ANNUAL REPORT 2014

Contents
Consolidated Financial Highlights
To Our Shareholders and Investors
Management’s Discussion and Analysis
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Board of Directors, Corporate Auditors, and Executive Officers
Investor Information

1
2
4
6
8
9
10
12
13
32
33
33

Statements in this annual report with respect to Nisshin Steel Co., Ltd.’s plans, strategies, forecasts and other explanations thatare not historical facts are forward-looking statements that are based on management’s assumptions and beliefs derived frominformation currently available and invoke risks and uncertainties.
Factors that could cause actual results to differ materially from such statements include, without limitation, global economic
conditions, demand for and competitive pricing pressure on products and services, Nisshin Steel Co., Ltd.’s ability to continue
to win acceptance for its products and services in highly competitive markets, and currency exchange rate fluctuations.

Consolidated Financial Highlights
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

Net sales
Net income (loss)
Total assets
Total net assets
Net income (loss) per share2
Cash dividends per share2

Millions of yen(except per share amounts)
2013
2014
¥ 518,981¥ 576,447(37,398)
17,759694,250
741,750
179,253
215,958¥

177.72
15.00¥(393.32)
5.00

Percent change
2014/2013
11.1%
–
6.8%
20.5%
–
200.0%

Thousands of U.S. dollars1(except per share amounts)
2014$ 5,600,923
172,551
7,207,054
2,098,309
$

1.72
0.14

Notes: 1. Unless indicated otherwise, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into U.S. dollars, forconvenience only, at ¥102.92=US$1, the effective rate of exchange at March 31, 2014.
2. Per share amounts are in yen and U.S. dollars.

1

To Our Shareholders and Investors
Overview of the Fiscal Year Ended March 31, 2014
During the fiscal year under review, the Japanese economy was firm overall, led by a recovery in corporate activity, mainly inthe automobile and housing and building materials sectors. This performance was underpinned by such factors as an improved
export environment due to the effect of the government’s economic policies and the correction of the yen’s appreciation, andfull-blown reconstruction-related demand following the 2011 Great East Japan Earthquake. Overseas, the European and North
American economies gradually recovered, while concerns grew stronger over the slowdown of economic growth in China andemerging countries.
The steel industry also saw firm domestic demand; however, due to the structural issue of a swelling global steel supply glutcaused by surplus production capacity in China, the environment continued to be conducive to softening prices in the Asia
region and an increase in imported steel, and the impact on the steel market became apparent both in Japan and overseas.
Under this operating environment the Nisshin Group made steady progress on the targets in its 24th Medium-Term
Consolidated Management Plan. Our Group worked to enhance its competitive edge, primarily through promoting the main
theme of the plan: to maximize the synergies of business integration. At the same time, the Company focused its efforts on
improving profits by proactively expanding sales of its proprietary high-added-value products, among other means.
In particular, ZAM®, our highly corrosion-resistant hot-dip coated steel sheet, was well received in a wide range of fields,
including structural materials for housing, bases for solar power generators, and automobiles, and achieved a new record formonthly orders as we continued to implement vigorous sales promotion activities. Moreover, in 2013, we took steps such as
obtaining Japanese Industrial Standard (JIS) certification for ZAM®, seeking to broaden the market even further. In the field of
pre-painted steel sheets, we launched a new product called GRAJET designed for use as a metal siding material, which we
jointly developed with Nisshin A&C Co., Ltd. GRAJET is part of our SELiOS brand of pre-painted steel sheets that offers
outstanding antifouling and scratch resistance, and has received high praise from customers due to its clear advantage indesignability over conventional metal exterior walls, enabled by newly developed printing technology. Going forward, we willcontinue to actively develop demand.
In the area of production, we rigorously selected investments to secure increases in profits, while at the same time
promoting measures to enable a greater degree of freedom in the purchase of raw materials, which led directly to cost reductions
such as lower-priced feedstocks in upstream processes and a raised scrap ratio in stainless steel operations. We also continued
our focus on rationalization and total cost reduction programs centered on capital expenditures and investments to improve
productivity and adoption of energy-saving measures. At the same time we earnestly promoted initiatives to ensure stable
operations such as measures to prevent a reoccurrence of the fire at the Sakai Works cold-rolling mill.
Furthermore, the Nisshin Group stepped up strategies in overseas markets. In the U.S., we commenced production of
ZAM® in November 2013 at Wheeling-Nisshin, Inc., a subsidiary that manufactures and sells surface-treated steel sheets, andsales volumes have been increasing steadily. In China, Nisshin Steel (Nantong) High-Tech Sheet Co., Ltd. commenced
operations in May 2014, as a subsidiary for manufacturing and selling electrolytic copper plated steel sheets to meet local
procurement needs of Japanese transplants centered on automotive parts. We have also worked assiduously to expand ourpresence in the ASEAN region as part of our global development, including completion of Phase II of a capacity expansion
project at Bahru Stainless SDN. BHD., a joint venture with Spain’s Acerinox, S.A. established in Malaysia for cold rolling ofstainless steel.
Turning to consolidated operating results for the fiscal year ended March 31, 2014, there were a number of factors that
depressed profits, namely the increase in energy costs, a fire at the Sakai Works cold-rolling mill, and instability experienced at
the Kure Works No.1 blast furnace. However, the Company made vigorous efforts to boost sales of core products, to rationalize
and cut overall costs, to promote asset reduction and to implement other necessary steps. As a result, on a consolidated basis net
sales were ¥576,447 million, up ¥57,466 million year on year, ordinary income was ¥19,722 million, up ¥36,601 million year on
year, and net income was ¥17,759 million, up ¥55,158 million year on year.

Outlook for the Fiscal Year Ending March 31, 2015
Looking ahead, the Japanese economy is expected to continue along a basic recovery path spurred by the manufacturing industry,
amid expectations for improved corporate performance and an end to deflation. On the other hand, however, there are concerns
about factors that could impact the economy, such as stalling demand following a consumption tax increase in April 2014,
slowdowns in the economies of China and emerging countries and rapidly increasing geopolitical risks.

2The steel industry is expected to enjoy firm domestic demand, despite concerns over the impact of the consumption tax
increase. On the other hand, little progress has been made in resolving the global structural supply glut for steel, and intensecompetition and imbalance in supply and demand are forecast to continue in the Asian markets.
Under this operating environment, the Company absorbed its wholly owned subsidiaries Nisshin Steel Co., Ltd. and Nippon
Metal Industry Co., Ltd. on April 1, 2014, and relaunched itself as a reborn “Nisshin Steel.” To ensure that it remains thecompany of choice for its customers in today’s uncertain business climates, the Company will make a concentrated effort tosecure the success of the 24th Medium-Term Consolidated Management Plan, by getting the most of integration synergies andother resources.
First, we will respond to the immediate problems of a significant increase in electricity costs and high nickel and other raw
material prices by making a concerted group-wide effort to address our never-ending challenges of rationalization and saving
overall costs. At the same time, we will work to reflect the portion of these cost increases that we cannot absorb through our own
efforts appropriately into our sales prices, while seeking understanding from our customers.
Moreover, in order to maximize the effects of integration synergies, we will take steps to complete the renovation of thesteelmaking facilities at the Shunan Works early, and to realize relevant benefits including a cost cutback from concentrated
steel-making operations and production efficiency gains from larger stainless steel coils. Specifically, we will activate the newfacilities in phases from the second half of 2014, targeting start-up of operations in spring of 2015. At the same time, we will
make an effort to realize the benefits of our plan early by gradually transferring steel production processes from the Kinuura
Works to the Shunan Works, and moving up the termination of steelmaking at the Kinuura Works to the end of 2015. Moreover,by the time we start up the new steelmaking facility, we will achieve cost saving by reorganizing our stainless steel grades toconsolidate production, and we will work to reduce manufacturing costs and improve quality and yield through division of
production to utilize the characteristics of the hot rolling line at the Kure Works and the Steckel mill at the Kinuura Works.
With regard to special steel, which is one of our core products, we are working to open new markets by leveraging
high-cleanliness steel. To this end, we will proceed steadily with construction of a new ladle furnace (LF) at the Kure Works,
aiming for completion in September 2015. Moreover, in China, where further growth is forecast, we are taking steps to develop
demand from Japanese and European automakers. Specifically, we have decided to establish a special steel manufacturing andsales subsidiary as a joint venture with Japanese and US partners. We intend to grow this venture into a new pillar of the NisshinGroup’s global business expansion and will construct a plant, aiming for start-up of operations during 2016.
In stainless steel pipes and tubes, we integrated the operations of the Amagasaki Works and Nippon Metal Tube Co., Ltd.
and launched Nisshin Stainless Steel Tubing Co., Ltd. on April 1, 2014. Through the integration we have formed a structure
capable of rapidly matching operations closely to the market in this intensely competitive field. At the same time, the newcompany also concentrates production items to enable higher capacity utilization and ensure strong competitiveness and highprofitability. Furthermore, in the processing field, where the Company has strengths, we will take into account the medium- tolong-term trends such as a demand shift to overseas markets while continuing to pursue optimum production systems, including
business partnerships and consolidation of facilities.
In addition to strengthening our competitiveness in production through these initiatives, we will combine our outstanding
materials development prowess with the special processing and forming technologies of our Group companies in a concertedGroup-wide effort to create demand and develop new markets by actively proposing solutions to our customers. We will expand
our profits and improve our product mix by increasing sales of our high-value-added products, with a primary focus on our coreproducts ZAM®, special steel, stainless steel, and pre-painted steel sheets.
Furthermore, in order to respond to the rapid changes forecasted for the operating environment going forward, the NisshinGroup will work assiduously on structural reforms in its existing businesses for sweeping efficiency gains and a leaner
organization. These efforts will generate management resources that can be redeployed in aggressive investments in growthfields such as overseas markets. Thus, we will strive to build a robust business foundation to enable us to win out in competitionat the global level.
Guided by our corporate philosophy of “realize our customers’ dreams and ideals with the use of steel,” we will work withour customers to create new markets. To this end, we will try even harder to bring together the combined power of the NisshinGroup under the newly launched Nisshin Steel. We will strive to attain our profit targets and to increase our corporate value, as
we continue to evolve day by day as a corporate group with a strong market presence.

