Sumitomo Heavy Industries, Ltd.
CONSOLIDATED FINANCIAL REPORTFor the Full Year Ended March 31, 2015

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, 2015

Summary of Consolidated Financial Results
For the Full Year Ended March 31, 2015
Presented May 8, 2015

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 26, 2015
June 29, 2015
June 26, 2015
Yes
Yes (for analysts)

1. FY 2014 Consolidated Results (April 1, 2014, to March 31, 2015)(1) Business Results(Unit: million yen)
Current Full Term
April 1, 2015
to March 31, 2014

Previous Full Term
April 1, 2014
to March 31, 2013

% change% change

Net sales

667,099

8.4

615,271

5.0

Operating income

45,99834.0

34,3299.7

Ordinary income

45,11336.7

33,0006.5

Net income

24,34836.1

17,891

205.1

39.71

29.17

Fully diluted net income per share――

Return on equity (ROE, %)

7.1

5.8

Return on assets (%)

6.0

4.8

Ordinary income to net sales (%)

6.9

5.6

Net income per share (yen)Note: Comprehensive income:Fiscal year ended March 31, 2015: 39,922 million yen (-5.4%)
Fiscal year ended March 31, 2014: 42,210 million yen (167.4%)
Reference: Equity method investment profit and loss:
Fiscal year ended March 31, 2015: (1,549 million yen gain)
Fiscal year ended March 31, 2014: (1,201 million yen gain)2

Consolidated Results for the Full Year
Ended March 31, 2015

(2) Financial Position(Unit: million yen)
End of Current Full Year
March 31, 2015

End of Previous Full Year
March 31, 2014

Total assets

786,027

724,182

Net assets

365,101

331,059

45.8

45.1

587.37532.28Equity ratio (%)
Net assets per share (yen)Reference: Equity:
Fiscal year ended March 31, 2015: 360,079 million yen
Fiscal year ended March 31, 2014: 326,433 million yen(3) Cash Flows(Unit: million yen)
Current Full Year
April 1, 2014 toMarch 31, 2015

Previous Full Year
April 1, 2013 toMarch 31, 2014

Cash flows from operating activities

62,17063,661

Cash flows from investing activities(14,112)(27,622)

Cash flows from financing activities(36,889)(9,498)Cash and cash equivalents at end of period

90,32476,418

2. Dividends(Unit: yen)
Year Ended March 31,
2014Year Ended March 31,
2015

Year Ending March 31,
2016 (forecast)

―

―

―

Second quarter

3.00

5.00

7.00

Third quarter

―

―

―

End of term

4.00

7.00

7.00
14.00

Annual dividends per shareFirst quarter

Annual dividends

7.00

12.00

Total dividends (million yen)

4,293

7,356

Payout ratio (consolidated, %)

24.0

30.2

Net assets dividend yield (consolidated, %)

1.3

2.0

3

28.6

Consolidated Results for the Full Year
Ended March 31, 2015

3. FY 2015 Consolidated Forecasts (April 1, 2015, to March 31, 2016)(Unit: million yen)
Second Quarter (Cumulative)
April 1, 2015 to September 30,
2015

Full Year
April 1, 2015 to March 31, 2016

Net sales

330,000% change
7.7

700,000% change
4.9%

Operating income

20,0000.3%

52,500

14.1%

Ordinary income

19,500(2.5%)

50,000

10.8%

Full-year net income attributed to shareholders of
the parent company

11,000(10.4%)

30,00023.2%

Projected net income per share (yen)

17.94

4

48.94

Consolidated Results for the Full Year
Ended March 31, 2015

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):Yes(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, 2015
As of March 31, 2014

614,527,405 shares
614,527,405 shares(ii) Number of treasury shares at end of fiscal period:
As of March 31, 2015
As of March 31, 2014

1,495,994 shares
1,248,184 shares(iii) Average number of shares during fiscal period:
As of March 31, 2015
As of March 31, 2014

613,122,326 shares
613,410,540 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.

5Consolidated Results for the Full Year
Ended March 31, 2015

Supplementary Materials – Table of Contents

I.

Results of Operations ....................................................................................................................... 7
1. Analysis of Operating Results .......................................................................................................... 7
2. Analysis of Financial Condition ...................................................................................................... 10
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 ...............................................11

II. Status of the Business Group ....................................................................................................... 12
III. Management Policies ..................................................................................................................... 14
1. Basic Management Policy .............................................................................................................. 14
2. Medium- to Long-Term Management Strategy, Target Management Benchmarks and Action Items
for the Group................................................................................................................................... 14
IV. Selection of Accounting Standards .............................................................................................. 16
V. Consolidated Financial Statements ................................................................................................. 17
1. Consolidated Balance Sheets.......................................................................................................... 17
2. Consolidated Income Statements and Consolidated Statement of Comprehensive Income ......... 21
3. Consolidated Statements of Changes to Stockholders' Equity ....................................................... 23
4. Consolidated Cash Flows Statement .............................................................................................. 25
5. Items of Special Note Concerning the Consolidated Financial Statements .................................... 27(Significant Events or Conditions that Question the Premise of a Going Concern) ......................... 27(Changes to Accounting Policies) ..................................................................................................... 27(Changes to Accounting Estimates and Changes to Accounting Policies that are Difficult toDifferentiate) ...................................................................................................................................... 27(Segment Information) ...................................................................................................................... 28(Per Share Information) .................................................................................................................... 32(Subsequent Events of Significant Importance) ............................................................................... 32
VI. Supplemental Information ............................................................................................................... 33
Orders Received, Sales, and Balance of Orders Received, by Segment ........................................... 33

