JFE Holdings, Inc.
Financial Report for
Fiscal year ended March 31, 2024

Financial Information
1. Preparation Policy of the Consolidated Financial Statements
The consolidated financial statements of the Company are prepared in accordance with International Financial Reporting Standards(hereinafter referred to as “IFRS”) pursuant to the provisions of Article 93 of the Ordinance on Terminology, Forms, and Preparation
Methods of Consolidated Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976; hereinafter referred to as the“Ordinance on Consolidated Financial Statements”).

2. Audit Certification
In accordance with the provisions of Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act, the consolidated
financial statements of the Company for the fiscal year ended March 31, 2024 were audited by Ernst & Young ShinNihon LLC.

3. Particular Efforts to Secure the Appropriateness of Consolidated Financial Statements
The Company is making particular efforts to ensure the appropriateness of consolidated financial statements. Specifically, in orderto establish a system for gaining proper understanding of the details and revisions of accounting standards and relevant guidance
and responding accordingly, the Company has joined the Financial Accounting Standards Foundation and attends seminars andworkshops held by the foundation.

4. Development of a System for Fair Preparation of Consolidated Financial Statements in Accordance with IFRSIn order to prepare appropriate consolidated financial statements under IFRS, the Company keeps up to date with the latest
accounting standards and assesses their impact by obtaining press releases and standards issued by the International AccountingStandards Board as necessary. The Company has also formulated the Group Accounting Policies in compliance with IFRS andconducts its accounting based on those policies. In addition, the Company attends seminars and workshops held by the Financial
Accounting Standards Foundation, audit firms, and other organizations, thereby accumulating expertise within the Company.

ʊ1ʊ

Consolidated Financial Statements
Consolidated Statement of Financial Position(million yen)
Notes

As of March 31, 2023

As of March 31, 2024

AssetsCurrent assets
Cash and cash equivalents

7, 22

119,391

243,079

Trade and other receivables

8, 22, 40

776,115

762,428

Contract assets

28

116,293

134,569

Inventories

9

1,367,230

1,348,378

22,957

5,792

Other financial assets

10, 4018,937

18,778Other current assets

11

96,759113,992

2,517,685

2,627,020

40,929㸫

2,558,615

2,627,020

1,891,053

1,948,217

Income taxes receivable

Subtotal
Assets held for sale

12

Total current assets
Non-current assets
Property, plant and equipment

13, 22

Goodwill

14

14,911

15,446

Intangible assets

14

126,855

140,591

Right-of-use assets

15, 22

98,611

98,75816

53,55952,8496, 19, 22465,482

561,477

Investment property
Investments accounted for using equity
methodRetirement benefit asset

25

23,521

29,495

Deferred tax assets

20

74,72856,249Other financial assets

10, 22, 40

200,599

207,448

Other non-current assets

11

16,10017,4102,965,425

3,127,944

5,524,040

5,754,964

Total non-current assets
Total assets6

ʊ2ʊ

(million yen)
Notes

As of March 31, 2023

As of March 31, 2024

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Bonds payable, borrowings, and leaseliabilities
Contract liabilities

21, 22, 40

703,212

667,072

22, 39,40

397,026

426,42828

48,54350,18632,32032,69824

10,781

12,191Other financial liabilities

23, 40

181,046

149,300

Other current liabilities

11

265,268

282,317

1,638,200

1,620,195

23,598

㸫

1,661,798

1,620,195

22, 39, 40

1,465,939

1,403,849

25

120,663

105,706

Provisions

24

19,12817,592

Deferred tax liabilities

20

5,480

6,050

Other financial liabilities

23, 4041,32553,467

Other non-current liabilities

11

16,308

9,581

1,668,846

1,596,247

3,330,644

3,216,443

Income taxes payable
Provisions

Subtotal
Liabilities directly associated with assets
held for sale
Total current liabilities
Non-current liabilities
Bonds payable, borrowings, and leaseliabilities
Retirement benefit liability

12

Total non-current liabilities
Total liabilities
EquityShare capital

26

147,143

171,310

Capital surplus

26

640,536

587,266

Retained earnings

26

1,397,735

1,570,027

Treasury shares26(156,408)(14,938)

91,315150,461

2,120,322

2,464,128

73,07374,392

2,193,395

2,538,521

5,524,040

5,754,964

Other components of equity
Equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

ʊ3ʊConsolidated Statement of Profit or Loss(million yen)

Revenue
Cost of sales

Notes

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

28

5,268,794

5,174,632

13, 14, 30(4,659,371)(4,518,447)

609,423

656,185

13, 14, 29,
30, 31(392,446)(408,682)

6, 19

23,00256,16012, 3238,06047,482

33(42,198)(52,921)235,841

298,224

6

4,105

㸫

6, 17

(3,542)(11,220)

6, 12, 34(6,739)㸫

Gross profit

Selling, general and administrative expenses
Share of profit of investments accounted forusing equity method
Other income
Other expenses
Business profit
Gain on sales of land
Impairment losses
Loss on liquidation of subsidiaries andassociates
Restructuring expenses

6, 35

Operating profit(4,578)㸫

225,086

287,003

Finance income

6, 36

3,677

5,048

Finance costs

6, 36(18,481)(23,665)

210,282

268,386(43,530)(67,414)

166,752

200,971

162,621

197,421

4,130

3,550

166,752

200,971

Profit before tax
Income tax expense

20

Net profit

Profit attributable to:
Owners of parent
Non-controlling interests
Net profit

Earnings per share
Basic earnings per share (yen)38

280.68323.33

Diluted earnings per share (yen)38

280.52315.09ʊ4ʊConsolidated Statement of Comprehensive Income(million yen)Notes

Net profit

Fiscal year ended March 31, Fiscal year ended March 31,
2023
2024

166,752

200,971

25, 37

8,144

18,00037, 40(8,651)

