Sumitomo Heavy Industries, Ltd.
CONSOLIDATED FINANCIAL REPORTFor the Full Year Ended March 31, 2014

All financial information has been prepared in accordance with generally accepted accounting principles in Japan. This document
has been translated from the Japanese original as a guide to non-Japanese investors, and contains forward-looking statementsthat are based on management’s estimates, assumptions, and projections at the time of publication. A number of factors could
cause actual results to differ materially from expectations. Amounts shown in this financial statement have been rounded to thenearest million yen.

Consolidated Results for the Full Year
Ended March 31, 2014

Summary of Consolidated Financial Results
For the Full Year Ended March 31, 2014
Presented May 8, 2014

Sumitomo Heavy Industries, Ltd.
Listed exchanges

Tokyo Stock Exchange

Stock code

6302

Head officeTokyo

President

Shunsuke Betsukawa

URLwww.shi.co.jp

Inquiries

Tsuneyoshi Sato
General Manager, Corporate Communications Dept.

Telephone+81 3 6737 2331

Scheduled date of ordinary shareholders’meeting
Scheduled date of payment of cash
dividends
Scheduled date of securities report filing
Availability of supplementary explanatory
materials for financial statement
Holding of meeting to explain financial
statement

June 27, 2014
June 30, 2014
June 27, 2014
Yes
Yes (for analysts)

1. FY 2013 Consolidated Results (April 1, 2013, to March 31, 2014)(1) Business Results(Unit: million yen)
Current Full Term
April 1, 2014
to March 31, 2013

Previous Full Term
April 1, 2013
to March 31, 2012

% change% change

Net sales

615,271

5.0

585,871(6.1)

Operating income

34,3299.7

31,288(33.6)

Ordinary income

33,0006.5

30,997(30.5)Net income

17,891

205.1

5,865

(69.9)

29.17

9.56

Fully diluted net income per share――

Return on equity (ROE, %)

5.8

2.1

Return on assets (%)

4.8

4.6

Ordinary income to net sales (%)

5.6

5.3

Net income per share (yen)Note: Comprehensive income:Fiscal year ended March 31, 2014: 42,210 million yen (167.4%)
Fiscal year ended March 31, 2013: 15,784 million yen (-18.9%)
Reference: Equity method investment profit and loss:
Fiscal year ended March 31, 2014: (1,201 million yen gain)
Fiscal year ended March 31, 2013: (578 million yen gain)

1

Consolidated Results for the Full Year
Ended March 31, 2014

(2) Financial Position(Unit: million yen)
End of Current Full Year
March 31, 2014

End of Previous Full Year
March 31, 2013

Total assets

724,182

647,724

Net assets

331,059

292,826

45.1

44.6

532.28470.69Equity ratio (%)
Net assets per share (yen)Reference: Equity:
Fiscal year ended March 31, 2014: 326,433 million yen
Fiscal year ended March 31, 2013: 288,849 million yen(3) Cash Flows(Unit: million yen)
Current Full Year
April 1, 2013 toMarch 31, 2014

Previous Full Year
April 1, 2012 toMarch 31, 2013

Cash flows from operating activities

63,611

2,660

Cash flows from investing activities(27,622)(19,660)

Cash flows from financing activities(9,498)(11,428)

Cash and cash equivalents at end of period

76,41846,476

2. Dividends(Unit: yen)
Year Ended March 31,
2013

Year Ended March 31,
2014Year Ending March 31,
2015 (forecast)

―

―

―

Second quarter

4.00

3.00

4.00

Third quarter

―

―

―

End of term

4.00

4.00

5.00
9.00

Annual dividends per shareFirst quarter

Annual dividends

8.00

7.00

Total dividends (million yen)

4,909

4,293

Payout ratio (consolidated, %)

83.7

24.0

Net assets dividend yield (consolidated, %)

1.7

1.3

2

29.1

Consolidated Results for the Full Year
Ended March 31, 2014

3. FY 2014 Consolidated Forecasts (April 1, 2014, to March 31, 2015)(Unit: million yen)
Second Quarter (Cumulative)
April 1, 2014 to September 30,
2014

Full Year
April 1, 2014 to March 31, 2015

Net sales

300,000% change
9.9

650,000% change
5.6

Operating income

12,00043.4

37,000

7.8

Ordinary income

10,50034.1

33,5002.1

Net income

5,500

62.9

19,000

7.0

Projected net income per share (yen)

8.97

3

30.98

Consolidated Results for the Full Year
Ended March 31, 2014

Additional Notes(1) Transfers of important subsidiaries during the fiscal period (moves of specific subsidiaries due to change in scope of
consolidation):
None
Newly consolidated:

None

Excluded from consolidation:

None(2) Changes to accounting policies, changes to accounting estimates, and retrospective restatements(i) Changes to accounting policies due to revisions to accounting standards:

Yes(ii) Changes to accounting policies not otherwise stated in (i):None(iii) Changes to accounting estimates:None(iv) Retrospective restatements:

None(3) Number of shares issued (common shares)(i) Number of shares issued at end of fiscal period (including treasury stock):
As of March 31, 2014
As of March 31, 2013

614,527,405 shares
614,527,405 shares(ii) Number of treasury shares at end of fiscal period:
As of March 31, 2014
As of March 31, 2013

1,248,184 shares
857,899 shares(iii) Average number of shares during fiscal period:
As of March 31, 2014
As of March 31, 2013

613,410,540 shares
613,696,384 shares

Disclosure of Present Status of Audit Procedures
In compliance with the Financial Instruments and Exchange Act, audit procedures for financial statements are
performed when the Consolidated Financial Results are announced.
Explanations and Other Special Items regarding the Pertinent Reasons for the Earnings Forecast
Earnings forecasts and outlooks concerning future financial results are believed to be reasonable based on
information available at the time of publication. Actual financial results may vary from the above forecast andoutlook due to a variety of factors. For information on the assumptions that form the basis of the earnings
forecast and items to note concerning the use of earnings forecasts, please refer to the analysis of businessperformance in the Supplementary Materials section beginning on page 6.

4

Consolidated Results for the Full Year
Ended March 31, 2014

Supplementary Materials – Table of Contents

I.

Results of Operations ....................................................................................................................... 6
1. Analysis of Operating Results .......................................................................................................... 6
2. Analysis of Financial Condition ........................................................................................................ 9
3. Basic Policy on Earnings Appropriation and Dividend for the Consolidated Fiscal Year Under
Review as well as the Current Fiscal Year Ending March 31, 2015 .............................................. 10

II. Status of the Business Group ....................................................................................................... 11
III. Management Policies ..................................................................................................................... 13
1. Basic Management Policy .............................................................................................................. 13
2. Target Management Benchmarks, 3. Medium- to Long-Term Management Strategy ................... 13
4. Action Items for the Group ............................................................................................................. 13
IV. Consolidated Financial Statements ................................................................................................ 16
1. Consolidated Balance Sheets.......................................................................................................... 16
2. Consolidated Income Statements and Consolidated Statement of Comprehensive Income ......... 19
3. Consolidated Statements of Changes to Stockholders' Equity ....................................................... 21
4. Consolidated Cash Flows Statement .............................................................................................. 23
5. Items of Special Note Concerning the Consolidated Financial Statements .................................... 24(Significant Events or Conditions that Question the Premise of a Going Concern) ......................... 24(Segment Information) ...................................................................................................................... 25(Per Share Information) .................................................................................................................... 28
V. Supplemental Information ................................................................................................................. 29
Orders Received, Sales, and Balance of Orders Received, by Segment ........................................... 29

