsecured straight bonds due in 2015 7.000 ¥10. available-for-sale securities whose fair value is not reliably determinable were as follows: Millions of yen Thousands of U.788 $8.292 $ — $83. Long-term Debt Long-term debt as of March 31.448 Carrying amount (fair value) does not exceed acquisition cost: Equity securities 3. dollars 2015 Due within 1 year Due after 1 to 2 years Due after 2 to 3 years Due after 3 to 4 years Due after 4 to 5 years Due after 5 years Bonds $58.000 ¥— ¥13.146 46 T HK ANNUAL R EP O R T 2015 .715% Unsecured straight bonds due in 2017 13.000 ¥10. 2015 and 2014.090 $166.292 $83. fiscal year end and operating results for the past two fiscal years and sale securities value were recognized during the years ended March comparing the average month-end closing market price during the 31.500 (74) Total $27.000 ¥20.146 0.000 10. ended March 31.660% Unsecured straight bonds due in 2020 10. 2015 and 2014. whether the impairment losses should be recognized or not “Acquisition cost” in the above table refers to the cost after de. No impairment losses on available-for.000 ¥ — ¥10. Thousands of U.000 83.146 Bank loans — — — — 83.146 — Total $58.000 13.090 $166.146 $83. 6.000 10.840 $15.146 Total ¥60.000 ¥20. past 24 months with the acquisition cost by each issue.202 $— $108. tion cost.213 $11. dollars 2015 2014 2015 Available-for-sale securities ¥173 ¥173 $1.146 Corporate bonds issued by the Company: 1.000 ¥60.

716 T H K A N N U A L R E P O R T 2 01 5 47 .438 ¥8.664 Plan assets (10. 2015 and 2014. 2.053) Ending balance of plan assets ¥10.832 $86. 2015 and 2014.883 $127.897 ¥ 4.832 ¥7. Fund Plans of multi-employer plans and if the plan assets attribut- Under lump-sum payment plans (all are non-contributory).716 Net defined benefit liability 4. lump-sum severance benefits or pensions based on sala.034) Other — 17 — Ending balance of projected benefit obligations ¥15.849 Net liability recorded in the consolidated balance sheet ¥ 4.897 ¥ 4. they are sum payments based on salaries and service years are provided.827 Restated beginning balance 14.S.S.050 $ 40.273 Net defined benefit asset (67) (32) (557) Net liability recorded in the consolidated balance sheet ¥ 4. benefit liability and retirement benefit expenses are calculated using Under the defined benefit corporate pension plans (all are con.050 $ 40. dollars 2015 2014 2015 Contributory defined benefit obligations ¥ 14.964 4. were as follows: Millions of yen Thousands of U.S.163 $107.438) (8. Notes to Consolidated Financial Statements 7.117 Cumulative effect of accounting changes 1. were as follows: Millions of yen Thousands of U.832) (86. tributory).336 ¥12.663 — 13. a simplified method.204 32. lump. net defined non-contributory defined benefit plans and defined contribution plans. able to those companies cannot be calculated reasonably. dollars 2015 2014 2015 Beginning balance of plan assets ¥ 8.064 Retirement benefits paid (365) (291) (3.045 Actuarial differences 873 628 7.434 Expected return on plan assets 246 132 2.094 Retirement benefits paid (247) (204) (2.548 $73.788 (3) Reconciliation between the ending balances of defined benefit obligations and plan assets and net defined benefit liability recorded in the consolidated balance sheet Millions of yen Thousands of U.563 Actuarial differences 128 22 1. Outline of the retirement benefit plans adopted Under some defined benefit corporate pension plans and lump- The Company and consolidated subsidiaries adopt contributory and sum payment plans of certain consolidated subsidiaries.883 ¥12. Some consolidated subsidiaries participate in Welfare Pension ries and service years are provided. Defined Benefit Plans (1) The changes in projected benefit obligations for the years ended March 31.392 ¥12.546 12.788) 3.513 (2) The changes in plan assets for the years ended March 31.975 Interest cost 188 235 1.258 Contribution from the employer 733 727 6. dollars 2015 2014 2015 Beginning balance of projected benefit obligation ¥12.163 120.036 $119. accounted for in the same manner as the defined contribution plans.944 Service cost 839 736 6.953 3.083 41. Employees’ Retirement Benefits 1.867 Non-contributory defined benefit obligations 944 846 7.

Multi-Employer Plans termined considering allocation of plan assets which are ex- The amounts of the required contribution to the Welfare Pension Fund pected currently and in the future and the long-term rates of Plans of multi-employer plans which are accounted for in the same return which are expected currently and in the future from manner as defined contribution plans were ¥45 million ($374 thou- the various components of the plan assets. on plan assets The long-term expected rate of return on plan assets is de- 4. respectively.236 Unrecognized actuarial differences (1. respectively. 2015 and 2014.4% 2. 2015 and 2014. dollars 2015 2014 2015 Service cost ¥ 859 ¥ 736 $ 7.S.804) Amortization of actuarial differences (4) 50 (33) Amortization of prior service costs 138 138 1.5% Equity securities 43% 40% General account 32% 36% 3. sand) and ¥51 million for the years ended March 31.563 Expected return on plan assets (217) (132) (1.027 $ 8.480) Total ¥ 90 ¥ 979 $ 748 (7) Plan assets (8) Main actuarial assumptions used for the years ended March 31.147 Actuarial differences 750 — 6.533 thousand) and ¥405 million for the years ended b.391 (6) Remeasurements of defined benefit plans The components of remeasurements of defined benefit plans (before tax effect) on “Accumulated other comprehensive income” were as follows: Millions of yen Thousands of U.235 Total 889 — 7.023 (5) Remeasurements of defined benefit plans The components of remeasurements of defined benefit plans (before tax effect) on “Other comprehensive income” were as follows: Millions of yen Thousands of U.730 $ 13.0% Debt securities 22% 22% Long-term expected rate of return 2.142 Interest cost 188 235 1. were as follows: Millions of yen Thousands of U. Defined Contribution Plans Other 3% 2% The amounts of the required contribution to the defined contribution Total 100% 100% plans of the Company and its consolidated subsidiaries were ¥425 million ($3. dollars 2015 2014 2015 Unrecognized prior service costs ¥ 1.501) (751) (12.S.147 Retirement benefit expenses on defined benefit plans ¥ 965 ¥1.S. 48 T HK ANNUAL R EP O R T 2015 .5% 1. 2015 and 2014. were set forth as follows: Plan assets consisted of the following: 2015 2014 2015 2014 Discount rate 1. (4) The components of retirement benefit expenses for the years ended March 31. dollars 2015 2014 2015 Prior service costs ¥138 ¥— $1. Components of plan assets 2015 and 2014. a.592 ¥1. Method of determining the long-term expected rate of return March 31.