11,69819, 37

2,891

653

2,384

30,351Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans
Net change in fair value of equity instruments
designated as measured at fair value through othercomprehensive income
Share of other comprehensive income of investments
accounted for using equity method
Total of items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations

37

18,23922,569Effective portion of cash flow hedges

37

1,823

5,035

19, 37

14,614

29,63534,67757,24037,06187,592203,814

288,563

198,999

284,357

Non-controlling interests

4,815

4,206

Comprehensive income

203,814

288,563

Share of other comprehensive income of investments
accounted for using equity method
Total of items that may be reclassified to profit orloss
Total other comprehensive income

Comprehensive income

Comprehensive income attributable to:
Owners of parent

ʊ5ʊConsolidated Statement of Changes in Equity(million yen)
Equity attributable to owners of parent
Other components of equity

Notes

Net change infair value ofequityinstruments
Treasury shares Remeasurements
designated asof definedmeasured at fairbenefit plansvalue throughothercomprehensive
incomeShare capital

Capital surplus

Retainedearnings

147,143652,233

1,294,875(180,580)–

55,560Net profit––

162,621–––

Other comprehensive income

–

–

–

–

9,023

(6,700)Comprehensive income––

162,621–9,023(6,700)Purchase of treasury shares

–

–

–

(60)

–

–

Disposal of treasury shares–(2,000)–24,204––––(75,198)–––

Balance as of April 1, 2022

Dividends

27

Share-based payment transactions

31

Changes in scope of consolidation
Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings
Transfer to non-financial assets

40

Other
Total transactions with owners
Balance as of March 31, 2023

–

131

–

27

–

–

–

–

–

–

–

–

–

(9,827)

–

–

–

–

–

–

15,437–(9,023)(6,413)

–

–

–

–

–

–

–

–

–

–

–

–

–

(11,696)(59,761)

24,172(9,023)(6,413)

147,143

640,536

1,397,735(156,408)–

42,446Equity attributable to owners of parent
Other components of equity
Non-controllinginterests

Exchangedifferences ontranslation offoreign
operations

Effective
portion of cash
flow hedges

16,086

2,949

74,596

1,988,268

82,4702,070,739–––

162,6214,130

166,752

Other comprehensive income

31,8542,200

36,37736,377684

37,061

Comprehensive income

31,8542,200

36,377

198,999

4,815

203,814Purchase of treasury shares

–

–

–

(60)

–

(60)

Disposal of treasury shares

–

–

–

22,204–

22,204––(75,198)(1,815)(77,014)

Notes

Balance as of April 1, 2022
Net profit

Total

Total equity

Total

Dividends

27–

Share-based payment transactions

31

–

–

–

158

–

158

–

–

–

–

(127)

(127)

–

–

–

(9,827)(12,382)(22,210)––(15,437)

–

–

–

–

(4,221)(4,221)(4,221)–(4,221)

–

–

–

–

112

112

–

(4,221)(19,658)(66,944)(14,213)(81,157)

47,941

928

91,3152,120,322

73,073

2,193,395

Changes in scope of consolidation
Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings
Transfer to non-financial assets
Other
Total transactions with owners
Balance as of March 31, 2023

40

ʊ6ʊ

(million yen)
Equity attributable to owners of parent
Other components of equity

Notes

Net change infair value ofequityinstruments
Share
Remeasurements
designated asacquisitionof definedmeasured at fairrightsbenefit plansvalue throughothercomprehensive
incomeCapitalsurplusRetainedearnings

Treasuryshares147,143

640,536

1,397,735(156,408)

㸫Net profit㸫㸫

197,421

㸫

㸫

㸫

㸫

Other comprehensive income

㸫

㸫

㸫

㸫

㸫

18,281

11,862Comprehensive income㸫㸫

197,421㸫㸫

18,281

11,862

24,167

24,167

㸫

㸫

㸫

㸫

㸫

㸫

(453)

㸫

㸫

㸫

㸫

㸫

Share capital

Balance as of April 1, 2023

Issuance of new shares

26

Share issuance cost㸫

42,446

㸫

㸫

㸫

(76)

㸫

㸫

㸫

Disposal of treasury shares26

㸫(75,184)㸫

141,432㸫㸫㸫

Dividends

27

㸫

㸫

(49,275)

㸫

㸫

㸫

㸫

Share-based payment transactions

31

㸫

47

㸫

114

㸫

㸫

㸫

Issuance of convertible bonds

㸫

㸫

㸫

㸫

3,081

㸫

㸫

Changes in scope of consolidation
Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings
Transfer to non-financial assets

㸫

(1)

㸫

㸫

㸫

㸫

㸫

㸫

(1,846)

㸫

㸫

㸫

㸫

㸫

㸫

㸫

24,146㸫㸫

(18,281)(5,864)

㸫

㸫

㸫

㸫

㸫

㸫

㸫

㸫

㸫

㸫

㸫

㸫

㸫

㸫

24,167(53,269)(25,129)

141,470

3,081(18,281)(5,864)

171,310587,266

1,570,027(14,938)3,081

㸫

48,444Purchase of treasury shares

Other
Total transactions with owners
Balance as of March 31, 2024

40

ʊ7ʊ

Equity attributable to owners of parent
Other components of equity
Non-controllinginterests