6

Consolidated Results for the Full Year
Ended March 31, 2015

I. Results of Operations
1. Analysis of Operating Results(1) Summary of Economic Climate during the Consolidated Fiscal Year
The Japanese economy in the current consolidated fiscal year under review saw a delayed recovery from the slowdown indemand after the spike caused by the increase in sales tax (i.e. a rush to put in orders prior to the increase in sales tax).
On the other hand, capital investment levels remained relatively strong as corporate financial performance improved withthe weaker Japanese yen. Outside Japan, there were clear signs of economic recovery in the United States. On the other
hand, the Eurozone slowed with the situation in Ukraine worsening, while the Chinese economy remained stagnant
primarily due to the Chinese government’s stronger stance on investment controls. As a result, the global economy as awhole trended towards a gradual slowdown.
Set against this economic backdrop, the Group launched its new “Medium-Term Management Plan 2016” during thecurrent consolidated fiscal year under review and focused on the following core strategies in its business operations:(i) Achieve “Steady growth” to Ensure that a Foundation for Sustainable Growth is Established(a) “Globalization (Expansion)”In the plastics machinery business, the ties with the Group’s German subsidiary, Sumitomo (SHI) Demag Plastics
Machinery, in the areas of sales and development were strengthened for electric injection molding machines. In the gear
reducer business, the Group pushed forward with the integration of a product platform with its Belgium subsidiary, Hansen
Industrial Transmissions NV. Finally, in the construction machinery business, the Group strengthened its partnership with
CNH Industrial N.V. through the licensing of technology relating to hydraulic excavators.
(b) “Innovation (Change)”
Under this tagline, the Group continued to demonstrate its product development capabilities. For example, in the gear
reducer business, the Group launched a gear motor that utilizes an energy-saving technique that satisfies the IE3 Class
Premium Efficiency standard. In the industrial machinery business, the world’s first small-scale vertically arranged proton
therapy system was delivered to a treatment facility. Moreover, the Group made a full-fledged effort to strengthen its
aftermarket business across all business segments, a key topic raised in the medium-term management plan.
(c) “Group Synergies (Connect)”
The Group was able to achieve sales expansion of hybrid hydraulic excavators through product differentiation, which isbased on system control technologies that were internally developed over the years. Moreover, in order to enhancecompetitiveness levels across each business of the Group, a new R&D Center was established at the Ehime Works. By
doing so, the Group established a foundation to further strengthen technological research activities in such areas asmaterials and surface treatments.
(d) “Growth of Energy Related Segments”
In regard to energy-related businesses, which has been designated a growth area in the medium-term management plan,
the Group worked to increase order levels for products in this area. As a result, the Group received an order for Japan’slargest and most efficient biomass-fueled power generating facility that utilizes wood chips as a fuel source.
(ii) "Return to higher levels of profitability"
In the plastics machinery business, the electric-driven injection molding machine specifically designed for light guiding
plates that was introduced in the previous consolidated fiscal year saw a boost in sales to smart phone manufacturers.
This contributed to the sales and income level and helped improve the profit margin of the Precision Machinery Segment..
The profit margin in overall segments of the Group improved as well..
(iii) "Persistent efforts for operational quality improvements"
In order to strengthen the Group’s product quality management functions, an organizational change was made to upgrade
the Department of Corporate Quality in the Head Office to the Corporate Quality Group. In the area of safety, the Grouplaunched the second execution phase of the Health and Safety Reform Plan, with the aim to strengthen health and safety
management capabilities and to eliminate workplace injuries.

7

Consolidated Results for the Full Year
Ended March 31, 2015(iv) Thoroughly Implement Compliance Measures
In line with the Group’s guiding principle of “Prioritizing Compliance Above All Else”, various efforts to ensure that theimportance of compliance is understood across the entire Group were carried out. Outside of Japan, compliance training
was conducted for employees of overseas affiliated companies in order to enhance the Group’s focus on compliance. In
Japan, training for personnel before overseas posting as well as educational seminars on both domestic and internationalanti-trust laws and anti-corruption laws were held.

As a result of these management strategies, orders for the current consolidated fiscal year under review increased by
12.5% as compared to the previous fiscal year to finish at a record-setting JPY740.8 billion. Sales also increased by 8.4%
as compared to the previous fiscal year to finish at another record-setting JPY667.1 billion.
Turning to income, operating income finished at JPY46.0 billion, a 34% increase as compared to the previous fiscal year,
and ordinary income finished at JPY45.1 billion, a 36.7% increase as compared to the previous fiscal year. Full-year net
income also increased by 36.1% as compared to the previous fiscal year to finish at JPY24.3 billion. The improvements in
profitability were mainly as a result of an increase in sales. Finally, the after-tax ROIC ended at 6.5%*.
On a non-consolidated basis, the fiscal year under review saw orders finish at JPY237.4 billion and sales finish at
JPY192.2 billion. Further, the Group posted a non-consolidated operating income of JPY8.2 billion, a non-consolidated
ordinary income of JPY17.9 billion and a non-consolidated net income of JPY10.9 billion for the fiscal year under review.
After considering the aforementioned financial performance and the Group’s fiscal condition, the dividend from retained
earnings for the current consolidated fiscal year under review has been set at JPY12 per share, an increase of JPY5 ascompared to the previous fiscal year. It should be noted that this figure already includes the JPY5 per share that wasannounced as an interim dividend.

* ROIC is an abbreviation for Return on Invested Capital, and it measures the amount of profit generated from invested
capital (the sum of shareholders’ equity and interest-bearing liabilities) as well as profitability as compared to thecost of capital.
(2) Group Results by Segment(i) Machinery Components
Although there was a slowdown in the Eurozone and China markets, there was continued growth in the domestic market
and positive movement in market conditions for both North America and other regions. As a result, both orders and sales
increased as compared to the previous fiscal year.
In actual figures, the segment as a whole saw orders increase by 6% as compared to the previous fiscal year to finish at
JPY104.7 billion, and sales increase by 3% as compared to the previous fiscal year to finish at JPY102.6 billion. In
addition, the segment posted an operating income of JPY6.6 billion, a 9% increase as compared to the previous fiscal
year.
(ii) Precision Machinery
With respect to plastics machinery, strong demand from the IT industry in Asia as well as positive market conditions inJapan as well as the Eurozone resulted in increases in both orders and sales as compared to the previous fiscal year. In
other product areas, orders and sales also increased as compared to the previous fiscal year mainly as a result of arecovery in demand for semiconductor-related equipment.
In actual figures, the segment as a whole saw orders increase by 15% as compared to the previous fiscal year to finish at
JPY154.6 billion, and sales increase by 10% as compared to the previous fiscal year to finish at JPY146.4 billion. In
addition, the segment posted an operating income of JPY13.5 billion, a 43% increase as compared to the previous fiscal
year.

