Consolidated Basis Results of the Fiscal 2017
(April 1, 2017 – March 31, 2018)
May 10, 2018
TOPY INDUSTRIES, LIMITED
Stock listing: Tokyo, Nagoya stock exchanges
7231
URL: http://www.topy.co.jp/english/index.html
Nobuhiko Takamatsu, President and CEO
Shuichi Tachibana, Operating Officer, General Manager, General Affairs Department
Telephone: 03-3493-0777 / (Overseas) 81-3-3493-0777
Scheduled date for holding of ordinary general meeting of shareholders: June 26, 2018
Scheduled date for dividend payment:
June 5, 2018
Scheduled date for submission of securities report:
June 26, 2018
Preparation of supplementary explanatory materials: Yes
Holding of financial results meeting:Yes (for analysts and institutional investors)
Registered Company name:
Code number:
Representative:
Contact:(Figures of less than ¥1 million have been omitted)
1. Consolidated Financial and Operating Results of the Fiscal 2017 (April 1, 2017 - March 31, 2018)(1) Consolidated Operating Results(Percentage figures are changes from the previous fiscal year)
Profit attributable
Net sales
Operating profit
Ordinary profit
to owners of parent
Million yen%

Fiscal 2017
230,462
Fiscal 2016
208,237(Note) Comprehensive income:

10.7
(3.5)

Profit per share

Million yen

%

7,997
11.4
7,180
(28.2)
Fiscal 2017 ¥7,199 million
Profit per shareafter full dilution

Yen

Million yen%

Million yen

%

8,034
6,116

31.4
5,500
(23.5)(30.5)
7,191
322.9
-6.5%
Fiscal 2016
¥7,702 million –%Ordinary profit Operating profit
Return on equity
to total assets
to net sales

Yen%

Fiscal 2017234.25–
Fiscal 2016
303.90–(For reference) Share of (profit) loss of entities accounted for using equity method:

%

5.2
7.1
Fiscal 2017
Fiscal 2016

%

3.4
2.7
¥144 million¥81 million

3.5
3.4

* The Company consolidated ten shares of its common stock into one share on October 1, 2016, the effective day. As a result, profit per share has been calculated under theassumption that the aforementioned consolidation of shares was carried out at the beginning of the previous consolidated fiscal year.

(2) Consolidated Financial Results
Total assets
Million yen

Million yen

Fiscal 2017249,221
Fiscal 2016
223,050(For reference) Shareholders’ equity:
Fiscal 2017(3) Consolidated Cash Flows
Cash flow fromoperating activities
Fiscal 2017
Fiscal 2016

Ratio of shareholders’equity to total assets

Net assets

109,859
104,853¥108,959 million

Cash flow frominvesting activities

Net assets per share
%

Yen

43.7
46.6
Fiscal 2016

4,640.13
4,426.81¥103,951 million

Cash flow fromfinancing activities

Million yen

Million yen

10,780
10,130(5,861)(1,016)

Cash and cash equivalents
at end of period

Million yen

Million yen

1,834(16,861)

23,036
16,3492. Dividends
End of firstquarter
Fiscal 2016
Fiscal 2017
Fiscal 2018 (Forecasts)

End of second
quarter

Dividends per share
End of third
End of fiscal
quarteryear

Full fiscal year

Total dividends(annual)Payout ratio(consolidated)

Dividends/
net assets(consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

–
–
–

1.00
20.00
20.00

–
–
–

70.00
60.00
70.00

–
80.00
90.00

1,885
1,884

26.3
34.2
31.1

1.9
1.8

* The Company consolidated ten shares of its common stock into one share on October 1, 2016, the effective day. As a result, the year-end dividends per share for Fiscal
2016 presented are the amount that takes into account the effects of the aforementioned consolidation of shares, and full-year dividends per share for fiscal 2016 shows “-.”The year-end dividends per share in the second quarter for fiscal 2016 are ¥10, converted in accordance with the standard after the consolidation of shares, and the full-year
dividends per share for fiscal 2016 are ¥80.

3. Consolidated Financial Forecasts for Fiscal 2018 (April 1, 2018 - March 31, 2019)(Percentage figures are changes from the same period of the previous fiscal year)
Profit attributable to
Net sales
Operating profit
Ordinary profit
Profit per shareowners of parent
First half
Full year

Million yen
133,000
283,000

%
24.0
22.8

Million yen
3,000
10,000%(16.8)
25.0–1–

Million yen
2,900
10,100%(27.5)
25.7

Million yen
1,800
6,800

%
(35.0)
23.6

Yen
76.65
289.58

* NOTE(1) Changes in the State of Material Subsidiaries during the Period: Yes
Newly included: – Ring Techs Co., Ltd.
Excluded: –(2) Changes in Accounting Principles, Changes in Accounting Estimates, and Retrospective Restatements(a) Changes in accounting principles accompanying the amendment of accounting standards: None(b) Changes other than those in (a) above: None(c) Changes in accounting estimates: None(d) Retrospective restatements: None
(3) Number of Shares Issued (Common shares)(a) Number of shares issued at the end of the period (including treasury stock)
Fiscal 2017
24,077,510 sharesFiscal 2016(b) Number of treasury stock at the end of the period
Fiscal 2017595,417 sharesFiscal 2016(c) Average number of shares issued during the period
Fiscal 201723,482,598 sharesFiscal 2016