5

Consolidated Results for the Full Year
Ended March 31, 2014

I. Results of Operations
1. Analysis of Operating Results(1) Summary of Economic Climate during the Consolidated Fiscal Year
During the consolidated fiscal year under review, the overall Japanese economy showed signs of recovery due to factors
such as the weaker Japanese Yen, and the increase in public- as well as private-sector capital investments. On the other
hand, the overall direction of the global economy outside of Japan remained unclear as partial signs of recovery in the U.S.
market were outweighed by the slowdown of emerging markets such as China and India, which drove global economic
growth, and the delayed recovery of the Eurozone.
Set against this economic backdrop, the Sumitomo Heavy Industries Group (hereinafter referred to as the “Group”)
positioned the current consolidated fiscal year under review as the Group’s turnaround year and implementedorganizational reforms across all business divisions. In addition, it focused on improving product quality further in order tostrengthen the foundation for future expansion. As a result of these efforts, the figures for orders, sales, operating income,ordinary income and net income for the current consolidated fiscal year under review exceeded those of the previous
fiscal year.
The current consolidated fiscal year under review also marked the final implementation year of the Innovation 21
Medium-Term Management Plan. With this in mind, the Group raised the following as key initiatives:(i) Enhance and Effectively Use the Group’s Global Network
Measures were implemented to maximize the performance of the Group’s global network of manufacturing, sales andservice capabilities in various markets around the world.
In the power transmission business, the Group unified functional capabilities as highlighted in the integration of Hansen
Industrial Transmission NV’s (the Group’s Belgian subsidiary) locations in North America and Australia with the Group’s
other locations in these countries.
In the hydraulic excavator business, by improving links between the Tangshan (China), Indonesia and domestic plants,
the Group strengthened its ability to respond to market fluctuations in each geography and stabilized profit margins.
(ii) Develop and Market Innovative Products (Product Innovation)
The Group continues to focus on developing “Green Products” that aim to reduce the load on the earth’s environment.
During the consolidated fiscal year under review, the "Sumijetter® II", a sloped-ejection type grit jet pump designed for
wastewater treatment plants, as well as the “SH200-6”, a hydraulic excavator that differentiates between operating modes,
received the Chairman’s Award at the 2013 (34th) Excellence in Energy Efficient Equipment Ceremony which was held by
the Japan Machinery Federation. The Sumijetter® II provides for an approximate 40% reduction in energy consumption
and CO2 emissions as compared to traditional models. In addition, the Group also commenced the sale of a model ofSH200-6 that is equipped with hybrid machinery that is able to achieve a 15% reduction in fuel consumption as comparedto the existing standard model.
(iii) Introduce Innovation into Manufacturing, Sales, and Business Execution (Process Innovation)
The Group has continued to engage in process innovation across all phases of the product life cycle including productplanning, development and design, manufacturing, sales and after-sales service. In the field of product planning, themarket development aspects of the process were strengthened to ensure that world-class products that boast top notch
quality are created. As for product development and design, the Group implemented measures to reduce design leadtimes and minimize man-hours as part of its design process innovation measures. With regard to manufacturing, theGroup worked to implement manufacturing reform activities based on the principles of the Toyota Production System(TPS), and shortened manufacturing lead times. Finally, within the sales and after-sales service functions, the Group
promoted a common approach across the entire company to attract new customers as well as strengthen the relationshipwith existing customers with the aim to increase the number of orders for high-margin products.

6

Consolidated Results for the Full Year
Ended March 31, 2014(iv) Implement Structural Reforms Across the Entire Group Business
The Group implemented structural reforms across the entire Group business with a particular focus on the industrial
machinery-related businesses. More specifically, the Logistics & Parking Systems Division went through anabsorption-type company split whereby the operations of this division were succeeded by Sumitomo Heavy Industries
Material Handling Systems Co., Ltd., a wholly owned subsidiary of the Group that manufactures material handlingequipment. In addition, Sumitomo Heavy Industries Techno-Fort Co., Ltd., a wholly-owned subsidiary that manufactures
forging presses, also went through an absorption-type company split whereby the operations of this company weremerged into the Group’s quantum equipment business. Through such structural reform measures across the entire Groupbusiness, a system that allows for the strategic allocation of management resources was established.
(v) Measures taken in the Ships Business
The Group prioritized improvements to profitability above everything else in its ships business. With this in mind, theGroup looked to maintain the minimum level of shipbuilding infrastructure necessary to sustain business continuity. During
the fiscal year under review, the Group received orders for five new vessels as market conditions in the shipbuilding
industry showed signs of gradual improvement.
(vi) Thoroughly Implement Compliance Measures
In line with the Group’s guiding principle of “Prioritizing Compliance Above All Else”, the Group has made various andrepeated efforts to ensure that the importance of compliance is understood across the entire Group.
During the consolidated fiscal year under review, to strengthen the compliance framework of its growing overseas
business units, compliance-related training was conducted for the directors and executives of subsidiaries located inSoutheast Asia and China. In Japan, compliance training was carried out for employees posted overseas. At the sametime, educational seminars on the antitrust laws of Japan and overseas countries were also held. Last but not least,
training sessions on the prevention of “power harassment” as well as “compliance in discussion methods” were also held.
As previously disclosed, the Ministry of Defense (MOD) suspended all orders from the Group’s defense systems business(from December 18, 2013 to May 17, 2014) as a result of a discovery that inappropriate actions were taken during the
manufacturing process of machine guns designated for the MOD. The Group fully accepted the gravity of the situation and
immediately set up an internal investigation committee that looked into the background of the issue as well as the reasonsfor the occurrence. For those that participated in these inappropriate actions, disciplinary action was taken. In addition, theremuneration of a few directors was also clawed back. Moreover, the Group voluntarily agreed to rectify any product thatis deemed to be defective as a result of the inappropriate action taken by a certain number of employees.
The Group has formulated and submitted a Future Recurrence Prevention Plan to the MOD that includes measures toclarify the manufacturing processes associated with its defense equipment. In addition, the plan calls for theestablishment of an internal quality management system to prevent the delivery of non-conforming products. This plan isalready being implemented in phases. Moreover, the Company is re-emphasizing compliance education across its entire
employee base.

As a result of the above, the fiscal year under review saw orders increase by 20% from the previous fiscal year to finish at
JPY658.2 billion and sales also increase by 5% from the previous fiscal year to finish at JPY615.3 billion on aconsolidated basis.
From the standpoint of profit and loss, mainly as a consequence of improved sales figures, the fiscal year under review
saw operating income increase by 10% from the previous fiscal year to finish at JPY34.3 billion, ordinary income increaseby 6% from the previous fiscal year to finish at JPY33.0 billion, and net income increase by 205% from the previous fiscal
year to finish at JPY17.9 billion, all on a consolidated basis. Finally, after-tax ROIC* was 4.8%.
On a non-consolidated basis, the fiscal year under review saw orders finish at JPY194.2 billion and sales finish at
JPY160.3 billion. Further, the Group posted a non-consolidated operating income of JPY1.9 billion, a non-consolidated
ordinary income of JPY10.8 billion and a non-consolidated net income of JPY11.3 billion for the fiscal year under review.