8

Consolidated Results for the Full Year
Ended March 31, 2015(iii) Construction Machinery
Despite reduced demand from the China market, the hydraulic excavator business was able to exceed previous fiscal
year figures for orders and sales mainly due to strong demand from the domestic Japanese market as well as improved
performance in the North American market after a round of inventory adjustments. With respect to the mobile cranebusiness, although orders increased as compared to the previous fiscal year, sales were down mainly due to a slowdown
in the North American market caused by the cold spell that gripped certain parts of the region at the beginning of the fiscal
year.
In actual figures, the segment as a whole saw orders increase by 7% as compared to the previous fiscal year to finish at
JPY206.5 billion, and sales increase by 5% as compared to the previous fiscal year to finish at JPY202.0 billion. In
addition, the segment posted an operating income of JPY11.9 billion, a 25% increase as compared to the previous fiscal
year.
(iv) Industrial Machinery
The material handling business posted improved results for orders as demand from the domestic shipbuilding sector
showed signs of recovery. In the turbine/pump business, orders and sales increased as compared to the previous fiscal
year as demand for turbines from the overseas power generation sector remained high.
In actual figures, the segment as a whole saw orders increase by 6% as compared to the previous fiscal year to finish at
JPY89.6 billion, and sales fall by 4% as compared to the previous fiscal year to finish at JPY75.8 billion. In addition, thesegment posted an operating income of JPY5.8 billion, a 46% increase as compared to the previous fiscal year.
(v) Ships
Although the overall shipping industry remained relatively flat, the recovery of the market for medium-size tankers which
the Group specializes in and the weakening Japanese yen resulted in the segment receiving orders for nine vessels
during the fiscal year, an improvement of four vessels as compared to the previous fiscal year. With regard to sales, threevessels were handed over during the current fiscal year, an increase of two vessels from the previous fiscal year.
In actual figures, the segment as a whole saw orders increase by 95% as compared to the previous fiscal year to finish at
JPY61.9 billion, and sales increase by 76% as compared to the previous fiscal year to finish at JPY26.1 billion. In addition,
the segment posted an operating loss of JPY1.2 billion.
(vi) Environmental Facilities & Plants
Orders and sales figures for the energy plant business were better than in the previous fiscal year as the number ofbiomass-fueled electricity generation boiler projects in Japan continued to rise. On the other hand, orders and sales forthe water treatment plant business fell as compared to the previous term due to the lack of new O&M (Operation &Maintenance) service proposals.
In actual figures, the segment as a whole saw orders increase by 9% as compared to the previous fiscal year to finish at
JPY113.4 billion, and sales increase by 22% as compared to the previous fiscal year to finish at JPY105.5 billion. In
addition, the segment posted an operating income of JPY7.5 billion, a 24% increase as compared to the previous fiscal
year.
(3) Outlook for the Upcoming Fiscal Year (Ending March 31, 2016)
The economic environment that forms the backdrop of the Group’s operations remains murky. In the domestic market,
expectations for a positive growth cycle are increasing primarily because strong corporate results have given promise to arecovery in capital investments and increased wages. Outside of Japan, although the U.S. market is expected to remain
on a positive track, uncertainty factors such as the prolonged stagnation of the Chinese economy as well as geopoliticalrisks and debt problems in Europe continue to hinder expectations.

In this type of environment, the Group is accelerating the implementation of the various strategies set forth in the Medium
Term Management Plan 2016 that was commenced in the previous fiscal year, with the aim to meet the final objectives in
the plan one year in advance.

9Consolidated Results for the Full Year
Ended March 31, 2015

As of the publication date of this document, the outlook for the upcoming fiscal year ending March 31, 2016, is as follows:
Consolidated Results

AmountAs Compared to FY 2014

Sales

JPY700.0 billion+4.9%

Operating income

JPY52.5 billion+14.1%

Ordinary income

JPY50.0 billion+10.8%Net income attributed to shareholdersof the parent company

JPY30.0 billion+23.2%(The above figures are calculated at an exchange rate of JPY118 and JPY130 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 JPY786.0 billion, an increase of JPY61.8
billion from the end of the previous consolidated fiscal year. This was mainly due to the JPY13.0 billion increase in tradenotes and accounts receivable, the JPY25.0 billion increase in marketable securities, the JPY9.6 billion increase ininventory assets, and the JPY8.0 billion increase in tangible fixed assets exceeding the JPY10.4 billion decrease in cash
and deposits.
Total liabilities rose to JPY420.9 billion, an increase of JPY27.8 billion as compared to the end of the previous
consolidated fiscal year. This was mainly due to the JPY16.2 billion increase in trade notes and accounts payable, and the
JPY14.2 billion increase in advances received exceeding the JPY23.8 billion decrease in interest-bearing liabilities(interest-bearing liabilities as a ratio to total assets decreased by 4.2% to 10.6%).
Net assets at the end of the consolidated fiscal year under review stood at JPY365.1 billion, an increase of JPY34.0 billion
from the end of the previous consolidated fiscal year. This was mainly due to increases of JPY18.7 billion in retained
earnings, and JPY14.6 billion in the foreign currency translation adjustment.
Consequently, the shareholders’ equity ratio for the consolidated fiscal year under review improved by 0.7 points from theend of the previous consolidated fiscal year to finish at 45.8%.