24,077,510 shares
595,205 shares
23,662,858 shares* The Company consolidated ten shares of its common stock into one share on October 1, 2016, the effective day. As a result, average number of sharesissued during the period have been calculated under the assumption that the aforementioned consolidation of shares was carried out at the beginning of
the previous consolidated fiscal year.

(For reference) Non-Consolidated Results
1. Non-Consolidated Financial and Operating Results of the Fiscal 2017 (April 1, 2017 - March 31, 2018)(1) Non-Consolidated Operating Results(Percentage figures are changes from the previous fiscal year)
Net sales
Operating profit
Ordinary profit
ProfitMillion yen

Fiscal 2017
Fiscal 2016%

138,872
122,501

Million yen

13.4
(4.0)

Million yen

11.2(49.1)

4,199
4,822

%

Million yen(12.9)(19.0)

2,259
6,677

%

(66.2)
295.1

Profit per shareafter full dilution

Profit per share
Fiscal 2017
Fiscal 2016

%

2,771
2,493

Yen

Yen

96.21
282.15––* The Company consolidated ten shares of its common stock into one share on October 1, 2016, the effective day. As a result, profit per share has been calculated under theassumption that the aforementioned consolidation of shares was carried out at the beginning of the previous fiscal year.

(2) Non-Consolidated Financial Results
Total assets

Ratio of shareholders’equity to total assets

Net assets

Million yen

Million yen

Fiscal 2017
191,869
Fiscal 2016
174,125(For reference) Shareholders’ equity:
Fiscal 2017
Fiscal 2016

79,297
77,907¥79,297 million¥77,907 million

Net assets per share
%

Yen

41.3
44.7

3,376.40
3,317.20

2. Non-Consolidated Financial Forecasts for Fiscal 2018 (April 1, 2018 - March 31, 2019)(Percentage figures are changes from the same period of the previous fiscal year)
Net sales
Operating profit
Ordinary profit
ProfitProfit per shareFirst half
Full year

Million yen%

Million yen%

Million yen%

Million yen%

Yen

75,000155,000

14.5
11.6

500
2,300

(69.6)(17.0)

1,400
3,800

(43.6)
(9.5)

1,100
2,800

(41.4)
23.9

46.84
119.22*These Consolidated Basic Results are not included in the scope of audits by certified public accountants or audit corporations.
* Explanation of the Appropriate Use of Performance Forecasts and Other Related Items(Caution concerning future descriptions etc.)
The above estimate has been compiled based on information available at the time this disclosure was made. The actual earnings
are subject to change from the estimated values due to various factors. For assumed conditions underlying the earnings forecast
and cautionary statements in using the earnings forecast, please refer to “1. Overview of Operating Results” on page 4.
(Obtaining supplementary documents of financial results)
Supplementary documents will be posted on the Company’s website.

–2–

Index of Attached Documents
1. Overview of Operating Results ................................................................................................................................................

4(1) Overview of Operating Results for the Fiscal Year under Review ......................................................................................

4(2) Overview of Financial Position for the Fiscal Year under Review ......................................................................................

5(3) Future Outlook ....................................................................................................................................................................

6(4) Basic Profit Allocation Policy, and Dividends for the Current and New Fiscal Year ..........................................................

6

2. Basic Policy for the Selection of Accounting Standards...........................................................................................................

6

3. Consolidated Financial Statements and Key Notes ..................................................................................................................

7(1) Consolidated Balance Sheets ..............................................................................................................................................

7(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ..........................................

9

Consolidated Statements of Income ..................................................................................................................................

9

Consolidated Statements of Comprehensive Income ........................................................................................................ 10(3) Consolidated Statements of Changes in Net Assets ............................................................................................................ 11(4) Consolidated Cash Flow Statements ................................................................................................................................... 13(5) Notes regarding the consolidated financial statements........................................................................................................ 15(Note Related to Going-Concern Assumption) ................................................................................................................. 15(Segment information) ...................................................................................................................................................... 15(Information per share) ..................................................................................................................................................... 16(Important events after the reporting period) .................................................................................................................... 17

Note: This document has been translated from the original Japanese version for reference purposes only. In the event of any
discrepancy between this translated document and the original Japanese version, the original shall prevail.
The original disclosure in Japanese was released on May 10th, 2018 at 13:30 (GMT+9).
The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from thetranslation.