2015. 2014 Increase Decrease March 31.020 thousand) and ¥5.269 3.S.895 $ 380. 2015. 9. 2015 Outstanding shares issued: Common stock 133. additional paid-in capital. other capital surplus if the company has prescribed so in its articles of incorporation.601 Total amount of benefit obligations on pension financing calculation and 58.000 million ($124.856. and retained earnings can be transferred among the accounts under The Act provides certain limitations on the amounts available for certain conditions upon resolution of the shareholders. the Group had no material contingent liabilities. Under the Act.651 million as of March 31.64%. companies can pay dividends at any time during paid-in capital equals 25% of the common stock. 2015 and 2014. Notes to Consolidated Financial Statements (1) Latest funding status of multi-employer plans as of March 31. Contingent Liabilities As of March 31. depending on the equity account charged upon the payment of such ital be included in capital surplus as “Additional paid-in capital”.935 482.497 3. 2015 and amount of net assets after dividends must be maintained at no less 2014 were as follows: than ¥3 million. The changes in the number of issued shares of common stock and treasury stock during the years ended March 31. ing calculation purpose in the amounts of ¥5.263. Past service costs under the multi- (3) Supplementary explanation employer plans are amortized on a straight-line basis over a peri- The amounts of “Net” shown in the above table (1) consisted of od of 20 years.903 Treasury stock: Common stock 7.116 8. The Act also provides that common time during the fiscal year upon resolution by the Board of Directors stock.856. respectively. re- for the years ended March 31. Committed Line of Credit As of March 31. dividends until the aggregate amount of legal reserve and additional Under the Act. but the and treasury stock during the years ended March 31. Interim dividends may be paid at any reversed without limitation.746 T H K A N N U A L R E P O R T 2 01 5 49 . million ($54. and deficit brought forward in the amounts of ¥6. 2015 and 2014. None of the committed lines of credit were used.285) ¥(11. 2015 and 2014 Millions of yen Thousands of U. dollars 2015 2014 2015 Plan assets ¥ 45. dividends or the purchase of treasury stock.903 — — 133. 2015 and 2014 was 3.145) (2) The Company’s share of contribution to the multi-employer plans thousand) and ¥5. Net Assets The Companies Act of Japan (the “Act”) requires that at least 50% of The Act requires that an amount equal to 10% of dividends must the paid-in capital of new share issues be transferred to the “Common be appropriated as a legal reserve or as additional paid-in capital stock” account and the amount not exceeding 50% of the paid-in cap. The limitation is defined The changes in the number of issued shares of common stock as the amount available for distribution to the shareholders.747 minimum policy reserve Net ¥(12.060 54.040) $(102. 2015 and 2014 were as follows: Number of shares April 1. legal reserve.719 thousand).266. the Group had committed lines of credit amounting to ¥15. The share shown in the above note (2) does not the outstanding balance of past service costs for pension financ.775 ¥ 43. the the fiscal year in addition to the year-end dividend upon resolution at total amount of additional paid-in capital and legal reserve may be the shareholders’ meeting.70% and spectively. respectively. agree with the actual Group’s share of the funding status.787 million ($48. 10.477 — 7.388 million as of March 31.

S.784 million. 2015 The following cash dividend payments were approved during the fiscal year: General shareholders’ meeting held on June 21. 23. 2015 and 2014 were ¥360 million ($2. 30. general and administrative expenses for the years ended March 31.993 thousand) and ¥355 million.477 shares of less than one share unit.269 An increase in treasury stock is due to acquisition of 2.139 million ¥9. Number of shares April 1.392 2.908 million ($40. respectively. 9. dollars) (U.898 million ¥15. 2015 and 2014 were ¥4. 2014 The following cash dividend payments were approved during the fiscal year: General shareholders’ meeting held on June 15. dollar) ¥2. respectively. 31.S.044 thousand) ($0.00 Mar. 2013 Increase Decrease March 31.00 Common stock Mar.856. 50 T HK ANNUAL R EP O R T 2015 . 8.531 million ¥ 20.903 Treasury stock: Common stock 7. 2014 Jun. An increase in treasury stock is due to acquisition of 3. 31.903 — — 133.16) Year ended March 31. general and administrative expenses for the years ended March 31.12) Board of Directors meeting held on November 6. dollars) (U. 2014 ($21. The treasury stock in the above table includes treasury stock (shares issued by the Company) acquired by an affiliate accounted for using the equity method which is attributed to the Company. 2014: Total amount Per share amount Millions of yen Yen Dividend record date Effective date (Thousands of U. 2013 Jun.856. 2013 11.392 million ¥ 11.S.927 50 7. 2013 Board of Directors meeting held on November 7. 2014 ($15. 12.S. 17. 2013: Total amount Per share amount Dividend record date Effective date Millions of yen Yen Common stock ¥1. Amortization of Goodwill Amortization of goodwill included in selling.781 thousand) ($0.00 Common stock Sep. 2014: Total amount Per share amount Millions of yen Yen Dividend record date Effective date (Thousands of U. Year ended March 31.00 Sep. dollar) ¥1. 2013 Dec. 30.927 shares of less than one share unit. 2014 Outstanding shares issued: Common stock 133. The treasury stock in the above table includes treasury stock (shares issued by the Company) acquired by an affiliate accounted for using the equity method which is attributed to the Company.260.808 thousand) and ¥4. A decrease in treasury stock is due to additional purchase requisition of 50 shares of less than one share unit. Research and Development Research and development expenses included in cost of sales or selling.263. 2014 Dec. 2013: Total amount Per share amount Dividend record date Effective date Millions of yen Yen Common stock ¥1.