7Consolidated Results for the Full Year
Ended March 31, 2014

* The ROIC (return on invested capital) for the Group is calculated based on the following formula:(operating income + interest income / dividend income) × 55% (1 − effective tax rate)
ROIC=(average shareholder equity for the fiscal year) + (average interest-bearing liabilities for the fiscal year)(2) Group Results by Segment(i) Machinery Components
The recovery of overseas markets as well as the strong demand in the domestic market for gear motors designed forgeneral machinery resulted in improvements for both sales and orders.
In actual figures, the segment as a whole saw orders increase by 10% as compared to the previous fiscal year to finish at
JPY98.5 billion and sales increase by 10% as compared to the previous fiscal year to finish at JPY100.0 billion. The
segment also posted operating income of JPY5.9 billion, a 112% improvement as compared to the previous fiscal year.
(ii) Precision Machinery
With respect to the plastics machinery business, strong market conditions in the electronic and electrical sectors primarilyin Asia as well as improved market conditions in Europe resulted in gains to both sales and orders. Other businesses inthis segment posted mixed figures with strong demand for cryogenic coolers. As a result, orders and sales stay as samelevel as the previous year as a whole.
In actual figures, the segment as a whole saw orders increase by 13% as compared to the previous fiscal year to finish at
JPY134.5 billion, and sales increase by 7% as compared to the previous fiscal year to finish at JPY133.5 billion. In
addition, the segment posted an operating income of JPY8.7 billion, a 1% decrease as compared to the previous fiscal
year.
(iii) Construction Machinery
The hydraulic excavator business posted increases in both orders and sales due to the upturn in the Japanese market
and the robust level of demand from the overseas markets. Boosted by strong demand from North America, theconstruction crane business also followed suit with an increase in both orders and sales.
In actual figures, the segment as a whole saw orders improve by 28% as compared to the previous fiscal year to finish at
JPY193.3 billion, and sales increase by 26% as compared to the previous fiscal year to finish at JPY192.5 billion. In
addition, the segment posted an operating income of JPY10.3 billion, a 68% increase as compared to the previous fiscal
year.
(iv) Industrial Machinery
In the turbine and pump business, orders increased as compared to the previous fiscal year due to strong conditions in thedomestic biomass-fueled power generation facilities market. However, sales fell as compared to the previous fiscal year
mainly due to a low amount of orders carried forward from previous periods.
The materials handling equipment business also saw an increase in orders as compared to the previous fiscal year asboth the domestic and overseas market for power generation facilities-related equipment trended positively. However,sales fell as compared to the previous fiscal year due to the low amount of orders carried forward from previous periods.
In actual figures, the segment as a whole saw orders increase by 6% as compared to the previous fiscal year to finish at
JPY84.5 billion, and sales fall by 6% as compared to the previous fiscal year to finish at JPY78.8 billion. In addition, thesegment posted an operating income of JPY4.1 billion, a 7% decrease as compared to the previous fiscal year.
(v) Ships
As market conditions in the Ship segment continues to recover, five new ship orders were received during the current
consolidated fiscal year under review, representing an increase of four ship orders as compared to the previous fiscal year.
However, in terms of sales, only one vessel was handed over during the current consolidated fiscal year under review,
four below the total from the previous fiscal year.

8Consolidated Results for the Full Year
Ended March 31, 2014

In actual figures, the segment as a whole saw orders increase by 159% as compared to the previous fiscal year to finish at
JPY31.7 billion, and sales fall by 68% as compared to the previous fiscal year to finish at JPY14.8 billion. In addition, thesegment posted an operating loss of JPY3.0 billion.
(vi) Environmental Facilities & Plants
The energy plant business saw an increase in both orders and sales as compared to the previous fiscal year mainly due tothe high level of activity in the domestic biomass-fueled power generation boiler market. The water treatment plantbusiness also saw an increase in both orders and sales as a result of buoyant market conditions for products in this
sector.
In actual figures, the segment as a whole saw orders increase by 14% as compared to the previous fiscal year to finish at
JPY104.2 billion, and sales increase by 10% as compared to the previous fiscal year to finish at JPY86.2 billion. In
addition, the segment posted an operating income of JPY6.2 billion, an increase of 11% as compared to the previous
fiscal year.

(3) Outlook for the Upcoming Fiscal Year (Ending March 31, 2015)
The economic environment that forms the backdrop of the Group’s business remains unclear. On one hand, the domestic
Japanese economy is on a path of recovery. On the other hand, overseas markets have seen a slowdown in the growth of
emerging markets such as China and India, as well as the delayed recovery of the Eurozone from its debt crisis.
In this type of environment, the Group is focusing its efforts on the three pillars of growth, “Globalization (Expansion)”,“Innovation (Change)” and “Group Synergies (Connect)” in line with the strategies set forth in the new medium-term
management plan entitled “Medium-Term Management Plan 2016”, which will be initiated during FY2014.
As of the publication date of this document, the outlook for the upcoming fiscal year ending March 31, 2015, is as follows:
Consolidated Results

AmountAs Compared to FY 2013

Sales

JPY650.0 billion+5.6%

Operating income

JPY37.0 billion+7.8%

Ordinary income

JPY33.5 billion+1.5%

Net income

JPY19.0 billion+6.2%(The above figures are calculated at an exchange rate of JPY100 and JPY135 against the dollar and euro, respectively.)* The above forecast concerning future financial results is believed to be reasonable based on information available at thetime of publication. Actual financial results may vary from the above forecast due to a variety of factors.

2. Analysis of Financial Condition(1) Condition of Assets, Liabilities, and Net Assets
Total assets at the end of the consolidated fiscal year under review stood at JPY724.2 billion, an increase of JPY76.5
billion from the end of the previous consolidated fiscal year. This was mainly due to increases of JPY20.0 billion in cash
and deposits, JPY8.7 billion in accounts and notes receivable, JPY5.0 billion in inventory assets, and JPY9.6 billion intangible fixed assets.
Total liabilities at the end of the consolidated fiscal year under review stood at JPY393.1 billion, an increase of JPY38.2
billion from the end of the previous consolidated fiscal year. This was mainly due to increases of JPY10.6 billion notes andaccounts payable, and JPY8.9 billion in interest-bearing liabilities (the ratio of outstanding interest-bearing debt to total
assets improved by 0.4% to 14.8%).
Net assets at the end of the consolidated fiscal year under review stood at JPY331.1 billion, an increase of JPY38.2 billion
from the end of the previous consolidated fiscal year. This was mainly due to increases of JPY13.5 billion in retained
earnings, and JPY21.5 billion in the foreign currency translation adjustment.

9Consolidated Results for the Full Year
Ended March 31, 2014

Consequently, the shareholders’ equity ratio for the consolidated fiscal year under review improved by 0.5 points from theend of the previous consolidated fiscal year to finish at 45.1%.