(2) Cash Flow Conditions
The cash and cash equivalent balance at the end of the consolidated fiscal year under review stood at JPY90.3 billion, an
increase of JPY13.9 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)
The increase in cash flow from operating activities was JPY62.2 billion (as compared to an increase in cash flow of
JPY63.7 billion in the previous fiscal year). The main sources of cash flow were net income before taxes and otheradjustments of JPY38.7 billion, depreciation of JPY16.3 billion and the JPY9.8 billion increase in trade payables. The
main reason for cash outflow from operating activities was the JPY16.3 billion payment of corporate and other taxes.
(Cash Flow from Investing Activities)
The decrease in cash flow as a result of investing activities was JPY14.1 billion (as compared to a decrease in cash flowof JPY27.6 billion in the previous fiscal year). The main reasons for the cash outflow were the JPY17.3 billion used toacquire fixed assets and the JPY1.4 billion used for loans.
(Cash Flow from Financing Activities)

10Consolidated Results for the Full Year
Ended March 31, 2015

The decrease in cash flow as a result of financing activities was JPY36.9 billion (as compared to a decrease in cash flowof JPY9.5 billion in the previous fiscal year). The main reasons for the cash outflow were the JPY29.5 billion (net amountwith cash inflow of loans) used to repay loans and the JPY5.5 billion used to pay dividends.
Trends in the Group’s cash flow indices are provided below:
FY 2010

FY 2011

FY 2012FY 2013

FY 2014

Shareholders’ equity ratio (%)

42.6

40.3

44.6

45.1

45.8

Shareholders’ equity ratio on amarket price basis (%)

53.2

40.8

36.1

35.5

61.4

Redemption period (years)

1.9

4.1

37.0

1.7

1.3

Interest coverage ratio (multiples)

24.2

14.0

1.3

24.5

29.3

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 Fiscal Year Ending March 31, 2016
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. In the current medium-term management plan, the Group has set a target of 30%
for the consolidated dividend payout ratio.
For the consolidated fiscal year under review, the Group is forecasting a dividend of JPY12 per share (inclusive of the
JPY5 per share interim dividend), an increase of JPY5 per share from the previous year.
For the fiscal year ending March 2016, the Group is forecasting a dividend of JPY14 per share.

11

Consolidated Results for the Full Year
Ended March 31, 2015

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, Ltd. is responsible for the overall manufacturing,
distribution, and after-sales service of the product line. Sumitomo (SHI) Demag Plastics Machinery North America, Inc. is
responsible for the overall distribution of the product line in the North American market, and Sumitomo (SHI) Demag
Plastics Machinery GmbH is responsible for manufacturing and distribution of the product line in Europe.
Sumitomo Heavy Industries, Ltd. is responsible for overall manufacturing and distribution of laser processing systems,
cryocoolers, precision positioning equipment, control system equipment, and defense equipment.
In the area of semiconductor production equipment, both Sumitomo Heavy Industries and SEN Corporation
responsible for overall manufacturing and distribution.

*1

are

Finally, Sumitomo Nacco Materials Handling Co., Ltd. is responsible for the overall manufacturing and distribution of
forklift products.
*1

As of April 1, 2015, SEN Corporation has been renamed Sumitomo Heavy Industries Ion Technology Co., Ltd.

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; Sumiju SCE (Xiamen)
Construction Machinery Co., Ltd. is responsible for the distribution 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 for the North American
market.

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.

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.

12

Consolidated Results for the Full Year
Ended March 31, 2015

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.

13

Consolidated Results for the Full Year
Ended March 31, 2015

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 the recovery
track as the government continues to implement measures to stimulate the economy, the weaker Japanese yen drives
export growth and capital investment levels increase as production levels return to prior levels. However, it will take sometime for personal consumption and capital investment levels to return to a sufficient level. Overseas, the situation remains
much murkier as although the U.S. economy has trended positively, emerging markets, in particular China that has been
the engine of the global economy, have slowed down, and the delayed recovery of the Eurozone from its debt crisis has
slowed the pace of an overall recovery.
(1) “Medium-Term Management Plan 2016”
In the “Medium-Term Management Plan 2016” that was launched in the previous fiscal year, the Group established atarget of JPY700.0 billion in sales, and an operating profit margin of 7.5% by FY2016. ROIC continues to be the Group’s
key performance indicator and the plan calls for ROIC to remain greater than 7%.
In order to achieve these targets, the Group is aiming to become a company to supply first-class products. However, thekey point here is that the Group is not aiming to grow for the sake of growing. Rather, it will focus on achieving steady
growth to build a foundation that ensures a return to high levels of profitability.
Also, across the wide range of businesses that the Group operates in order to meet the diverse needs of its customers,
the Medium-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 is looking to actively develop this area of the business.
Moreover, as the Group acts on the plan, it will continue to maintain fiscal discipline while targeting a dividend payout ratioof 30% during the three-year implementation period of the plan.

(2) Key Areas of Focus for the Fiscal Year Ending March 31, 2016
FY2015 is the second implementation year of the Medium-Term Management Plan 2016. As a result of solid order levels
received in the previous fiscal year, a positive atmosphere of operational growth has enveloped the Group. As broader
economic trends do not allow for optimism, the Group will focus on executing the following initiatives during the fiscal year.
(i) Achieve steady growth to ensure that a foundation for sustainable growth is established14