S.259 830 10.215) (1. dollars 2015 2014 2015 Deferred tax assets: Valuation loss of investments in affiliates ¥ 7.966 Total ¥929 ¥751 $7.281 Unrealized gain on intercompany sales of property.361 Net defined benefit liability 1.845) (37.S.890 52.845 Less: valuation allowance (9.102) Depreciation (1. dollars 2015 2014 2015 Due within one year ¥451 ¥412 $3. Lease commitments under non-cancelable operating leases as of March 31. 2015 and 2014 were as follows: Millions of yen Thousands of U. As of March 31.770 ¥ 1. and other assets.506 Impairment loss 361 290 3. in the aggregate. Notes to Consolidated Financial Statements 13.575 131. plant and equipment 602 507 5.001 Retirement benefits payable to directors and corporate auditors 274 316 2.891) Unrealized gains on land revaluation (1.0 % for the years ended March 31.6% and 38.456 1.749 Due after one year 477 338 3.712 Loss on devaluation of investments in securities 60 66 498 Allowance for doubtful receivables 32 18 266 Other 428 422 3.166) (14.335) (1.278 Accrued expenses 224 279 1.724 14. Income Taxes The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which. 2015 and 2014.180) (11. significant components of deferred tax assets and liabilities were as follows: Millions of yen Thousands of U. resulted in nor- mal effective statutory tax rate of approximately 35.381 Accrued bonuses to employees 996 984 8.008 846 8.791) (2.468 Loss on devaluation of inventories 1.558 Total 15.380 ¥ 8.100) Special depreciation reserve for tax purpose (28) (42) (232) Other (160) (157) (1.684) (79.531) (4.141 $ 61.857 15.044 $ 14.024 885 8.106 Unrealized gain on intercompany sales of inventories 1.673) Net deferred tax assets ¥ 1. software.344 12. 2015 and 2014.555) (9.301 5.330) Total deferred tax liabilities (4.446) Total deferred tax assets 6. equipment.298) (10. Lease The Group leases certain machinery.005 Enterprise tax payable 542 442 4.514 Tax loss carried forward 1.862 Accumulated depreciation 206 198 1.390 Deferred tax liabilities: Unrealized gains on available-for-sale securities (1.716 T H K A N N U A L R E P O R T 2 01 5 51 . respectively.

9 % 34.6) (3.6 0. 2015 until March 31. remeasurements of defined benefit plans on accumulated es to be settled from April 1. 52 T HK ANNUAL R EP O R T 2015 . As a result. 2015 and 2014 was as follows: 2015 2014 Normal effective statutory tax rate 35.0 2. 2015.9 Adjustment of the amounts of deferred tax assets due to tax rate change 0.6 % 38. net of deferred tax liabilities. 2016 and to other comprehensive income decreased by ¥2 million ($16 thou- 32.3% for those to be settled on or after April 1. alized gain on available-for-sale securities increased by ¥111 million tory tax rate to be used for the calculation of deferred tax assets and ($922 thousand) and ¥55 million ($457 thousand).0) Special tax incentives (1.1) Tax credit for research and development (1.7) Amortization of goodwill 0.4 % Adjustments of deferred tax assets and liabilities due to a change deferred tax assets.3 Statutory tax rate difference between parent and subsidiaries (1.6% to 33. 2016.2 Equity in earnings of affiliates (0.8) Inhabitant per capita tax 0.1 0. decreased by ¥53 in the corporate income tax rate: million ($440 thousand) and income taxes—deferred and net unre- A new tax reform act enacted on March 31.1) (0. sand) as of March 31.2) (1.3 Investments in consolidated subsidiaries 0.6) (0. addition.8 1.6 Other (0.2 0.0 % Non-deductible items such as entertainment expenses 0. A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statements of income for the years ended March 31.7) Difference of applicable effective tax rate 0.7 Non-taxable items such as dividends received (2.2 (1.2) (2. In deferred tax liabilities from 35. respectively.2) — Valuation allowance 1. 2015 changed the statu.1% for temporary differenc.3) Actual effective tax rate 31.3 0.

S.045 19.51 16. Other Comprehensive Income The components of other comprehensive income for the years ended March 31.554 Reclassification adjustment to net income — 2 — Share of other comprehensive income of an affiliate accounted 187 803 1.519 $93.788 16.398 Share of other comprehensive income of an affiliate accounted for under the equity method: Income recognized during the year 187 801 1.290 Foreign currency translation adjustments: Gain recognized during the year 10.045 19.114 Amount before tax effect 889 — 7. 2015 and 2014 is not presented since the Company did not have any kind of secu- rities with potential dilutive effect in the fiscal years.287 Reclassification adjustment to net income 28 — 232 Amount before tax effect 10.678 Tax effect (167) (26) (1.957.736.662 83. Per Share Information Per share information as of and for the years ended March 31.662 83. 2015 and 2014 were as follows: Millions of yen Thousands of U.36 ¥ 123. T H K A N N U A L R E P O R T 2 01 5 53 .391 Tax effect (359) — (2.16 $ 1. dollars 2015 2014 2015 Net income—basic ¥ 179.388) Net unrealized gain on available-for-sale securities 516 53 4.280 ¥20.520 Remeasurements of defined benefit plans Gain recognized during the year 755 — 6.678 Reclassification adjustment to net income — — — Amount before tax effect 683 80 5. dollars 2015 2014 2015 Net unrealized gain on available-for-sale securities: Gain recognized during the year ¥ 683 ¥ 80 $ 5.48 1.49 Net assets 1.27 Diluted net income per share for the years ended March 31.554 for under the equity method Total other comprehensive income ¥11.277 Reclassification adjustment to net income 134 — 1. 2015 and 2014 is as follows: Yen U.017 19.520 Tax effect — — — Foreign currency translation adjustments 10.662 83.S.984) Remeasurements of defined benefit plans 529 — 4. Notes to Consolidated Financial Statements 15.

