Sumitomo Heavy Industries, Ltd.
CONSOLIDATED FINANCIAL REPORTFor the Full Year Ended March 31, 2013

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, 2013

Summary of Consolidated Financial Results
For the Full Year Ended March 31, 2013
Presented May 8, 2013

Sumitomo Heavy Industries, Ltd.
Listed exchanges

Tokyo Stock Exchange, Osaka Securities 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 2333

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, 2013
June 28, 2013
June 27, 2013
Yes
Yes (for analysts)

1. FY 2012 Consolidated Results (April 1, 2012, to March 31, 2013)(1) Business Results(Units: millions of yen)
Current Full Term
April 1, 2012
to March 31, 2013

Previous Full Term
April 1, 2011
to March 31, 2012

% change% change

Net sales

585,871(6.1)

624,100

13.9

Operating income

31,288(33.6)

47,135

2.9

Ordinary income

30,997(30.5)

44,6190.8

Net income

5,865(69.9)

19,492(30.2)Net income per share (yen)

9.56

31.75

Fully diluted net income per share――

Return on equity (ROE, %)

2.1

7.1

Return on assets (%)

4.6

6.8

Ordinary income to net sales (%)

5.3

7.6

Note: Comprehensive income:Fiscal year ended March 31, 2013: 15,784 million yen (-18.9%)
Fiscal year ended March 31, 2012: 19,472 million yen (-9.9%)
Reference: Equity method investment profit and loss:
Fiscal year ended March 31, 2013: (578 million yen gain)
Fiscal year ended March 31, 2012: (456 million yen loss)

1

Consolidated Results for the Full Year
Ended March 31, 2013

(2) Financial Position(Units: millions of yen)
End of Current Full Year
March 31, 2013

End of Previous Full Year
March 31, 2012

Total assets

647,724

691,841

Net assets

292,826

282,145

44.6

40.3

470.69454.43Equity ratio (%)
Net assets per share (yen)Reference: Equity:
Fiscal year ended March 31, 2013: 288,849 million yen
Fiscal year ended March 31, 2012: 278,888 million yen(3) Cash Flows(Units: millions of yen)
Current Full Year
April 1, 2012 toMarch 31, 2013

Previous Full Year
April 1, 2011 toMarch 31, 2012

Cash flows from operating activities

2,660

23,309Cash flows from investing activities(19,660)(22,671)

Cash flows from financing activities(11,428)

19,879Cash and cash equivalents at end of period

46,476

72,376

2. Dividends(Units: yen)
Year Ended March 31,
2012

Year Ended March 31,
2013

Year Ending March 31,
2013 (forecast)

Annual dividends per share―――

Second quarter

4.00

4.00

3.00

Third quarter

―

―

―

First quarterEnd of term

6.00

4.00

3.00

Annual dividends

10.00

8.00

6.00

Total dividends (millions of yen)

6,137

4,909

Payout ratio (consolidated, %)

31.5

83.7

Net assets dividend yield (consolidated, %)

2.2

1.7

2

26.3

Consolidated Results for the Full Year
Ended March 31, 2013

3. FY 2013 Consolidated Forecasts (April 1, 2013, to March 31, 2014)(Units: millions of yen)
Second Quarter (Cumulative)
April 1, 2013 to September 30,
2013

Full Year
April 1, 2013 to March 31, 2014

275,000% change(6.2)

600,000% change
2.4

Operating income

7,000(59.8)

30,000(4.1)

Ordinary income

6,000(63.8)

26,000(16.1)Net income

2,000(79.7)

14,000138.7

Projected net income per share (yen)

3.26

Net sales

3

22.81

Consolidated Results for the Full Year
Ended March 31, 2013

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: ―Excluded from consolidation: ―(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:Yes(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, 2013
As of March 31, 2012

614,527,405 shares
614,527,405 shares(ii) Number of treasury shares at end of fiscal period:
As of March 31, 2013
As of March 31, 2012

857,899 shares
811,946 shares(iii) Average number of shares during fiscal period:
As of March 31, 2013
As of March 31, 2012

613,696,384 shares
613,952,563 shares

Disclosure of Present Status of Audit Procedures
In compliance with the Financial Instruments and Exchange Act, audit procedures for financial statements arebeing 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 see the analysis of businessperformance in the Supplementary Materials section beginning on page 6.

4

Consolidated Results for the Full Year
Ended March 31, 2013

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, 2014 .............................................. 10

II. Status of the Business Group ....................................................................................................... 11
III. Management Policies ..................................................................................................................... 13
1. Basic Management Policy .............................................................................................................. 13
2. Target Management Benchmarks .................................................................................................. 13
3. Medium- to Long-Term Management Strategy............................................................................... 13
4. Action Items for the Group ............................................................................................................. 13
IV. Consolidated Financial Statements ................................................................................................ 17
1. Consolidated Balance Sheets .......................................................................................................... 17
2. Consolidated Income Statements and Consolidated Statement of Comprehensive Income .......... 19
3. Consolidated Statements of Changes to Stockholders' Equity........................................................ 22
4. Consolidated Cash Flows Statement ............................................................................................... 26
5. Items of Special Note Concerning the Consolidated Financial Statements ................................... 28(Significant Events or Conditions that Question the Premise of a Going Concern) ......................... 28(Changes to Accounting Estimates and Changes to Accounting Policies that are Difficult toDifferentiate) ...................................................................................................................................... 28(Segment Information) ...................................................................................................................... 28(Per Share Information) .................................................................................................................... 31(Subsequent Events of Significant Importance) ............................................................................... 31
6. Orders Received, Sales, and Balance of Orders Received, by Segment ....................................... 32