President & Chief Executive Officer3

Management’s Discussion and Analysis
Financial Position
Consolidated total assets at the end of the year ended March 31, 2014 stood at ¥741,750 million, up ¥47,499 million from theend of the year ended March 31, 2013 mainly due to an increase of investments in securities by ¥6,647 million, inventories by¥5,316 million, and notes and accounts receivable by ¥5,073 million.
Total liabilities amounted to ¥525,792 million, up ¥10,795 million from the end of the year ended March 31, 2013 mainly
due to an increase of notes and accounts payable by ¥13,151 million and a decrease of interest-bearing debt by ¥10,045 million.
Total net assets were ¥215,958 million, up ¥36,704 million from the end of the year ended March 31, 2013 mainly due tothe current year’s net income of ¥17,759 million.

Cash FlowsNet cash provided by operating activities totaled ¥26,668 million. Major contributors thereto were income before provision forincome taxes of ¥22,577 million and depreciation and amortization of ¥22,193 million.
Net cash used in investing activities totaled ¥19,252 million, with ¥22,356 million spent on acquisition of property, plantand equipment.
Net cash used in financing activities totaled ¥11,609 million, which is mainly due to a decrease in interest-bearing debt by¥10,045 million.
As a result of these developments, and including an increase in effect of foreign currency translation adjustment of cash andcash equivalents by ¥1,618 million, the consolidated balance of cash and cash equivalents at the end of the year ended March 31,
2014 decreased by ¥2,575 million to ¥40,694 million.

4

5

Consolidated Balance Sheets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
March 31, 2014 and 2013
Thousands of
U.S. dollars (Note 4)
2014

Millions of yen
2013
2014

ASSETS
Current assets:
Cash on hand and in banks (Notes 17 and 19)
Notes and accounts receivable (Note 19)
Marketable securities (Notes 19 and 20)
Inventories (Note 5)
Deferred income taxes (Note 8)
Other current assets
Allowance for doubtful accounts
Total current assets¥

Investments and long-term receivables:
Investments in securities (Notes 6, 13, 19 and 20)
Deferred income taxes (Note 8)
Asset for retirement benefits (Note 9)
Other (Note 6)
Allowance for doubtful accounts
Total investments and long-term receivables

40,86979,47010,000143,636
3,419
24,822(718)
301,500¥

43,27474,397
5,134
138,320
1,577
15,779(680)
277,802$397,094
772,153
97,162
1,395,608
33,219241,177(6,976)2,929,459

122,832
2,847
26,766
20,356(682)
172,121116,185
2,598
33,189(787)
151,185

1,193,470
27,662260,066
197,784(6,626)
1,672,376

281,860
973,819
1,255,679(1,077,739)
177,940
72,3157,770
258,026

279,626
960,836
1,240,463(1,063,591)
176,871
73,114
6,703
256,689

2,738,631
9,461,902
12,200,534(10,471,618)
1,728,915
702,633
75,4952,507,054

Other assets

9,969

8,175

96,861

Deferred assets

132

397

1,282

694,250$ 7,207,054

Property, plant and equipment, at cost:
Buildings and structures
Machinery, equipment and vessels
Accumulated depreciation
Land
Construction in progress
Total property, plant and equipment

Total assets

The accompanying notes are an integral part of these financial statements.

6¥

741,750¥

Thousands of
U.S. dollars (Note 4)
2014

Millions of yen
2013
2014

LIABILITIESCurrent liabilities:
Notes and accounts payable (Note 19)
Short-term loans (Notes 7 and 19)
Current portion of long-term debt (Notes 7 and 19)
Commercial paper (Note 19)
Provision for environmental remediation
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 7 and 19)
Deferred income taxes (Note 8)
Allowance for retirement benefits for directors and corporate
auditors
Reserve for rebuilding furnaces
Provision for environmental remediation
Employees’ retirement benefits (Note 9)
Liability for retirement benefits (Note 9)
Other liabilities
Total long-term liabilities
Total liabilities¥

NET ASSETS
Shareholders’ equity:
Common stock, no par value at March 31, 2014 and 2013
Authorized: 430,000 thousand shares at March 31, 2014 and 2013
Issued: 109,843 thousand shares at March 31, 2014 and 2013
(Note 15)Additional paid-in capital
Retained earnings
Treasury stock, at cost (Note 15)
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized gain or loss on available-for-sale securities
Deferred gain or loss on hedges
Adjustment on revaluation of land (Note 14)
Foreign currency translation adjustment
Retirement benefits asset and liability adjustments
Total accumulated other comprehensive income
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets¥

7

94,38560,69537,084
159
37,940230,265¥

81,23467,70649,03825,00067
36,056259,103$

917,071589,729
360,318
1,544
368,635
2,237,320

225,735
13,331

191,816
11,4072,193,305
129,527

424

397

4,119

13,722383
38,875
3,053
295,526
525,792

13,124393
35,8592,894
255,893514,997

133,326
3,721
377,720
29,6632,871,414
5,108,744

30,00030,000291,488

90,05566,242(8,741)
177,556

90,05549,797(8,732)
161,120875,000
643,626(84,930)
1,725,184

15,384
(95)
360
7,279
7,355
30,2848,117
215,958

15,366385
360(5,305)
10,805
7,327
179,253

149,475(923)
3,497
70,724
71,463294,247
78,8672,098,309

694,250$ 7,207,054

741,750¥

Consolidated Statements of Income
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

Net sales
Cost of sales (Note 5)
Gross profit
Selling, general and administrative expenses (Notes 11 and 12)
Operating income (loss)
Other income (expenses):
Interest and dividend income
Interest expense
Equity in earnings of unconsolidated subsidiaries and affiliates
Foreign exchange gain
Service cost of temporarily transferred employees
Other, net
Ordinary income (loss)
Special items:
Gain on sale of properties
Gain on sale of investments in securities (Note 20)
Gain on negative goodwill
Special items, income and gain
Loss on sale and disposition of properties
Loss on devaluation of other investments
Loss from instability experienced at blast furnace
Loss on fire
Loss on devaluation of investments in securities
Retirement benefit expense
Expenses for integration
Other
Special items, expense and loss
Income (loss) before provision for income taxes
Provision for income taxes (Note 8):
Current
Deferred
Total provision for income taxes
Income (loss) before minority interests
Minority interests in earnings of consolidated subsidiaries
Net income (loss)
Net income (loss) per share
Cash dividends per share

Millions of yen
2013
2014
¥ 518,981¥ 576,447
488,800
513,866
30,18062,58147,01446,024(16,833)
16,557

Thousands of
U.S. dollars (Note 4)2014$ 5,600,923
4,992,868
608,054447,182
160,872

5,280(5,494)
5,397
1,328(1,485)(1,861)
19,722

5,616(5,740)3,362
1,756(1,587)(3,454)(16,878)

51,301(53,381)
52,43812,903(14,428)(18,082)
191,624

4,322
3,536
7,858
1,553
271
1,646
1,530
5,003
22,577

54
1,736
1,791
701
2,391
3,071
3,782
512
127
10,586(25,674)

41,99334,35676,35015,0892,633
15,993
14,865
48,610219,364

4,066
(405)
3,661
18,916
1,156
17,7591,964
8,364
10,328(36,003)
1,395(37,398)

39,506(3,935)35,571
183,793
11,232
172,551¥¥

Weighted average number of shares issued and outstanding(thousands)

177.72
15.00
99,932

The accompanying notes are an integral part of these financial statements.

8

Yen

¥
¥

(393.32)
5.00
95,084$

U.S. dollars (Note 4)
$
1.72
0.14

Consolidated Statements of Comprehensive Income
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

Income (loss) before minority interests
Other comprehensive income (Note 18) :Unrealized gain or loss on available-for-sale securities
Deferred gain or loss on hedges
Foreign currency translation adjustment
Share of other comprehensive income of companies accounted
for by the equity method
Other, net
Total other comprehensive income
Comprehensive income (loss)
Total comprehensive income (loss) attributable to :Shareholders of the Parent Company
Minority interests

Millions of yen
2013
2014
¥ (36,003)¥
18,916¥¥

The accompanying notes are an integral part of these financial statements.