Exchangedifferences ontranslation offoreign
operations

Effective
portion of cash
flow hedges

47,941

928

91,3152,120,322

73,073

2,193,395

㸫㸫㸫

197,4213,550

200,971

48,094

8,697

86,93586,935656

87,59248,094

8,697

86,935284,357

4,206

288,563㸫㸫㸫

48,335

㸫

48,335

Share issuance cost

㸫

㸫

㸫

(453)

㸫

(453)

Purchase of treasury shares

㸫

㸫

㸫

(76)

㸫

(76)

Notes

Balance as of April 1, 2023
Net profit
Other comprehensive income
Comprehensive income
Issuance of new shares

26

Total

Total equity

Total

Disposal of treasury shares

26

㸫

㸫

㸫

66,248

㸫

66,248Dividends

27

㸫

㸫

㸫

(49,275)(1,698)(50,973)

Share-based payment transactions

31

㸫

㸫

㸫

162

㸫

162

Issuance of convertible bonds

㸫

㸫

3,081

3,081

㸫

3,081

Changes in scope of consolidation

㸫

㸫

㸫

(1)

(484)

(485)

Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings

㸫

㸫

㸫

(1,846)(801)(2,648)㸫㸫

(24,146)

㸫

㸫

㸫

㸫

(6,725)(6,725)(6,725)

㸫(6,725)

㸫

㸫

㸫

㸫

97

97

㸫

(6,725)(27,790)

59,448(2,887)56,561

96,0352,900

150,4612,464,128

74,392

2,538,521

Transfer to non-financial assets
Other
Total transactions with owners
Balance as of March 31, 2024

40

ʊ8ʊ

Consolidated Statement of Cash Flow(million yen)
Notes

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Cash flows from operating activities
Profit before tax

210,282

268,386

Depreciation and amortization

269,600

274,101

Changes in allowance(5,172)(559)

Interest and dividend income(9,315)(10,513)Interest expenses
Share of loss (profit) of investments accounted
for using equity method
Changes in trade and other receivables

16,76021,353(23,002)(56,160)

19,336

31,139Changes in inventories(124,579)

34,7806,995(43,563)

Changes in trade and other payables
Other

117,396(2,209)Subtotal

478,301

516,754

Interest and dividends received

37,25024,699Interest paid

(15,155)(20,507)

Income taxes paid
Net cash provided by (used in) operating
activities(104,599)(41,979)395,797478,967(289,197)(329,830)

17,673

10,329Cash flows from investing activities
Purchase of property, plant and equipment,
intangible assets, and investment property
Proceeds from sale of property, plant andequipment, intangible assets, and investment
property
Purchase of investments(9,072)(16,183)

Proceeds from sale of investments

20,93914,281Other
Net cash provided by (used in) investing
activities(14,651)(3,855)(274,308)(325,259)

ʊ9ʊ

(million yen)
Notes

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

39

(4,576)(13,970)

Cash flows from financing activities
Changes in short-term borrowings
Changes in commercial papers

39

19,999(19,999)

Proceeds from long-term borrowings

39

305,876

60,347

Repayments of long-term borrowings

39(330,944)(130,654)

Proceeds from issuance of bonds

39

30,00090,000

Payments for redemption of bonds

39(20,000)(40,000)

Proceeds from issuance of shares

26–

52,072(60)(76)

Payments for purchase of treasury shares
Proceeds from disposal of treasury shares

26

884

62,499Dividends paid to owners of parent

27(75,198)(49,275)

Other
Net cash provided by (used in) financing
activities

39(36,155)(56,429)(110,175)(45,487)

7,839

13,931

19,153

122,151(1,536)

1,536

101,773

119,391

119,391

243,079

Effect of exchange rate change on cash and cash
equivalents
Changes in cash and cash equivalents
Changes in cash and cash equivalents resulting
from transfer to assets held for sale
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

7

ʊ10ʊ

Notes to Consolidated Financial Statements
1. Reporting Entity
JFE Holdings, Inc. (the “Company”) is an incorporated company established under Japan’s Companies Act and is located in Japan.
The consolidated financial statements of the Company, as of March 31, 2024, consist of the Company and its subsidiaries (the“Group”) and its interests in associates and joint arrangements of the Company.
Details of the Group’s business are described in Note “6. Segment Information.”

2. Basis of Presentation(1) Statement of compliance with IFRSAs the Company meets the requirements for treatment as a “specified company under the designated international accounting
standards,” set out under Article 1-2 of the Ordinance on Consolidated Financial Statements, the provision of Article 93 of the said
ordinance is applied. The Group’s consolidated financial statements are therefore prepared in accordance with IFRS issued by theInternational Accounting Standards Board.
The Group’s consolidated financial statements for the fiscal year ended March 31, 2024 were authorized for issue on July 26,
2024 by Yoshihisa Kitano, President and CEO.
(2) Basis of measurement
The Group’s consolidated financial statements have been prepared on a historical cost basis, with the exception of financial
instruments described in Note “3. Material Accounting Policies.”(3) Functional currency and reporting currency
The Group’s consolidated financial statements are presented in Japanese yen, which is the Company’s functional currency.
Amounts less than one million yen are rounded down.
(4) Changes in presentation(Consolidated Statement of Cash Flow)“Proceeds from disposal of treasury shares,” which was included in “Other” under “Cash flows from financing activities” in thefiscal year ended March 31, 2023, is presented separately in current fiscal year due to its increased materiality in terms of amount.
The consolidated financial statements for the fiscal year ended March 31, 2023 have been reclassified to reflect this change inpresentation.
As a result, 884 million yen included in “Other” under “Cash flows from financing activities” in the consolidated statement ofcash flow for the fiscal year ended March 31, 2023 has been reclassified as “Proceeds from disposal of treasury shares.”3. Material Accounting Policies(1) Basis of consolidation(i) Subsidiaries
Subsidiaries are those companies over which the Company has control. If the Group has an exposure or right to variable
returns from involvement in the investee, and has the ability to use its power over the investee to affect the amount of returns,
then it is regarded as controlling the investee.
If there is a change in equity interest in a subsidiary without loss of control, it is accounted for as a capital transaction. If
there is a change in equity interest in a subsidiary accompanied by a loss of control, the subsidiary’s assets and liabilities, noncontrolling interests related to the subsidiary, and other components of equity are derecognized, with any gain or loss resulting
therefrom recognized in profit or loss.
For subsidiaries whose reporting periods end on a date that differs from that of the parent entity, provisional financial
statements as of the consolidated reporting date are used.