–3–

1. Overview of Operating Results(1) Overview of Operating Results for the Fiscal Year under Review
Operating Results for the Consolidated Fiscal Year under review
During the consolidated fiscal year under review, the global economy staged a moderate recovery overall, reflecting solid
economic conditions in the United States and Europe as well as signs of continued recovery in China and emerging countries. The
Japanese economy made a gradual recovery as employment environment and consumer spending picked up and industrial
production and capital spending showed an upward trend.
Under these circumstances, the Group steadily implemented the Growth & Change 2018 initiative of the mid-term management
plan to achieve sustainable growth and offer great workplaces. As part of these efforts, to expand the global supply system in thesteel wheel business, the Group established a joint venture in India where long-term automobile manufacture can be expected. In
addition, to further build up the business base, the Group made Ring Techs Co., Ltd. (which engages in the same type of businessas that of the Group) a wholly-owned subsidiary. Furthermore, the Group continued to work on rationalizing costs throughreassessing its production systems and improving productivity according to demand. Also, Kanagawa Factory has been awarded
the 2017 Energy Conservation Grand Prize through the promotion of energy saving. .
As disclosed on April 17, 2018, in order to formulate a new base structure of global supply system for aluminum wheels, theGroup has decided to make ATC Holdings Co, Ltd., a holding company of ASAHI TEC Corporation, a wholly-owned subsidiary.
The process of making ATC Holdings Co, Ltd. a wholly-owned subsidiary is scheduled to finish at the end of May, after gaining
approval from domestic and international competition law authorities.
As a result, net sales for the consolidated fiscal year under review for the Topy Industries Group were ¥230,462 million (up10.7% year on year), operating profit was ¥7,997 million (up 11.4% year on year) and ordinary profit was ¥8,034 million (up31.4% year on year). On the other hand, profit attributable to owners of parent closed at ¥5,500 million (down 23.5% year onyear) due to extraordinary income of a gain on sales of non-current assets recorded in the previous term.
Performance by Segment(Steel Business)
In the electric furnace industry, demand for steel materials remained firm. Meanwhile, the prices of iron and steel scrap, the mainmaterials, rose, and the prices of auxiliary materials such as alloy iron and electricity cost etc. also escalated, which led to thecontinued adverse circumstances.
In this environment, the Topy Industries Group sought to continue cost improvement and rationalize sales prices. As a result, thesales price rose above the increased price of iron and steel scrap; however, mainly due to the increased costs of auxiliary materials
net sales came to ¥71,525 million (up 12.1% year on year). However, operating profit was ¥1,925 million (down 33.2% year onyear).
(Automotive & Industrial Machinery Components Business)
In the construction machinery industry, domestic sales of hydraulic shovels increased due to last-minute demand before emission
regulations etc., and demand in China increased substantially backed by infrastructure investment. In addition, demand for mining
equipment also expanded due to increased coal prices, among other factors. In the automobile industry, domestic automobile
production exceeded the results of the previous fiscal year owing to brisk exports; however, demand in the United States where good
movement had been seen, showed a weakening trend in passenger car sales.
Given these conditions, the Group succeeded in selling a greater number of components, including parts for the undercarriages of
construction machinery and very large wheels for mining, in particular. As a result, net sales stood at ¥142,790 million (up 10.1%
year on year). Operating profit rose to ¥8,433 million (up 29.2% year on year) as a result of the efforts to minimize fixed costs andimprove cost management through response to increase in sales volume.
(Power Business)
The group endeavored to maintain the stable supply of electricity in line with its business plan. Despite the increase in coal price,
the fuel for power generation, net sales came to ¥9,596 million (up 13.9% year on year) and operating profit grew 76.1% year on
year, to ¥871 million, due to the increase in the electricity sales price being greater than the increase of coal price.
(Others)
The Topy Industries Group has also endeavored in expanding domestic and international sales of synthetic mica used incosmetics and other products, and in developing application of crawler robots. Furthermore, the Group engages in indoor andoutdoor sign systems, civil engineering and construction, leasing of real estate such as Topy-Rec Plaza (Minami-Suna, Koto-ku,
Tokyo), and the operation of the sports club OSSO. Net sales were ¥6,548 million, and operating profit was ¥1,465 million.
–4–(2) Overview of Financial Position for the Fiscal Year under Review
Asset, liabilities and net assets
Total assets at the end of the consolidated fiscal year under review increased by ¥26,171 million from the end of the previous
consolidated fiscal year, to ¥249,221 million. This was mainly due to an increase of ¥9,472 million in notes and accounts
receivable-trade, a rise of ¥8,964 million in inventories and an increase of ¥6,600 million in cash and deposits.
Liabilities were ¥139,361 million, an increase of ¥21,165 million from the end of the previous consolidated fiscal year. This
mainly reflected an increase of ¥11,171 million in accounts payable, a rise of ¥5,264 million in interest-bearing debts and anincrease of ¥976 million in income tax payable.
Net assets were ¥109,859 million, an increase of ¥5,005 million from the end of the previous consolidated fiscal year. This was
mainly due to an increase of ¥3,380 million in retained earnings, an increase of ¥1,359 million in valuation difference on
available-for-sale securities and an increase of ¥543 million in remeasurements of defined benefit plans. As a result, net assets per
share stood at ¥4,640.13 and the net worth ratio was 43.7%.
Cash flows
Cash and cash equivalents (hereinafter referred to as “funds”) during this consolidated fiscal year stood at ¥23,036 million (anincrease of ¥6,687 million year on year). This was due to the allocation of increased funds from operating activities and financing
activities to the purchase of property, plant and equipment in investment activities.
(Cash flows from operating activities)
Funds provided by operating activities during this consolidated fiscal year stood at ¥10,780 million (an increase of ¥650 million
year on year). This mainly reflected profit before income taxes and non-controlling interests of ¥7,933 million (a decrease of¥2,963 million year on year), depreciation of ¥10,599 million (a decrease of ¥32 million year on year), notes and accounts
receivable-trade of ¥7,497 million (a decrease of ¥3,049 million year on year) and inventories of ¥7,007 million (a decrease of¥6,763 million year on year).
(Cash flows from investment activities)
Funds used in investment activities during this consolidated fiscal year stood at ¥5,861 million (a decrease of ¥4,845 million year
on year). This mainly reflected expenditure for the purchase of property, plant and equipment of ¥8,330 million (an increase of¥108 million year on year) and proceeds from the purchase of shares of subsidiaries, resulting in a change in the scope of
consolidation of ¥3,181 million (an increase of ¥3,181 year on year).
(Cash flows from financing activities)
Funds used in financing activities during this consolidated fiscal year stood at ¥1,834 million (an increase of ¥18,695 million year
on year). This mainly reflected proceeds from long-term loans payable of ¥7,565 million (an increase of ¥6,490 million year onyear) and repayments of long-term loans payable of ¥6,351 million (an increase of ¥2,890 million year on year).
(Reference) Cash flow-related indicators
Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Equity ratio (%)