5

Consolidated Results for the Full Year
Ended March 31, 2013

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, although there were some bright signs, such as the weakening of theJapanese yen during the second half of the fiscal year and an upswing in public investments, the economic outlook
continued to remain uncertain, as it did one year ago. At the same time, the overall global economy remained unstableas partial signs of recovery in the U.S. market were out-staged by the slowdown of the Chinese economy, the driver ofglobal economic growth, as well as the disruption to public-sector finance and financial markets in the eurozone, which,negatively impacted the real economy.
Against this economic backdrop, the Sumitomo Heavy Industries Group (hereinafter referred to as the “Group”)
strengthened its sales activities, integrated various parts of its organization to increase operational efficiency, andexecuted other initiatives that focused on increasing market competitiveness in line with the plans set forth in the
Innovation 21 Medium-Term Management Plan. Despite these efforts, and because of the impact of stagnant markets,the consolidated fiscal year under review saw the Group post lower than prior-year figures for orders, sales, operating
income, ordinary income, and net income.
While keeping one eye on conditions in the overseas markets, the Group looked to counteract a downturn in markets
through the following key initiatives during the consolidated fiscal year under review:(i) Enhance and Effectively Use the Group’s Global Network
In the power transmission business, the Group strengthened existing links between plants in Tangshan (China) andBrazil, Hansen Industrial Transmissions NV’s plant in Belgium, and domestic Japanese plants to enhance its ability tosupply gearboxes globally. Further, by effectively using its Vietnam plant, where production for small gearmotors wasconcentrated, the Group accelerated its efforts to develop both the domestic Japanese and overseas markets withrespect to this product line.
In the plastics machinery business, the Group further strengthened the links and synergy between Sumitomo (SHI)
Demag Plastics Machinery GmbH’s plant in Germany and domestic Japanese plants.
Finally, in the hydraulic excavator business, the close links between the plants in Tangshan (China), Indonesia, andJapan allowed the Group to provide a stable supply of products to both the Japanese and overseas markets.
(ii) Develop and Market Innovative Products (Product Innovation)
In recent years, the Group has focused on developing “Green Products” that contribute to environmental protection.
During the consolidated fiscal year under review, the Group’s SE-EV series of fully electric injection molding machines
won the Minister of Economy, Trade and Industry Award in the category of Most Energy-Efficient Machine, which wasselected by the Japan Machinery Federation.
In the medical equipment sector, the Group concentrated its efforts on increasing the popularity of cutting-edge cancer
therapy systems. For example, an order for a Boron Neutron Capture Therapy (BNCT) System that extracts neutrons
from an accelerator and selectively destroys cancer cells was received during the consolidated fiscal year under review.
(iii) Introduce Innovation into Manufacturing, Sales, and Business Execution (Process Innovation)
The Group has continued to accelerate process innovation in all phases of the product planning, development, design,
manufacturing, sales, and after-sales service functions. At the same time, the Group has decided to reform the structureof its business by integrating parts of it to improve operational efficiencies. Moreover, the Group consolidated its head
office functions into a shared services subsidiary company to increase the efficiency and advance the capabilities of suchfunctions. Although certain Group companies are already receiving the services of this company, during the consolidated
fiscal year under review, the shared services company expanded the number of companies that receive its services andworked to further standardize business processes.

6

Consolidated Results for the Full Year
Ended March 31, 2013(iv) Avert Worsening Performance in the Ships Business
Worsening market conditions coupled with overcapacity in China and increased competitiveness in Korea has meant that
the Group’s Ships business segment continues to face difficulties. Amid this turmoil, the Group turned down orders thatwere deemed unprofitable, and consequently received only one order for a new vessel during the consolidated fiscal
year under review. On the other hand, the Group maintained the minimum level of shipbuilding formation necessary tosustain the business, with the goal of reducing the negative impact of this business on overall financial performance.
Further, the Group acknowledged that a long period of time may be required for the market to fully recover, future profit
projections are likely to worsen in this segment, and the need to write-down assets is becoming more and more probable.
With these points in mind, the Group considered the salvage potential of its business assets in this segment and decided
to write-down fixed assets relating to the building of new ships during the consolidated fiscal year under review. As aresult, this business segment posted an extraordinary loss of JPY16.4 billion.
(v) 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 theconsolidated fiscal year under review, to strengthen the compliance framework for its growing overseas business units inline with the further globalization of the Group, educational seminars were held for dispatched personnel, and training
sessions on both Japanese and foreign antitrust laws were carried out. The Group also held training sessions on theprevention of power harassment and compliance in discussion methods.
As disclosed previously, Sumitomo Heavy Industries, Ltd., and one of its subsidiaries, Sumiju Tokki Service Co., Ltd.,
were suspended from bidding on Ministry of Defense (MOD) contracts because of overbilling on previous contracts. As of
February of this year, the overbilled amount has been repaid to the MOD, and the suspension has subsequently been
lifted. Nevertheless, the Group realized the gravity and seriousness of the incident and carried out a comprehensive
review of its business structure with the guiding principle of the review being the image of a sound operating business. In
terms of measures to prevent recurrences of such events, the Group reviewed its business processes, enforced arotation system for executive officers, implemented an order estimation review process, improved compliance education,and revised its disciplinary action procedures. It goes without saying that the Group is fully committed to preventing
recurrences of such events and intends to further promote compliance efforts internally.
Despite the efforts outlined above, the fiscal year under review saw orders decrease by 4% from the previous fiscal year
to finish at JPY550.7 billion, and sales decreased by 6% from the previous fiscal year to finish at JPY585.9 billion on aconsolidated basis.
From the standpoint of profit and loss, mainly as a consequence of declining sales, during the fiscal year under review
operating income decreased by 34% from the previous fiscal year to finish at JPY31.3 billion, ordinary income decreasedby 31% from the previous fiscal year to finish at JPY31.0 billion, and net income decreased by 70% from the previous
fiscal year to finish at JPY5.9 billion, all on a consolidated basis. Finally, after-tax ROIC* was 4.9%.
On a non-consolidated basis, the fiscal year under review saw orders finish at JPY156.9 billion, and sales finished at
JPY177.4 billion. Further, the Group posted a non-consolidated operating income of JPY0 billion, a non-consolidated
ordinary income of JPY14.3 billion, and a non-consolidated net loss of JPY100 million for the fiscal year under review.