ʊ11ʊ

(ii) Associates and joint arrangements
An entity in which the Group owns at least 20% and at most 50% of the voting rights is considered an associate unless it
can be clearly demonstrated that the Company cannot exercise influence over financial and operating policy decisions of theentity. An entity in which the Group owns less than 20% of the voting rights is considered an associate if the Company can
exercise influence over financial and operating policy decisions of the entity. Investments in associates are accounted for using
the equity accounting method.
A joint arrangement is an arrangement in which two or more parties have joint control such that decisions about the relevant
activities of the arrangement require the unanimous consent of the parties sharing control. If the parties that share joint control
have substantial rights to the assets and obligations for the liabilities relating to the arrangement, it is called a joint operation.
If an arrangement is structured through a separate vehicle and the parties that share joint control have rights to the net assetsof the arrangement, it is called a joint venture. In relation to its interest in a joint operation, the Group recognizes its share ofassets, liabilities, revenue, and expenses. Joint ventures are accounted for using the equity accounting method.
For associates whose reporting periods end on a date that differs from that of the parent entity, provisional financial
statements as of the consolidated reporting date are prepared.
For JSW Steel Limited, provisional financial statements are prepared based on December 31 as the reporting date because
local legislation imposes restrictions on when certain information becomes available to the Company. Necessary adjustments
have been made for material transactions or events disclosed between JSW Steel’s provisional reporting date and theconsolidated reporting date.

(2) Business combinations
Business combinations are accounted for using the acquisition method.
Identifiable assets acquired and liabilities assumed through business combinations, as a general rule, are measured at fair value.
If the total value of the fair value of consideration (including contingent consideration) transferred in the business combination,
the amount of any non-controlling interests of the acquiree, and the fair value of the acquirer’s previously held equity interest in
the acquiree (“Value A”) exceeds the net value (in principle, fair value) of the acquiree’s identifiable assets and liabilities assumed(“Value B”), the excess is recognized as goodwill. If, on the other hand, Value A is less than Value B, the difference is recognizedin profit or loss as of the acquisition date.
For each individual transaction, the Company chooses to measure non-controlling interests at fair value or as a proportionate
share of the fair value of identifiable net assets of the acquiree.
(3) Foreign currency translation(i) Translation of foreign currency transactions
Foreign currency transactions are translated into the functional currency of each company using the exchange rate or similarrate prevailing on the transaction date. Monetary items denominated in foreign currencies at the end of the reporting period
are translated into the functional currency at the exchange rate prevailing at the end of the reporting period. Non-monetary
items denominated in foreign currencies measured at fair value are translated into the functional currency at the exchange rate
prevailing on the date on which the fair value is determined. The resulting exchange differences are recognized in profit orloss. When the valuation difference of a non-monetary item is recognized in other comprehensive income, any exchange
component is recognized in other comprehensive income.
(ii) Translation of foreign operations
Assets and liabilities of foreign operations are translated at the exchange rates prevailing at the end of the reporting period.
In addition, revenues and expenses of foreign operations are translated at the average exchange rates for the reporting period
unless exchange rates fluctuated significantly during the period. Exchange differences arising from translation are recognizedin other comprehensive income, and the accumulated amount is included in other components of equity.
When disposing of foreign operations, the cumulative amount of exchange differences related to the foreign operations is
recognized in profit or loss at the time of disposal.

ʊ12ʊ

(4) Financial instruments(i) Financial assets
a. Initial recognition and measurement
At initial recognition, financial assets are classified either as financial assets measured at amortized cost or as financial
assets measured at fair value. The Group recognizes a financial asset on the transaction date on which it becomes a party to
the contractual provisions of the financial asset.
Financial assets that meet the following conditions are classified as financial assets measured at amortized cost:• The asset is held in a business model of which the objective is to hold the asset in order to collect its contractual cash
flows; and• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding
Financial assets other than financial assets measured at amortized cost are classified as financial assets measured at fairvalue.
With the exception of equity financial assets held for trading purposes that must be measured at fair value through profit
or loss, equity financial assets measured at fair value are individually classified either as measured at fair value throughprofit or loss or as measured at fair value through other comprehensive income, with that classification being made when
the asset is initially recognized and applying continuously thereafter.
With the exception of financial assets measured at fair value through profit or loss, financial assets are measured at fairvalue at initial recognition plus transaction costs directly attributable to the acquisition. Financial assets measured at fairvalue through profit or loss are measured at fair value at initial recognition, and transaction costs directly attributable to thetransaction are recognized in profit or loss.
Compound financial instruments issued by the Group comprise convertible bonds, which may be converted intoshareholders’ equity if the bondholder elects to do so. The financial liability component of the compound financial
instrument is initially recognized at the fair value of similar liabilities that have no equity conversion option. The equity
component is initially recognized as the difference between the fair value of the entire compound financial instrument andthe fair value of the liability component, and is not remeasured subsequent to initial recognition.
b. Measurement subsequent to initial recognition(a) Financial assets measured at amortized cost
After initial recognition, measurement is the amortized cost using the effective interest method.
(b) Financial assets measured at fair value through profit or loss
After initial recognition, measurement is the fair value with subsequent changes recognized in profit or loss.
(c) Equity financial assets measured at fair value through other comprehensive income
After initial recognition, measurement is the fair value with subsequent changes recognized in other comprehensive
income.
Amounts recognized in other comprehensive income are transferred to retained earnings when an asset is derecognizedor its fair value declines significantly (except when recovery is deemed probable); they are not transferred to profit or loss.
Dividends derived from such financial assets are recognized as profit or loss.
c. Derecognition
Financial assets are derecognized when the contractual rights to receive cash flows have extinguished or when thecontractual rights to receive cash flows have been transferred and substantially all risks and rewards of ownership of thefinancial asset are transferred to another entity.
d. Impairment
For financial assets measured at amortized cost, the Company recognizes allowance for doubtful accounts based on
expected credit losses.