(2) Cash Flow Conditions
The cash and cash equivalent balance at the end of the consolidated fiscal year under review stood at JPY76.4 billion, an
increase of JPY29.9 billion as compared to the previous consolidated fiscal year.
The cash flow conditions in each area and the factors behind any changes are outlined below:(Cash Flow from Operating Activities)
Cash flow from operating activities was JPY63.7 billion for the consolidated fiscal year under review, as compared to
JPY2.7 billion during the previous fiscal year. The main sources of cash inflow was the JPY31.3 billion in net income
before tax and other adjustments and the JPY10.2 billion decrease in inventory assets, The main sources of cash outflow
was the payment of corporate income taxes amounting to JPY9.7 billion.
(Cash Flow from Investing Activities)
Cash flow used for investing activities totaled JPY27.6 billion for the consolidated fiscal year under review, as compared to
JPY19.7 billion during the previous fiscal year. This was mainly due to the JPY19.0 billion used to acquire fixed assets,
and the JPY12.6 billion used for the payment of loans receivable, surpassing the JPY1.7 billion of cash generated fromthe sale of investment securities.
(Cash Flow from Financing Activities)
Cash flow used for financing activities was JPY9.5 billion for the consolidated fiscal year under review, as compared to the
JPY11.4 billion during the previous fiscal year. This was mainly due to the JPY10.0 billion used to repay commercial paper,
the JPY4.3 billion used to pay dividends, and the JPY7.1 billion used to borrow funds.
Trends in the Group’s cash flow indices are provided below:
FY 2009

FY 2010

FY 2011

FY 2012FY 2013

Shareholders’ equity ratio (%)

40.0

42.6

40.3

44.6

45.1

Shareholders’ equity ratio on amarket price basis (%)

55.7

53.2

40.8

36.1

35.5

Redemption period (years)

1.5

1.9

4.1

37.0

1.7

Interest coverage ratio (multiples)

30.8

24.2

14.0

1.3

23.8

Shareholders’ equity ratio = shareholders’ equity / total assets
Shareholders’ equity ratio on market price basis = total market value of shares / total assets
Redemption period = outstanding interest-bearing debt / operating cash flow
Interest coverage ratio = operating cash flow / interest expense

3. Basic Policy on Earnings Appropriation and Dividend for the Consolidated Fiscal
Year Under Review as well as the Current Fiscal Year Ending March 31, 2015
The Group’s basic stance on profit sharing is to pay a dividend amount commensurate to the income earned during theperiod, and to keep that amount as high as possible. However, the decision on the actual amount of the dividend is madeafter making considerations for the level of retained earnings necessary to ensure that the Group is able to sustain astable business model in the long term. For the next medium-term management plan, the Group has set 30% as its goal
for the consolidated dividend payout ratio.
For the consolidated fiscal year under review, the Group is forecasting a dividend of JPY7 per share (inclusive of the JPY3
per share interim dividend), a decrease of JPY1 per share from the previous year.
For the fiscal year ending March 2015, the Group is forecasting a dividend of JPY9 per share.

10Consolidated Results for the Full Year
Ended March 31, 2014

II. Status of the Business GroupThe main business areas of the Group and the positioning of major Group companies in these areas are outlined below.

1. Machinery Components
In the area of transmission power equipment, both Sumitomo Heavy Industries and Seisa Gear, Ltd. are responsible forthe overall product manufacturing and distribution. The responsibility for global manufacturing and distribution of theseproducts falls to Sumitomo Machinery Corporation of America in North America; Sumitomo (SHI) Cyclo Drive Germany
GmbH and Hansen Industrial Transmissions NV in Europe; and Sumitomo (SHI) Cyclo Drive Asia Pacific Pte., Ltd. inSoutheast Asia. In China, Sumitomo Heavy Industries (Tangshan) Ltd. carries out manufacturing while Sumitomo (SHI)
Cyclo Drive China, Ltd. carries out manufacturing and is also responsible for the overall distribution of products in the
country. Product distribution in Japan is the responsibility of Sumitomo Heavy Industries PTC Sales Co., Ltd.

2. Precision Machinery
In the area of plastics machinery equipment, Sumitomo Heavy Industries is responsible for the overall manufacturing,
distribution, and after-sales service of the product line. Globally, Sumitomo (SHI) Demag Plastics Machinery North
America, Inc. is responsible for the overall manufacturing and distribution of these products in North America, andSumitomo (SHI) Demag Plastics Machinery GmbH is responsible for overall operations in Europe.
Sumitomo Heavy Industries is responsible for overall manufacturing and distribution of laser processing systems,
cryocoolers, precision positioning equipment, precision forgings, control components, and defense equipment.
In the area of semiconductor production equipment, both Sumitomo Heavy Industries and SEN Corporation are
responsible for overall manufacturing and distribution.

3. Construction Machinery
In the area of hydraulic excavators and road construction machinery, Sumitomo (S.H.I.) Construction Machinery Co., Ltd.
is responsible for the manufacturing and distribution of products to overseas markets; Sumitomo (S.H.I.) Construction
Machinery (Tangshan) Co., Ltd. is responsible for the manufacturing of products in China; PT. Sumitomo S.H.I.
Construction Machinery Indonesia is responsible for the manufacturing of products in Indonesia; and Sumitomo (S.H.I.)
Construction Machinery Sales Co., Ltd. is responsible for the distribution of products in Japan. In the area of mobile
cranes, Hitachi Sumitomo Heavy Industries Construction Crane Co., Ltd. is responsible for overall development,
distribution, and manufacturing of products for the Japanese market, while Link-Belt Construction Equipment Company,
L.P., LLLP mainly oversees the overall manufacturing and sales of products in North America.

4. Industrial Machinery
Sumitomo Heavy Industries is responsible for the overall manufacturing and distribution of accelerators, LCD display
production equipment, and forging machines.
Sumitomo Heavy Industries Material Handling Systems Co., Ltd. is responsible for overall manufacturing and distributionof material handling systems, logistics and handling systems, and automated parking systems.
Shin Nippon Machinery Co., Ltd. is responsible for the overall manufacturing and distribution of industrial turbines andpumps.
Finally, Sumitomo Nacco Materials Handling Co., Ltd. is responsible for the overall manufacturing and distribution of
forklift products.

5. Ships
In this segment, shipbuilding is carried out by Sumitomo Heavy Industries Marine & Engineering Co., Ltd., while
Sumitomo Heavy Industries is responsible for the distribution of the finished product.

11

Consolidated Results for the Full Year
Ended March 31, 2014

6. Environmental Facilities & Plants
In the areas of boiler systems, industrial waste treatment systems, pulp and paper machinery, and air pollution prevention
equipment, both Sumitomo Heavy Industries and Nihon Spindle Manufacturing Co., Ltd. are responsible for overall
manufacturing and distribution.
Sumitomo Heavy Industries Environment Co., Ltd. is responsible for the overall manufacturing and distribution of water
treatment systems.
Further, the manufacturing and distribution of reactor vessels is handled by Sumitomo Heavy Industries and Sumitomo
Heavy Industries Process Equipment Co., Ltd.
Finally, Izumi Food Machinery Co., Ltd. is responsible for the overall manufacturing and distribution of food machinery.

12Consolidated Results for the Full Year
Ended March 31, 2014

III. Management Policies
1. Basic Management Policy
The Group is guided by the Sumitomo Business Spirit. The two components of the philosophy, namely “the placing ofprime importance on conducting business with integrity and sound management” and “not pursuing easy gains or acting
imprudently under any circumstances”, form the basis of the Group’s vision in any environment, regardless of the era or
the state of the economy. The Group rigorously complies with the spirit of the philosophy, and actively pursues structuralreforms to its business organization to ensure that it is able to build a strong corporate culture.
The Group also believes that by focusing on creating customer value, and thereby earning customers’ long-term trust, it
can achieve sustainable growth and increase overall corporate value. Further, succeeding in this task will also lead to theGroup meeting its corporate citizenship responsibilities to its shareholders, employees, and surrounding communities.
To ensure a highly stable growth trajectory on the global stage, the Group is committed to becoming a “Systematic
Knowledge-Creating Company” that is able to sustainably supply customers with first-class products. Moreover, theGroup is actively strengthening its functional efficiencies in the areas of marketing, development, and production in pursuitof the ultimate level of workmanship.