Consolidated Results for the Full Year
Ended March 31, 2015

As a business expansion strategy, the Group will aim to form organic synergies between the overseas network of the
mass-produced machinery business where investments have primarily been made to date with other facilities andfunctions both domestically and outside of Japan. Through this, the Group will expand business opportunities. In addition,
focused and timely investments will be made in necessary areas to ensure that synergies are strengthened in an
accelerated manner. Although strategies will differ because of the external environment and business environment ofeach operation, an optimal scenario for the overall Group will be established and every effort will be made to make this areality.
In order to expand the heavy machinery business, the unique technologies developed for each product type will be
refreshed. At the same time, the strengthening of product capabilities will be promoted through the use of common
technologies in areas such as materials and controls. Innovation activities in the manufacturing area will also be promoted.
For example, innovation activities will be pursued in areas of production technologies such as bonding and processing,which form the foundations of the manufacturing process, with the aim to achieve sustainable improvement andmanufacturing breakthroughs. In addition, innovation activities in engineering areas will also be pursued.
Moreover, the strengthening of aftermarket businesses has been positioned as a common goal across the entire Group aspart of a broader strategy to form synergies across the various business groups. More specifically, the number of locations
that services this function will be increased, and areas such as human resources and informatization, which form the basisof the service, will be strengthened. By doing so, sales process innovation that aims to expand the business will bepromoted.
(ii) Return to higher levels of profitability
As part of the Group’s portfolio management activities, the growth stage and external environment of each business groupwill be taken into account before clearly establishing target profitability levels and key priorities. With this understanding,management resources can be re-distributed accordingly and the business can be restructured in an appropriate manner.
Aggressive target levels will be set for the Group’s leading business groups such as machinery components and precision
machinery in order to drive high profit levels. At the same time, baseline targets for all businesses, segments, producttypes and regions will be established. Through this, the Group will aim to transform itself into a highly profitable company.
(iii) Persistent efforts for operational quality improvements(a) Improvements to Product Quality
The Group will implement a management style that puts quality first through such efforts as creating stronger cooperation
between the Head Office and the various businesses to ensure that every effort is being made to increase product quality.
(b) Thorough Implementation of 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. With this in mind, various compliance-related activities are carried out across theGroup, both in Japan and internationally. During the upcoming period, education and training to improve awareness levels
among the directors and employees of all Group companies will be continued to ensure that recognition of the importanceof compliance permeates across the entire Group.
(c) Safety-Related Activities
FY2015 marks the second year of implementing the second phase of the Group’s Basic Health and Safety Improvement
Plan. The Group plans to set detailed objectives to achieve the overall goals of the plan, strengthen health and safety
management functions, and work to eliminate occupational injuries during the fiscal year.

15

Consolidated Results for the Full Year
Ended March 31, 2015

IV. Selection of Accounting Standards
The Group plans to continue utilizing Japanese accounting standards for the foreseeable future. With regard to the use ofinternational accounting standards in the future, the Group will take into account the situation across various domestic andinternational markets and take appropriate action if deemed necessary.

16Consolidated Results for the Full Year
Ended March 31, 2015

V. Consolidated Financial Statements
1. Consolidated Balance Sheets(Unit: million yen)
End of Full YearAs of March 31, 2014

End of Full YearAs of March 31, 2015

AmountAmountAssetsCurrent assets
Cash and deposits

67,82657,423

Notes and accounts receivable

181,961

194,916

Marketable securities

10,00035,000

Products

63,81967,920Works in progress

49,14454,762

Raw materials and stock

31,28631,154

Deferred income taxes

13,201

17,176

Other

18,93434,852

Allowance for doubtful accounts(1,217)(1,202)

Total current assets

434,954492,000

125,920130,291

Accumulated depreciation(75,945)(79,737)

Buildings and structures (net)49,97550,553

Machinery and transportation tools

143,501

155,703(93,949)(101,286)

Machinery and transportation tools (net)49,552

54,417

Land

109,265

108,749

Construction in progress

2,884

3,288

Other

36,48641,143(27,877)(29,849)

8,609

11,294

220,284

228,302

Other

8,648

9,333

Total intangible fixed assets

8,648

9,333

Investment securities

26,74529,509Long-term loans

13,786

8,340

Fixed assets
Tangible fixed assets
Buildings and structures

Accumulated depreciation

Accumulated depreciation
Other (net)Total tangible fixed assets
Intangible fixed assets

Investments and other assets

17

Consolidated Results for the Full Year
Ended March 31, 2015

End of Full YearAs of March 31, 2014

End of Full YearAs of March 31, 2015

AmountAmountDeferred income taxes

10,118

9,607

Other

11,134

11,121

Allowance for doubtful accounts(1,486)(2,184)

Total investments and other assets

60,29656,392289,228

294,027

724,182

786,027

Total Fixed assets
Total assets

18

Consolidated Results for the Full Year
Ended March 31, 2015

(Unit: million yen)
End of Full YearAs of March 31, 2014

End of Full YearAs of March 31, 2015

AmountAmountLiabilities
Current liabilities
Notes and accounts payable

124,211140,436

Short-term bank loans

52,817

42,110Long-term loans due within one year

16,855

15,201

Corporate bonds redeemable within one year

10,000―

Income tax payable

6,903

8,590

Advance payments received on contracts

30,493

44,698

Allowance for guaranteed construction

6,780

7,985

Provision for loss on construction orders

1,691

1,518

Provision for loss on operations

1,936

3,542

Provision for loss on operation transfers―

742

Allowance for compensatory damages

―

565

Other

37,44647,385

Total current liabilities

289,130

312,771―

10,000Long-term debt due after one year

27,761

16,333

Provision for loss on operation transfers

461

161

Provision for loss on product liability claims

36

42

Defined benefit liability

40,037

46,162

Deferred income taxes on revaluation

24,60822,293Other

11,09013,163

Total fixed liabilities

103,993108,155

393,123

420,926

Capital stock

30,87230,872

Capital surplus

23,78923,789Retained earnings

221,101

239,815

(632)

(764)

275,130

293,712

Unrealized gains on securities

3,753

5,437

Profit (loss) on deferred hedge(379)(2,229)Fixed Liabilities
Bonds

Total liabilities
Net assets
Shareholders' equity

Treasury stock
Total Shareholders' equity
Accumulated other comprehensive income

19Consolidated Results for the Full Year
Ended March 31, 2015

End of Full YearAs of March 31, 2014

End of Full YearAs of March 31, 2015

AmountAmountRevaluation reserve for land

38,27240,476

Foreign currency translation adjustments

11,993

26,641Re-measurement of defined benefit plans(2,336)(3,957)