ʊ13ʊ

Allowance for doubtful accounts is calculated as the present value of the difference between the contractual cash flows
due to the Group and the cash flows that the Group expects to receive.
The Group determines whether the credit risk on each financial asset has increased significantly since initial recognitionon each reporting date, and if the credit risk has not increased significantly since initial recognition, the amount of theallowance for doubtful accounts is assessed based on the expected credit losses resulting from default events that may occur
within 12 months (expected credit losses over 12 months). If, on the reporting date, credit risk on a financial asset has
increased significantly since initial recognition, the amount of the allowance for doubtful accounts is assessed based on the
expected credit losses arising from all possible default events over the expected lifetime of the financial asset (expectedcredit losses over full lifetime). However, in the case of trade receivables, contract assets, and lease receivables that do notcontain a significant financing component, regardless of the above, the amount of the allowance for doubtful accounts isalways measured using the expected credit losses for the instrument’s full lifetime.
A receivable is determined to be credit-impaired when a fact such as the commencement of legal liquidation proceedings
due to the obligor’s bankruptcy or the significant deterioration of the obligor’s financial condition occurs. When it becomesapparent that a receivable will be unrecoverable in the future due to a write-off under the provisions of the Corporate
Reorganization Act, the carrying amount of the receivable is directly reduced.
Provision of allowance for doubtful accounts on financial assets is recognized in profit or loss. In the case of events that
reduce the allowance for doubtful accounts, reversals of allowance for doubtful accounts are recognized in profit or loss.
Estimates of allowance for doubtful accounts relating to financial assets reflect the following.
• Unbiased probability-weighted amounts calculated by evaluating a range of possible outcomes;• Time value of money; and• Rational and supportable information about past events, current conditions, and forecasts of future economic conditions,available at the reporting date without undue cost or effort.
(ii) Financial liabilities
a. Initial recognition and measurement
Financial liabilities are classified either as financial liabilities measured at amortized cost or as financial liabilities
measured at fair value through profit or loss at the time of initial recognition. The Group initially recognizes issued debt
securities on the date of issue, and other financial liabilities are initially recognized on the transaction date on which theGroup becomes a party to the contractual provisions of the financial liability.
Financial liabilities measured at amortized cost are measured at fair value minus transaction costs directly attributable tothe issue of the instruments at the time of initial recognition. However, financial liabilities measured at fair value throughprofit or loss are measured at fair value at the time of initial recognition.
b. Measurement subsequent to initial recognition(a) Financial liabilities measured at amortized cost
After initial recognition, measurement is the amortized cost using the effective interest method.
(b) Financial liabilities measured at fair value through profit or loss
After initial recognition, measurement is the fair value with subsequent changes recognized in profit or loss.
c. Derecognition
Financial liabilities are derecognized when the financial liabilities extinguish; that is, when the liabilities are discharged,
are canceled, or expire.
(iii) Derivative and hedge accounting
The Group enters into derivative transactions such as forward exchange contracts and interest rate swaps in order to hedge
foreign exchange risk, interest rate risk, and the like.
At the inception of the hedge, the Group formally designates and documents the risk management purpose and strategy forthe hedging relationship and the implementation of the hedge. This documentation identifies the hedging instrument, the item

ʊ14ʊor transaction being hedged, the nature of the risk being hedged, and the method of evaluating the effectiveness of the hedging
instrument in offsetting the exposure to changes in the fair value or cash flows of the hedged item due to the risk being hedged.
Moreover, the Group assesses at the inception of the hedging relationship, and on an ongoing basis, whether a hedging
relationship meets the hedge effectiveness requirements.
Derivatives are initially recognized at fair value. After initial recognition, fair value is measured and subsequent changes aretreated as shown immediately below.
a. Fair value hedges
Changes in the fair value of derivatives used as hedging instruments are recognized in profit or loss or othercomprehensive income. Changes in the fair value of the hedged item corresponding to the hedged risk are recognized in
profit or loss or other comprehensive income, with the carrying amount of the hedged item being adjusted.