a monthly basis. As to raising funds.150 ¥596 Derivatives ¥ — ¥ — ¥ — 54 T HK ANNUAL R EP O R T 2015 . Group’s global business are subject to foreign currency exchange fair value and financial condition of investees are periodically risks. (c) Liquidity risks—Each company of the Group prepares and vestment use for which the maximum redemption/repayment period updates cash-flow plans and maintains appropriate amounts is six years and one month. General manager of the and payables denominated in foreign currencies. results may differ if different assump- (3) Risk management tions are used in the valuation. The Group controls interest rate risks by of ready liquidity. If quoted price is not available. The contract amounts for derivatives (a) Credit risks—The Group controls customers’ credit risks in listed in Note 18 do not represent volume of underlying market risks accordance with internal rules for controlling receivables.596 596 Total ¥ 89. Financial Instruments and Related Disclosures (1) Policy for financial instruments propriate departments of the Group monitor major customers’ The Group’s use of its surplus funds is limited to short-term deposits financial conditions to promptly obtain information about pos- and other low-risk financial assets. Financial instruments whose fair value is readily determinable as of March 31. other rational valua- purposes.000 60. struments for speculative purposes.553 ¥ 90. Derivative transactions are executed and controlled rency exchange contracts applicable to net amounts of receivables by the Corporate Strategy Division. tion techniques are used instead. 2015 and 2014 are as follows: Millions of yen 2015 Carrying amount Fair value Difference Assets: (1) Cash and cash equivalents ¥155. Ap. Receivables denominated in foreign currencies arising from the risks in relation to bank loans. utilizing interest rate swap contracts. the Group ness plans.239 ¥ — (2) Trade accounts and notes receivable 63. of the derivative transactions. Bonds and bank loans are financed for working capital or capital in. age foreign exchange risks of each currency and interest rate ers.964 ¥221. Most of notes and accounts payable are due within a year.450 63.553 ¥ — (5) Long-term debt—Bonds 60. Because such valuation techniques include certain assumptions. Because the counterparties of derivatives are nances by issuing bonds and bank loans in accordance with busi. reviewed. As to investments in securities.964 ¥ — Liabilities: (4) Trade accounts and notes payable ¥ 29. The Group utilizes forward foreign currency exchange contracts (4) Other information and interest rate swap contracts to manage foreign exchange risks Fair values of financial instruments are based on quoted prices in and interest rate risks.450 — (3) Investments in securities Available-for-sale securities 3.273 3. sible bad debts.553 ¥ 29. the Group fi. (b) Market risks—The Group utilizes forward foreign currency (2) Nature and risks of financial instruments exchange contracts and interest rate swap contracts to man- Notes and accounts receivable are subject to credit risks of custom. does not anticipate any losses arising from credit risk.239 ¥155. The Group controls these risks by utilizing forward foreign cur.273 — Total ¥221. The Group does not hold or issue derivative financial in. 17. Corporate Strategy Division reports results and conditions of Most investment securities consist of equity securities and are derivative transactions at the Board of Director’s meetings on subject to market value volatility risks. Use of derivatives is limited to operating active markets. limited to major international financial institutions.

955 Derivatives $ — $ — $ — Notes: (1). dollars 2015 2015 Due within one year Due after one year Due within one year Due after one year (1) Cash and cash equivalents ¥155. (a) variable interest rates reflect the current market rate.213 27.239 — $1. Such financial instruments as of March 31.547 $ — Liabilities: (4) Trade accounts and notes payable $ 245. (2) and (4)—As these items are settled within a year and have fair values approximately equal to their carrying amounts.754 — (2) Trade accounts and notes receivable 63. Fair value information of investment securities is discussed in Note 5.562 — Total ¥218.316 — Maturities of long-term debts as of March 31. (3)—Fair value of equity securities is stated at quoted market price.411 ¥ — (5) Long-term debt—Bonds 60. T H K A N N U A L R E P O R T 2 01 5 55 .290.833 4.161 2.845.754 $ — (2) Trade accounts and notes receivable 527.547 $1. 2015 are disclosed in Note 6. dollars 2015 Carrying amount Fair value Difference Assets: (1) Cash and cash equivalents $1. Maturity analysis for financial assets as of March 31.411 ¥ 86. (6)—Bank loans are payable with variable interest rates.589 589 Total ¥ 85.000 60.722 $ — (5) Long-term debt—Bonds 498.557 — (3) Investments in securities Available-for-sale securities 2. and (b) the Company’s credit status has not significantly changed after the issuance.000 ¥589 Derivatives ¥ — ¥ — ¥ — Thousands of U.690 — $1. dollars 2015 2014 2015 Unlisted equity securities ¥173 ¥173 $1. Derivatives—Details and information are discussed in Note 18. Financial instruments which do not have quoted market prices and whose fair value is not reliably determinable are not included in the table above.845.411 ¥ 25. Fair value of bank loans is stated at carrying amount because fair value of such bank loans is considered approximately equal to its carrying amount based on the following assumptions.290. Notes to Consolidated Financial Statements Millions of yen 2014 Carrying amount Fair value Difference Assets: (1) Cash and cash equivalents ¥138.955 Total $ 744.213 — Total $1.061 ¥193.557 52.161 — Total ¥193.343 ¥138.S.599 $ 749. 2015 is as follows: Millions of yen Thousands of U. (5)—Fair value of bonds is stated at present value of a total amount of its principal and interest discounted by a rate determined considering its remaining periods and credit risks. 2015 and 2014 are as follows: Millions of yen Thousands of U.818.450 — 527.754 $1.343 ¥ — (2) Trade accounts and notes receivable 52.877 503.438 Detailed information about investments in securities is discussed in Note 5.562 527.S.722 $ 245.061 ¥ — Liabilities: (4) Trade accounts and notes payable ¥ 25.562 — (3) Investments in securities Available-for-sale securities 27.563 $4.S. they are stated at the carrying amounts.290.