40.5

42.1

42.7

46.6

43.7

Equity ratio based on market value (%)

18.5

26.2

22.7

31.1

29.2

The ratio of interest-bearing debt tooperating cash flow (years)

8.6

4.0

3.6

5.5

5.7

Interest coverage ratio (times)

8.0

17.0

16.9

12.0

17.3

Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on market value: Market capitalization / Total assets
The ratio of interest-bearing debt to operating cash flow: Interest-bearing debt / Cash flows
Interest coverage ratio: Cash flows / Interest payments(Note 1) All amounts are on a consolidated basis.
(Note 2) Total market value for stocks is calculated on the basis of the number of outstanding shares, excluding treasury stock.
(Note 3) Cash flows are cash flows from operating activities.
(Note 4) Interest-bearing debt is all the debt with interest on the consolidated balance sheet.

–5–(3) Future Outlook
The global economy is expected to continue to make a steady recovery. The Japanese economy is also expected to continue
recovering moderately going forward thanks to improvements in employment/income conditions and the government economic
policy, among other factors. However, the Group will need to keep a close eye on the business environment surrounding theGroup due to uncertain factors, such as protectionist movements mainly in the United States and the outlook of economic
conditions in China and emerging countries.
Under these business conditions, the Topy Industries Group is proceeding with its medium-term plan, “Growth & Change 2018.”
The implementation period for this plan is three years, and it commenced in the previous fiscal year. Working in line with thisplan, the Group will aim to achieve sustainable growth by steadily carrying out a number of measures. These measures include
accelerating the global development of the automotive and industrial machinery components business that the Group regards asdrivers of growth, expanding the lineups of products by taking advantage of the Group’s unique technologies in the steel business,and taking on the challenges of developing new business related to crawler robots and mica. The Group will work to transform
itself into a company that is able to provide job satisfaction to individuals who will play leading roles by ensuring that they haveevery opportunity to fully demonstrate their potential.
For the consolidated results of the next fiscal year, the Group forecasts net sales of ¥283,000 million, operating profit of ¥100,00
million, ordinary profit of ¥10,100 million, and ¥6,800 million for profit attributable to owners of parent upon the reflection of
the impact on the business results of ATC Holding Co., Ltd. being made a wholly-owned subsidiary.
(4) Basic Profit Allocation Policy, and Dividends for the Current and New Fiscal Year
The Company’s basic policy for profit distribution is to return profits to its shareholders based on the consolidated businessresults, while at the same time increasing retained earnings for the development of future business and the strengthening ofcorporate structure. The Company will allocate retained earnings to investment in new business and the development of newtechnologies and products that will contribute to long-term, stable business development, thereby enabling it to strengthen its
corporate structure and global competitiveness. In terms of the index of profit return based on consolidated business earnings, itwill aim for an approximate range of 30% to 35%, a consolidated payout ratio that will be determined after carefully studying thepossibility of continuing to pay dividends consistently.
For the year-end dividend for this consolidated fiscal year, the Company plans to pay ¥60 per share. Given the interim dividendof ¥20 per share paid, the annual dividend for the fiscal year under review will be ¥80 per share.
In terms of the dividends for the next fiscal year, the Company plans to pay ¥90 yen per year.