9

Thousands of
U.S. dollars (Note 4)2014$ 183,793

(76)
(734)
4,262

8,672
235
2,236

(738)
(7,131)41,410

9,154

5,072

88,942

133
12,73931,655(41)
16,175(19,827)

1,292
123,775
307,568

30,015
1,640¥¥(21,547)
1,719

$
$

291,634
15,934

Consolidated Statements of Changes in Net Assets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2014 and 2013
Millions of yen
Shareholders’ equity

Balance at April 1, 2012
Changes of items during the year
Cash dividends
Net loss
Acquisition of treasury stock(Decrease) increase by share transfer
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at April 1, 2013
Changes of items during the year
Cash dividends
Net income
Acquisition of treasury stock
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at March 31, 2014

Common stock¥
79,913

Additional
paid-in capital¥
49,893Retainedearnings¥
88,577

Treasury stock,at cost¥ (26,444)

Totalshareholders’equity¥ 191,939¥–––(49,913)––(49,913)30,000¥–––40,162––40,162
90,055¥(1,358)(37,398)––(22)–(38,779)
49,797¥––(4)
17,716––
17,711(8,732)¥(1,358)(37,398)
(4)
7,965
(22)
–
(30,818)
161,120

¥

–
–
–
–
–
–
30,000

¥

–
–
–
–
–
–
90,055¥(500)
17,759–(814)–
16,444
66,242

¥

–
–
(8)
–
–
(8)
(8,741)¥(500)
17,759(8)(814)–
16,436
177,556

Millions of yen
Accumulated other comprehensive income

Balance at April 1, 2012
Changes of items during the year
Cash dividends
Net loss
Acquisition of treasury stock(Decrease) increase by share transfer
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at April 1, 2013
Changes of items during the year
Cash dividends
Net income
Acquisition of treasury stock
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at March 31, 2014360

Foreigncurrencytranslation
adjustment¥ (12,485)

Retirement
benefits
asset andliability
adjustments

¥

–

Total
accumulated
othercomprehensive income

Minority
interests inconsolidated
subsidiaries

¥

6,633

¥ 193,485

¥

–
–
–
–
–
–
–
360

–
–
–
–
–
7,179
7,179
¥ (5,305)

¥

–
–
–
–
–
–
–
–

–
–
–
–
–
15,893
15,893¥ 10,805

¥

–
–
–
–
–
693
693
7,327

(1,358)(37,398)
(4)
7,965
(22)
16,587(14,231)¥ 179,253

¥

–
–
–
–
–
–
360

–
–
–
–
12,585
12,585¥ 7,279

¥

–
–
–
–
7,355
7,355
7,355

–
–
–
–
19,47819,478¥ 30,284

¥

–
–
–
–
789
789
8,117

(500)
17,759(8)(814)
20,26836,704¥ 215,958

Unrealized
gain or loss
on availablefor-salesecurities

Deferredgain or loss
on hedges¥

319

Adjustmentonrevaluationof land

¥

–
–
–
–
–
8,648
8,648
¥ 15,366

¥

–
–
–
–
–
65
65
385

¥

–
–
–
–
(480)
(480)
(95)

¥

6,718

–
–
–
–
17
17
¥ 15,38410¥ (5,087)

Total net
assetsThousands of U.S. dollars (Note 4)
Shareholders’ equity

Balance at April 1, 2013
Changes of items during the year
Cash dividends
Net income
Acquisition of treasury stock
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at March 31, 2014

Common stock$ 291,488

Additional
paid-in capital$ 875,000

Retainedearnings$ 483,841

Treasury stock,at cost$ (84,842)

Total
shareholders’equity$ 1,565,487

–
–
–
–
–
–
291,488

–
–
–
–
–
–
875,000(4,858)172,551–(7,909)–159,774
643,626

–
–
(77)
–
–
(77)
(84,930)(4,858)172,551(77)(7,909)–159,696$ 1,725,184

$

$

$

$

Thousands of U.S. dollars (Note 4 )Accumulated other comprehensive income

Balance at April 1, 2013
Changes of items during the year
Cash dividends
Net income
Acquisition of treasury stock
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at March 31, 2014

3,497

Foreigncurrencytranslation
adjustment

Retirement
benefits
asset andliability
adjustments$ (51,544) $Total
accumulated
othercomprehensive income

Minority
interests inconsolidated
subsidiaries

–
–
–
–
–
–
3,497

–
–
–
–
122,279
122,279$ 70,724––––
71,463
71,463$ 71,463––––
189,253
189,253$ 294,247–(4,858)–172,551–(77)–(7,909)7,666
196,9297,666
356,626$ 78,867 $ 2,098,309

Unrealized
gain or loss
on availablefor-salesecurities

Deferredgain or loss
on hedges

Adjustmentonrevaluationof land

$

–
–
–
–
165
165
$ 149,475––––(4,663)(4,663)$(923)$$ 149,300

$

3,740

11

–

$ 104,984

Total net
assets$ 71,191 $ 1,741,673

Consolidated Statements of Cash Flows
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

Cash flows from operating activities:
Income (loss) before provision for income taxes
Depreciation and amortization
Decrease in employees’ retirement benefits account
Increase in liability for retirement benefits
Decrease in prepaid pension cost
Increase in asset for retirement benefits
Increase in reserve for rebuilding furnaces
Equity in earnings of unconsolidated subsidiaries and affiliates
Interest and dividend income
Interest expense(Gain) loss on sale and disposition of properties(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Other, net

Millions of yen
2013
2014
¥

(25,674)
30,921(1,213)3,350
422(3,362)(5,616)
5,740
646
12,737
13,847(10,455)
4,153
25,497
6,823(5,753)(1,853)24,714

Receipt of interest and cash dividends
Payment of interest
Payment of income taxes
Net cash provided by operating activities

22,57722,193
1,473(1,809)598(5,397)(5,280)5,494(2,768)(4,599)(4,853)
13,546(12,879)
28,294
5,537(5,579)(1,584)
26,668Cash flows from investing activities:
Acquisition of investments in securities
Proceeds from sale of investments in securities
Acquisition of shares of subsidiaries
Proceeds from sale of shares of subsidiaries and affiliates
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Other, net
Net cash used in investing activities

(41)
9,332
(24)
186
(22,356)
5,408(11,757)(19,252)

(47)
1,356
(354)
5,134
(22,644)
1,005(9,338)(24,889)(398)
90,672(233)
1,807(217,217)
52,545(114,234)(187,057)

Cash flows from financing activities:
Decrease in short-term loans, net(Decrease) increase in commercial paper, net
Proceeds from long-term debt
Repayment and redemption of long-term debt
Acquisition of treasury stock
Cash dividends
Other, net
Net cash (used in) provided by financing activities(7,029)(25,000)
70,988(49,059)
(8)
(508)
(992)
(11,609)(2,192)
15,00066,600(56,831)(4)(1,361)(1,096)
20,112(68,295)(242,907)
689,739(476,671)(77)(4,935)(9,638)(112,796)

1,618

1,560

15,720(2,575)43,26921,497
18,235(25,019)
420,413

-

1,354

-

40,6942,182
43,269Foreign currency translation adjustment of cash and cash
equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net increase in cash and cash equivalents from newly
consolidated subsidiaries
Net increase in cash and cash equivalents due to share transfer
Cash and cash equivalents at end of year (Note 17)
The accompanying notes are an integral part of these financial statements.

12¥

Thousands of
U.S. dollars (Note 4)
2014

¥

¥

$

$

219,364
215,633
14,312(17,576)
5,810(52,438)(51,301)
53,381(26,894)(44,685)(47,153)
131,616(125,136)
274,91253,799(54,207)(15,390)259,113395,394

Notes to Consolidated Financial Statements
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2014 and 2013

1. Basis of Presenting the Financial Statements
Nisshin Steel Holdings Co., Ltd. (hereinafter, the “Company”) was established as a holding company on October 1, 2012 bymeans of joint share transfer, with Nisshin Steel Co., Ltd. (hereinafter Nisshin Steel) and Nippon Metal Industry Co., Ltd.
(hereinafter Nippon Metal Industry) as its wholly owned subsidiaries. Effective April 1, 2014, the Company merged with
Nisshin Steel and Nippon Metal Industry, both wholly owned by the Company.
In addition, the Company changed its trade name from “Nisshin Steel Holdings Co., Ltd.” to “Nisshin Steel Co., Ltd.”The accompanying consolidated financial statements have been prepared from the accounts maintained by the Company
and its subsidiaries in conformity with accounting principles generally accepted in Japan, which are different in certain respects
in so far as the application and disclosure requirements of International Financial Reporting Standards.
Certain items presented in the consolidated financial statements submitted to the Director of the Kanto Finance Bureau in
Japan have been reclassified for the convenience of readers outside Japan.

2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its 15 consolidated subsidiaries, listed below(together, the “Companies”):
Nisshin Steel Co., Ltd
Nippon Metal Industry Co., Ltd
Nisshin A&C Co., Ltd.
Nisshin Kokan Co., Ltd.
Shinwa Kigyo Co., Ltd.
Tsukiboshi Logistics Co., Ltd.
Nikkinko Trading Co., Ltd
Nisshin Koki Co., Ltd.
Tsukiboshi Shoji Co., Ltd.
Nisshin Holding, Inc.
Nisshin Steel USA, LLC
Wheeling-Nisshin, Inc.
Nisshin Automotive Tubing LLC
Nisshin France S.A.
NSA Metals Proprietary Limited
The fiscal year periods and the closing dates thereof for the financial statements of consolidated subsidiaries are inagreement with those of the Company, except for the six foreign consolidated subsidiaries: Nisshin Holding, Nisshin Steel USA,
Wheeling-Nisshin, Nisshin Automotive Tubing, Nisshin France and NSA Metals (with fiscal years ending on December 31). In
consolidating these foreign subsidiaries, the Company makes adjustments for any material transactions subsequent to December
31.
Regarding the elimination of investments in the stock of consolidated subsidiaries, together with the underlying equity inthe net assets of such subsidiaries, the Company follows the step-by-step acquisition approach to include equity in the net
income (loss) of subsidiaries, subsequent to the date of acquisition, in the Consolidated Statements of Income and theConsolidated Statements of Changes in Net Assets.
Valuation of the assets and liabilities of consolidated subsidiaries is made at their fair values in proportion to the parent
company’s equity in the subsidiaries upon each acquisition.
The difference between the cost of an investment in a subsidiary and the amount of underlying equity in the net assets of thesubsidiary is deferred as an asset or a liability as the case may be and amortized over a period of five years on a straight-line
basis.
Investments in unconsolidated subsidiaries and affiliates are accounted for using the equity method, except for those valued
at cost due to the lack of materiality.
The number of unconsolidated subsidiaries accounted for using the equity method was 12 at March 31, 2014 and included:
Tsukiboshi Art Co., Ltd.
Osaka Stainless Center Co., Ltd.
13