820 ¥387 ¥ 11.678 Inter-segment 46. Singapore and other) based on the The Group’s main products are machinery parts such as LM (linear Group’s production/sales structure. in the following tables are inter-segment elimination on consolidation.018 ¥25. and transportation equipment-relat. France and other). Segment income is computed based on operating income. motion) guides and ball screws.673 20. (2) The Americas (the are reviewed periodically by the Board of Directors to determine al.381 ¥ 499 ¥ 3. (1) Japan.534 ¥ 1. Segment information of the Group as of March 31.610 Other items Depreciation and amortization ¥ 5.358) ¥28. United States and other).442 — 4.393 (51.714 (51. 19.350 ¥ 456 ¥ 1. recognized and included in interest expenses or income.695 1. Inter-segment sales and transfer are gies and conduct its business activities in a similar way that the stated at amounts based on their fair market values. local subsidiaries establish its comprehensive business strate. 2015 and 2014 is as follows: Millions of yen 2015 Contract Amount Fair value of derivative Within one year Over one year instruments Interest rate swaps (fixed rate payment.567 Amortization of goodwill 61 — — — 298 360 — 360 Investment in an affiliate accounted for 4.178 ¥(131.714) — Total 168. 18.000 ¥10.389 ¥20. The re- ed parts such as link balls and suspension ball joints.747 ¥ (1. namely.388 Assets ¥325.274 ¥ 1.000 ¥(63) Thousands of U.225 32. floating rate receipt) ¥10. In each coun. Fair value information of such derivatives as of March 31.293 ¥ 29.567) ¥373. 2014.929 ¥73.710 ¥217. There were no derivatives outstanding as of March 31.146 $83.191 ¥28.047 630 10.678 Segment profit ¥ 25.639 144 4.153 51. dollars 2015 Contract Amount Fair value of derivative Within one year Over one year instruments Interest rate swaps (fixed rate payment. (3) Europe (Germany.249 30 33 4.157 (302) 9. The Group’s interest rate but the differential paid or received under the swap agreements are swaps qualify for hedge accounting and meet specific matching cri.106 34.864 269. All adjustments Company and domestic subsidiaries do in Japan. (4) location of operating resources and evaluate its performance.442 under the equity method Increase in property. Derivatives and Hedging Activities The Group utilizes interest rate swap agreements to hedge interest teria under Japanese GAAP and are not remeasured at market value rate risks associated with its bank loans.442 — — — — 4.248 1. the reportable segment information consists of the five arate financial information is available. floating rate receipt) $83.681 ¥60.642 ¥20.855 equipment and intangibles 56 T HK ANNUAL R EP O R T 2015 . the counter parties of the contracts.714) 217.160 ¥505. policies as discussed in Note 2.146 $(523) Fair value of derivative instruments in the table above is stated at amount obtained from financial institutions.S.275 ¥12. portable segment information is prepared under the same accounting try.678 ¥ — ¥217. and whose operating results geographical segments. Therefore. and (5) Other (Taiwan.523 13.857 ¥34. 2015 and 2014 and for the years then ended is as follows: Reportable segments Millions of yen 2015 Japan The Americas Europe China Other Total Adjustments Consolidated Sales to customers ¥121. China. Segment Information The reportable segments are component of the Group for which sep.362 ¥ 205 ¥ 11. plant and 3.111 ¥ 1.

320 9.477 2.365 $(1.470 $ 1.273 2.265 440.627 1.814 $170.809.930) $3.788 $ 12.971 229.649 11.956 50.851 $11.843 ¥ (472) ¥ 17.700 ¥217.911 T H K A N N U A L R E P O R T 2 01 5 57 .982 (429.857 ¥11.266 ¥18.900 ¥18.096 $105.791 709 44.982) — Total 1.013.S.545 ¥44.397.915 $499.554 $289.202 $167.200 $1.070 ¥(114.182 (44.631 18.982) 1.880 $235.261 ¥185.466 Thousands of U.335 $ (11.466 Inter-segment 39.618 ¥18.750 $ 247.182) 185.064 28.722 ¥135.482 $ 4.309 Total ¥217.175 Amortization of goodwill 507 — — — 2.293 168. plant and 3.993 — 2.361 ¥34.511) 81.956 ¥ 144 ¥ 11.416 Other items Depreciation and amortization ¥ 5.543 249 274 35.586 429.809.678 $1.027 $215.950 256 4.896 — 3.239.933 — — — — 36.809.083 $235.856 ¥20.302 ¥20.704 $ 96.195 $288.911 Sales by geographical area Millions of yen 2015 Japan The Americas Europe China Other Total Sales to customers ¥113.163 270.466 Segment profit (loss) ¥ 16.148 $ 31.370 Assets ¥300.933 — 36.332 23.246 ¥451.649 5.102 1.663 ¥ 1.035 Assets $2.738 288.622 $4.106.035 $167.648 (44.366 ¥ 304 ¥ 10.092 (642) 10. plant and 30.722 13.678 Millions of yen 2014 Japan The Americas Europe China Other Total Sales to customers ¥101.653) ¥336.940 equipment and intangibles Sales by business Millions of yen Thousands of U. dollars 2015 Japan The Americas Europe China Other Total Adjustments Consolidated Sales to customers $1.200.939 ¥25.052 ¥28.896 — — — — 3.369.754 $ 11.901 (429.809.957 825 11.933 under the equity method Increase in property.427 Other items Depreciation and amortization $ 43.456 ¥28.601 Transportation Equipment-Related Business 52.911 Inter-segment 384.434 ¥ 1.707.466 $1.734 ¥185.217 $ 94.896 under the equity method Increase in property.589 $610.166 ¥ 180 ¥ (614) ¥ 676 ¥ 17.197 33.072 ¥62.152 ¥ 469 ¥ 3.S.791 $ 10.911 Segment profit $ 208.224 $ 3.678 ¥185.993 Investment in an affiliate accounted for 36.427 ¥19.628 13 40 3. Notes to Consolidated Financial Statements Millions of yen 2014 Japan The Americas Europe China Other Total Adjustments Consolidated Sales to customers ¥107.101 Amortization of goodwill 61 — — — 294 355 — 355 Investment in an affiliate accounted for 3.112 $1.449 equipment and intangibles Thousands of U.911 $ — $1.093.809.292 ¥19.436 ¥28.466 ¥ — ¥185.320 $172.761 $ 3. dollars 2015 2014 2015 Industrial Equipment-Related Business ¥164.451 (2.238 84. dollars 2015 Japan The Americas Europe China Other Total Sales to customers $942.291) $ 236.182) — Total 147.351 ¥17.416 115.S.