2. Basic Policy for the Selection of Accounting Standards
The Group adopts the Japanese accounting standards, taking into account the possibility of comparing terms of consolidated
financial statements and performances between the companies.
It will work to adopt the International Financial Reporting Standards as appropriate, considering the situation in both Japan andother countries.

–6–3. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheets(Million yen)Previous Consolidated
Accounting Year
(March 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts

Current Consolidated
Accounting Year
(March 31, 2018)16,57943,781
12,337
4,310
9,915
1,530
5,728
(28)

23,17953,253
17,572
5,503
12,452
1,434
6,600
(65)

94,154

119,930

83,348(54,051)

85,948(57,633)

29,296
179,388(134,090)

28,315
186,638(145,132)

Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation

45,29815,4993,955(2,044)41,506
15,897
3,493(2,172)

Leased assets, net
Construction in progress
Other
Accumulated depreciation

1,910
1,849
32,809(31,001)

1,320
3,871
38,586(37,290)

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation

1,808

1,295

Total property, plant and equipment
Intangible assets
Other

Other, net

95,66392,206

1,722

3,078

Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts

1,722

3,078

27,272
626
1,025
–
2,681
(94)

29,351
469
1,027
365
2,852
(60)

Total investments and other assets
Total non-current assets
Total assets–7–

31,51034,005

128,895

129,291

223,050249,221

(Million yen)Previous Consolidated
Accounting Year
(March 31, 2017)
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term loans payable
Current portion of bonds
Lease obligations
Income taxes payable
Other

Current Consolidated
Accounting Year
(March 31, 2018)

20,49912,34816,503
3,300
604
738
11,224

26,324
17,694
17,356
5,000
582
1,715
14,21865,21882,89120,80015,227
1,765
789
195
–
–
305
11,031177
2,683

20,80017,940
875
1,613
158
28
42
248
11,249276
3,238

52,97756,470Total liabilities

118,196

139,361

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

20,983
18,62559,922(1,728)20,98318,652
63,302(1,734)

Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for corporate officers' retirement benefits
Provision for officers’ stock benefits
Provision for directors' retirement benefits
Reserve for repairs
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities

97,801

101,203

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

Total shareholders’ equity

6,610
(14)
332
(778)

7,970
(9)
31
(235)

Total accumulated other comprehensive income

6,149

7,756

902

899

104,853

109,859

223,050249,221

Non-controlling interests
Total net assets
Total liabilities and net assets–8–(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Million yen)

Net sales
Cost of sales

Previous Consolidated
Current Consolidated
Accounting Year
Accounting Year
(April 1, 2016 - March 31, 2017) (April 1, 2017 - March 31, 2018)
208,237
230,462
173,350
192,741

Gross profit
Selling, general and administrative expenses

34,886
27,70637,72029,723Operating profit
Non-operating income
Interest income
Dividends income
Share of profit of entities accounted for using equity
methodInsurance income
Other

7,180

7,997

77
619

69
683

81

144

133
267

31
382

Total non-operating income
Non-operating expenses
Interest expenses

1,179

1,311

802

608

Foreign exchange losses

728－

Premium paid
Other

136
575

135
530

2,243

1,274

6,116

8,034

7,104
54
–
38

266
520
3,066
–

7,197

3,853

890
779
14
4
300
356
69

303
496
–
1,089
–
2,007
55

Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on bargain purchase
Other
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on reduction of non-current assets
Loss on valuation of investment securities
Restructuring loss
Impairment loss
Other

2,415

3,953

Profit before income taxes and non-controlling interests

Total extraordinary losses

10,897

7,933

Income taxes - current
Income taxes - deferred

1,750
1,719

2,402
(70)

Total income taxes

3,469

2,331

Profit

7,427

5,602

Profit attributable to non-controlling interests
Profit attributable to owners of parent

–9–

236

101

7,191

5,500

(Consolidated Statements of Comprehensive Income)(Million yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method

Previous Consolidated
Current Consolidated
Accounting Year
Accounting Year
(April 1, 2016 - March 31, 2017) (April 1, 2017 - March 31, 2018)
7,427
5,602

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests– 10 –

1,563(0)(1,604)
265

1,354
5
(310)
542

51

5

274

1,597

7,702

7,199

7,475

7,107

226

91

(3) Consolidated Statements of Changes in Net Assets
Previous Consolidated Accounting Year (April 1, 2016 - March 31, 2017)(Million yen)
Shareholders’ equity
Capital stock
Balance at the beginning of year