The number of affiliates accounted for using the equity method was 17 at March 31, 2014 and included:
Nihon Teppan Co., Ltd.
Sanko Metal Industrial Co., Ltd.
Canox Corporation
Ningbo Baoxin Stainless Steel Co., Ltd.
Acerinox, S.A.
An affiliate was excluded from the scope of the equity method due to the sales of its shares in the year ended March 31,
2014.
Foreign Currency Translation
Foreign currency transactions are generally translated using foreign exchange rates prevailing at the respective transaction dates.
Receivables and payables in foreign currencies are translated at the foreign exchange rates prevailing at the respective balance
sheets dates.
The assets and liabilities of overseas subsidiaries are translated into yen at the foreign exchange rates prevailing at therespective balance sheets dates, whereas net assets are translated at historical rates.
Investments in Securities
Investments in securities are classified into four categories:(1) Trading securities are valued at their fair values on the balance sheets date, and any unrealized gain or loss is charged toincome. The Companies had no trading securities at March 31, 2014.
(2) Held-to-maturity securities are stated at cost after the amortization of premiums or discounts on acquisition, which areamortized over the period to maturity. The Companies had no held-to-maturity securities at March 31, 2014.
(3) Investments in unconsolidated subsidiaries and major affiliates are accounted for using the equity method, except for thosevalued at cost due to their lack of materiality.
(4) Available-for-sale securities are valued at their fair values except for those valued at cost due to a lack of fair value
information. Applicable unrealized net-of-tax gains and losses are included in accumulated other comprehensive income.
Inventory Valuation
Inventories are valued at cost mainly using the weighted average method (the amounts on the Consolidated Balance Sheetsreflect the decrease in their value due to their decrease in profitability, if any), except for supplies which are valued at themoving-average cost (the amounts on the Consolidated Balance Sheets reflect the decrease in their value due to their decrease inprofitability, if any).
Property, Plant and Equipment
Depreciation is computed using the straight-line method.
The cost of maintenance, repairs and minor renewals is charged to operating income as incurred. Major renewals andimprovements are capitalized. The cost of property, plant and equipment retired or otherwise disposed of and the corresponding
accumulated depreciation are eliminated from the related accounts, and the resulting profit or loss is reflected in income.
Leased Assets
Finance leases which do not involve the transfer of ownership rights are depreciated with the straight-line method, adopting thelease period as the useful life and assuming a residual value of zero.
Other Assets
Amortization of intangible assets including software is computed using the straight-line method. Software is amortized over theinternally estimated useful life, i.e., five years.
Allowance for Doubtful Accounts
The allowance for doubtful accounts is evaluated based on the actual bad debt rate in the past. For doubtful receivables, etc., thelikelihood of collection is evaluated in accounting for the allowance.

14

Employees’ Retirement Benefits
The retirement benefit obligation for employees is attributed to each period by the straight-line method over the estimated yearsof service of the eligible employees.
Actuarial gain or loss is recognized in expenses using the straight-line method over mainly 18 years. Prior service cost isrecognized in expenses using the straight-line method over mainly 14 years.
Allowance for Retirement Benefits for Directors and Corporate Auditors
The allowance for retirement benefits for directors and corporate auditors is calculated based on internal rules.
Nisshin Steel decided to abolish the lump-sum severance benefit payments for directors and corporate auditors at theAnnual Shareholders’ Meeting held on June 26, 2003. The Company posted the amount for payments of the lump-sum severance
benefit payments for their duties performed until June 26, 2003.
Reserve for Rebuilding Furnaces
Blast furnaces, including related machines, periodically require substantial component replacements and repairs. Such work
occurs normally every 10 years after blast furnaces are put into operation. The estimated future costs of such work are provided
for and charged to income on a straight-line basis over the periods to the date of the anticipated replacements and repairs. The
difference between such estimated costs and the actual costs is charged or credited to income at the time the work takes place. In
estimating such future costs for a specific furnace, the general price level increase and other economic factors are taken into
consideration.
Provision for Environmental Remediation
The provision for environmental remediation is estimated and recorded to provide for future potential costs, such as waste
management costs for stored PCB (polychlorinated biphenyl).
Deferred Assets
Significant bond issue costs, except for those that are not material, are deferred and amortized over a reasonable period of timethrough bond redemption.
Sales Recognition
Sales of finished goods are generally recognized when goods are shipped to the customers.
Loss from instability experienced at blast furnace
An extraordinary loss has been recognized for restoration cost from the operation trouble regarding to instability experienced at
the Kure Works blast furnace of the Company’s subsidiary, Nisshin Steel.
Loss on fireAn extraordinary loss has been recognized for restoration cost from the fire incident at the Sakai Works cold-rolling mill of theCompany’s subsidiary, Nisshin Steel.
Income Taxes
The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequencesof temporary differences between the carrying amounts and the tax basis of assets and liabilities.
Consumption Tax
In Japan, consumption tax was imposed on domestic consumption of goods and services at the rate of 5% until March 31, 2014.
The consumption tax imposed on the Companies’ sales to customers is withheld by the Companies at the time of sale and paid to
the national government. The consumption tax withheld upon sale is not included in the amount of “Net sales” in theaccompanying Consolidated Statements of Income but is recorded as a liability. The balances of consumption tax withheld andconsumption tax paid (an asset item), which are paid by the Companies on the purchase of products, merchandise and services
from vendors, are offset, and the net balance is included in “Other current liabilities” in the Consolidated Balance Sheets.
Cash and Cash Equivalents
Cash and cash equivalents included in the Consolidated Statements of Cash Flows comprise cash on hand and in banks, deposits
that can be withdrawn upon demand and easily cashable short-term investments with a three-month or shorter redemption termthat carry a negligible risk of fluctuation in value.
15

Net Income and Cash Dividends per Share
The computation of net income per share is based on the weighted average number of common shares issued and outstanding
during each year. Cash dividends per share shown for each year in the accompanying Consolidated Statements of Income arebased on cash dividends applicable to the net income of each year.
Standards Issued but not yet Effective(Accounting Standards for Retirement Benefits)
On May 17, 2012, the Accounting Standard Board of Japan (“ASBJ”) issued ‘‘Accounting Standard for Retirement Benefits’’(ASBJ Statement No. 26) and ‘‘Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25), which
replaced the Accounting Standard for Retirement Benefits that had been issued by the Business Accounting Council in 1998 with
an effective date of April 1, 2000 and the other related practical guidance, being followed by partial amendments from time totime through 2009.
(1) Overview
Under the revised Accounting Standard, unrecognized actuarial gain and loss and unrecognized prior service cost arerecognized within the net asset section, after adjusting for tax effects, and the deficit or surplus is recognized as a liability orasset without any adjustments. With regard to the method for attribution of expected retirement benefits to period, the benefit
formula basis becomes applicable besides the straight-line basis. Furthermore, the method to determine the discount rate has
been also revised.
(2) Scheduled date of adoption
The revisions to the calculation methods for the retirement benefit obligation and service costs are scheduled to be adopted
from the beginning of the year ending March 31, 2015. As tentative treatments are specified in the Accounting Standard andrelated Guidance, the revision will not be retrospectively applied to the consolidated financial statements of prior periods.
(3) Impact of adopting revised accounting standards and guidance
The impact is being evaluated at the time of preparation of these consolidated financial statements.

3. Accounting Changes(Accounting Changes)
The Company adopted “Accounting Standard for Retirement Benefits” (ASBJ Statement No.26 of May 17, 2012) and“Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No.25 of May 17, 2012) (except for certain
provisions described in the main clause of Section 35 of the standard and in the main clause of Section 67 of the guidance) at theend of the fiscal year ended March 31, 2014. These accounting standards require entities to apply a revised method for recording
the retirement benefit obligation, after deducting pension plan assets, as a liability for retirement benefits. In addition,
unrecognized actuarial differences and unrecognized prior service costs are recorded as a liability for retirement benefits.
Concerning the application of the Accounting Standard for Retirement Benefits, based on the provisional treatment set out
in Clause 37 of the standard, the effects of such changes in the current fiscal year have been recorded in retirement benefits asset
and liability adjustments through accumulated other comprehensive income.
As a result of this change, retirement benefit liability and retirement benefit assets were recognized in the amount of¥38,875 million (US$377,720 thousand) and ¥26,766 million (US$260,066 thousand), respectively, and accumulated othercomprehensive income decreased by ¥7,355 million (US$71,463 thousand) at March 31, 2014. In addition, net assets per sharedecreased by ¥73.90 (US$0.71).
(Changes in accounting policies that are impossible to distinguish from changes in accounting estimates)
The Company’s domestic consolidated subsidiaries (except for some subsidiaries) changed depreciation method of property,
plant and equipment (excluding buildings) from the declining-balance method to the straight-line method from the year ended
March 31, 2014.
Under the “24th Medium-Term Consolidated Management Plan” (FY2014-FY2017), domestic sales and production are to
be focused on core products that a steady demand is expected for. Accordingly, capital investments are to be made carefully
selected for quality improvement and cost reduction to enable a stable production capacity. The Group’s facilities are, therefore,
expected to operate more evenly and stably on a long-term basis. Based on these changes, the Group decided to change thedepreciation method for property, plant and equipment (excluding buildings) to the straight-line method to allocate thedepreciation expenses more appropriately.
This change decreased depreciation expenses by ¥7,222 million (US$70,171 thousand) and increased operating income,ordinary income and income before provision for income taxes by ¥6,039 million (US$58,676 thousand) for the year ended
March 31, 2014, relative to what they would have been had the previous method been used.
16

(Changes in Presentation)
Consolidated Balance Sheets“Provision for loss on disaster,” that was separately presented under “Current liabilities” in the fiscal year ended March 31, 2013,
is included in “Other current liabilities” under “Current liabilities” in the fiscal year ended March 31, 2014 due to its decreased
financial materiality. To reflect this change in presentation, corresponding reclassifications have been made to the consolidated
financial statements ended March 31, 2013.
This change resulted in a reclassification of “Provision for loss on disaster” of ¥140 million to “Other current liabilities”
under “Current liabilities” for the year ended March 31, 2013.
Consolidated Statements of Income“Retirement benefits expense” that was separately presented under “Other expenses” in the fiscal year ended March 31, 2013, is
included in “Other, net” under “Other expenses” in the fiscal year ended March 31, 2014 due to its decreased financial
materiality. To reflect this change in presentation, corresponding reclassifications have been made to the consolidated financial
statements ended March 31, 2013.
This change resulted in a reclassification of “Retirement benefits expense” of ¥1,743 million (US$16,935 thousand) to“Other, net” under “Other expenses”.