dollars) (U. This includes the consideration for the shares to be acquired as noted in above 3. 2015 Jun. “Name of the company to be acquired. number of shares to be acquired and ownership ratio after acquisition.s. 58 T HK ANNUAL R EP O R T 2015 . to establish the global platform in addition to Asia Pacific region. 2.L. Michigan. 31.S. 22. 2015. 2015 ($31. Subsequent Events Appropriation of retained earnings The following appropriation of retained earnings as of March 31. 1. and reached an agreement on the same date. in Europe and North America and 100% shares of a TRW subsidiary. production and sales in Europe and North America regions and accordingly. L.” 6. Tillsonburg.570 thousand) ($0.C. its size. Germany 3. dollar) ¥3.24) Acquisition of the businesses and shares The company resolved at the Board of Directors meeting held on April 21. Amounts of assets and liabilities to be transferred They have not been fixed at this moment. Czech Republic Capital CZK 335 million Number of shares to be acquired 335. to acquire the linkage and suspension business of TRW Automotive Inc.479 shares Ownership ratio after acquisition 100% 4. Sellers of business and their locations Seller Location TRW Automotive U.S.00 Common stock Mar. Portland. a. 2015 was approved at the Company’s shareholders’ meeting held on June 20. Reasons of the Acquisition The Company acquires the businesses and the shares in order to expand the functions of development. Ontario. its size.S. number of shares to be acquired and ownership ratio after acquisition Name of the company to be acquired TRW-DAS. Name of the company to be acquired. Canada TRW Canada Ltd. Timing of the business transfer and acquisition of shares Within four months after the date of the contract 7.797 million ¥30. Location Decice.S. Canada Gellep-Krefeld. St. 2015: Total amount Per share amount Millions of yen Yen Dividend record date Effective date (Thousands of U. Catharines. Germany TRW Automotive GmbH Dusseldolf. Financing for the payment and payment method The payments will be financed from internal and external resources. Notes to Consolidated Financial Statements 20.A. Price of the business acquisition Total amount is estimated to be approximately $400 million. U. Ontario. 5.

T H K A N N U A L R E P O R T 2 01 5 59 .

000 100.-based pioneer of the Machining Center and world-class production volumes increased and the proportion of ad- leader of its day. export volumes to Europe and the United States This ball spline was the predecessor to THK’s current flag. This revolutionary prod. Against this backdrop. high for the volume manufacture of quality products. Company’s LM guides by a major which in turn boost the load that the de. signifi.-based machine tool manufacturer of vice can tolerate and permits the trans. the application of LM guides enjoyed explosive growth. LM guides to- to the LM guide. increasingly component to linear motion (LM).000 machine tools and factory automation 1970s 1980s 0 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 The 1970s: The 1980s: Inauguration and Initial Period of Set Up Significant Developments in Factory Automation (FA) While rolling contact utilizing rotary bearings was a standard The “Oil Shock” saw the demise of heavy industry. THK developed the ball spline.000 Expansion of numerically controlled (NC) 50.S.000 KOFU Plant (JPN) established GIFU Plant (JPN) established 1985 MIE Plant (JPN) established YAMAGUCHI Plant (JPN) established 1989 200. the technology-based industries.S. Benefiting from the use of the groove machined into the spline axle. ball splines are the precursor mechanism of ball splines. Inc. With In 1978. (USA) established 1972 1982 Production and sale of LM guides began THK Europe GmbH (GER) established 1977 1984 250. its day. Ball Splines LM Guides Developed in the same year that THK was Developed utilizing the structure and established.. climbed steadily. the use of LM vanced machine tools with numerically controlled (NC) saw guides in machine tools grew from strength to strength. 60 T HK ANNUAL R EP O R T 2015 . Buoyed by depreciation in the value of the yen In 1971. in machine tools has seen significant growth. steady growth. the Company’s products were adopted by a FA advancing across production frontlines. which was first introduced in 1972. machine tool U. the application of THK’s products mission of torque. in Japan. pushing method for accomplishing rolling motion at this time. CORPORATE HISTORY Net Sales (Millions of yen) 300. to the fore. which enabled as well as the outstanding quality of products manufactured a higher level of linear motion precision and performance.000 THK listed on over-the-counter (OTC) market THK TAIWAN CO. U. demand was ship LM guide. day represent THK’s flagship product uct allows balls to roll along an R-shaped range. LTD. (TPE) established 150. such as automobiles. Under these circumstances. With this breakthrough.000 1971 1981 THK established THK America. cant difficulties were encountered in introducing a rolling semiconductors and home electric appliances.