* The ROIC (return on invested capital) for the Group is calculated based on the following formula:(operating income + interest income and dividend income) × 55% (=1 − effective tax rate)
ROIC=(average shareholder equity for the fiscal year) + (average interest-bearing liabilities for the fiscal year)7Consolidated Results for the Full Year
Ended March 31, 2013

(2) Group Results by Segment(i) Machinery Components
The downturn in European markets and the relatively poor sales of gearboxes to the resources and energy sectors
resulted in a decline in both sales and orders. In actual figures, the segment as a whole saw orders fall by 6% ascompared to the previous fiscal year to finish at JPY89.2 billion, and sales fell by 2% as compared to the previous fiscal
year to finish at JPY91.2 billion. In addition, the segment posted operating income of JPY2.8 billion, a 35% decrease ascompared to the previous fiscal year.
(ii) Precision Machinery
With respect to the plastics machinery business, the relatively poor sales to the electronic and electrical sectors in Japanand other parts of Asia resulted in a decline in both sales and orders. Other businesses in this segment also did not faremuch better with the sale of electronic-related products not doing as well as initially planned, and subsequently bothorders and sales declined as compared to the previous fiscal year.
In actual figures, the segment as a whole saw orders fall by 7% as compared to the previous fiscal year to finish at
JPY134.4 billion, and sales fell by 3% as compared to the previous fiscal year to finish at JPY139.2 billion. In addition,
the segment posted an operating income of JPY7.7 billion, a 39% decrease as compared to the previous fiscal year.
(iii) Construction Machinery
Although the domestic market showed positive signs of recovery, the worsening conditions in the Chinese market
resulted in both a decline in sales and orders in the hydraulic excavator business. On the other hand, the construction
crane business posted improved figures for both orders and sales as the North American market improved.
In actual figures, the segment as a whole saw orders fall by 7% as compared to the previous fiscal year to finish at
JPY151.2 billion, and sales fell by 4% as compared to the previous fiscal year to finish at JPY152.8 billion. In addition,
the segment posted an operating income of JPY6.1 billion, a 26% decrease as compared to the previous fiscal year.
(iv) Industrial Machinery
In the turbine and pump business, orders fell as compared to the previous fiscal year mainly because of worsening
market conditions in Southeast Asia. However, sales increased as compared to the previous fiscal year in this area
mainly because orders outstanding from previous periods were carried forward. The materials handling equipment
business posted a decline in both orders and sales as demand from the domestic steel and shipbuilding sectors
remained weak.
In actual figures, the segment as a whole saw orders fall by 9% as compared to the previous fiscal year to finish at
JPY63.6 billion, and sales fell by 14% as compared to the previous fiscal year to finish at JPY69.6 billion. In addition, thesegment posted an operating income of JPY5.4 billion, a 44% decrease as compared to the previous fiscal year.
(v) Ships
Although market conditions remained weak in the Ships segment as they were a year ago, during the consolidated fiscal
year under review the number of new ship orders received increased to one as compared to zero in the previous fiscal
year. Further, in terms of sales, five vessels were handed over during the consolidated fiscal year under review, twobelow the total from the previous fiscal year.
In actual figures, the segment as a whole saw orders increase by 82% as compared to the previous fiscal year to finish at
JPY12.3 billion, and sales fell by 21% as compared to the previous fiscal year to finish at JPY46.0 billion. In addition, thesegment posted an operating income of JPY2.4 billion, a 78% decrease as compared to the previous fiscal year.
(vi) Environmental Facilities & Plants
Orders increased in the energy plant business mainly because of the high level of activity in the domestic biomass-fueled
power generation boiler market as well as the large-scale project for a private power generating facility for a mine inIndonesia. On the other hand, sales fell mainly because of the low number of orders carried over from previous periods.
The water treatment plant business saw a decline in both orders and sales as overall market conditions remained weak.

8

Consolidated Results for the Full Year
Ended March 31, 2013

In actual figures, the segment as a whole saw orders increase by 7% as compared to the previous fiscal year to finish at
JPY91.4 billion, and sales fell by 2% as compared to the previous fiscal year to finish at JPY78.6 billion. In addition, thesegment posted an operating income of JPY5.6 billion.
(3) Outlook for the Upcoming Fiscal Year (Ending March 31, 2014)
The economic environment that forms the backdrop of the Group’s business remains unpredictable. On one hand,emerging market economies are anticipated to continue showing strong growth, while at the same time, signs of arecovery are being seen in developed economies, such as the United States and Japan. On the other hand, the debt
crisis in Europe, a slowdown of the Chinese economy, rising crude oil prices, and the long-term strength of the yen are
all causes of concern that can hamper any kind of positive economic momentum.
In this type of environment, the Group plans to focus on achieving its key goal of “Innovation of Half and Double” while
implementing the following principal strategies set forth in the new Innovation 21 Medium-Term Management Plan:
1. Enhance and effectively use the Group’s global network.
2. Develop and market innovative products (product innovation).
3. Introduce innovation into manufacturing, sales, and business execution (process innovation).
As of the publication date of this document, the outlook for the upcoming fiscal year ending March 31, 2014, is as follows:
Consolidated Results

AmountAs Compared to FY 2011

Sales

JPY600.0 billion+2.4%

Operating income

JPY30.0 billion-4.1%

Ordinary income

JPY26.0 billion-16.1%Net income

JPY14.0 billion+138.7%(The above figures are calculated at an exchange rate of JPY95 and JPY125 against the dollar and euro, respectively.)* The above forecast concerning future financial results is believed to be reasonable based on information available atthe time 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 JPY647.7 billion, a decrease of JPY44.1
billion from the end of the previous consolidated fiscal year. Although there was a JPY6.1 billion increase in investments
and other assets, this was offset by decreases of JPY25.6 billion in cash and deposits, JPY7.9 billion in accounts andnotes receivable, JPY4.7 billion in inventory assets, and JPY9.2 billion in tangible fixed assets.
Total liabilities at the end of the consolidated fiscal year under review stood at JPY354.9 billion, a decrease of JPY54.8
billion from the end of the previous consolidated fiscal year. Although there was an increase of JPY2.0 billion ininterest-bearing liabilities as a result of the Group issuing new commercial paper (the ratio of outstanding interest-bearing
debt to total assets deteriorated by 1.2% to close at 15.2%), there was a JPY40.3 billion decrease in notes and accounts
payable and a JPY3.0 billion decrease in deferred tax liability. With regard to the latter, the decrease was due to arevaluation of the deferred tax liability amount, which was necessary as the impairment loss booked for the assets in the
Ships segment included land.
Net assets at the end of the consolidated fiscal year under review stood at JPY292.8 billion, an increase of JPY10.7
billion from the end of the previous consolidated fiscal year. Although there was a decrease of JPY5.2 billion pertaining to
the difference in the revaluation of land assets, retained earnings and the foreign currency translation adjustment
increased by JPY6.1 billion and JPY9.7 billion, respectively.
Consequently, the shareholders’ equity ratio for the consolidated fiscal year under review improved by 4.3 points fromthe end of the previous consolidated fiscal year to finish at 44.6%.