b. Cash flow hedges
The portion of the change in the fair value of derivatives used as hedging instruments that is determined to be an effective
hedge is recognized in other comprehensive income, and the cumulative amount is included in other components of equity.
The portion of hedges that is ineffective is recognized in profit or loss. Amounts accumulated in other components of equity
are reclassified from other components of equity to profit or loss in the accounting period in which the transaction being
hedged affects profit or loss. However, if the forecast transaction being hedged subsequently results in the recognition of anon-financial asset or non-financial liability, the amount accumulated in other components of equity is treated as an
adjustment to the initial carrying amount of that non-financial asset or non-financial liability.
Hedge accounting is discontinued prospectively when the hedging instrument expires, is sold, or is terminated or exercised,or if the derivative no longer meets the requirements for hedge accounting. When the forecast transaction is no longer
expected to occur, the amount accumulated in other components of equity is immediately reclassified from other componentsof equity to profit or loss.
c. Derivatives not designated as hedges
Changes in the fair value of such derivatives are recognized in profit or loss.
(5) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, readily available cash, and short-term investments maturing within threemonths that are readily convertible to cash and subject to an insignificant risk of changes in value.
(6) Inventories
Inventories are measured at the lower of cost and net realizable value. Cost consists of material costs, direct labor costs, otherdirect costs, and an appropriate allocation of related manufacturing overhead costs. Net realizable value is calculated by deducting
the estimated selling costs from the estimated selling price. Cost is mainly calculated based on the weighted average method.
(7) Property, plant and equipment
The Group uses the cost model to measure the carrying amount of property, plant and equipment subsequent to their recognition.
Under this model, property, plant and equipment are carried at their cost less any accumulated depreciation and any accumulated
impairment losses.
Property, plant and equipment other than land and construction in progress are mainly depreciated using the straight-line
method.
The estimated useful lives of major asset items are as follows:• Buildings and structures: 2–75 years• Machinery and vehicles: 2–27 years
The estimated useful lives, depreciation methods, and residual values of property, plant and equipment are reviewed at the endof each fiscal year.
(8) Goodwill and intangible assets

ʊ15ʊ

(i) Goodwill
Goodwill is not amortized; it is tested for impairment annually or whenever an indication of impairment exists. Impairment
losses on goodwill are recognized in the consolidated statement of profit or loss and are not subsequently reversed.
Goodwill is carried at its cost less any accumulated impairment losses.
(ii) Intangible assets
Intangible assets acquired separately are measured at cost at the time of initial recognition. Intangible assets acquired inbusiness combinations are measured at fair value as of the acquisition date.
The Group uses the cost model to measure the carrying amount of intangible assets subsequent to their recognition. Under
this model, intangible assets are carried at their cost less any accumulated amortization and any accumulated impairment losses.
Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives.
Intangible assets mainly comprise software for internal use and have estimated useful lives of 2–10 years. The amortization
method and estimated useful lives are reviewed each year at the fiscal year-end and revised, as necessary.
(9) Leases
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. If the contract conveys the right tocontrol the use of an identified asset for a period of time in exchange for consideration, the contract is, or contains, a lease.
(i) Leases as a lessee
At the commencement date, the Group recognizes right-of-use assets and lease liabilities. At the commencement date, rightof-use assets are initially measured at the amount of the initial measurement of lease liabilities adjusted for any initial direct
costs, costs for restoration as required pursuant to the contract, and other costs. After the commencement date, the Group uses
the cost model to measure right-of-use assets. Under this model, right-of-use assets are measured at cost, less any accumulated
depreciation and any accumulated impairment losses. Right-of-use assets are depreciated using the straight-line method fromthe commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, unless
it is reasonably certain that the Group will acquire ownership of the leased assets at the end of the lease term. The lease termis determined as the non-cancelable period of leased assets, together with periods covered by an option to extend the lease if
the Group is reasonably certain to exercise that option, and periods covered by an option to terminate the lease if the Group isreasonably certain not to exercise that option.
Lease liabilities are measured at the present value of the lease payments that are not paid at the commencement date,discounted using the lessee’s incremental borrowing rate. After the commencement date, the Group measures the lease liability
by increasing the carrying amount to reflect interest on the lease liability and reducing the carrying amount to reflect the lease
payments made. In case of lease modifications, the Group remeasures the lease liability. For a lease modification that is notaccounted for as a separate lease and decreases the scope of the lease, the Group decreases the carrying amount of the rightof-use asset to reflect the partial or full termination of the lease, and recognizes in profit or loss any gain or loss relating to thepartial or full termination of the lease. The Group makes a corresponding adjustment to the right-of-use asset for all other leasemodifications.
However, the Group uses the exemption for short-term leases and leases of low-value assets; instead of recognizing rightof-use assets and lease liabilities for such leases, it expenses the lease payments on a straight-line basis over the lease term.
(ii) Leases as a lessor
Leases entered into as a lessor are classified as either finance leases or operating leases according to the substance of thetransaction rather than the form of the contract. Assets held under finance leases are presented as receivables in an amountequal to the net investment in the lease.
In the case of subleases, the intermediate lessor classifies the sublease with reference to the right-of-use asset arising fromthe head lease.
In the case of operating leases, the Group records the leased assets on the consolidated statement of financial position andrecognizes lease payments received as income on a straight-line basis over the lease term.