2. Medium- to Long-Term Management Strategy, Target Management Benchmarks
and Action Items for the GroupIn overall terms, the economic environment that forms the backdrop of the Group’s business in Japan is on track forrecovery as the effects of government measures to stimulate the economy and the weaker Japanese yen driving export
growth is outstripping any negative concerns resulting from the increase in the sales tax. Overseas, the situation remains
murky as although the US economy has trended positively, the slowdown in the growth of emerging markets such as
China and India, as well as the delayed recovery of the Eurozone from its debt crisis has slowed the pace of an overall
recovery.
In this type of operating environment, the Group has completed the implementation of the Innovation 21 Medium-Term
Management Plan, and will now look to focus on executing the new medium-term management plan entitled“Medium-Term Management Plan 2016”.
(1) General Review of the Previous Innovation 21 Medium-Term Management Plan
The initial financial objectives set forth in the Innovation 21 Medium-Term Management, which was first introduced in
FY2011, were not achieved mainly due to the impacts from the Great East Japan Earthquake, the Eurozone debt crisis,
and the slowdown of the Chinese economy. However, the basic concepts of “globalization” and “innovation” are believed
to be effective in any type of economic environment and with this in mind, the Group pushed forward with the constructionof new plants and the expansion of existing overseas plants, strengthened links with acquired overseas subsidiaries,
actively pursued design innovation, and introduced new products to the market.
Further, the Group formulated the new medium-term management plan entitled “Medium-Term Management Plan 2016”
to ensure that the benefits of such strategies bear fruit.

(2) The New Medium-Term Management Plan Entitled “Medium-Term Management Plan 2016”
In the new “Medium-Term Management Plan 2016”, the Group has established a goal of achieving JPY700.0 billion insales, and an operating profit margin of 7.5% in FY2016. ROIC continues to be the Group’s key performance indicator andthe plan calls for ROIC > WACC and for the figure to remain greater than 7%.
In order to achieve these financial objectives, the Group has formulated the following three goals in the plan:
1. Achieve steady growth to ensure that a foundation for sustainable growth is established;
2. Return to high levels of profitability; and3. Exhibit persistent efforts at the improvement of the quality of operations.

13Consolidated Results for the Full Year
Ended March 31, 2014

Through this, the Group will aim to continue being a corporation that supplies customers with first-class products. The key
point here is that the Group will not aim to grow for the sake of growing. Rather, it will focus on achieving steady growth tobuild a foundation that ensures a return to high levels of profitability.
Also, across the wide range of business areas that the Group endeavors to meet the diverse needs of its customers, theMedium-Term Management Plan 2016 has specifically identified the energy-related sector as an area of demand
expansion and growth. With this in mind, the Group will look to actively develop this area of the business.
Finally, as the plan is executed, the Group will continue to maintain its financial discipline, and actively make investments
into growth areas that effectively utilize its stronger financial standing. More specifically, the Medium-Term Management
Plan 2016 calls for capital and development investments in the order of JPY95.0 billion to be made during the three year
implementation period of the plan.
Moreover, the Group has set 30% as its goal for the dividend payout ratio during the three year implmentaion period pf theplan.

(3) Key Areas of Focus for the Fiscal Year Ending March 31, 2015
As previously mentioned, FY2014 marks the start of the Medium-Term Management Plan 2016. During this year, theGroup will focus on executing the following initiatives in order to achieve the targets set forth in the plan:(i) Achieve Steady Growth to Ensure that a Foundation for Sustainable Growth is Established
The Group will aim to achieve growth by focusing its efforts on the three pillars of growth, which are “Globalization(Expansion)”, “Innovation (Change)” and “Group Synergies (Connect)”.
Under “Globalization (Expansion)”, scenarios that allow for the investments made in the mass produced machinery
business during the previous implementation period of the Innovation 21 Medium-Term Management Plan to generate
results will be created and realized. For example, in the plastics machinery business, the link between Sumitomo (SHI)
Demag Plastics Machinery GmbH, a German subsidiary that was acquired by the Group, and the Group’s domestic
Japanese plants will be strengthened. Through this, the Group will aim to become the leader in electric injection molding
machines. In the heavy machinery business, the Group will pursue technological differentiation and increase its presencein overseas markets.
“Innovation (Change)” is a common theme throughout the Group and emphasis in this category will be placed onstrengthening the after-market business, restructuring the sales process, and the development of new products. In
addition, innovation activities aimed at strengthening the competitiveness of its power transmission products in the mass
produced machinery business as well as its engineering capabilities in the heavy machinery business will be promoted.
With regard to the “Group Synergies (Connect)” category, a System Development Center was newly established at theTechnology Research Center in April of this year. By doing this, the Group will look to strengthen the synergies across its
highly diversified product areas with system technology at its core and aim to increase customer value. In addition,synergies realized from organizational restructuring will also be pursued. For example, in April of this year, the Group
placed Sumitomo Heavy Industries Process Equipment Co., Ltd. and Izumi Food Machinery Co., Ltd. under the umbrellaof the newly established Chemical Machinery Business Center, consolidating the Group’s chemical machinery business.
Moreover, the Group is planning to separate a portion of its energy plant business and have Sumiju Plant Engineering Co.,
Ltd, a subsidiary of the Group, absorb and succeed this business on a go forward basis. This move is anticipated to becompleted in July of this year.
(ii) Turnaround to High Levels of Profitability
In the Group’s leading business areas such as power transmissions and plastics machinery, a high profit margin target of
10% has been established and every effort will be made to realize this figure. In addition, in order to ensure that all
business divisions, product models and geographic segments are able to stand on its own (i.e. generate profits on an
individual basis), the Group has set forth a target profit margin of 5% with the aim to return to high levels of profitability
across the entire business.
(iii) Exhibit Persistent Efforts at the Improvement of the Quality of Operations

14

Consolidated Results for the Full Year
Ended March 31, 2014

As part of the Group’s “Persistent efforts at the improvement of the quality of operations” we will be engaging in thefollowing activities:(a) Improve Product Quality
In April of this year, the Group made changes in the way the organization manages product quality in order to strengthen
its functions. First, the Corporate Quality Department was upgraded to become the Corporate Quality Group. In addition, a
new Product Quality Control Department was established within the Corporate Quality Group. Through such moves, notonly will each business division engage in quality innovation, but the head office’s ability to support and audit the businessdivisions will be strengthened.
(b) Thoroughly Implement Compliance Measures
The Group firmly believes that ensuring compliance across all of its business activities is one of the most, if not the most,important responsibilities that it has. As the Group grows internationally, focus has been placed on conducting
compliance-related activities not only for its domestic business units, but for all business units across the globe. During theupcoming period, efforts to improve awareness levels among the directors and employees of all Group companies will be
continued to ensure that recognition of the importance of compliance permeates across the entire Group.
(c) Safety-Related Activities
FY2014 will mark the start of the second phase of implementing the Group’s Basic Health and Safety Improvement Plan.
Based on the results of the first phase of implementing the plan, the Group will set detailed objectives, strengthen healthand safety management functions, and work to eliminate occupational injuries.