9

Consolidated Results for the Full Year
Ended March 31, 2013

(2) Cash Flow Conditions
The cash and cash equivalent balance at the end of the consolidated fiscal year under review stood at JPY46.5 billion, adecrease of JPY25.9 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 JPY2.7 billion for the consolidated fiscal year under review, a decrease of
JPY20.6 billion from the previous consolidated fiscal year. The main factors behind this were the decreases to net
income before tax and other adjustments, as well as the balance of accounts payable, exceeding any increases in thebalance of trade receivables and inventory assets.
Cash Flow from Investing Activities
Cash flow used for investing activities totaled JPY19.7 billion for the consolidated fiscal year under review, a decrease of
JPY3.0 billion as compared to the previous consolidated fiscal year. This was mainly due to a fall in cash used to acquire
fixed assets.
Cash Flow from Financing Activities
Cash flow used for financing activities was JPY11.4 billion for the consolidated fiscal year under review. The main
purpose of the funds was to make dividend payments.
The following table summarizes trends in the cash-flow index of the Group:
FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

Shareholders’ equity ratio (%)

34.8

40.0

42.6

40.3

44.6

Shareholders’ equity ratio on amarket price basis (%)

29.8

55.7

53.2

40.8

36.1

Redemption period (years)

3.2

1.5

1.9

4.1

37.0

Interest coverage ratio (multiples)

21.5

30.8

24.2

14.0

1.3

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, 2014
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 considering the sufficient level of retained earnings needed to ensure that the Group is able to sustain a stablebusiness model in the long term.
For the consolidated fiscal year under review, the Group is forecasting a dividend of JPY8 per share (inclusive of the
JPY4 per share interim dividend), a decrease of JPY2 per share from the previous year.
For the fiscal year ending March 2014, the Group is forecasting a dividend of JPY6 per share.

10Consolidated Results for the Full Year
Ended March 31, 2013

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.
Due to the establishment of new companies or the increased importance of existing companies, a total of 13 companies,
including Sumitomo Heavy Industries (China) Financial Leasing, Ltd., have been included within the scope of
consolidation during the fiscal year under review.

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, SHI Plastics Machinery Inc. of America is responsible forthe overall manufacturing and distribution of these products in North America, and Sumitomo (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, ion accelerators, plasma coating system for FPDs, 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.
Finally, Sumitomo NACCO Materials Handling Co., Ltd. is responsible for the overall manufacturing and distribution of
forklift equipment in this segment.

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
In this segment, Sumitomo Heavy Industries is responsible for the manufacturing and distribution of logistics andhandling systems, as well as automated parking systems.
Sumitomo Heavy Industries Techno-Fort Co., Ltd. is responsible for the overall manufacturing and distribution of forging
machines.
Sumitomo Heavy Industries Engineering and Services Co., Ltd. is responsible for the overall manufacturing anddistribution of material handling systems.
Finally in this segment, Shin Nippon Machinery Co., Ltd. is responsible for the overall manufacturing and distribution ofindustrial turbines and pumps.

11Consolidated Results for the Full Year
Ended March 31, 2013

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.

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 foroverall 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.
Please note that as of April 1, 2013, Sumitomo Techno-Fort Co., Ltd. was dissolved as a result of an absorption-typecompany merger that was executed where the Group became the surviving company. Further, on April 1, 2013, theGroup’s Logistics and Parking Systems business was transferred to Sumitomo Heavy Industries Engineering andServices Co., Ltd. Subsequently, the company was renamed Sumitomo Heavy Industries Material Handling Systems Co.,
Ltd.

12

Consolidated Results for the Full Year
Ended March 31, 2013

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 inpursuit of the ultimate level of workmanship.

2. Target Management Benchmarks, 3. Medium- to Long-Term Management Strategy
Since there are no significant changes from the disclosures made in the “Notice Regarding the Innovation 21 Medium
Term Management Plan”, these sections have been omitted. For further information on previously disclosed materials,
please visit the following Web sites:
Group Web site
http://www.shi.co.jp
Tokyo Stock Exchange Web site (link to search page for publicly listed companies)
http://www.tse.or.jp/listing/compsearch/index.html

4. Action Items for the GroupThe economic environment that forms the backdrop of the Group’s business is mixed. On one hand, the debt crisis in the
eurozone contributes to the region’s unpredictability. On the other hand, positive signs such as the continuing recovery of
the U.S. economy and the shift in the Chinese economy from a slowdown to a gentle recovery bode well for the future. In
Japan, the announcement of monetary easing measures and economy-boosting policies, as well as the continued
weakness of the Japanese yen, has resulted in an increase in the level of exports and a rise in capital investments,
raising the prospects of an economic recovery in the country.
In this type of environment, the Group put emphasis on increasing competitiveness by focusing on the key strategies set
forth in the Innovation 21 Medium-Term Management Plan, which are to introduce innovation into product development
and business processes. By doing so, the Group is aiming to become a “Strong and Powerful SHI” that is able to achievesustainable growth.
Moreover, FY2013 will be the year that the Group starts afresh and looks to rebound from a period of stagnation. At thesame time, the Group will reinforce its businesses through sound management and execute various structural reforms
across the entire company.