Total accumulated othercomprehensive income

51,304

66,367

Minority interests

4,626

5,022

Total net assets

331,059

365,101

724,182

786,027

Total liabilities and net assets

20

Consolidated Results for the Full Year
Ended March 31, 2015

2. Consolidated Income Statements and Consolidated Statement of Comprehensive
IncomeConsolidated Income Statements(Unit: million yen)Previous Full Year
April 1, 2013 toMarch 31, 2014

Current Full Year
April 1, 2014 toMarch 31, 2015

AmountAmountNet sales

615,271

667,099

Cost of sales

483,104

516,735

Gross income

132,166

150,364

Selling, general and administrative expenses

97,837104,366

Operating income

34,32945,998Interest income

337

473

Dividend income

1,013

986

Investment gain on equity method

1,201

1,549

Gain on foreign currency exchange

998

1,807

2,731

2,028

6,280

6,843

Interest expenses

2,637

2,148

Other

4,973

5,580

Total non-operating expenses

7,609

7,728

Ordinary income

33,00045,113

1,690

3,463

Business structure improvement costs

―

1,852

Compensation expenses

―

1,071

Total extraordinary losses

1,690

6,386

Income before income taxes

31,30938,727

Corporate income tax current

12,977

16,622

Corporate income tax deferred526(2,235)

Total corporate income taxes

13,503

14,387

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

17,807

24,339(84)(9)

17,891

24,348Non-operating income

Other
Total non-operating income
Non-operating expenses

Extraordinary losses
Loss on impaired assets

Profit (loss) of minority interests
Net income

21Consolidated Results for the Full Year
Ended March 31, 2015

Consolidated Statement of Comprehensive Income(Unit: million yen)Previous Full Year
April 1, 2013 to March 31, 2014

Current Full Year
April 1, 2014 to March 31, 2015

AmountAmount

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

17,807

24,339Unrealized gains on securities

1,049

1,682

Profit (loss) on deferred hedge

168(1,889)

Revaluation reserve for land

―

2,275

22,30315,096

Adjustment to retirement benefits―(1,628)Adjustment regarding pension obligationsof consolidated overseas subsidiaries

858―

Amount applied for equity method
accounting of affiliates

25

44

Total other comprehensive income

24,403

15,582

42,21039,922Comprehensive income attributed toshareholders of the parent company

41,442

39,483Comprehensive income attributed tominority interests

768

438

Other comprehensive income

Foreign currency translation adjustments

Comprehensive income(Breakdown)22Consolidated Results for the Full Year
Ended March 31, 2015

3. Consolidated Statements of Changes to Stockholders' Equity
Previous Full Year April 1, 2013 to March 31, 2014
(Unit: million yen)
Stockholders’ equity
Capitalstock
Balance at beginning of period

CapitalsurplusRetainedearnings

Total
Stockholders'equityTreasurystock

30,872

23,789207,580(455)

261,786

30,872

23,789207,580(455)

261,786―

Cumulative effects of changes in accounting policies
Restated balance
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
Fluctuations other than stockholders' equity in the
period (net)Total fluctuation in the period

(180)

4

4

(75)

(75)
―

Balance at end of period――

13,520(176)

13,34430,872

23,789221,101(632)

275,130―(3,808)

Total net assets(9,458)

Minority interests

38,197

Total accumulated othercomprehensive income

Foreign currency translation
adjustments(562)

Adjustment regarding pension
obligations of consolidated
overseas subsidiaries

Revaluation reserve for land

2,694

Re-measurement of defined
benefit plans

Profit (loss) on deferred hedge

Balance at beginning of period
Cumulative effects of changes
in accounting policies
Restated balance

Unrealized gains on securities

Accumulated other comprehensive income

27,064

3,977

292,826
―

2,694

(562)

38,197(9,458)―(3,808)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 inscope of consolidation
Fluctuations other thanstockholders' equity in the
period (net)Total fluctuation in the period
Balance at end of period

(180)
4
(75)

―

1,059

183

75

21,451(2,336)

3,808

24,240649

24,889

1,059

183

75

21,451(2,336)

3,808

24,240649

38,233

3,753

(379)

38,272

11,993(2,336)―51,304

4,626

331,05923

Consolidated Results for the Full Year
Ended March 31, 2015

Current Full Year April 1, 2014 to March 31, 2015
(Unit: million yen)
Stockholders’ equity
Capitalstock
Balance at beginning of period

CapitalsurplusRetainedearnings

30,872

23,789221,101

30,872

23,789219,626

Cumulative effects of changes in accounting policies

Total
Stockholders'equityTreasury
stock
(632)

275,130(632)

273,655(1,475)

Restated balance(1,475)

Fluctuation in the period
Dividends(5,519)Net income

24,348(5,519)24,348Acquisition of treasury stock(135)

Disposal of treasury stock0

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

(135)

3

3

72

72

1,287

1,287

―

―

20,189(132)

20,05730,872

23,789239,815(764)

293,712

11,993(2,336)―

Total net assets

Re-measurement of defined
benefit plans

38,272

Minority interests

Foreign currency translation
adjustments(379)

Total accumulated othercomprehensive income

Revaluation reserve for land

3,753

Adjustment regarding pension
obligations of consolidated
overseas subsidiaries

Profit (loss) on deferred hedge

Balance at beginning of period
Cumulative effects of changes
in accounting policies
Restated balance

Unrealized gains on securities

Accumulated other comprehensive income

51,304

4,626

331,059(1,475)

3,753

(379)

38,272

11,993(2,336)―51,304

4,626

329,584

Fluctuation in the period
Dividends(5,519)Net income

24,348Acquisition of treasury stock
Disposal of treasury stock
Difference from transfer ofrevaluation reserve for land
Increase from addition of
consolidated subsidiaries
accompanying changes inscope of consolidation
Fluctuations other thanstockholders' equity in the
period (net)Total fluctuation in the period
Balance at end of period