15

Consolidated Results for the Full Year
Ended March 31, 2014

IV. Consolidated Financial Statements
1. Consolidated Balance Sheets(Unit: million yen)
End of Full YearAs of March 31, 2013

End of Full YearAs of March 31, 2014

AmountAmountAssetsCurrent assets
Cash and deposits

47,81467,826―

10,000Notes and accounts receivable

173,300

181,961

Products

66,877

63,819Works in progress

44,79149,144

Raw materials and stock

27,54831,286

Deferred income taxes

12,191

13,201

Other

15,22318,934

Allowance for doubtful accounts(1,117)(1,217)

Total current assets

386,628434,954

Buildings and structures (net)48,807

49,975

Machinery and transportation tools (net)43,44749,552

Land

108,033

109,265

Construction in progress

2,614

2,884

Other (net)

7,750

8,609

210,652

220,284

Other

7,765

8,648

Total intangible fixed assets

7,765

8,648

25,18826,74551

13,786

Deferred income taxes

11,838

10,118

Other

7,420

11,134

Allowance for doubtful accounts(1,817)(1,486)

Total investments and other assets

42,67960,296

261,096289,228

647,724

724,182

Marketable securities

Fixed assets
Tangible fixed assets

Total tangible fixed assets
Intangible fixed assets

Investments and other assets
Investment securities
Long-term loans

Total Fixed assets
Total assets

16Consolidated Results for the Full Year
Ended March 31, 2014

(Unit: million yen)
End of Full YearAs of March 31, 2013

End of Full YearAs of March 31, 2014

AmountAmountLiabilities
Current liabilities
Notes and accounts payable

113,575

124,211

Short-term bank loans

48,032

52,817Long-term loans due within one year

1,245

16,855

Corporate bonds redeemable within one year―

10,000Commercial paper

10,000―

Income tax payable

3,014

6,903

Advance payments received on contracts

20,93730,493

Allowance for guaranteed construction

5,115

6,780

Other allowances

2,178

3,626

Other

38,91937,446

Current liabilities

243,014289,130

Bonds

10,000―Long-term debt due after one year

29,27027,761

Allowance for employees retirement benefits

39,169―Other allowances

48

497

Defined benefit liability―

40,037

Deferred income taxes on revaluation

24,60824,608

Other

8,789

11,090111,883

103,993354,898

393,123

Capital stock

30,87230,872

Capital surplus

23,78923,789Retained earnings

207,580

221,101

(455)

(632)

261,786

275,130

Unrealized gains on securities

2,694

3,753

Loss on deferred hedge

(562)

(379)

(3,808)―Fixed Liabilities

Total fixed liabilities
Total liabilities
Net assets
Shareholders' equity

Treasury stock
Total Shareholders' equity
Accumulated other comprehensive income

Adjustment regarding pension obligations ofconsolidated overseas subsidiaries

17Consolidated Results for the Full Year
Ended March 31, 2014

End of Full YearAs of March 31, 2013

End of Full YearAs of March 31, 2014

AmountAmountRe-measurement of defined benefit plans―(2,336)

Revaluation reserve for land

38,197

38,272Foreign currency translation adjustments(9,458)

11,993

Total accumulated othercomprehensive income

27,06451,304

Minority interests

3,977

4,626

Total net assets

292,826

331,059

647,724

724,182

Total liabilities and net assets

18

Consolidated Results for the Full Year
Ended March 31, 2014

2. Consolidated Income Statements and Consolidated Statement of Comprehensive
IncomeConsolidated Income Statements(Unit: million yen)Previous Full Year
April 1, 2012 toMarch 31, 2013

Current Full Year
April 1, 2013 toMarch 31, 2014

AmountAmountNet sales

585,871615,271

Cost of sales

465,309483,104

Gross income

120,562

132,166

Selling, general and administrative expenses

89,274

97,837

Operating income

31,28834,329Interest income

259

337

Dividend income

2,117

1,013

Investment gain on equity method

578

1,201

Gain on foreign currency exchange

1,347

998

Other

2,322

2,731

6,624

6,280

Interest expenses

2,097

2,637

Other

4,818

4,973

Total non-operating expenses

6,915

7,609

Ordinary income

30,99733,000Gain on sale of investment securities

1,343

―

Reversal of reserve for legal actions

802

―

2,145

―

Loss on impaired assets

17,392

1,690

Loss relating to defense equipment business

4,986

―

Total extraordinary losses

22,378

1,690

Income before income taxes

10,76431,309Corporate income tax current

10,553

12,977

Corporate income tax deferred(5,959)526

Total corporate income taxes

4,594

13,503

Net income before adjusting for profit (loss)
from minority interests

6,170

17,807

305

(84)

5,865

17,891Non-operating income

Total non-operating income
Non-operating expenses

Extraordinary gains

Total extraordinary gains
Extraordinary losses

Minority interests in income ( loss)
Net income

19Consolidated Results for the Full Year
Ended March 31, 2014

Consolidated Statement of Comprehensive Income(Unit: million yen)Previous Full Year
April 1, 2012 to March 31, 2013

Current Full Year
April 1, 2013 to March 31, 2014

AmountAmount

Net income before adjusting for profit (loss)
from minority interests

6,170

17,807

Unrealized gains on securities

426

1,049

Profit (loss) on deferred hedge

(811)

168

Adjustment regarding pension obligationsof consolidated overseas subsidiaries

(234)

858

Foreign currency translation adjustments

10,23522,303

Amount applied for equity method
accounting of affiliates

(1)

25

Total other comprehensive income

9,614

24,403

15,78442,21015,06841,442

716

768

Other comprehensive income

Comprehensive income(Breakdown)Comprehensive income relating to parent
company shareholdings
Comprehensive income relating tominority interests

20Consolidated Results for the Full Year
Ended March 31, 2014

3. Consolidated Statements of Changes to Stockholders' Equity
Previous Full Year April 1, 2012 to March 31, 2013
(Unit: million yen)
Stockholders’ equity
Capitalstock
Balance at beginning of period

Capitalsurplus30,872

Earnedsurplus23,789Total
Stockholders'equityTreasurystock

201,433(445)

255,649

Fluctuation in the period
Dividends(6,137)

Net income

5,865(6,137)
5,865

Acquisition of treasury stock(27)

Disposal of treasury stock(6)

Difference from transfer of revaluation reserve for land
Increase from addition of consolidated
subsidiaries accompanying changes in scope of
consolidation
Increase due to mergers between consolidated
and non-consolidated subsidiaries
Fluctuations other than stockholders' equity in the
period (net)Total fluctuation in the period
Balance at end of period

(27)

16

10

5,184

5,184

1,124

1,124

118

118

―

―

6,147

(10)

6,137

30,872

23,789207,580(455)

261,786

Minority interests

Total net assets

Adjustment regarding pension
obligations of consolidated
overseas subsidiaries

Re-measurement of defined
benefit plans―(3,573)

Total accumulated othercomprehensive income277

Foreign exchange translation
adjustments

2,267

Difference from transfer ofrevaluation reserve for land

Balance at beginning of period

Loss on deferred hedge

Unrealized holding gains onother securities

Accumulated other comprehensive income

43,381(19,113)

23,2393,258

282,145

Fluctuation in the period
Dividends(6,137)

Net income

5,865

Acquisition of treasury stock(27)

Disposal of treasury stock
Difference from transfer ofrevaluation reserve for
land
Increase from addition of
consolidated subsidiaries
accompanying changes inscope of consolidation
Increase due to mergers
between consolidated andnon-consolidated subsidiaries
Fluctuations other thanstockholders' equity in the
period (net)Total fluctuation in the period

10
5,184

1,124

118

427

(838)

(234)

―

(5,184)

9,654

3,824

719

4,544

427

(838)

(234)

―

(5,184)

9,654

3,824

719

10,68121

Consolidated Results for the Full Year
Ended March 31, 2014

Balance at end of period

2,694

(562)

―

(3,808)38,197(9,458)27,064

3,977

292,826

Current Full Year April 1, 2013 to March 31, 2014
(Unit: million yen)
Stockholders’ equity
Capitalstock
Balance at beginning of period

Capitalsurplus30,872

Earnedsurplus23,789Total
Stockholders'equityTreasurystock

207,580(455)

261,786

Fluctuation in the period
Dividends(4,295)