13

Consolidated Results for the Full Year
Ended March 31, 2013

(1) The New Innovation 21 Medium-Term Management Plan
The Innovation 21 Medium-Term Management Plan, which was initiated in FY 2011, calls for the Group to achieve salesof JPY730 billion and operating income of JPY73.0 billion by the end of fiscal 2013 (ending March 31, 2014). In addition,
the Group is targeting an ROIC of greater than 10% while at the same time maintaining an ROIC that is greater than
WACC on a continuous basis.
To achieve these figures, the Group has formulated the following three strategies:
1. Enhance and effectively use the Group’s global network.
2. Develop and market innovative products (product innovation).
3. Introduce innovation into manufacturing, sales, and business execution (process innovation).
Through the implementation of these measures and a focus on the key phrase of “Innovation of Half and Double”(doubling performance while cutting costs in half), the Group plans to restore its competitiveness and establish itself as adominant player in the global marketplace.
(2) Key Areas of Focus for the Fiscal Year Ending March 31, 2014
FY 2013 marks the final year of implementing the medium-term management plan. During this year, the Group will focus
on executing the following initiatives:(i) Enhance and Effectively Use the Group’s Global Network
SHI will work to enhance and maximize the use of its global network of manufacturing, sales, and service locations.
In the power transmission business, more specifically gearboxes, the Group will work to increase the operational
efficiency of the Tangshan (China) and Brazil plants, and strengthen the existing link between Hansen Industrial
Transmissions NV’s plant in Belgium and domestic Japanese plants, with the overall goal to capture more market shareglobally. Further, through the effective use of its Vietnam plant where production for small gearmotors was concentrated,
the Group will work to take advantage of enhanced cost competitiveness and develop markets for such products aroundthe world.
In the plastics machinery business, the Group will aim to further strengthen the links and synergy between Sumitomo(SHI) Demag Plastics Machinery GmbH’s plant in Germany and domestic Japanese plants, and ensure that any market
share opportunities in growing sectors and regions are being captured.
Finally, in the hydraulic excavator business, the Group will look to optimize the links between the overseas manufacturing
plants located in Tangshan (China) and Indonesia and domestic Japanese plants. By doing so, the Group will target
market share expansion in the growing markets of South East Asia and North and South America.
Furthermore, the Group will look to enhance the functions of the regional head offices established in China, the UnitedStates, Indonesia, and Brazil with the goal to establish a structure that allows for the rapid implementation ofmanagement measures that are specific to the needs of each region or market. Through this, SHI will continue to build aglobal network of operations that focuses on “Self-subsistence and Cooperation” and that allows Group companies
around the world to leverage the competitive edge that each boasts.
(ii) Develop and Market Innovative Products (Product Innovation)
The Group will focus its energies on the following markets and products:
In the field of power transmissions, the Group plans to further push for an increase in sales of its small- to medium-scale
gear reducers that incorporate IE3 (the international efficiency standard for motors) compliant premium efficiency motors.
By doing, it hopes to promote energy efficiency across the global industrial and social infrastructure sectors.
In the field of hydraulic excavators, the Group will take a focused approach and introduce new products that boast highenergy-efficiency and safety performance characteristics to markets in developed countries. At the same time, theproduct line-up aimed at emerging markets will be enhanced. The overall goal of these efforts is to enable the Group to
capture greater market share in the respective markets.

14

Consolidated Results for the Full Year
Ended March 31, 2013

In the field of plastics machinery, the Group will look to increase sales by not only significantly increasing the yields andenergy efficiency of its product line, but also by adding the SE-EV series of fully electric injection molding machines to its
suite of available products.
In addition to the above, the Group will accelerate the development of various other “Green Products” that emphasizeenergy efficiency and sustainable energy. Finally, to support these product innovation efforts, the Group will further
enhance coordination and cooperation between the Corporate Technology Operations Group and the respective
business segments.
(iii) Introduce Innovation into Manufacturing, Sales, and Business Execution (Process Innovation)
Over the years, the Group has introduced a multitude of process innovation ideas into all stages of the business,
including product planning, design and development, manufacturing, sales, and after-sales service. In the future, these
efforts will be further developed and applied to the Group’s global network of businesses. The Group expects this tosignificantly reduce costs and lead to greater market share in emerging economies. In addition to such efforts, the Groupwill further pursue organizational integrations, to achieve greater synergy and enhance organizational capabilities inareas where technical capabilities can be complemented or projection execution capabilities can be strengthened.
(iv) Implement Structural Changes across All Business Units
The first point will be to recover the profit potential of the mass-produced machinery businesses. Through theintroduction of new products, the Group will aim to quickly improve the profit potential of this business area, while at thesame time, carry out structural changes on the business as necessary.
The second point will be to implement structural changes to the heavy machinery businesses. As this business area
attempts to improve its profit potential and embarks on plans to expand overseas as a core business strategy, theproposed structural changes will create an organizational system that not only runs efficiently but also brings together thevarious technologies and technical know-how of the various departments within the business area, and distributes
management resources in an optimal manner.
As of April 1, 2013, the following organizational changes have been made.
1. The Group’s Logistics and Parking Systems business and Material Handling Machinery business was merged under
Sumitomo Heavy Industries Material Handling Systems Co., Ltd.
2. The Group’s Press Machine business and Medical Equipment business was merged to form a new division called
Industrial Equipment Division.
The Group plans to further discuss organizational changes to the heavy machinery businesses in the future andimplement them accordingly.
(v) Future Policies for Ship Building Business
Market conditions in the shipping industry remain at all-time lows. The one exception is in the area of tankers, which theGroup focuses on, where excess freight space is declining and the weakening yen is improving ship values, albeit at a
gradual pace. Nevertheless, significant time will be needed for a full recovery, and as such, it is safe to assume that thebusiness environment will continue to remain challenging for the forthcoming period.
Amid these conditions, the Group’s Ships segment will maintain the minimum level of shipbuilding formation necessary tosustain business continuity, and will pursue the development of value-added vessels, such as those that boast higher
energy efficiency or comply with new international environmental regulations.
(vi) Thoroughly Implement Compliance Measures
The Group firmly believes that ensuring compliance across all of its business activities is one of the most, it not the most,important responsibilities that it has. As the SHI Group has grown internationally, it has focused on conducting
compliance-related activities not only for its domestic business units, but for all business units across the globe. During
the upcoming period, the Group will continue to hold supplemental training and awareness programs for directors andemployees to ensure that recognition of the importance of compliance permeates the entire Group.

15

Consolidated Results for the Full Year
Ended March 31, 2013

(3) Formulation of a New Medium Term Management PlanFY 2013 marks the final year of implementing the Innovation 21 Medium-Term Management Plan. As a result of theseries of events that occurred from the first year of implementing the plan, namely the Great East Japan Earthquake, theeurozone debt crisis, and the slowdown of the Chinese economy, the Group was not able to meet the quantitative
objectives set forth in the plan. However, the key concepts of “Globalization” and “Innovation” that were set forth in theplan were deemed to be effective amid the whirlwind of change in the business environment.
In the upcoming consolidated fiscal year, the Group will set about developing a new medium-term management plan thatwill be implemented beginning in FY 2014. The plan will be based on the results of the Innovation 21 Medium-Term
Management Plan as well as the changes to the operating environment during the preceding three years. As a truly
global company, the Sumitomo Heavy Industries Group will work on increasing customer value across all regions of theworld with the aim to become a firm that is capable of sustainable growth.