4. U.S. Dollar Amounts
U.S. dollar amounts included in the consolidated financial statements and notes thereto represent the arithmetical results oftranslating yen into dollars on the basis of ¥102.92 = US$1, the effective rate of exchange at March 31, 2014. The inclusion ofsuch dollar amounts is solely for convenience and is not intended to imply that the yen amounts have been or could be readily
converted, realized or settled in dollars at ¥102.92 = US$1 or at any other rate.

5. Inventories
Details of “Inventories” in the Consolidated Balance Sheets at March 31, 2014 and 2013 are as follows:
Millions of yen
2013
2014
¥
57,621¥
61,44831,21335,04249,48547,146¥ 138,320¥ 143,636

Finished goods
Work in process
Raw materials and other supplies
Total

Thousands of
U.S. dollars
2014$ 597,046
340,478
458,083$ 1,395,608

The amounts of inventories on the Consolidated Balance Sheets at March 31, 2014 and 2013 reflect the decrease in their value
due to their decrease in profitability (after setting off the reversal amount of reducing the book value at the end of the previous
consolidated fiscal year). “Cost of sales” in the Consolidated Statements of Income for the year ended March 31, 2014 and 2013
include ¥3,839 million (US$37,300 thousand) and ¥327million of such unrealized net gain of inventories, respectively.

6. Investments in Unconsolidated Subsidiaries and Affiliates“Investments in securities” in the Consolidated Balance Sheets at March 31, 2014 and 2013 include investments inunconsolidated subsidiaries and affiliates are as follows:
Thousands ofMillions of yen
U.S. dollars
2013
2014
2014
Stocks of unconsolidated subsidiaries and affiliates¥
45,653¥55,094$ 535,308“Other” in “Investments and long-term receivables” in the Consolidated Balance Sheets at March 31, 2014 and 2013 include
investments in unconsolidated subsidiaries and affiliates as follows:
Thousands ofMillions of yen
U.S. dollars
2013
2014
2014
Equity in unconsolidated subsidiaries and affiliates
¥
9,622
¥
14,040$ 136,416

17

7. Short-term Loans and Long-term Debt
Short-term loans at March 31, 2014 and 2013 consisted of the following:
Millions of yen
2013
2014
¥
67,706¥
60,695

Bank loans

Thousands of
U.S. dollars
2014$ 589,729

It is a normal business custom in Japan for short-term loans to be rolled over.
Long-term debt at March 31, 2014 and 2013 consisted of the following:

Loans from banks and other financial institutions
18th 1.66% unsecured bond of the Company due May. 2013
19th 2.20% unsecured bond of the Company due Jun. 2018
20th 1.64% unsecured bond of the Company due May. 2014
1st series unsecured, interest deferrable and early redeemable
subordinated bonds solely for qualified institutional
investors*1
21st 0.62% unsecured bond of the Company due Jun. 2017
22nd 0.33% unsecured bond of the Company due Mar. 2017
23rd 0.64% unsecured bond of the Company due Mar. 2019
Total long-term debt
“Current portion of long-term debt” in the Consolidated
Balance Sheets“Long-term debt” in the Consolidated Balance Sheets*2

Millions of yen
2013
2014
¥ 130,854¥ 142,819–
10,00010,00010,00020,00020,000¥Thousands of
U.S. dollars
2014$ 1,387,670–

97,162
194,325

50,00050,000485,81420,00010,00010,000262,819

20,000––240,854

194,325
97,162
97,1622,553,624(37,084)(49,038)(360,318)

191,816$ 2,193,305

225,735¥*1. (1) From the day after October 9, 2009 – October 31, 2014: Annual rate 4.612 % (fixed rate)(2) From the day after October 31, 2014: 6-Month Yen London Interbank Offered Rate + 4.75% (floating rate)*2. The following is the financial covenants in the syndicated loan contract that the Company's consolidated subsidiary, or Nisshin Steel Co.,
Ltd. agreed with a group of financial institutes (signed on September 28, 2012, ¥25,000 million included in long-term debt).
(Financial Covenants)(1) The amount of shareholders' equity in the Consolidated Balance Sheets at March 31, 2013, at the end of the following fiscal years,
and at the end of the following second quarters shall be maintained at least 75% of the amount at the end of the latest fiscal year orof the latest second quarter. Note that the above shareholders’ equity includes a portion judged as equity credit attributes by theJapan Credit Rating Agency of the 1st series unsecured, interest deferrable and early redeemable subordinated bonds solely for
qualified institutional investors.
(2) “Ordinary income” in the Consolidated Statements of Income for the fiscal year ended March 31, 2013 and for the following fiscal
years shall not record loss for two consecutive years.
At March 31, 2014, Nisshin Steel Co., Ltd had not breached the financial covenants.

8. Income Taxes
The “Act for Partial Amendment of the Income Tax Act, etc” (Act No.10 of 2014) was promulgated on March 31, 2014 and, as aresult, the Company is no longer subject to the Special Reconciliation Corporate Tax effective for fiscal years beginning on orafter April 1, 2014.
As a result, the effective statutory tax rate used to measure the Company’s deferred tax assets and liabilities was changed
from 37.8% to 35.5% for the temporary differences expected to be realized or settled from fiscal years beginning April 1, 2014.
This tax rate change has an immaterial impact on the consolidated financial statements.

18

Components of the Companies’ deferred income tax assets and liabilities at March 31, 2014 and 2013 are as follows:
Thousands of
U.S. dollars
Millions of yen
2013
2014
2014
Deferred income tax assets:
Tax loss carry forwards¥
49,230¥47,053$ 457,180––
8,502
Non-deductible portion of employees’ retirement benefits–
Retirement benefit liability
82,811
8,523
Non-deductible portion of reserve for rebuilding furnaces
3,911
4,373
42,489Loss on impairment of fixed assets
3,219
2,977
28,925
Loss on devaluation of investments in securities
3,193
2,699
26,224Other
8,898
10,03597,502Preliminary deferred income tax assets
76,95475,663735,163
Valuation allowance(70,728)(68,198)(662,631)
Total deferred income tax assets
6,226
7,464
72,522
Deferred income tax liabilities:
Unrealized gain or loss on available-for-sale securities
Reserve for postponement of taxation on capital gains fromproperty
Other
Total deferred income tax liabilities
Net deferred income tax liabilities

¥

7,170

6,199

69,665

1,979

1,822

19,2285,379
14,5297,064

5,435
13,4587,231

52,263
141,167
68,635¥$

The reconciliation of the statutory tax rate to the income tax rate reflected in the Consolidated Statements of Income for the year
ended March 31, 2014 is as follows.

Statutory tax rate
Reconciliation:
Valuation allowance
Equity in earnings of unconsolidated subsidiaries and affiliates
Other
Effective rate of income tax expense

2014
37.8%
(11.2)
(9.0)
(1.4)
16.2%

The reconciliation of the statutory tax rate to the income tax rate reflected in the Consolidated Statements of Income for the year
ended March 31, 2013 is omitted because the Company recorded a net loss.

9.

Employees’ Retirement Benefits(Year ended March 31, 2014)(Defined benefit plan)
The Company and most of its domestic consolidated subsidiaries have defined benefit plans, i.e., lump-sum severance benefit
payments and defined benefit pension plans.
The changes in the retirement benefit obligation during the year ended March 31, 2014 are as follows.
Millions of yen
2014¥ 86,904
2,777
1,716
(698)
(4,894)(2)¥ 85,804

Retirement benefit obligation at April 1, 2013
Service cost
Interest cost
Actuarial loss
Retirement benefit paid
Contribution by the companies
Retirement benefit obligation at March 31, 2014

19

Thousands of
U.S. dollars
2014$ 844,383
26,982
16,673(6,781)(47,551)(19)$ 833,696

The changes in plan assets during the year ended March 31, 2014 are as follows.
Millions of yen
2014¥ 65,395
1,300
8,348
2,476
(3,825)¥ 73,695

Plan assets at April 1, 2013
Expected return on plan assets
Actuarial gainContribution by the Companies
Retirement benefit paid
Plan assets at March 31, 2014

Thousands of
U.S. dollars
2014$ 635,396
12,631
81,111
24,057(37,164)$ 716,041

The funded status of the plans and the amounts recognized in the consolidated balance sheet at March 31, 2014 for theCompany’s and the consolidated subsidiaries’ defined benefit plans are as follows.

Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Net balance of liability and asset recognizedon the Consolidated Balance Sheets
Retirement benefit liability
Asset for retirement benefits
Net balance of liability and asset recognizedon the Consolidated Balance Sheets

Millions of yen
2014¥ 50,066(73,695)(23,628)
35,737

Thousands of
U.S. dollars
2014$ 486,455(716,041)(229,576)
347,230

12,109117,654

38,875(26,766)

377,720(260,066)¥

12,109$117,654

The components of retirement benefit expense for the year ended March 31, 2014 are as follows.
Millions of yen
2014
¥
2,557
1,716
(1,300)2,070(1,140)¥3,905Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Retirement benefit expense

Thousands of
U.S. dollars
2014$ 24,844
16,673(12,631)
20,112(11,076)$ 37,942

Note: Retirement benefit expense for consolidated subsidiaries adopting the simplified method are included in “Service cost”.
Unrecognized prior service cost and unrecognized actuarial loss included in accumulated other comprehensive income (before
tax effect) at March 31, 2014 are as follows.
Thousands ofMillions of yen
U.S. dollars
2014
2014
Unrecognized prior service cost¥
4,458
$ 43,315
Unrecognized actuarial loss
2,674
25,981
Total
¥
7,132
$ 69,296
The fair value of plan assets by major category as a percentage of total plan assets at March 31, 2014 are as follows:
Millions of yen
2014
Stocks
68%
Bonds
28
Cash on hand and in banks
1
Other
3
Total
100%

20

Assumptions used in the calculation of the above information are as follows:
2014
2.0%
2.0%

Discount rate:
Expected rate of return on plan assets:(Defined Contribution plan)
The required contribution of the consolidated subsidiaries of the Company amounts to ¥98 million (US$952 thousand) for theyear ended March 31, 2014.
(Year ended March 31, 2013)
Analysis of the reserve account for “Employees’ retirement benefits” at March 31, 2013 is as follows:
Millions of yen
2013
Projected benefit obligations¥ 86,904
Plan assets(65,395)
Funded status
21,508Unrecognized actuarial differences(7,409)Unrecognized prior-service costs
5,478
Total employees’ retirement benefits
19,578Prepaid pension cost
16,281“Employees’ retirement benefits” in the Consolidated Balance Sheets¥ 35,859

Components of retirement benefit expense for the year ended March 31, 2013 are as follows:
Millions of yen
2013
Service costs¥
2,392Interest cost
2,205
Expected return on plan assets(1,527)
Amortization of unrecognized actuarial differences
3,147
Amortization of unrecognized prior-service costs(1,281)
Other
3,782
Retirement benefit expense¥
8,719
Assumptions made in the calculation of the above information are as follows:
Discount rate:
Expected rate of return on plan assets:
Method of attributing the projected benefits to periods of services:
Amortization of unrecognized actuarial differences:
Amortization of unrecognized prior-service costs:

2013
2.0%
2.0%
Straight-line basis
Primarily 17 years
Primarily 14 years

10. Contingent Liabilities
Contingent liabilities at March 31, 2014 and 2013 are as follows.

Guarantee of bank loans for employees
Guarantee of loans for others in the ordinary course ofbusiness
The Companies issued letters of guarantee for the future forothers in the ordinary course of businessNotes discounted

Millions of yen
2013
2014
¥
789
¥
596

Thousands of
U.S. dollars
2014
$
5,790

8,338

8,531

81,014

19

18

184

688

2,244

6,684

11. Research and Development Expenses
Research and development expenses for the years ended March 31, 2014 and 2013 totaled ¥3,665 million (US$35,610 thousand)and ¥4,472 million, respectively. They were included in manufacturing cost, selling, general and administrative expenses.

2112. Selling, General and Administrative Expenses
Principal selling, general and administrative expenses for the years ended March 31, 2014 and 2013 are as follows:
Thousands ofMillions of yen
U.S. dollars
2013
2014
2014
Freight out¥
16,259¥17,239$ 167,499
Salaries, bonuses and allowances
9,450
10,16898,795
Research and development expenses
4,444
3,639
35,357Retirement benefit expense
1,076
796
7,734

13. Mortgaged Properties
Breakdown of properties pledged as collateral at March 31, 2014 and 2013 are as follows:
Thousands of
U.S. dollars
2014

Millions of yen
2013
2014

Properties pledged as collateral:
Investments in securities
Total

¥
¥

16
16

¥
¥

16
16

$
$

155
155

14. Adjustment on Revaluation of Land
At March 31, 2002, some of the affiliates accounted for using the equity method revalued land in accordance with the Law
concerning Revaluation of Land. The Company’s share of a net-of-tax unrealized gain at March 31, 2014 has been recorded as aseparate component of accumulated other comprehensive income.

15. Net Assets
Number and types of stock at March 31, 2014 and 2013 are as follows:
Thousands of shares
Number of common
Number of treasury
stocks, issued
stocks109,843
9,903
–
11
–
0
109,843
9,915

March 31, 2013
Increase during the year
Decrease during the year
March 31, 2014

Increase in the number of treasury stocks consists of eight thousand shares due to purchase of shares of less than one unit andthree thousand shares due to change of the ownership ratio for an affiliate accounted for using the equity method.
Decrease in the number of treasury stocks consists of less than one thousand shares due to sales of the shares less than standard
unit by the Company upon requests by its shareholders.

16. Cash Dividends
Cash dividends declared are as follows:
Cash dividends payment in the year ending March 31, 2015
Amount of cash
Cash dividends
dividends paid
per share¥1,501 million¥15.0
May 19, 2014 Board of Directors’ Meeting
US$14,584 thousand
US$0.14
Cash dividends payment in the year ended March 31, 2014
Amount of cash
dividends paid
May 20, 2013 Board of Directors’ Meeting¥549 million

22

Cash dividends
per share¥5.0

Record date

Effective dateMar. 31, 2014

Jun. 9, 2014

Record dateMar. 31, 2013

Effective dateJun. 10, 2013

17. Supplementary Cash Flow Information
The reconciliation of “Cash on hand and in banks” in the Consolidated Balance Sheets at March 31, 2014 and 2013 to “Cash andcash equivalents at end of year” in the Consolidated Statements of Cash Flows for the years then ended are as follows:
Thousands ofMillions of yen
U.S. dollars
2013
2014
2014
Cash on hand and in banks¥
43,274¥40,869$ 397,094
Time deposits and short-term investments with deposit terms
(5)
(48)
(5)
or maturity periods exceeding three months
Other–(1,651)(170)
Cash and cash equivalents at end of year¥
43,269¥40,694$ 395,394

18. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive
income for the years ended March 31, 2014 and 2013:
Thousands of
U.S. dollars
Millions of yen
2013
2014
2014
Unrealized gain or loss on available-for-sale securities:
Amount arising during the year
¥
7,802
¥
4,548
$
44,189Reclassification adjustments for gains and losses included
2,523(3,536)(34,356)
in net income
Amount before tax effect
10,326
1,011
9,823
Tax effect(1,653)(1,087)(10,561)
Unrealized gain or loss on available-for-sale securities
8,672
(76)
(738)
Deferred gain or loss on hedges:
Amount arising during the year
Reclassification adjustments for gains and losses included
in net income
Acquisition adjustment
Amount before tax effectTax effect
Deferred gain or loss on hedges
Foreign currency translation adjustment:
Amount arising during the year
Reclassification adjustments for gains and losses included
in net income
Amount before tax effectTax effectForeign currency translation adjustment
Share of other comprehensive income of companies
accounted for with the equity method:Amount arising during the year
Reclassification adjustments for gains and losses included
in net income
Share of other comprehensive income of companies
accounted for with the equity method
Other, net:
Amount arising during the year
Reclassification adjustments for gains and losses included
in net income
Amount before tax effectTax effect
Other, net
Total other comprehensive income

23

¥

2,135

(1,050)20,744

(37)

3,497

(359)

(3,288)(1,190)456(734)(2,069)
378
(142)
235

(31,947)(11,562)4,430(7,131)

4,262

2,236

41,410

–

–

–

4,262
–
4,262

2,236
–
2,236

41,410–41,410

8,838

4,647

85,872

316

425

3,070

9,154

5,072

88,942

208

(68)

2,020

2

2

19

210
(77)
133
12,739

(66)
24
(41)
16,175

2040
(748)
1,292
123,775¥$

19. Financial Instruments
1. Status of financial instruments(1) Policy regarding financial instruments
The Companies’ cash is put mainly into short-term deposits, and temporary surplus is invested in highly secure financial
assets.
The Company obtains funds, which are deemed necessary according to its loan and investment plan, mainly from bankloans and bond issues. It also obtains short-term operating funds from bank loans and commercial paper. A group cash
management system has been implemented among the Company and major subsidiaries, which enables lending andborrowing of funds in both directions in a recurrent and continuous manner.
Derivatives are used to avoid interest rate risk for loans and foreign exchange risk for transactions in foreign currency.
The policy on derivatives of the Company and its consolidated subsidiaries restricts the use of derivative transactions to thoserelated to actual demands and forbids their use for the purpose of speculation.
(2) Types of financial instruments, their risk and risk management system
The Company is exposed to credit risk of customers arising from notes and accounts receivable. In order to manage such risk,
due dates and account balances of customers are controlled in accordance with the corporate management rules. The credit
status of major customers is also monitored in necessity.
Marketable securities and investment in securities are exposed to market value risk. Such securities are mainly those of
the corporations with which the Company has a business relationship. The Company monitors the market value as well as
financial situations of the issuing companies on a regular basis.
As loans and bonds have interest rate risk, the Company uses interest rate swap transactions for some loans, which meetthe exceptional requirements defined in Japanese generally accepted accounting principles for financial instruments.
Derivative transactions are made in accordance with the corporate management rules. The Company makes transactions
only with financial institutions with high ratings in order to reduce credit risk.
Liquidity risk of operating credit and loans is managed according to a method in which each group company prepares its
own cash-flow projections on a timely basis, etc.
2. Estimated fair value of financial instruments
Book value, estimated fair value and unrealized gains (losses) of financial instruments on the Consolidated Balance Sheets at
March 31, 2014 and 2013 are as follows. The table below does not include financial instruments for which it is extremely
difficult to determine the fair value.
(Year ended March 31, 2014)(1) Cash on hand and in banks(2) Notes and accounts receivable(3) Marketable securities and investments in securities
Stocks of subsidiaries and affiliates
Available-for-sale securities(4) Notes and accounts payable(5) Short-term loans(6) Commercial paper(7) Bonds(8) Long-term loans
Loans from banks and other financial institutions(9) Derivative transactions

24

Book value¥ 40,869
79,470Millions of yen
Estimated fairvalue
¥ 40,869
79,470

Unrealized gain
(loss)¥––

34,833
63,123(94,385)(60,695)(–)(120,000)

69,452
63,123(94,385)(60,695)(–)(121,883)