Net income

17,891(4,295)
17,891

Acquisition of treasury stock(180)

Disposal of treasury stock(1)

Difference from transfer of revaluation reserve for land
Increase from addition of consolidated
subsidiaries accompanying changes in scope of
consolidation
Increase due to mergers between consolidated
and non-consolidated subsidiaries
Fluctuations other than stockholders' equity in the
period (net)Total fluctuation in the period
Balance at end of period

(180)

4

4

(75)

(75)

―

―

―

―

―

―

13,520(176)

13,34430,872

23,789221,101(632)

275,130

Minority interests

Total net assets―

Total accumulated othercomprehensive income(3,808)Foreign exchange translation
adjustments(562)

Difference from transfer ofrevaluation reserve for land

Adjustment regarding pension
obligations of consolidated
overseas subsidiaries

2,694

Re-measurement of defined
benefit plans

Loss on deferred hedge

Balance at beginning of period

Unrealized holding gains onother securities

Accumulated other comprehensive income

38,197(9,458)27,064

3,977

292,826

Fluctuation in the period
Dividends(4,295)

Net income

17,891

Acquisition of treasury stock
Disposal of treasury stock
Difference from transfer ofrevaluation reserve for land
Increase from addition of
consolidated subsidiaries
accompanying changes in scopeof consolidation
Increase due to mergers between
consolidated andnon-consolidated subsidiaries
Fluctuations other thanstockholders' equity in the period(net)
Total fluctuation in the period
Balance at end of period

(180)
4
(75)

―

―

1,059

183

3,808

(2,336)75

21,451

24,240

1,059

183

3,808

3,753

(379)

―

(2,336)75

21,451

24,240649

38,233(2,336)38,272

11,99351,304

4,626

331,05922

649

24,889

Consolidated Results for the Full Year
Ended March 31, 2014

4. Consolidated Cash Flows Statement(Unit: million yen)Previous
Full Year
April 1, 2012 toMarch 31, 2013

Current
Full Year
April 1, 2013 toMarch 31, 2014

Cash flows from operating activities
Income before income taxes

10,76431,309Depreciation

18,282

18,617

Loss on impaired assets

17,392

1,690

Gain from the sale of investment securities(1,343)―

Reversal of provision for loss on litigation

(802)

―

Interest and dividend income(2,377)(1,350)Interest expenses

2,097

2,637

(Increase) decrease in notes and accounts receivable

6,025

6,091

(Increase) decrease in inventories

12,702

10,177

Increase (decrease) in notes and accounts payable(44,837)

2,306

Other

3,602

3,052

Subtotal

21,50674,529

2,240

1,398

Interest expenses(2,038)(2,595)

Payments for income taxes(19,047)(9,671)

2,660

63,661

Interest and dividends received

Net cash provided by operating activities
Cash flows from investing activities
Acquisition costs associated with fixed assets(22,052)(19,050)

Proceeds from sale of securities

1,362

1,747

Payments of loans receivable(6)(12,624)

1,035

2,304

(19,660)(27,622)

Net increase (decrease) in short-term loans

16,393(5,736)

Increase (decrease) in the amount of commercial paper

10,000(10,000)

Proceeds from long-term debt

15,41615,032

Repayments for long-term debt

(44,429)(2,236)

Cash dividends paid

(6,120)(4,307)

(426)

(260)

(2,263)(1,991)(11,428)(9,498)

Effect of exchange rate changes on cash and cash
equivalents

2,073

3,401

Net increase (decrease) in cash and cash equivalents(26,356)

29,942

Cash and cash equivalents at beginning of year

72,376

46,476

Increase due to new consolidated companies

327―

Increase in cash and cash equivalents due to mergers
between consolidated and non-consolidated subsidiaries

128―

46,47676,418Other
Net cash used in investing activities
Cash flows from financing activities

Payment of dividends to minority stockholders
Other
Net cash used in financing activities

Cash and cash equivalents at end of year23Consolidated Results for the Full Year
Ended March 31, 2014

5. Items of Special Note Concerning the Consolidated Financial Statements(Significant Events or Conditions that Question the Premise of a Going Concern)
No events or conditions are noted.

(Changes to Accounting Policies)(The Implementation of Accounting Standards for Retirement Benefits)
As of the end of the current consolidated fiscal year under review, the “Accounting Standard for Retirement Benefits”(Accounting Standards Board of Japan (ASBJ) Accounting Standard – ASBJ Statement No. 26 dated May 17, 2012;
hereinafter referred to as the “Accounting Standards for Retirement Benefits”) and the “Guidance on the AccountingStandard for Retirement Benefits” (ASBJ Guidance No. 25 dated May 17, 2012; hereinafter referred to as the“Implementation Guidance for the Retirement Benefit Accounting Standard”) has been adopted (with the exception of Item
35 of the Accounting Standards for Retirement Benefits and Item 67 of the Implementation Guidance for Retirement
Benefit Accounting Standards). As a result of this, the balance left after subtracting pension assets from retirement benefit
obligations is the retirement benefit amount that is accounted for as a liability. In addition, unrecognized actuarial
differences and unrecognized prior service costs are also accounted for as a liability relating to retirement benefits.
The implementation of the Accounting Standards for Retirement Benefits has been done in accordance with Item 37 of the
Implementation Guidance for the Retirement Benefit Accounting Standard where transitional treatment is allowed. As
such, at the end of the current consolidated fiscal year under review, the amount impacted by this change has beenadjusted in the re-measurement of the defined benefit plan under other comprehensive income.
Consequently, an amount equal to JPY40,037 million has been accounted for as a liability related to retirement benefits.
In addition, other comprehensive income has increased by JPY613 million.
Moreover, as a result of implementing the Accounting Standards for Retirement Benefits, the adjustment regarding
pension obligations of consolidated overseas subsidiaries which was displayed as a separate line item in the Group’s
consolidated balance sheet is now combined with the re-measurement of the defined benefit plan figure.
Please note that information regarding the impact of this change on a per-share basis is noted in the appropriate section.

24

Consolidated Results for the Full Year
Ended March 31, 2014

(Segment Information)
1. Summary of Reporting Segments
The Group’s reporting segments are based on those units within the Group where separate financial information isavailable and where the Group’s Board of Directors periodically deliberates over such matters as the distribution ofmanagement resources and the financial performance of such segments.
The Group formulates a comprehensive international and domestic strategy for individual products and services for thehead office and for each consolidated subsidiary, and executes such strategies at the operating level. Consequently, theGroup comprises segments that are split by categories of products and services offered by the head office andconsolidated subsidiaries. More specifically, the six reporting segments of the Group are “Machinery Components”,“Precision Machinery”, “Construction Machinery”, “Industrial Machinery”, “Ships”, and “Environmental Facilities & Plants”.
Please note that on April 1, 2013, Sumitomo Heavy Industries Techno-Fort Co., Ltd. was merged into the Group by
absorption and integrated into the Group’s quantum equipment business. As a result, ion accelerators, medical machines
and equipment, and plasma coating systems for FPDs, which were previously categorized under the Precision Machinery
segment, will now be categorized under the Industrial Machinery segment as of the beginning of the current consolidated
fiscal year. Any segment information published during the current consolidated fiscal year will therefore reflect these new
product classifications.