ʊ16ʊ

(10) Investment property
Investment property is real estate held for the purpose of earning rental income, capital gains, or both.
The Group uses the cost model to measure the carrying amount of investment property subsequent to its recognition. Under
this model, investment property is carried at cost less any accumulated depreciation and any accumulated impairment losses.
Investment property other than land is depreciated mainly using the straight-line method over the estimated useful life. The
estimated useful life of the Company’s main investment properties is 26 years.
The estimated useful lives, depreciation methods, and residual values of investment properties are reviewed at the end of eachfiscal year.
(11) Impairment of non-financial assets
For property, plant and equipment and intangible assets, if there is any indication at the end of each reporting period that an
asset may be impaired, the asset is assessed based on its recoverable amount, being the higher of fair value less costs of disposal
and its value in use; if the carrying amount of the asset exceeds its recoverable amount, then the asset is impaired and is written
down to its recoverable amount.
Goodwill, intangible assets with indefinite useful lives, and intangible assets not yet available for use are tested for impairment
annually or whenever an indication of impairment exists.
Impairment losses recognized on assets other than goodwill in previous years are assessed at the end of each reporting period
to determine whether there is any indication that the recognized impairment loss may no longer exist or may have decreased. If
any such indication exists, the recoverable amount is estimated, and if the recoverable amount exceeds the carrying amount of
the asset or the cash-generating unit to which the asset belongs, a reversal of the impairment loss is recognized and the carrying
amount is increased to the recoverable amount subject to the condition that the carrying amount of the asset may not exceed thecarrying amount (net of accumulated depreciation or accumulated amortization) that would have been determined had no
impairment loss been previously recognized. Impairment losses recognized on goodwill are not reversed in subsequent periods.
(12) Post-employment benefits(i) Defined benefit plans
Defined benefit plans are any retirement benefit plans other than defined contribution plans. For each separate plan, thedefined benefit obligation is calculated by estimating the future benefits earned as consideration for services provided by
employees in previous and current fiscal years, and discounting that amount to the present value. The fair value of plan assets
is deducted from the result of that calculation. The discount rate is determined with reference to the market yields of highquality corporate bonds that are denominated in the same currency as the expected benefit payment and that haveapproximately the same maturity as the Group’s defined benefit obligation.
If a retirement benefit plan is revised, costs related to the variable portion of benefits related to employees’ past service are
immediately recognized in profit or loss.
The Group recognizes changes in net defined benefit liability (asset) due to remeasurement in other comprehensive income
and immediately transfers the amounts to retained earnings.
(ii) Defined contribution plans
Expenses related to defined contribution plans are recognized as expenses in the period in which the employees provide theservices.
(13) Provisions
Provisions are recognized when the Company has a present obligation (legal obligation or constructive obligation) resulting
from past events, it is likely that an outflow of resources embodying economic benefits will be required to settle the obligation,
and a reliable estimate of the amount of the obligation can be made.
If the impact of the time value of money is material, provisions are measured at a discounted amount calculated using a discountrate that reflects the risks specific to the liability.

ʊ17ʊ

(14) Revenue
With the exception of interest, dividend income, and the like under IFRS 9 Financial Instruments, the Group uses the following
five-step approach in recognizing revenue that reflects the amount of consideration to which the Company expects to be entitledin exchange for the transfer of goods and services to customers:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to a distinct performance obligation of the contract
Step 5: Recognize revenue when the performance obligation is fulfilled (or as it is fulfilled).
With respect to sales of steel products in the steel business, revenues are mainly recognized at the point of shipment, when thecustomer assumes the significant risk and economic value of ownership of the product being physically transferred and the rightto receive payment is confirmed. Consideration for transactions is received mainly within one year from the fulfillment of
performance obligations and includes no significant financing components.
With regard to construction contracts in the engineering business, the Group mainly estimates the progress of fulfilling
performance obligations, and revenue is recognized over a fixed period based on the degree of progress. Consideration fortransactions is mainly received in phases during the contract term separately from the fulfillment of performance obligations, andthe remaining amount is received after a fixed period from the fulfillment of all performance obligations. Consideration forcertain transactions includes significant financing components. A cost-based input method is used for performance obligations
fulfilled over time in order to recognize revenue. The cost-based input method excludes the effects of any inputs that do notdepict the Group’s performance in transferring control of goods or services to the customer. When a cost incurred is notproportionate to progress, the Group’s performance is faithfully depicted by adjusting the input method to recognize revenue only
to the extent of that cost incurred.
With respect to sales of steel products in the trading business, revenues are mainly recognized at the point of delivery of the
product to the customer, when the legal title and physical ownership of the product as well as the significant risk and economic
value associated with ownership of the product are transferred to the customer, and the right to receive payment is confirmed. In
addition, for certain transactions in the trading business, the Company has the responsibility to carry out work as an agent.
Consideration for transactions is received mainly within one year from the fulfillment of performance obligations and includes
no significant financing components.
When the Group is engaged in a transaction as a principal to the transaction, revenue is presented as the total consideration
received from the customer. When the Group is engaged in transactions as an agent for a third party, revenue is presented as afee, calculated as the total amount of consideration received from the customer minus the amount collected for the third party.
(15) Business profit
Business profit is profit before income taxes excluding financial income and one-time items of significant value. Management
considers it as a benchmark indicator of the Company’s consolidated earnings.
(16) Income taxes
Income tax expense consists of current tax expense and deferred tax expense. These items are recognized in profit or loss
except when they arise from items that are directly recognized in other comprehensive income or equity and when they arise
from business combinations.
Current tax expense is measured as an amount that reflects the amount the Company expects the tax authorities to refund or
expects to pay to the tax authorities. The tax rate and tax law used to calculate the amount of tax are those that have been enacted
or substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are recognized for temporary differences, which are the differences between the
carrying amounts and tax bases of assets and liabilities, and for unused tax losses carryforwards and unused tax credits. Deferred
tax assets and deferred tax liabilities are determined at the tax rate estimated for the period when the asset is realized or theliability is settled, based on the tax rate and tax law that have been enacted or substantively enacted by the end of the reporting