Capital surplus

20,983Retained earnings

18,824

Total shareholders’equityTreasury shares

54,152(931)

93,028Changes of items during period
Dividends of surplus(1,421)(1,421)

Profit attributable to owners ofparent

7,191

7,191

Purchase of treasury shares
Disposal of treasury shares(65)

Change in ownership interest ofparent due to transactions with
non-controlling interests(133)(1,663)(1,663)

865

800
(133)

Net changes of items other thanshareholders' equity
Total changes of items during
periodBalance at the end of year

–

(198)

5,770

(797)

4,773

20,983

18,62559,922(1,728)97,801

Accumulated other comprehensive income

Balance at the beginning of year

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

4,995

(13)

1,927

Total
Remeasurements accumulatedof definedotherbenefit planscomprehensive
income(1,044)

5,865

Noncontrollinginterests

Total net assets

1,080

99,973

Changes of items during period
Dividends of surplus(1,421)

Profit attributable to owners ofparent

7,191

Purchase of treasury shares(1,663)

Disposal of treasury shares

800

Change in ownership interest ofparent due to transactions with
non-controlling interests(133)

Net changes of items other thanshareholders' equity

1,614

(0)

(1,594)

265

284

(178)

106

Total changes of items during
period1,614(0)(1,594)

265

284

(178)

4,880

Balance at the end of year

6,610

(14)

332

(778)

6,149

902

104,853– 11 –

Current Consolidated Accounting Year (April 1, 2017 - March 31, 2018)(Million yen)
Shareholders’ equity
Capital stock
Balance at the beginning of year

Capital surplus

20,983Retained earnings

18,625

Total shareholders’equityTreasury shares

59,922(1,728)97,801

Changes of items during period
Dividends of surplus(2,120)(2,120)

Profit attributable to owners ofparent

5,500

5,500

Purchase of treasury shares

(13)

(13)

Disposal of treasury shares

7

7

Change in ownership interest ofparent due to transactions with
non-controlling interests

27

27

Net changes of items other thanshareholders' equity
Total changes of items during
periodBalance at the end of year

–

27

3,380

(5)

3,402

20,98318,652

63,302(1,734)

101,203

Accumulated other comprehensive income

Balance at the beginning of year

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

6,610

(14)

332

Total
Remeasurements accumulatedof definedotherbenefit planscomprehensive
income
(778)

6,149

Noncontrollinginterests

Total net assets

902

104,853

Changes of items during period
Dividends of surplus(2,120)

Profit attributable to owners ofparent

5,500

Purchase of treasury shares(13)

Disposal of treasury shares

7

Change in ownership interest ofparent due to transactions with
non-controlling interests

27

Net changes of items other thanshareholders' equity

1,359

4

(301)

543

1,606

(2)

1,603

Total changes of items during
period

1,359

4

(301)

543

1,606

(2)

5,005

Balance at the end of year

7,970

(9)

31

(235)

7,756

899

109,859– 12 –

(4) Consolidated Cash Flow Statements(Million yen)Previous Consolidated
Current Consolidated
Accounting Year
Accounting Year
(April 1, 2016 - March 31, 2017) (April 1, 2017 - March 31, 2018)
Cash flows from operating activities–
Profit (loss) before income taxes and non-controllinginterests
Depreciation
Gain on bargain purchase
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in allowance for executive
directors’ retirement benefits
Increase (decrease) in allowance for periodic repairs
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Insurance income
Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on sales of short-term and long-term
investment securities
Loss (gain) on valuation of short-term and long-term
investment securities
Loss (gain) on sales and retirement of property, plantand equipment
Loss on reduction of non-current assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase/decrease in other assets/liabilities

10,897

7,933

10,631–356
24

10,599(3,066)
2,007
0

35

(37)

134
400
(697)
802
(133)

(57)
385
(752)
608
(31)

(81)

(144)

(54)

(520)

4

1,089

(5,434)

533

14

–

(4,448)(7,497)(243)(7,007)

3,037

8,707

(1,934)(1,292)

Subtotal

13,313

11,457

Interest and dividend income received
Interest expenses paid
Proceeds from insurance income
Income taxes paid

776
(842)
133
(3,250)

808
(623)
31
(893)

Net cash provided by (used in) operating activities

10,13010,780– 13 –

(Million yen)Previous Consolidated
Current Consolidated
Accounting Year
Accounting Year
(April 1, 2016 - March 31, 2017) (April 1, 2017 - March 31, 2018)
Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Payments for investments in capital
Payments of loans receivableCollection of loans receivable
Purchase of intangible assets
Payments for liquidation of subsidiaries and associates
Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation
Payments for sales of investments in capital ofsubsidiaries and associates resulting in change in scopeof consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Increase (decrease) in deposits received through CMS
Repayments of lease obligations
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Purchase of treasury shares
Proceeds from disposal of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents

142(8,439)
9,637
(13)
69
(756)
(20)
17
(496)
(809)

86
(8,330)916(1,474)
883
–
(16)
173
(1,449)
–

–

3,181

(365)

–

18

168

(1,016)(5,861)(5,511)
1,074(9,241)
298
(300)
0
(377)

1,741
7,565
(6,351)
4,954(3,300)
0
(578)

(352)

–

(1,663)800(1,419)
(168)

(13)
0
(2,117)(66)(16,861)

1,834

(502)

(65)

Net increase (decrease) in cash and cash equivalents(8,250)6,687

Cash and cash equivalents at the beginning of year

24,59916,349Cash and cash equivalents at the end of year

16,34923,036– 14 –

(5) Notes regarding the consolidated financial statements(Note Related to Going-Concern Assumption)
None(Segment information)
1. Summary of the reportable segments
The reportable segments of the Company are units constituting the Company that are to be regularly examined by the
Board of Directors to determine the allocation of management resources and evaluate the business results, as their financial
information is available separately from that of others.
The Company has business divisions by product and service, and each business division develops a comprehensive
domestic and overseas strategy for the products and services it offers in conducting its business activities.
Accordingly, the Company consists of segments by product and service based on the business divisions. There are threereportable segments: the Steel Business, the Automotive & Industrial Machinery Components Business and the PowerBusiness.
The Steel Business produces general section steel, deformed section steel, deformed bar steel and other steel products.
The Automotive & Industrial Machinery Component Business produces various wheels for automobiles, industrial vehicles
and construction machinery, pressing products, components for construction machinery, industrial fasteners, etc. The PowerBusiness engages in the wholesale of electricity.
2. Method of calculating amounts of net sales, profits or losses, assets and other items by reportable segment
The accounting method for the business segments reported is the same as that stated in “Important basic matters for
preparation of the consolidated financial statements.” In addition, the profits of the reportable segments show operating
profits. The internal revenue and transfer between segments are based on the actual market price.
3. Information regarding amounts of net sales, profits or losses, assets and other items by reportable segment
Previous consolidated fiscal year (from April 1, 2016 to March 31, 2017)(Million yen)
Reportable segment

Steel

Automotive&
Industrial
Machinery
Component
s

Power

Total

Others(Note) 1

Total

Amount ofadjustment(Note) 2

Amount recordedin the consolidated
financialstatements(Note) 3

Net sales
Net sales to outside
customers

63,803

129,6818,425

201,9106,326

208,237–

208,237

Internal sales or transfer
between segments

13,955––

13,955–

13,955(13,955)–
208,237

Total

77,758

129,6818,425

215,865

6,326

222,192(13,955)

Profits of segment

2,882

6,524

494

9,901

1,557

11,459(4,279)

7,180

Assets of segment

84,89197,093

5,797

187,783

13,328201,112

21,938223,050

Depreciation

4,324

5,244

602

10,170384

10,55576

10,631

Increase in property, plantand equipment andintangible assets

2,937

5,601

593

9,131

202

9,334

540

9,874

Other items(Note) 1. The category “Others” includes the business segments not included in the reportable segments such assynthetic mica, crawler robots, indoor and outdoor sign systems, civil engineering and construction, theleasing of real estate and the operation of the sports club.
2. The details of the adjustment are as explained below.
(1) Profits of segment in an amount of a loss of ¥4,279 million are common corporate expenses, etc. notallocated to the respective reportable segments. The common corporate expenses are mainly the
expenses related to the administrative divisions of the Company that are not attributable to the reportablesegments.
(2) Assets of segment in an amount of ¥21,938 million include the corporate assets of ¥26,228 million notallocated to the respective reportable segments and the elimination of intra-company transactions
between segments in an amount of -¥4,290 million. The corporate assets are mainly the assets related tothe administrative divisions of the Company that are not attributable to the reportable segments.
– 15 –

(3) Of the Other items, depreciation of ¥76 million mainly relates to the equipment of the administrative
divisions of the Company. In addition, an increase in property, plant and equipment and intangible assets
in an amount of ¥540 million is mainly capital spending of the administrative divisions of the Company.
3. Profit of segment is adjusted with operating profit recorded under the consolidated financial statements.
Consolidated fiscal year under review (from April 1, 2017 to March 31, 2018)(Million yen)
Reportable segment

Steel

Automotive&
Industrial
Machinery
Component
s

Power

Total

Others(Note) 1

Total

Amount ofadjustment(Note) 2

Amount recordedin the consolidated
financialstatements(Note) 3

Net sales
Net sales to outside
customers

71,525

142,790

9,596

223,913

6,548

230,462–

230,462Internal sales or transfer
between segments

19,782––

19,782–

19,782(19,782)–
230,462

Total

91,308142,790

9,596

243,695

6,548

250,244(19,782)