16Consolidated Results for the Full Year
Ended March 31, 2013

IV. Consolidated Financial Statements
1. Consolidated Balance Sheets(Units: millions of yen)
End of Full YearAs of March 31, 2012

End of Full YearAs of March 31, 2013

AmountAmountAssetsCash and deposits

73,37347,814

Notes and accounts receivable

181,248

173,300

Products

51,326

66,877Works in progress

71,562

44,791

Raw materials and stock

21,03427,548Deferred income taxes

12,196

12,191

Other

19,161

15,223(855)(1,117)429,046

386,628

Buildings and structures (net)49,92748,807

Machinery and transportation tools(net)

37,03243,447

Land

116,306

108,033

Construction in progress

9,448

2,614

Other (net)

7,099

7,750

Total tangible assets

219,812210,652

6,374

7,765

6,374

7,765

Investment securities

23,921

25,188Deferred income taxes

7,419

11,838

Other

6,683

7,471

Allowance for doubtful accounts(1,414)(1,817)36,60942,679Fixed assets

262,795

261,096

Total assets

691,841

647,724

Allowance for doubtful accounts
Current assets

Other
Total intangible assets

Investments and other assets

17

Consolidated Results for the Full Year
Ended March 31, 2013

(Units: millions of yen)
End of Full YearAs of March 31, 2012

End of Full YearAs of March 31, 2013

AmountAmountLiabilities
Notes and accounts payable

153,843

113,575

Short-term bank loans

27,38348,032Long-term loans due within one year

19,796

1,245

Commercial paper―

10,000

Income tax payable

11,3293,014

Advance payments received oncontracts

27,77020,937

Allowance for guaranteed construction

5,106

5,115

Other allowances

5,351

2,178

Other

37,88338,919288,461

243,014

Bonds

10,00010,000Long-term debt due after one year

39,34329,270

Employees’ severance and retirement
benefits

35,884

39,16954

48

Deferred income taxes on revaluation

27,651

24,608

Other

8,303

8,789

Long-term liabilities

121,235

111,883

Total liabilities

409,696354,898

Common stock

30,87230,872

Capital surplus

23,78923,789Retained earnings

201,433

207,580

Treasury stock

(445)

(455)

Stockholders’ equity

255,649

261,786

2,267

2,694

277

(562)

Adjustment regarding pension
obligations of consolidated overseas
subsidiaries(3,573)(3,808)

Revaluation reserve for land

43,381

38,197

Foreign currency translation adjustments(19,113)(9,458)Current liabilities

Other allowances

Net assets

Unrealized gains on securities
Loss on deferred hedge

18Consolidated Results for the Full Year
Ended March 31, 2013

End of Full YearAs of March 31, 2012

End of Full YearAs of March 31, 2013

AmountAmountTotal accumulated other comprehensive
income23,23927,064

Minority interests

3,258

3,977

Total net assets

282,145

292,826

Liabilities and net assets

691,841

647,724

2. Consolidated Income Statements and Consolidated Statement of Comprehensive
IncomeConsolidated Income Statements(Units: millions of yen)Previous Full Year
April 1, 2011 toMarch 31, 2012

Current Full Year
April 1, 2012 toMarch 31, 2013

AmountAmountNet sales

624,100

585,871

Cost of sales

490,878

465,309

Gross income

133,222

120,562

Selling, general & administrative expenses

86,087

89,274

Operating income

47,13531,288Interest income

480

259

Dividend income

473

2,117

Gain on foreign currency exchange

349

1,347

2,428

2,901

3,730

6,624

Interest expenses

1,652

2,097

Other

4,594

4,818

Total non-operating expenses

6,246

6,915

Ordinary income

44,61930,997

Gain on sale of investment securities

―

1,343

Reversal of reserve for legal actions―

802

Total extraordinary gains

―

2,145

Non-operating income

Other
Total non-operating income
Non-operating expenses

Extraordinary gains

Extraordinary losses

19Consolidated Results for the Full Year
Ended March 31, 2013

Previous Full Year
April 1, 2011 toMarch 31, 2012

Current Full Year
April 1, 2012 toMarch 31, 2013

AmountAmountLoss on impaired assets

688

17,392―

4,986

Loss on contracts

2,863

―

Loss on devaluation of marketablesecurities

2,166

―

706

―

Total extraordinary losses

6,423

22,378

Income before income taxes

38,195

10,764

Corporate income tax current

19,077

10,553

Corporate income tax deferred(1,395)(5,959)Total corporate income taxes

17,682

4,594

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

20,513

6,170

Minority interests

1,021

305

Net income

19,492

5,865

Loss relating to defense equipment
businessAmount amortized for prior service cost20Consolidated Results for the Full Year
Ended March 31, 2013

Consolidated Statement of Comprehensive Income(Units: millions of yen)Previous Full Year
April 1, 2011 to March 31, 2012

Current Full Year
April 1, 2012 to March 31, 2013

AmountAmount

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

20,513

6,170

Unrealized gains on securities

1,287

426

Profit (loss) on deferred hedge

(680)

(811)

Adjustment regarding pension
obligations of consolidated overseas
subsidiaries(1,596)(234)

Revaluation reserve for land

3,918

―

Foreign currency translation adjustments(3,966)

10,235

Amount applied for equity method
accounting of affiliates

(3)

(1)

Total other comprehensive income(1,041)

9,614

19,472

15,784Comprehensive income relating to parent
company shareholdings

18,434

15,068Comprehensive income relating tominority interests

1,039

716

Other comprehensive income

Comprehensive income(Breakdown)21

Consolidated Results for the Full Year
Ended March 31, 2013

3. Consolidated Statements of Changes to Stockholders' Equity(Units: millions of yen)Previous Full Year
April 1, 2011 to March 31, 2012

Current Full Year
April 1, 2012 to March 31, 2013

Stockholders’ equity
Capital stock
Balance at beginning of period

30,87230,872――30,87230,872

23,78923,789――23,78923,789188,047

201,433

Dividends(7,370)(6,137)

Net income

19,4925,865

Disposal of treasury stock

(1)

(6)

Difference from transfer ofrevaluation reserve for land

388

5,184

Increase from addition of
consolidated subsidiaries
accompanying changes in scopeof consolidation

877

1,124

Increase due to mergers between
consolidated andnon-consolidated subsidiaries―

118

Increase from reduction of
consolidated subsidiaries
accompanying changes in scopeof consolidation

0―

13,386

6,147

201,433

207,580

Fluctuation in the period
Total fluctuation in the period
Balance at end of period
Capital surplus
Balance at beginning of period
Fluctuation in the period
Total fluctuation in the period
Balance at end of period
Earned surplus
Balance at beginning of period
Fluctuation in the period

Total fluctuation in the period
Balance at end of period

22Consolidated Results for the Full Year
Ended March 31, 2013

Previous Full Year
April 1, 2011 to March 31, 2012

Current Full Year
April 1, 2012 to March 31, 2013

Treasury stock
Balance at beginning of period

(67)

(445)

(383)

(27)

5

16

(378)

(10)