Ltd.) (MYS) became a consolidated subsidiary DALIAN THK CO. T H K A N N U A L R E P O R T 2 01 5 61 . use of THK’s products LM guides with caged ball technology is expanding across a variety of fields including medical equipment. aircraft.. THK is building an integrated production and home electric appliances as well as the upswing in demand sales structure with facilities and operations closer to centers of demand to produce and sell for semiconductor production. which handles seismic isolation and damping sys- tems. Bhd. Recognizing the vast potential that also exists in other areas within the consumer their line. 2000s. LTD. THK is also working to expand its sales network in a bid to steadily capture demand amid expan- accelerated its business development globally. In developed countries. Moreover.. particularly over recent years. Entering the these targets. (THA) 2012 THK listed on the first section of the established THK RHYTHM MEXICANA S. the Americas. (CHN) established THK (CHINA) CO. (USA) established 2003 THK MANUFACTURING OF VIETNAM CO. As a part of efforts to promote the Development of New Business Areas. LTD. LTD.A. Europe and Asia. LTD. of upgrading and expanding its sales network while bol- LM guides—focusing mainly on second-generation LM stering its production capabilities across newly emerging markets including China. which handles such products as electric actuators and next-gen- LM Guides with eration robot-related products. LTD. LTD. THK the relentless advance of manufacturing globalization.. the Company is pursuing Full-Scale Globalization and the Development of New Business Areas while working to expand its business domains. (FRA) established (CHN) established 1996 2007 Production and sale of 2001 Acquisition of RHYTHM CORPORATION THK RHYTHM MALAYSIA Sdn. the Company is working diligently to culti- Caged Ball Technology vate fields in close proximity to the consumer goods sector. reduces noise and enables tem technologies nurtured over a long period and is accelerating the pace at which it develops long-term maintenance-free operation new business fields. flat panel display production locally in four areas: Japan. sion in its user base. LTD. which is responsible for activities in transportation equipment-related fields. Europe S.. compared with first-generation LM guides. the number of LM guides used in semi.V. the Company is honing its accumulated know-how and core linear motion sys- service life. and renewable were developed as the next generation in energy. (CHN) established 2005 THK MANUFACTURING OF CHINA (LIAONING) CO. the FAI Division. 1991 2000 2006 2011 YAMAGATA Plant (JPN) established THK Manufacturing of THK LM SYSTEM Pte. which is guides with caged ball technology increased. Inc... (CHN) (VNM) established 2015 established Transfer of the European and North American 2004 L&S business from TRW Automotive Inc. (CHN) established caged roller technology began THK RHYTHM (THAILAND) CO.. an operating margin of 20% conductor production equipment surged dramatically in line and a return on assets (ROA) of 15% as its long-term performance targets. (SIN) established THK RHYTHM CHANGZHOU CO. THK identified ¥300 billion in consolidated net sales. LTD. THK MANUFACTURING OF CHINA (WUXI) CO. 1997 Tokyo Stock Exchange (TSE) (MEX) established THK Manufacturing of 2008 America. In order to achieve with the increase in semiconductor demand.. DE C. the use of ball cage technology extends goods sector.. LTD.A. At the same time.S. amid the proliferation of mobile devices and digital In order to promote Full-Scale Globalization. LM guide with caged ball technology began Production and sale of LM guides with (now THK RHYTHM CO. (CHN) established Proliferation of mobile phones and Rise of the electronics industry digital home electric appliances Growth of semiconductor production equipment industry 1972–1990: Non-consolidated net sales 1991–2015: Consolidated net sales 1990s 2000s 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Years ended March 31 The 1990s: Future Growth: The Rise of the Electronics Industry Expanding Business Domains by Pursuing Full-Scale Globalization and the Development of New Business Areas During the 1990s. The Company is continuing its and related production equipment—products that applied trend. THK India Private Limited (IND) established THK (SHANGHAI) CO. THK has set up three specialist divisions: the ACE Division. In keeping the balls in place. In 2001. and the IMT Division. In tune with projected to enjoy demand growth over the medium-to-long-term.

LTD.00 THK MANUFACTURING OF CHINA (CHANGZHOU) CO.00 THK RHYTHM MALAYSIA Sdn.V. spherical joints Illinois. Japan 100. spherical joints Taipei. spherical joints 100.00 Tremblay-en-France.00 NIPPON SLIDE CO. LTD.00 DALIAN THK CO. Transportation equipment-related business Shizuoka. 100.00 THK RHYTHM CHANGZHOU CO. LTD. China 70. Holding and management company. 2015 Percentage Owned Subsidiaries Main Operations Head Office by the Company.. LTD..00 THK MANUFACTURING OF CHINA (WUXI) CO.82 62 T HK ANNUAL R EP O R T 2015 . LTD. S. Ltd.00 THK TAIWAN CO. ball screws. Transportation equipment-related business Rayong. THK France S. Tokyo. China 100. China 100.A. SUBSIDIARIES & AFFILIATE As of March 31. actuators Dalian.S. China 100. DE C.. LTD.00 THK Manufacturing of America. Manufacture of LM-related parts.. LTD..A. LTD.00 and machinery TALK SYSTEM CORPORATION Sale of machinery parts and various types of equipment Tokyo.S. Mexico 100. spherical joints Ensisheim. ball screws.A. Japan 100. ball screws.A. Sale of LM guides. Manufacture of LM guides.. spherical joints Karnataka.00 THK MANUFACTURING OF VIETNAM CO. Transportation equipment-related business Guangzhou. Manufacture and sale of LM guides Daegu.. LTD. Manufacture and sale of slide rails Tokyo.L.00 THK RHYTHM CO. Transportation equipment-related business Tennessee. China 100.. spherical joints Ohio. Transportation equipment-related business Guanajuato..00 THK (SHANGHAI) CO..S..S. Manufacture and sale of ball screws. France 100. Germany 100. South Korea 33. LTD. spherical joints Ratingen. Holding and management company Illinois. Transportation equipment-related business Penang. U. Taiwan 100.00 THK NIIGATA CO. ball screws.00 THK Holdings of America. Transportation equipment-related business Changzhou. spherical joints Kaki Bukit.00 THK RHYTHM NORTH AMERICA CO.00 THK RHYTHM (THAILAND) CO. Thailand 100.00 THK GmbH Sale of LM guides. sale of LM guides Dalian.. Japan 100. Netherlands 100.. Sale of LM guides.00 THK RHYTHM MEXICANA. U. Ireland 100. Manufacture of slide rails Bac Ninh.00 THK RHYTHM GUANGZHOU CO. India 100. U. Ltd. ball screws. Japan 100.V. Sale of LM guides. LTD. ball screws. unit products Changzhou.00 L Trading Co.00 THK America. Japan 99. U.. Manufacture of LM guides Dalian.00 THK (CHINA) CO.S.A. China 100. ball screws. spherical joints Shanghai. 100. L. Sale of LM guides. Manufacture of LM guides. Transportation equipment-related business Shizuoka. Bhd.00 THK India Private Limited Sale of LM guides. 100. 100. ball screws. Inc. China 100.00 France THK Manufacturing of Europe S.00 THK MANUFACTURING OF CHINA (LIAONING) CO. LTD.A.S. China 100. Holding and management company Amsterdam. Directly or Indirectly (%) SAMICK THK CO. Singapore 100.00 THK Europe B. LTD. Inc. LTD. Vietnam 100. Manufacture and sale of ball screws Dublin.C. Japan 100.A... Malaysia 80. LTD. Manufacture of LM guides Wuxi. LTD.. Directly or Indirectly (%) Manufacture and sale of vital machinery components THK INTECHS CO. LTD.00 THK Manufacturing of Ireland Ltd.. Sale of LM guides.00 Percentage Owned Affiliate Main Operations Head Office by the Company.00 THK LM SYSTEM Pte. Manufacture of ball splines Niigata.