Businesses

Main Products

Machinery Components

Power transmission and control equipment

Precision Machinery

Plastic injection molding machines, film forming machines, semiconductor
production equipment, laser processing systems, cryocoolers, precision
positioning equipment, precision forgings, control components, defense
equipment, machining tools

Construction Machinery

Hydraulic excavators, mobile cranes, road machinery

Industrial Machinery

Ion accelerators, medical machines and equipment, plasma coating systems for
FPDs, forging machines, material handling systems, logistics systems,
automated parking systems, turbines, pumps

Ships

Ships

Environmental Facilities & Plants

Private power generation facilities, boilers, industrial waste treatment facilities, air
pollution control equipment, water and sewage treatment systems, processequipment, pressure vessels, mixing vessels, air-conditioning equipment, foodprocessing machinery

25

Consolidated Results for the Full Year
Ended March 31, 2014

2. Information Regarding Net Sales, Profits, Assets, Liabilities, and Other Items by Reporting Segment
Previous Full Year (April 1, 2012, to March 31, 2013)(Unit: million yen)Segment
Item

A

B

C

D

E

F

84,26446,013

Subtotal

Other1

Total

G2

H

Net sales(1) Sales to externalcustomers

91,174 124,603 152,773(2) Internal sales
betweensegments or
exchanges

2,113

23

914

86

Total

93,287 125,597 152,796

85,17846,09979,084 582,041

11,333 593,374

2,767

6,132

4,385

2,366

5,575

1,361

106,582 120,248 158,186

64,133

52,84861,533 563,530

Segment profit

3

Segment assets

994

8,635

78,584 577,410

501

4,630

29,8608,460 585,871

2,873

7,503

31,22149,006 612,536― 585,871―(7,503)(7,503) 585,871
66

31,28835,188 647,724

Other categories
Depreciation expense

4,272

4,691

4,526

1,865

1,663

913

17,930353

18,282―

18,282

Increase in tangible
and intangible assets

7,395

5,994

12,983

1,721

692

743

29,527362

29,888―29,888Segments:
A: Machinery Components
B: Precision Machinery
C: Construction Machinery
D: Industrial Machinery
E: Ships
F: Environmental Facilities & Plants
G: Adjustments
H: Value included on the consolidated income statement
Notes:
1. “Other” represents businesses that are not included in the other reporting segments. This includes the Group’s
real-estate businesses, software-related business, and other businesses.
2. Mainly due to the deletion of intersegment transactions
3. Segment profits have been adjusted with operating income recorded in the consolidated income statement.

26

Consolidated Results for the Full Year
Ended March 31, 2014

Current Full Year (April 1, 2013, to March 31, 2014)(Unit: million yen)Segment
Item

A

B

C

F

Subtotal

Other1DE78,793

14,814

27

760

151

101,720 134,595 192,538

79,553

14,96586,538 609,910

12,432 622,342

10,2294,076(2,992)

6,198

2,053

113,972 123,432 200,519

67,132

48,60863,603 617,266

Total

G2

H

Net sales(1) Sales to externalcustomers

99,994 133,518 192,511(2) Internal sales
betweensegments or
exchanges

1,726

Total
3

Segment profit (loss)
Segment assets

5,876

1,077

8,684

86,166 605,796

371

4,113

32,141

9,475 615,271

2,958

7,071

34,19454,906 672,172― 615,271―(7,071)(7,071) 615,271
135

34,32952,009 724,182

Other categories
Depreciation expense

4,510

4,518

6,377

1,771

307

866

18,288329

18,617―

18,617

Increase in tangible
and intangible assets

3,344

4,564

9,435

986

485

774

19,588741

20,329―20,329Segments:
A: Machinery Components
B: Precision Machinery
C: Construction Machinery
D: Industrial Machinery
E: Ships
F: Environmental Facilities & Plants
G: Adjustments
H: Value included on the consolidated income statement
Notes:
1. “Other” represents businesses that are not included in the other reporting segments. This includes the Group’s
real-estate businesses, software-related business, and other businesses.
2. Mainly due to the deletion of intersegment transactions
3. Segment profits have been adjusted with operating income recorded in the consolidated income statement.

27

Consolidated Results for the Full Year
Ended March 31, 2014

(Per Share Information)
Previous Full Year
April 1, 2012 toMarch 31, 2013

Current Full Year
April 1, 2013 toMarch 31, 2014

Net assets per share

470.69 yen

532.28 yen

Net income per share

9.56 yen

29.17 yen

Notes:
1.

The diluted net income per share for the current consolidated fiscal year under review is not listed because there
are no dilutive shares.

2.

As noted in the “Changes to Accounting Policies” section, the implementation of the Accounting Standards for
Retirement Benefits has been done in accordance with Item 37 of the Implementation Guidance for the
Retirement Benefit Accounting Standard where transitional treatment is allowed. Consequently, the net asset
amount per share for the current consolidated fiscal year under review has increased by JPY1.00.

3.

The basis for calculating the net income per share is outlined below:

Item

Current Full Year
April 1, 2013 toMarch 31, 2014

Previous Full Year
April 1, 2012 toMarch 31, 2013

5,865 million yen

17,891 million yen――

Net income for common stock

5,865 million yen

17,891 million yen

Average number of outstanding
shares for the term

613,696,000 shares

613,411,000 shares

Net income for the period
Value not attributable to common
stockholders

28

Consolidated Results for the Full Year
Ended March 31, 2014

V. Supplemental Information
Orders Received, Sales, and Balance of Orders Received, by Segment(1) Orders Received(Unit: million yen)Segment

April 1, 2012 toMarch 31, 2013
AmountApril 1, 2013 toMarch 31, 2014%

AmountY/Y Change%

Amount%Machinery Components

89,17616.2

98,502

15.0

9,326

10.5

Precision Machinery

118,51721.5

134,51120.4

15,994

13.5

Construction Machinery

151,195

27.5

193,330

29.4

42,136

27.9

Industrial Machinery

79,52014.4

84,509

12.8

4,990

6.3

Ships

12,2582.2

31,736

4.8

19,478158.9

Environmental Facilities & Plants

91,36416.6

104,24415.9

12,880

14.1

Others8,662

1.6

11,400

1.7

2,738

31.6

Total

550,691100.0

658,233

100.0

107,54219.5(2) Sales(Unit: million yen)Segment

April 1, 2012 toMarch 31, 2013
AmountApril 1, 2013 toMarch 31, 2014%

AmountY/Y Change%

Amount%Machinery Components

91,17415.6

99,994

16.3

8,820

9.7

Precision Machinery

124,60321.3

133,518

21.7

8,915

7.2

Construction Machinery

152,773

26.1

192,51131.3

39,73826.0

Industrial Machinery

84,26414.4

78,79312.8(5,471)

(6.5)

Ships

46,013

7.8

14,8142.4(31,199)(67.8)

Environmental Facilities & Plants

78,58413.4

86,166

14.0

7,583

9.6

Others

8,460

1.4

9,475

1.5

1,014

12.0

Total

585,871100.0

615,271

100.0

29,4005.0(3) Balance of Orders Received(Unit: million yen)Segment

End of Full YearAs of March 31, 2013

End of Full YearAs of March 31, 2014

AmountAmount%%Y/Y Change
Amount%Machinery Components

30,023

11.1

28,532

9.1(1,492)(5.0)

Precision Machinery

41,46515.3

42,458

13.5

993

2.4

Construction Machinery

25,752

9.5

26,571

8.4

819

3.2

Industrial Machinery

73,66027.1

79,376

25.3

5,717

7.8

Ships

10,973

4.0

27,895

8.9

16,922

154.2

Environmental Facilities & Plants

87,512

32.3

105,590

33.6

18,078

20.7

Others

1,840

0.7

3,765

1.2

1,925

104.6

Total

271,225100.0

314,187

100.0

42,96315.8

29