34,619–––(–)(1,883)(142,819)
279(143,273)
279

(454)
–

(Year ended March 31, 2014)
Thousands of U.S. dollars
Estimated fair
Unrealized gain
Book value
value(loss)$ 397,094$ 397,094$–
772,153
772,153–(1) Cash on hand and in banks(2) Notes and accounts receivable(3) Marketable securities and investments in securities
Stocks of subsidiaries and affiliates
Available-for-sale securities(4) Notes and accounts payable(5) Short-term loans(6) Commercial paper(7) Bonds(8) Long-term loans
Loans from banks and other financial institutions(9) Derivative transactions

338,447
613,321(917,071)(589,729)(–)(1,165,954)

674,815
613,321(917,071)(589,729)(–)(1,184,249)

336,368–––(–)(18,295)(1,387,670)
2,710(1,392,081)
2,710(4,411)–

Book value¥ 43,274
74,397

Millions of yen
Estimated fairvalue
¥ 43,274
74,397

Unrealized gain
(loss)¥––

26,15462,395(81,234)(67,706)(25,000)(110,000)

39,22462,395(81,234)(67,706)(25,000)(113,316)

13,069––––(3,316)(130,854)
1,470(132,405)
1,470(1,551)–(Year ended March 31, 2013)(1) Cash on hand and in banks(2) Notes and accounts receivable(3) Marketable securities and investments in securities
Stocks of subsidiaries and affiliates
Available-for-sale securities(4) Notes and accounts payable(5) Short-term loans(6) Commercial paper(7) Bonds(8) Long-term loans
Loans from banks and other financial institutions(9) Derivative transactions

Notes:
1. Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivativetransactions(1) Cash on hand and in banks and (2) Notes and accounts receivable
Since these are settled in a short period of time and their fair value is almost equal to the book value, they are based on thebook value.
(3) Marketable securities and investments in securities
Fair value of stocks is based on the price presented by stock exchanges, while bonds are based on the price presented bystock exchanges or financial institutions.
(4) Notes and accounts payables, (5) Short-term loans and (6) Commercial paper
Since these are settled in a short period of time and their fair value is almost equal to the book value, they are based on thebook value.
(7) Bonds
Fair value of bonds is based on the market price. The fair value of the 1st Series Unsecured, Interest Deferrable and Early
Redeemable Subordinated Bonds Solely for Qualified Institutional Investors is calculated by discounting the principal andinterest payments by the assumed discount rate for bonds of the same rating.
(8) Long-term loans
Fair value of long-term loans is calculated by discounting the principal and interest payments by the assumed discount rates
for similar new loans.
(9) Derivative transactions
Please refer to Note “21. Derivative transactions”.

25

2. Financial instruments for which it is extremely difficult to determine the fair value
In “(3) Marketable securities and investments in securities: Stocks of subsidiaries and affiliates”, the fair value for unlisted
stocks (¥20,260 million (US$196,851 thousand) and ¥19,498 million in the Consolidated Balance Sheets at March 31, 2014
and 2013, respectively.) does not have to be disclosed because there is no market price for them, their future cash flow cannot
be estimated, and because it is deemed very difficult to determine their fair value.
In “(3) Marketable securities and investments in securities: Available-for-sale securities”, the fair value for unlisted
stocks (¥14,615 million (US$142,003 thousand) and ¥13,271 million in the Consolidated Balance Sheets at March 31, 2014
and 2013 respectively.) and others (¥0 million (US$0 thousand) and ¥0 million in the Consolidated Balance Sheets at March
31, 2014 and 2013, respectively.) does not have to be disclosed because there is no market price for them, their future cash
flow cannot be estimated, and because it is deemed very difficult to determine their fair value.
The redemption schedule for receivables and marketable securities with maturities at March 31, 2014 and 2013 are as follows:(Year ended March 31, 2014)
Millions of yen
Over one year
Over five years
and within five
and within ten
Within one year
years
years
Over ten years
Cash on hand and in banks
¥
–
¥
–
¥
–
¥ 40,422
Notes and accounts receivable–––
79,470Marketable securities and investments insecurities
Certificate of deposit
10,000–––National and local governmental bonds, etc.
–
–
4
11
Total
¥
–
¥ 129,893¥
4¥
11(Year ended March 31, 2014)

Cash on hand and in banks
Notes and accounts receivable
Marketable securities and investments insecurities
Certificate of deposit
National and local governmental bonds, etc.
Total

Within one year
$ 392,751
772,153
97,162–$ 1,262,077

Thousands of U.S. dollars
Over one year
Over five years
and within five
and within ten
years
years
$
–
$
–
–
–

$

–
38
38

$

–
106
106

Over ten years
$
–
–

$

–
–
–

(Year ended March 31, 2013)

Cash on hand and in banks
Notes and accounts receivable
Marketable securities and investments insecurities
National and local governmental bonds, etc.
Total

Within one year
¥ 43,017
74,397¥–
117,415

26

Millions of yen
Over one year
Over five years
and within five
and within ten
years
years
¥
–
¥
–
–
–

¥

4
4

¥

11
11

Over ten years
¥
–
–

¥

–
–

20. Securities
Available-for-sale securities(Year ended March 31, 2014)

Securities whose book value exceeds
their acquisition cost:
Stocks
Bonds
National and local governmental
bonds, etc
Subtotal
Securities whose book value does notexceed their acquisition cost:
Stocks
Bonds
Other
Other
Subtotal
Total

Millions of yen
Acquisition UnrealizedBook value
costgain (loss)

Thousands of U.S. dollars
Acquisition UnrealizedBook value
costgain (loss)¥

23,136$ 439,933$ 215,128$ 224,795

0

155

155

0

23,137$ 440,099$ 215,283$ 224,805$$

45,278¥22,141

16

¥

16

¥

45,295¥

22,157

¥

¥

6,657

¥

7,648

¥

¥
¥

1,170
10,00017,82863,123¥¥

1,301
10,00018,94941,107(130)
11,368–97,162¥ (1,121) $ 173,221¥ (22,015) $ 613,321(990) $

64,681

74,31012,64097,162$ 184,113$ 399,407(9,619)(1,263)–$ (10,891)$ (213,904)(Year ended March 31, 2013)

Securities whose book value exceeds
their acquisition cost:
Stocks
Bonds
National and local governmental
bonds, etc
Subtotal
Securities whose book value does notexceed their acquisition cost:
Stocks
Bonds
Other
Other
Subtotal
Total

Millions of yen
Acquisition UnrealizedBook value
costgain (loss)¥

48,381¥

25,84616¥

16

22,534
0¥

48,398¥25,863¥

22,535

¥

7,935

¥

9,154

¥

(1,219)

¥
¥

927
5,134
13,99662,395

¥
¥

1,119
5,134
15,407
41,270

¥
¥

(191)
–
(1,410)21,124

Regarding available-for-sale securities for which fair value information was not available, their aggregate book value on theConsolidated Balance Sheets was ¥14,615 million (US$142,003 thousand) and ¥13,271 million at March 31, 2014 and 2013,
respectively.
Sale of securities classified as available-for-sale securities and the aggregate gain and loss for the years ended March 31, 2014
and 2013 are as follows:(Year ended March 31, 2014)
Thousands ofMillions of yen
U.S. dollars
Sale proceeds¥
9,332$ 90,672
Aggregate gain
3,536
34,356Aggregate loss––
(Year ended March 31, 2013)
Millions of yen
¥
4,864
572
22

Sale proceeds
Aggregate gain
Aggregate loss

27

21. Derivative Transactions
The policy on derivatives of the Company and its consolidated subsidiaries restricts the use of derivative transactions to thoserelated to actual demands and forbids their use for the purpose of speculation. The Company and its consolidated subsidiaries
use derivative transactions for the purpose of reducing the impact on earnings caused by future market fluctuations, hedging
losses, reducing procurement costs and fixing costs. In the years ended March 31, 2014 and 2013, the Company and its
consolidated subsidiaries used interest rate swaps, forward exchange contracts and currency options to hedge the risk against rate
fluctuations or reduce the interest rates of bank loans, bonds and other means of financing.
Under the hedge accounting method, hedging instruments and hedged items for the year ended March 31, 2014 and 2013
are as follows:• The deferral hedge accounting method is adopted for hedging transactions. As for interest swaps, when the amounts, index
and period meet the conditions for hedged items, the exceptional method defined in Japanese generally accepted accounting
principles for financial instruments is applied.
• Hedging instruments are interest rate swaps, forward exchange contracts, currency options and currency swaps.
• Hedged items are the interest of bank loans, bonds and other means of financing and foreign currency transactions.

22. Segment Information
The Companies operate solely in the steel business segment, so the disclosure of business segment information has been
omitted.
Products and services information(Year ended March 31, 2014)
Steel Products¥ 541,972

Sales to third parties

Millions of yen
Other¥ 34,474

Total¥ 576,447(Year ended March 31, 2014)
Steel Products$ 5,265,954

Sales to third parties

Thousands of U.S. dollars
Other
Total
$ 334,959$ 5,600,923(Year ended March 31, 2013)
Steel Products¥ 487,630

Sales to third parties

Millions of yen
Other¥ 31,351

Total¥ 518,981

Geographical information(Year ended March 31, 2014)
Millions of yen
Sales to third partiesJapan¥ 464,206

North
America¥ 41,466

Other
24,686

Total¥ 576,447

Japan$ 4,510,357

Thousands of U.S. dollars
North
America
East Asia
Other$ 402,895$ 447,804$ 239,856

Total$ 5,600,923

Japan¥ 416,948

North
America¥
37,112

East Asia¥ 46,088¥(Year ended March 31, 2014)

Sales to third parties

Notes: Net sales information above is based on customer location.

(Year ended March 31, 2013)
Millions of yen
Sales to third parties

East Asia¥ 36,362¥

Other
28,557

Total¥ 518,981

The amortization and balance of goodwill by segments at and for the years ended March 31, 2014 and 2013 are as follows.