(Trust Account) 6.292. energy saving.727 12.42 The Master Trust Bank of Japan.772 2.A.168.903 shares and generating new trends to contribute to the creation of an affluent society. Shinagawa-ku. THK CO.000 3.000 15.362 2.23 chines with long service lives. LTD.954. and are used in (Yen) Stock Price (Left scale) Trading Volume (Right scale) (Thousands of shares) the rotating parts of many different types of industrial ma- chinery.000 10.610 2. They realize the development of high. suitable for saving drive motor power.700 26.21 Other Corporations 254 5. these products motor or other drive component.392 16.074.72 MELLON BANK.100 1.000 20. THK products help to convert slippage into controlled rotary motion.155 1. which incorporated a part Ball screws are high-efficiency feed screws with the balls Electric Actuators are hybrid products combining a guide with linear rolling motion into practical usage for the first making a rolling motion between the screw and the nut. 4. easily and precisely in a straight line.131.. Ltd. 7.646. high-speed ma. manufactures and supplies vital machinery components around the world.15 Individuals and Others 16.com/ Independent Auditors Grant Thornton Taiyo LLC. 2.500 4.52 JP MORGAN CHASE BANK 385632 2.651. Ltd.THK PROFILE CORPORATE DATA As of March 31. LTD. They are roller bearings with high rotation accuracy realizing allowable loads greater and enabling torque trans. N. Cross roller rings have orthogonally arranged cylindrical roll- novative product with a ball rolling on a groove in the shaft. component such as an LM guide with a ball screw.000 To Our Stakeholders 06 THK Products 19 Financial Section 30 Transfer of the L&S Business Research and Development 22 Corporate History 60 0 0 from TRW Automotive Inc.000 Contents 2.07 LM guides are our main products.364 5.20 Securities Companies 43 2. Stock Transfer Agent Mitsubishi UFJ Trust and Banking Corporation Number of Shareholders 17.494 (consolidated). 2015 Company Profile Head Office 3-11-6 Nishi-Gotanda.223 Main Products Major Shareholders Shareholders Number of Issued Shares Held Shareholding Ratio (%) Japan Trustee Services Bank.12 LM Guide Ball Screw Electric Actuator FTC CO.373.116 3.thk.263.389 2. making them most of parts and design man-hours can be realized by adopting RBC IST 15 PCT LENDING ACCOUNT—CLIENT ACCOUNT 1. which is “providing innovative products to the world Common Stock: Authorized 465..774. The rings are Stock Price and Trading Volume mission while making linear movements.400 1.000 5.897. 3.486. linear THE BANK OF NEW YORK 132812 2.263.83 THK CO.84 Overseas Institutions 467 67.634 50.43 Ball splines are rolling guide spline bearings. LTD. high-rigidity.17 Ball Spline Cross Roller Ring Treasury Stock 1 7.” THK has continued to focus on the development Stock Exchange Listing Tokyo Stock Exchange (1st Section) of a variety of products including LM guides.140.000 7. the electric actuator. (Trust Account) 10. Tokyo 141-8503. highly rigid despite their compact design..700 shares Issued 133. AS AGENT FOR ITS CLIENT MELLON OMNIBUS US PENSION 3. Shareholder Composition Shareholder Type Number of Shareholders Number of Issued Shares Held Shareholding Ratio (%) Financial Institutions 66 35.353 (parent company) Month of Ordinary June General Meeting of Shareholders URL http://www. 11 Environmental Preservation 24 Subsidiaries & Affiliate 62 14/4 14/5 14/6 14/7 14/8 14/9 14/10 14/11 14/12 15/1 15/2 15/3 15/4 15/5 15/6 15/7 Corporate Governance and Internal Controls 26 Corporate Data 63 T HK ANNUAL R E POR T 2015 63 .847.55 Akihiro Teramachi 3. have drive torque of one-third or less.61 time in the world. capable of bearing loads in every direction. This is an in.877.000 2. as a creative development-driven enterprise since our establishment in 1971. Compared with conventional sliding screws.41 precision.364 5. ers. Driven by a Stock Information business philosophy that emphasizes the Company’s business philosophy.856. Japan Telephone +81-3-5434-0351 Established April 1971 ABOUT THK Number of Employees 9.095. enabling parts of machinery to move smoothly.000 THK’s Challenge 02 Business Review: Geographic Business Review 12 Board of Directors and Consolidated Performance Overview 04 Business Review: New Business Review 16 Audit & Supervisory Board Members 28 1. Reductions in the number JPMCB USA RESIDENTS PENSION JASDEC LEND 385051 1.

Shinagawa-ku. Japan Annual Report 2015 Tel: +81-3-5434-0351 Fax: +81-3-5434-0353 URL : http://www. Annual Report 2015 THE MARK OF LINEAR MOTION 3-11-6 Nishi-Gotanda.thk. Tokyo 141-8503.com/ .