(445)

(455)

242,641

255,649

Dividends(7,370)(6,137)

Net income

19,492

5,865

(383)

(27)

Disposal of treasury stock

5

10

Difference from transfer ofrevaluation reserve for land

388

5,184

Increase from addition of
consolidated subsidiaries
accompanying changes in scopeof consolidation

877

1,124

Increase due to mergers between
consolidated andnon-consolidated subsidiaries―

118

Increase from reduction of
consolidated subsidiaries
accompanying changes in scopeof consolidation

0―

13,0086,137

255,649

261,786

981

2,267

Fluctuations other thanstockholders' equity in the period
(net)

1,286

427

Total fluctuation in the period

1,286

427

2,267

2,694

Fluctuation in the period
Acquisition of treasury stock
Disposal of treasury stock
Total fluctuation in the period
Balance at end of period
Stockholders' equity
Balance at beginning of period
Fluctuation in the period

Acquisition of treasury stock

Total fluctuation in the period
Balance at end of period
Accumulated other comprehensive income
Unrealized holding gains on othersecurities
Balance at beginning of period
Fluctuation in the period

Balance at end of period
Loss on deferred hedge

23Consolidated Results for the Full Year
Ended March 31, 2013

Previous Full Year
April 1, 2011 to March 31, 2012

Balance at beginning of period

Current Full Year
April 1, 2012 to March 31, 2013

960

277

Fluctuations other thanstockholders' equity in the period
(net)

(683)

(838)

Total fluctuation in the period

(683)

(838)

277

(562)

(1,978)(3,573)

Fluctuations other thanstockholders' equity in the period(net)(1,596)(234)

Total fluctuation in the period(1,596)(234)(3,573)(3,808)39,851

43,381

Fluctuations other thanstockholders' equity in the period
(net)

3,530

(5,184)

Total fluctuation in the period

3,530(5,184)

43,381

38,197(15,129)(19,113)

Fluctuations other thanstockholders' equity in the period(net)(3,984)

9,654

Total fluctuation in the period(3,984)

9,654(19,113)(9,458)24,68623,239(1,446)

3,824

Fluctuation in the period

Balance at end of period
Adjustment regarding pension obligationsof consolidated overseas subsidiaries
Balance at beginning of period
Fluctuation in the period

Balance at end of period
Difference from transfer of revaluation
reserve for land
Balance at beginning of period
Fluctuation in the period

Balance at end of period
Foreign exchange translation
adjustments
Balance at beginning of period
Fluctuation in the period

Balance at end of period
Total accumulated other comprehensive
incomeBalance at beginning of period
Fluctuation in the period
Fluctuations other thanstockholders' equity in the period24Consolidated Results for the Full Year
Ended March 31, 2013

Previous Full Year
April 1, 2011 to March 31, 2012

Current Full Year
April 1, 2012 to March 31, 2013(net)
Total fluctuation in the period(1,446)

3,824

23,23927,064

2,053

3,258

Fluctuations other than stockholders'equity in the period (net)

1,204

719

Total fluctuation in the period

1,204

719

3,258

3,977

269,380

282,145

Dividends(7,370)(6,137)

Net income

19,492

5,865

(383)

(27)

Disposal of treasury stock

5

10

Difference from transfer ofrevaluation reserve for land

388

5,184

Increase from addition of
consolidated subsidiaries
accompanying changes in scope of
consolidation

877

1,124

Increase due to mergers between
consolidated and non-consolidated
subsidiaries―

118

Increase from reduction of
consolidated subsidiaries
accompanying changes in scope of
consolidation0―

Fluctuations other than stockholders'equity in the period (net)

(242)

4,544

12,766

10,681

282,145

292,826

Balance at end of period
Minority interests
Balance at beginning of period
Fluctuation in the period

Balance at end of period
Total net assets
Balance at beginning of period
Fluctuation in the period

Acquisition of treasury stock

Total fluctuation in the period
Balance at end of period25Consolidated Results for the Full Year
Ended March 31, 2013

4. Consolidated Cash Flows Statement(Units: millions of yen)Previous
Full Year
April 1, 2011 toMarch 31, 2012

Current
Full Year
April 1, 2012 toMarch 31, 2013

Cash flows from operating activities
Income before income taxes

38,195

10,764

Depreciation

17,82018,282(Gain) loss from the sale of investment securities―(1,343)

Reversal of reserve for legal actions

―

(802)

688

17,392

Loss on contracts

2,863

―

(Gain) loss on valuation of investment securities

2,166

―

Amount amortized for prior service cost

706―

Interest and dividend income(953)(2,377)

Interest expenses

1,652

2,097

(Increase) decrease in notes and accounts receivable(30,305)

6,025(Increase) decrease in inventories(14,485)

12,702

Increase (decrease) in notes and accounts payable

21,159(44,837)

Other

3,538

3,602

Subtotal

43,04521,506

Interest and dividends received

1,438

2,240

Interest expenses(1,660)(2,038)

Payments for income taxes(19,514)(19,047)

23,3092,660(24,227)(22,052)

Proceeds from sale of securities

768

1,362

Other

788

1,029

(22,671)(19,660)

Loss on impaired assets

Net cash provided by operating activities
Cash flows from investing activities
Acquisition costs associated with fixed assets

Net cash used in investing activities

26

Consolidated Results for the Full Year
Ended March 31, 2013

Previous
Full Year
April 1, 2011 toMarch 31, 2012

Current
Full Year
April 1, 2012 toMarch 31, 2013

Cash flows from financing activities
Net increase (decrease) in short-term loans

6,246

16,393―

10,000

Proceeds from long-term debt

27,213

15,416

Repayments for long-term debt

(4,416)(44,429)

Cash dividends paid

(7,354)(6,120)

(49)

(426)

(1,763)(2,263)

19,879(11,428)

Effect of exchange rate changes on cash and cash
equivalents

(649)

2,073

Net increase (decrease) in cash and cash equivalents

19,867(26,356)

Cash and cash equivalents at beginning of year

51,70072,376809

327

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

128

Decrease due to exclusion of previously consolidated
entities(0)―72,376

46,476

Increase (decrease) in the amount of commercial paper

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

Increase due to new consolidated companies

Cash and cash equivalents at end of year27

Consolidated Results for the Full Year
Ended March 31, 2013

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 Estimates and Changes to Accounting Policies that are Difficult toDifferentiate)
In accordance with the revisions to the Corporation Tax Act, the Group and its domestic consolidated subsidiaries haveused the post-revision depreciation method for tangible fixed assets as of the first quarter of the current consolidated
fiscal year under review. This only applies to those tangible fixed assets acquired after April 1, 2012.
The impact of this change on the profit and loss figures for the current consolidated fiscal year under review is negligible.