28

(Year ended March 31, 2014)
No relevant information.
(Year ended March 31, 2013)
Millions of yen
Steel
¥
1,375
–

Amortization
Balance at March 31

23. Related Party Transactions
Material transactions of the Company and the consolidated subsidiaries with related companies and individuals, excludingtransactions with consolidated subsidiaries which are removed from the consolidated financial statements and other than those
disclosed elsewhere in these financial statements, for the years ended March 31, 2014 and 2013 are as follows:(Year ended March 31, 2014)

Name ofRelatedcompany
Nihon TeppanCo., Ltd.

Canox
Corporation

Paid-in capital

Principal
business¥1,300 million
Sale of$12,631 thousand coated steel¥2,310 million
Sale of$22,444 thousand coated steel

Equity ownership
percentage by the
consolidated
subsidiary atMar. 31, 2014
50.0%

16.1%

Millions of yen/Thousands of U.S. dollars
Resulting accounting balance
Transaction
Description of theconsolidated
subsidiary’s
transactions
Sale of the Nisshin
Steel’s coated steel
products to the related
party

2014

Account

2014¥68,127$661,941

Accounts receivable¥4,300$41,780

Purchase of the steel
products by
Tsukiboshi Shoji Co.,Ltd.

¥20,914$203,206

Accounts payable¥8,833$85,823

Sale of the Nisshin
Steel’s coated steel
products to the related
party¥40,867$397,075

Accounts receivable¥4,737$46,026(Year ended March 31, 2013)

Name ofRelatedcompany
Nihon TeppanCo., Ltd.

Canox
Corporation

Paid-in capital¥1,300 million¥2,310 million

Principal
business
Sale ofcoated steel

Sale ofcoated steel

Equity ownership
percentage by the
consolidated
subsidiary atMar. 31, 2013
50.0%

15.9%

Transaction
Description of theconsolidated
subsidiary’s
transactions
Sale of the Nisshin
Steel’s coated steel
products to the related
party

Millions of yen
Resulting accounting balance2013

Account¥55,109

Accounts receivable¥8,114Purchase of the steel
products by
Tsukiboshi Shoji Co.,Ltd.

¥18,675

Accounts payable¥7,174

Sale of the Nisshin
Steel’s coated steel
products to the related
party¥38,111

Accounts receivable¥4,50729

2013

The significant related company in the year ended March 31, 2014 and 2013 is Acerinox, S.A. Summary of the consolidated
financial condition of Acerinox, S.A. are as follows:
Millions of euros
2013
2014
Total current assets
€
1,907
€
1,790
Total non-current assets
2,308
2,200
Total current liabilities
1,324
1,447
Total non-current liabilities
1,178
990
Total equity
1,713
1,553
Revenues
Profit (loss) from ordinary activities
Net profit (loss) attributable to the Group

4,554
(18)
(18)

3,966
33
22

24. Other(1) Information on the consolidated cumulative and quarterly results for the year ended March 31, 2014 is as follows:
Millions of yen(except per share)
1Q
2Q
3Q
4Q
Cumulative results
Net sales¥ 131,149¥ 270,336¥ 417,841¥ 576,447
Income before provision for income taxes
5,688
11,637
15,587
22,577Net Income
4,945
9,163
12,08417,759Net income per share*1
¥
49.49
¥
91.69
¥
120.93¥177.72
Quarterly results
Net income per share*1
¥
49.49
¥
42.20
¥
29.24
¥
56.79

Cumulative results
Net sales
Loss before provision for income taxes
Net loss
Net loss per share*1
Quarterly results
Net loss per share*1*1. Per share amounts are in yen and U.S. dollars.

Thousands of U.S. dollars(except per share)
2Q
3Q

1Q

4Q

$ 1,274,280
55,26648,047$
0.48$ 2,626,661
113,068
89,030$0.89$ 4,059,862
151,447
117,411$
1.17$ 5,600,923
219,364
172,551
$
1.72

$

$

$

$

0.48

0.41

0.28

0.55

(2) Significant lawsuits and claims, etc.
The Company’s consolidated subsidiary, Nisshin Steel, filed a suit with the Tokyo High Court to rescind the decision
rendered by the Japan Fair Trade Commission that dismissed Nisshin Steel’s hearing request regarding a cease and desist
order and surcharge payment order issued by the Commission which found Nisshin Steel’s act in violation of theantimonopoly law in connection with the sale of prepainted hot dip zinc coated steel sheets and steel bands for building
material manufacturers. On December 13, 2013, Nisshin Steel received a judgment which dismissed Nisshin Steel’s claim.
Since Nisshin Steel is dissatisfied with the said judgment, it filed a final appeal with the Supreme Court on December 26,
2013.

25. Major Subsequent Events(Merger among the Company, Nisshin Steel and Nippon Metal Industry, and renaming of Nisshin Steel Holdings)
Effective April 1, 2014, the Company merged with Nisshin Steel Co., Ltd. and Nippon Metal Industry Co., Ltd., both wholly
owned by the Company, and changed its trade name from “Nisshin Steel Holdings Co., Ltd.” to “Nisshin Steel Co., Ltd.”30

(1) Outline of the business combination(i) Name, businesses and amount of assets and liabilities of the acquired companies
Name:
Nisshin Steel Co., Ltd.
Businesses: Manufacture, processing and sales of steel products
Amounts of assets and liabilities assumed at the date of transaction are as follows:
Millions of yen¥ 626,606
469,363
157,243

Total assets
Total liabilities
Total net assets

Thousands of
U.S. dollars$ 6,088,282
4,560,464
1,527,817

Name:
Nippon Metal Industry Co., Ltd.
Businesses: Manufacture, processing and sales of stainless steel and other metal products
Amounts of assets and liabilities assumed at the date of transaction are as follows:
Millions of yen¥
55,52756,070(543)

Total assets
Total liabilities
Total net assets

Thousands of
U.S. dollars$ 539,516
544,792(5,275)(ii) Date of the business combination
April 1, 2014(iii) Legal form of the business combination
An absorption-type merger with the Company being the surviving company, and Nisshin Steel and Nippon Metal Industry
being the absorbed companies. Both Nisshin Steel and Nippon Metal will be dissolved.
(iv) New trade nameNisshin Steel Co., Ltd.
(v) Main reason for the business combination
On October 1, 2012, the management of Nisshin Steel and Nippon Metal Industry was consolidated and the Company wasestablished as a holding company aiming at forming an organization which would enable the group companies to acquire
actual consolidated merits as early as possible, such as consolidation of sales departments, in order to adapt to structuralchanges in the business environment and to survive against severe competition.
Such management consolidation had been considered with a view to a merger among the Company, Nisshin Steel andNippon Metal Industry as a further organizational restructuring for the next step to maximize consolidation merits.
Therefore, while the management resources were consolidated, the three companies’ merger proposals have been
examined and investigated in a concrete manner.
In light of further integration in the manufacturing departments and eliminating overlapping functions in theadministration departments so as to maximize consolidation merits, an absorption-type merger was determined to be
consummated under which the Company will be the absorption-type merger subsisting company and Nisshin steel andNippon Metal Industry will be the absorbed companies with the effective date being April 1, 2014. At the same time, therenaming of the Company to “Nisshin Steel Co., Ltd.” was also decided.
(2) Accounting Method
This acquisition will be accounted for as transactions under common control pursuant to the “Accounting Standard forBusiness Combination” (ASBJ Statement No.21, revised on December 26, 2008) and the “Revised Guidance on AccountingStandard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No.10, revised on
December 26, 2008).
Accordingly, the Company expects to recognize a “loss on extinguishment of tie-in shares” of ¥17 billion as a special
loss in its non-consolidated financial statements ending March 31, 2015. As the Company owned 100% shares of the Nisshin
Steel and Nippon Metal Industry, there will be no impact on the consolidated financial statements from the merger.

31

32

Board of Directors, Corporate Auditors and Executive Officers(As of June 25, 2014)
Directors

Toshinori Miki*1

Umeo Irie *1

Yukio Nariyoshi*1

Koji Mizumoto*1

Kenji Minami

Yukio Uchida

Masahiro Sasaki

Katsuhisa Miyakusu

Nobuhiro Miyoshi

Isao Endo
2

Audit and Supervisory Board Members

Kazuhisa Obama *Yukihiro Ito

Koichi Muraoka

Yoichiro Yamakawa

Makoto Haya
President and Chief Executive Officer

Toshinori Miki

Vice-President and Executive Officers

Umeo Irie

Yukio Nariyoshi

Koji Mizumoto
Managing Executive Officers

Kenji Minami

Yukio Uchida

Masahiro Sasaki

Katsuhisa Miyakusu

Nobuhiro Miyoshi

Hiroshi Takahashi

Junya Hayakawa

Junichi Higurashi

Kiyoshi Yasui

Takashi Nakao

Tetsuo Kaharu*1 Representative Director*2 Senior Audit and Supervisory Board Member

Investor Information
Nisshin Steel Co., Ltd.
Registered Head Office

Shin Kokusai Building, 4-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo
100-8366, Japan
Telephone: (81)-3 3216-5566

Facsimile: (81)-3 3216-5546

Year of Establishment

2012

Common Stock

Authorized: 430,000 thousand shares(As of March 31, 2014)

Issued: 109,843 thousand shares
Balance: ¥30,000,000 thousand

Common Stock Price Range(Tokyo Stock Exchange)

2014
High

2013
Low

¥ 1,196

Second Quarter

1,388

777

Third Quarter

1,508

1,194

849

476

Fourth Quarter

1,267

834

820

631

Number of Shareholders

51,983

Independent Certified Public Accountants

Ernst & Young ShinNihon LLC

Inquiries:
Public & Investor Relations Team
General Administration Department
Nisshin Steel Co., Ltd.
Shin Kokusai Building, 4-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-8366, Japan
Telephone: (81)-3 3216-5566 Facsimile: (81)-3 3216-5546

33

653

¥

Low

First Quarter

Note: Years ended March 31.

¥

High
–
–

¥

–
–