(135)
3
72

1,287

1,683

(1,850)2,203

14,648(1,621)―

15,063396

15,4601,683(1,850)2,203

14,648(1,621)―

15,063396

35,516

5,437(2,229)40,476

26,641(3,957)―66,367

5,022

365,10124

Consolidated Results for the Full Year
Ended March 31, 2015

4. Consolidated Cash Flows Statement(Unit: million yen)Previous
Full Year
April 1, 2013 toMarch 31, 2014

Current
Full Year
April 1, 2014 toMarch 31, 2015

Cash flows from operating activities
Income before income taxes

31,30938,727

Depreciation

18,617

16,281

Loss on impaired assets

1,690

3,463

―

1,852

Business structure improvement costs

―

1,071

Interest and dividend income(1,350)(1,459)Interest expenses

2,637

2,148

Increase (decrease) in reserve amount

2,638

3,075

(Increase) decrease in notes and accounts receivable

6,091

6,458

(Increase) decrease in inventories

10,177(4,526)

Increase (decrease) in notes and accounts payable

Compensation expenses

2,306

9,750

Other

414

1,984

Subtotal

74,52978,825Interest and dividends received

1,398

1,791

Interest expenses(2,595)(2,121)

Payments for income taxes(9,671)(16,324)

63,661

62,170(19,050)(17,349)

Cash flow from the sale of tangible and intangible fixed
assets

1,407

1,420

Proceeds from sale of securities

1,747

841

(Increase) decrease in short-term loans

1,385

1,297

Payments of loans receivable(12,624)(1,388)Cash flow from loan recoveries

14

1,779

(502)

(710)

(27,622)(14,112)Net increase (decrease) in short-term loans(5,736)(15,432)

Increase (decrease) in the amount of commercial paper(10,000)―

Net cash provided by operating activities
Cash flows from investing activities
Cash outflow due to the acquisition of tangible andintangible fixed assets

Other
Net cash used in investing activities
Cash flows from financing activities

Proceeds from long-term debt

15,032

4,771

Repayments for long-term debt

(2,236)(18,859)―

10,000Cash flow from the issuance of corporate bonds―(10,000)(4,307)(5,533)

(260)

(42)

(1,991)(1,793)

Net cash used in financing activities(9,498)(36,889)

Effect of exchange rate changes on cash and cash
equivalents

3,401

2,812

Cash outflow due to the repayment of corporate bonds
Cash dividends paid
Payment of dividends to minority stockholders
Other

25

Consolidated Results for the Full Year
Ended March 31, 2015

Previous
Full Year
April 1, 2013 toMarch 31, 2014

Current
Full Year
April 1, 2014 toMarch 31, 2015

Net increase (decrease) in cash and cash equivalents

29,942

13,980Cash and cash equivalents at beginning of year

46,47676,418

Increase due to new consolidated companies―

46

Decrease in cash and cash equivalents due to the
exclusion of consolidated subsidiaries

―

(120)

76,41890,324

Cash and cash equivalents at end of year26

Consolidated Results for the Full Year
Ended March 31, 2015

5. Items of Special Note Concerning the Consolidated Financial Statements(Significant Events or Conditions that Question the Premise of a Going Concern)
There are no applicable items.

(Changes to Accounting Policies)(The Implementation of Accounting Standards for Retirement Benefits)
With regard to 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 Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25
dated May 17, 2012; hereinafter referred to as the “Implementation Guidance for the Retirement Benefit AccountingStandard”), Item 35 of the Accounting Standards for Retirement Benefits and Item 67 of the Implementation Guidance for
Retirement Benefit Accounting Standards has been adopted from the current consolidated fiscal year under review.
The Group reviewed the calculation methodology for retirement benefit obligations and service costs. As a result of thisreview the period attribution method for retirement benefit projections was changed from straight-line attribution to thebenefit formula. In addition, the method to set the discount rate was changed to a method that utilizes a single weighted
average discount rate that reflects the payment projection period for retirement benefits and the amount for each payment
projection period.
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 in thecalculation methodology for retirement benefit obligations and service costs has been subtracted from retained earnings.
Consequently, retirement benefit liabilities at the end of the current consolidated fiscal year under review increased by
JPY1,861 million, and retained earnings fell by JPY1,475 million. Please note that the impact of this change to operating
income, ordinary income and net income before taxes and other adjustments for the current consolidated fiscal year underreview is minimal.

(Changes to Accounting Estimates and Changes to Accounting Policies that are Difficult to Differentiate)
In the past, Sumitomo Heavy Industries, Ltd. and its domestic consolidated subsidiaries utilized the declining-balancemethod to depreciate tangible fixed assets (straight-line method was used for buildings acquired after April 1, 1998).
However, from the current consolidated fiscal year under review, the depreciation method was changed to the straight-line
method.
The current consolidated fiscal year under review marks the first year of implementing the medium-term management
plan. In accordance with the plan, the Group is looking to distribute resources to overseas locations in response to theanticipated growth of overseas markets. At the same time, for domestic locations, a shift in investment was made toensure a sustainable and stable production platform. In consideration of this, the Group decided to review the depreciation
method currently utilized and changed it to the aforementioned straight-line method as it allowed for the more accurate
reflection of the operating condition of assets as domestic production facilities shift to a stable operating platform.
Moreover, the new method ensures that cost allocations can be made more rationally.
As a result of this change, operating income, ordinary income and net income before taxes and other adjustments for thecurrent consolidated fiscal year under review has increased by JPY2,651 million as compared to using the previous
calculation methodology.

27

Consolidated Results for the Full Year
Ended March 31, 2015

(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, 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 press 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

2. Method of Calculating Net Sales, Income or Loss, Assets and Liabilities for each Reporting Segment(The Implementation of Accounting Standards for Retirement Benefits)
As mentioned previously in the “Changes to Accounting Policies” section, the methodology used to calculate retirement
benefit obligations and service costs was changed from the current consolidated fiscal year under review. At the sametime, the methodology used to calculate retirement benefit obligations and service costs was also changed at thebusiness segment level.
The impact of this change to segment income for the current consolidated fiscal year under review is minimal.