(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”.

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, ion accelerators, medical machines and equipment,
plasma coating systems for FPDs, precision forgings, control components,
defense equipment, machining tools

Construction Machinery

Hydraulic excavators, mobile cranes, road machinery

Industrial Machinery

Forging machines, material handling systems, logistics systems, automatedparking 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, agitation tanks, air-conditioning equipment, foodprocessing machinery28

Consolidated Results for the Full Year
Ended March 31, 2013

2. Information Regarding Net Sales, Profits, Assets, Liabilities, and Other Items by Reporting Segment
Previous Full Year (April 1, 2011, to March 31, 2012)(Units: millions of yen)Segment
Item

A

B

C

D

E

F

80,683

58,111

Subtotal

Other1

Total

G2

H

Net sales(1) Sales to externalcustomers

93,206 144,145 158,942(2) Internal sales
betweensegments or
exchanges

2,310

18

321

90

Total

95,516 145,561 158,960

81,00458,201

4,238

8,293

9,499

10,935

104,660 144,859 143,153

59,344

79,26660,241 591,524

Segment profit

3

Segment assets

1,416

12,507

80,116 615,202

607

4,763

80,723 619,965
645,4788,898 624,100

2,886

7,649

11,784 631,749
1,631

47,10945,599 637,123― 624,100―(7,649)(7,649) 624,100
25

47,13554,718 691,841

Other categories
Depreciation expense

3,750

5,063

3,929

1,536

2,081

1,026

17,385435

17,820―17,820

Increase in tangible
and intangible assets

7,516

3,488

5,901

825

924

853

19,508175

19,682―

19,682

Segments:
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.

29

Consolidated Results for the Full Year
Ended March 31, 2013

Current Full Year (April 1, 2012, to March 31, 2013)(Units: millions of yen)Segment
Item

A

B

C

D

E

F

69,64946,013

Subtotal

Other1

Total

G2

H

Net sales(1) Sales to externalcustomers

91,174 139,218 152,773(2) Internal sales
betweensegments or
exchanges

2,113

23

239

86

Total

93,287 140,951 152,796

69,88846,09979,084 582,105

11,333 593,437

2,767

6,132

5,358

2,366

5,575

1,361

106,582 138,072 158,186

46,383

52,84861,533 563,604

Segment profit

3

Segment assets

1,733

7,665

78,584 577,410

501

4,694

29,8628,460 585,871

2,873

7,567

31,22449,006 612,611― 585,871―(7,567)(7,567) 585,871
64

31,28835,113 647,724

Other categories
Depreciation expense

4,272

5,137

4,526

1,419

1,663

913

17,930353

18,282―

18,282

Increase in tangible
and intangible assets

7,395

6,516

12,983

1,198

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.

30

Consolidated Results for the Full Year
Ended March 31, 2013

(Per Share Information)
Previous Full Year
April 1, 2011 toMarch 31, 2012

Current Full Year
April 1, 2012 toMarch 31, 2013

Net assets per share

454.43 yen

470.69 yen

Net income per share

31.75 yen

9.56 yen

Note that EPS adjusted for full dilution is not presented because there are noresidual shares.
The basis for calculation of net income per share is as follows:
Previous Full Year
April 1, 2011 toMarch 31, 2012

Current Full Year
April 1, 2012 toMarch 31, 2013

19,492 million yen

5,865 million yen――

Net income for common stock

19,492 million yen

5,865 million yen

Average number of outstanding
shares for the term

613,953,000 shares

613,696,000 shares

Net income for the period
Value not attributable to common
stockholders(Subsequent Events of Significant Importance)
No events are noted.

31

Consolidated Results for the Full Year
Ended March 31, 2013

6. Orders Received, Sales, and Balance of Orders Received, by Segment
Orders Received(Units: millions of yen)Segment

April 1, 2011 toMarch 31, 2012
AmountApril 1, 2012 toMarch 31, 2013%

AmountY/Y Change%

Amount%Machinery Components

95,082

16.6

89,17616.2(5,906)(6.2)

Precision Machinery

143,918

25.2

134,406

24.4(9,511)(6.6)

Construction Machinery

162,35928.4

151,195

27.4(11,164)(6.9)

Industrial Machinery

69,607

12.2

63,631

11.6(5,976)

(8.6)

Ships

6,721

1.2

12,258

2.2

5,537

82.4

Environmental Facilities & Plants

85,006

14.9

91,364

16.6

6,358

7.5

Others

8,594

1.5

8,662

1.6

68

0.8

Total

571,285100.0

550,691

100.0(20,594)

(3.6)

Sales
(Units: millions of yen)Segment

April 1, 2011 toMarch 31, 2012
AmountApril 1, 2012 toMarch 31, 2013%

AmountY/Y Change%

Amount%Machinery Components

93,206

14.9

91,17415.6(2,033)(2.2)

Precision Machinery

144,14523.1

139,218

23.8(4,927)(3.4)

Construction Machinery

158,94225.5

152,77326.1(6,168)(3.9)

Industrial Machinery

80,68312.9

69,64911.9(11,034)(13.7)

Ships

58,111

9.3

46,0137.8(12,098)(20.8)

Environmental Facilities & Plants

80,116

12.9

78,58413.4(1,532)(1.9)

Others

8,898

1.4

8,460

1.4

(438)

(4.9)

Total

624,100

100.0

585,871

100.0(38,230)(6.1)

Balance of Orders Received(Units: millions of yen)Segment

End of Full YearAs of March 31, 2012

End of Full YearAs of March 31, 2013

AmountAmount%%Y/Y Change
Amount%Machinery Components

29,548

9.7

27,551

10.2(1,998)(6.8)

Precision Machinery

60,71319.9

55,901

20.7(4,812)(7.9)

Construction Machinery

26,167

8.6

24,588

9.1(1,579)(6.0)

Industrial Machinery

68,092

22.3

62,07323.0(6,019)

(8.8)

Ships

44,45014.5

10,695

3.9(33,755)(75.9)

Environmental Facilities & Plants

74,82024.5

87,601

32.4

12,781

17.1

Others

1,638

0.5

1,840

0.7

202

12.3

Total

305,426100.0

270,249

100.0(35,179)(11.5)

32