Profits of segment

1,925

8,433

871

11,230

1,465

12,695(4,698)

7,997

Assets of segment

94,420110,603

5,495

210,519

14,847225,366

23,855249,221

Depreciation

4,296

5,224

541

10,061454

10,51682

10,599

Increase in property, plantand equipment andintangible assets

4,118

5,635

367

10,121

488

10,610

1,522

12,132Other items(Note) 1. The category “Others” includes the business segments not included in the reportable segments such assynthetic mica, crawler robots, indoor and outdoor sign systems, civil engineering and construction, theleasing of real estate and the operation of the sports club.
2. The details of the adjustment are as explained below.
(1) Profits of segment in an amount of a loss of ¥4,698 million are common corporate expenses, etc. notallocated to the respective reportable segments. The common corporate expenses are mainly the
expenses related to the administrative divisions of the Company that are not attributable to the reportablesegments.
(2) Assets of segment in an amount of ¥23,855 million include the corporate assets of ¥29,913 million notallocated to the respective reportable segments and the elimination of intra-company transactions
between segments in an amount of -¥6,058 million. The corporate assets are mainly the assets related tothe administrative divisions of the Company that are not attributable to the reportable segments.
(3) Of the Other items, depreciation of ¥82 million mainly relates to the equipment of the administrative
divisions of the Company. In addition, an increase in property, plant and equipment and intangible assets
in an amount of ¥1,522 million is mainly capital spending of the administrative divisions of theCompany.
3. Profit of segment is adjusted with operating profit recorded under the consolidated financial statements.

(Information per share)Previous consolidated fiscal year
Consolidated fiscal year under review(from April 1, 2016 to March 31, 2017) (from April 1, 2017 to March 31, 2018)
Net assets per share
Profit per share

4,426.81 yen

4,640.13 yen

303.90 yen

234.25 yen(Note) 1. Profit per share after full dilution is not stated because there are no dilutive shares.
2. The shares were consolidated at the ratio of 10 to 1 shares of common stock effective on October 1, 2016. Accordingly, inthe calculation of profit per share, it was assumed that the said stock consolidation took place at the beginning of theprevious consolidated fiscal year.
3. In the calculation of net assets per share, the shares of the Company that are held by the trust related to the stockcompensation plan for directors, etc. are included in the treasury shares that are deducted from the total number of shares– 16 –

issued and outstanding at the end of the fiscal year (72 thousand shares for the previous consolidated fiscal year and 68
thousand shares for the consolidated fiscal year under review).
In addition, also in the calculation of profit per share, the said shares above are included in the treasury shares that are
deducted in the calculation of the average number of shares during the fiscal year (72 thousand shares for the previous
consolidated fiscal year and 69 thousand shares for the consolidated fiscal year under review).
4. The bases for the calculation of profit per share are as shown below.
Previous consolidated fiscal year
Consolidated fiscal year under review(from April 1, 2016 to March 31, 2017) (from April 1, 2017 to March 31, 2018)
Profit attributable to owners of parent (million
yen)
Amount not attributable to common shareholders(million yen)
Profit attributable to owners of parent in relation
to common shares (million yen)
Average number of shares during the fiscal year
(thousand shares)

7,191

5,500

–

–

7,191

5,500

23,662

23,482(Important events after the reporting period)(A subsidiary made upon the acquisition of shares)
The Company decided to acquire the shares at the meeting of the Board of Directors on April 17, 2018 and entered into anagreement for the transfer of the shares on the same day.
The outline is as shown below.
(1) Purpose of the acquisition of shares
The Company positions the automotive components business as a driver of growth under the medium-term consolidated
management plan, “Growth & Change 2018,” which is currently implemented to achieve sustainable growth by accelerating the
global business expansion. To this end, the Company decided to acquire the shares for the construction of a new foundation for
the global system to supply aluminum wheels.
(2) Names of the companies and entities from which the Company acquires the shares
Unison Capital III(F), L.P. and seven other partnerships(3) Name, business and scale of the company to be acquired(i) Name: ATC Holdings Co., Ltd.
(ii) Business description: management of the subsidiaries engaging in the manufacture and sales of aluminum wheels forautomobiles and two-wheel vehicles and aluminum gravity casting components forautomobiles(iii) Stated capital: 100 million yen(4) Date of acquisition of shares
May 31, 2018 (scheduled)(5) Number of shares to be acquired, acquisition cost and shareholding ratio after acquisition(i) Number of shares acquired: 1,214,100 thousand shares(ii) Acquisition cost: 14,494 million yen (rough estimate)(iii) Shareholding ratio after acquisition: 100%(6) Method of financing of the funds for payment and payment of those funds
Appropriation of the funds on hand and interest-bearing debts– 17 –