(Change in Methodology to Depreciate Tangible Fixed Assets)
As mentioned previously in the “Changes to Accounting Estimates and Changes to Accounting Policies that are Difficult toDifferentiate” section, the methodology to depreciate tangible fixed assets was changed from the current consolidated
fiscal year. At the same time, the depreciation methodology was also changed at the business segment level.

28

Consolidated Results for the Full Year
Ended March 31, 2015

As a result of this change, segment income for the current consolidated fiscal year increased as compared to the previous
calculation method. More specifically net income for machinery components increased by JPY308 million, net income for
precision machinery increased by JPY816 million, net income for construction machinery increased by JPY920 million,
net income for industrial machinery increased by JPY294 million, segment income for environmental plant and facilities
increased by JPY199 million, net income for others increased by JPY61 million, and the net loss in the Ships segment
improved by JPY52 million.

(Change in Methodology to Calculate the Profit or Loss of Business Segments)
From the current consolidated fiscal year under review, a new allocation method for research and development expenses
has been utilized. This was to enable the Group to more accurately measure segment performance. The segment-related
profit and loss figures for the previous consolidated fiscal year are calculated and displayed based on the new
methodology.

29

Consolidated Results for the Full Year
Ended March 31, 2015

3. Information Regarding Net Sales, Profits, Assets, Liabilities, and Other Items by Reporting Segment
Previous 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

9,534

3,954

(2,996)

6,087

2,053

113,972 124,893 200,519

65,672

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

6,106

1,077

9,456

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

1,711

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 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, 2015

Current Full Year (April 1, 2014, to March 31, 2015)(Unit: million yen)Segment
Item

A

B

C

D

E

F

Subtotal

Other1

Total

G2

H

Net sales(1) Sales to externalcustomers

102,624 146,424 202,002(2) Internal sales
betweensegments or
exchanges

2,060

Total
Segment profit (loss)

3

Segment assets

26,085 105,539 658,491

1,020

104,683 147,921 202,018

76,83626,188 106,153 663,800

11,681 675,481

11,9495,758(1,249)

7,537

1,874

110,995 147,656 230,131

61,66851,40772,648 674,504

13,527

103

614

5,309

8,608 667,099

16

6,635

1,497

75,81744,158

3,073

8,382

46,031

52,339 726,843― 667,099―(8,382)(8,382) 667,099(34)

45,99859,184 786,027

Other categories
Depreciation expense

4,320

3,219

6,655

859

289

672

16,015266

16,281―

16,281

Increase in tangible
and intangible assets

2,899

4,464

9,317

1,115

552

1,609

19.958712

20.670―20,670

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 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.

31

Consolidated Results for the Full Year
Ended March 31, 2015

(Per Share Information)
Previous Full Year
April 1, 2013 toMarch 31, 2014

Current Full Year
April 1, 2014 toMarch 31, 2015

Net assets per share532.28 yen

587.37 yen

Net income per share

29.17 yen

39.71 yen

Notes:
1.

The diluted net income per share 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. As a result of this, net assets
per share for the current consolidated fiscal year under review decreased by JPY2.41. Please note that the
impact of this change to net income per share is minimal.

3.

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

Item

Current Full Year
April 1, 2014 toMarch 31, 201５

Previous Full Year
April 1, 2013 toMarch 31, 2014

17,891 million yen

24,348 million yen――

Net income for common stock

17,891 million yen

24,348 million yen

Average number of outstanding
shares for the term

613,411,000 shares

613,122,000 shares

Net income for the period
Value not attributable to common
stockholders(Subsequent Events of Significant Importance)
There are no applicable items.

32Consolidated Results for the Full Year
Ended March 31, 2015

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

April 1, 2013 toMarch 31, 2014
AmountApril 1, 2014 toMarch 31, 2015%

AmountY/Y Change%

Amount%Machinery Components

98,502

15.0

104,690

14.1

6,188

6.3

Precision Machinery

134,511

20.4

154,625

20.9

20,11415.0

Construction Machinery

193,330

29.4

206,46127.9

13,130

6.8

Industrial Machinery

84,50912.8

89,623

12.1

5,114

6.1

Ships

31,736

4.8

61,9238.3

30,187

95.1

Environmental Facilities & Plants

104,24415.9

113,406

15.3

9,162

8.8

Others

11,4001.7

10,096

1.4(1,304)(11.4)

Total

658,233

100.0

740,824

100.0

82,59012.5(2) Sales(Unit: million yen)Segment

April 1, 2013 toMarch 31, 2014
AmountApril 1, 2014 toMarch 31, 2015%

AmountY/Y Change%

Amount%Machinery Components

99,994

16.3

102,624

15.4

2,630

2.6

Precision Machinery

133,518

21.7

146,42421.9

12,906

9.7

Construction Machinery

192,51131.3

202,002

30.3

9,491

4.9

Industrial Machinery

78,79312.8

75,81711.4(2,976)

(3.8)

Ships

14,8142.4

26,085

3.9

11,271

76.1

Environmental Facilities & Plants

86,166

14.0

105,539

15.8

19,372

22.5

Others

9,475

1.5

8,608

1.3

(867)

(9.1)

Total

615,271100.0

667,099

100.0

51,8288.4(3) Balance of Orders Received(Unit: million yen)Segment

End of Full YearAs of March 31, 2014

End of Full YearAs of March 31, 2015

AmountAmount%%Y/Y Change
Amount%Machinery Components

30,0999.4

32,166

8.2

2,066

6.9

Precision Machinery

42,632

13.3

50,832

12.9

8,201

19.2

Construction Machinery

27,614

8.6

32,073

8.1

4,458

16.1

Industrial Machinery

80,18825.0

93,99423.9

13,806

17.2

Ships

28,5468.9

64,384

16.3

35,838125.5

Environmental Facilities & Plants

107,50733.6

115,374

29.3

7,868

7.3

Others

3,765

1.2

5,253

1.3

1,488

39.5

Total

320,351100.0

394,076

100.0

73,72523.0

33