ʊ18ʊ

period.
Deferred tax liabilities are recognized for taxable temporary differences excluding the following:• Temporary differences arising from initial recognition of goodwill;• Temporary differences resulting from the initial recognition of an asset or liability in a transaction that is not a businesscombination and that neither affects accounting income or taxable income at the time of the transaction nor gives rise tosimilar taxable temporary differences and deductible temporary differences; and• Taxable temporary differences arising from investments in subsidiaries and associates, and interests in joint arrangements,
when the Company is able to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognized for deductible temporary differences, unused tax losses carryforwards, and unused tax
credits, but only to the extent that it is probable that future taxable income will be available against which the deductible temporary
difference can be utilized, except when the deductible temporary difference results from the initial recognition of an asset or
liability in a transaction that is not a business combination and that neither affects accounting income or taxable income at the of
the transaction nor gives rise to similar taxable temporary differences and deductible temporary differences.
Deferred tax assets are recognized for deductible temporary differences arising from investments in subsidiaries and associates,
and interests in joint arrangements, only when it is probable that the temporary difference will reverse in the foreseeable futureand it is probable that taxable income will be available against which the deductible temporary difference can be utilized.
The Company and its certain domestic consolidated subsidiaries apply the group tax sharing system.
(17) Equity(i) Share capital and capital surplus
Capital paid in by shareholders is recognized in share capital or capital surplus.
(ii) Treasury shares
When treasury shares are acquired, the consideration paid, including direct transaction costs, is recognized as a deduction
from equity. When treasury shares are disposed of, the difference between the consideration received and the carrying amountof the treasury shares is recognized directly in equity.
(18) Non-current assets held for sale
A non-current asset (or disposal group) is classified as held for sale if its carrying amount will be recovered principally througha sale transaction rather than through continuing use. For an asset (or disposal group) to be classified as held for sale, the asset(or disposal group) must be available for immediate sale in its present condition and its sale must be highly probable. The sale isconsidered highly probable only when the Group’s management is committed to a plan to sell the asset (or disposal group), andthe sale is expected to be completed within one year from the date of classification.
After being classified as held for sale, the asset (or disposal group) is measured at the lower of the carrying amount and fairvalue less costs to sell, and is not depreciated or amortized.

ʊ19ʊ

4. Significant Judgements, Accounting Estimates, and Assumptions
In preparing the consolidated financial statements, the Group makes judgments, accounting estimates, and assumptions that affectthe application of accounting policies and the amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions
are based on management’s best judgments reflecting historical experiences and various factors that are believed to be reasonable
under the circumstances. By their nature, however, actual results may differ from the estimates and assumptions.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effects resulting from revisions of these estimates
are recognized in the period in which the estimates are revised and in future periods affected by the revision.
Judgments made in applying accounting policies that have a significant effect on the consolidated financial statements are mainly
as follows:• Scope of subsidiaries, associates, and joint arrangements (Note “3. Material Accounting Policies”)• Revenue recognition (Note “3. Material Accounting Policies”)• Leases (Note “3. Material Accounting Policies”)
Information on accounting estimates and assumptions that may have a significant effect on the consolidated financial statements is
as follows:• Valuation of inventories (Note “3. Material Accounting Policies” and Note “9. Inventories”)
Inventories are measured at cost. However, if net realizable value is lower than cost at the end of the reporting period,
inventories are measured at the net realizable value and the difference between cost is recognized in cost of sales in principle.
Furthermore, for idle inventories outside the operating cycle, net realizable value and other items are determined by reflecting
future demand and market trends. A significant decline in net realizable value due to worse-than-forecast market environment
may cause losses.
• Impairment of non-financial assets (Note “3. Material Accounting Policies” and Note “17. Impairment of Non-financial Assets”)
The Group tests property, plant and equipment, goodwill, and intangible assets for impairment in accordance with Note “3.
Material Accounting Policies.” In determining recoverable amounts in impairment tests, assumptions are made for future cash
flows, discount rates, and other items. Although these assumptions are determined based on management’s best estimates andjudgments, they may be affected by uncertain changes in economic conditions in the future and other factors. If a revision isnecessary, it may have a significant effect on the consolidated financial statements.
• Recoverability of deferred tax assets (Note “3. Material Accounting Policies” and Note “20. Income Taxes”)
Deferred tax assets are recognized only to the extent that it is probable that future taxable income will be available against
which the deductible temporary differences can be utilized. In judging the probability of taxable income, the timing and amountof taxable income are estimated based on the business plan. Although such estimates are made based on management’s best
estimates, they may differ from actual results due to uncertain changes in economic conditions in the future and other factors.
• Valuation and accounting for provisions (Note “3. Material Accounting Policies” and Note “24. Provisions”)
Provisions are measured based on the best estimates of the expenditures expected to be required to settle the obligations in the
future on the reporting date. The expenditures expected to be required to settle the obligations in the future are determined bycomprehensively taking into account future possible results. Since assumptions which are used for measuring these provisions
may be affected by uncertain changes in economic conditions in the future and other factors, the assumptions involve the risk of
causing a significant modification on the measurement of provisions prospectively.
• Measurement of defined benefit obligations (Note “3. Material Accounting Policies” and Note “25. Post-employment Benefits”)
With respect to defined benefit corporate pension plans, the net amount of defined benefit obligations and fair values of plan
assets are recognized as liabilities or assets. Defined benefit obligations are determined based on actuarial assumptions which
include the estimates of discount, retirement, mortality, and salary increase rates. These assumptions are determined bycomprehensively taking into account all available information, such as market trends in interest rate fluctuations. Since theseʊ20ʊactuarial assumptions may be affected by uncertain changes in the economic environment in the future, social trends, and otherfactors, the assumptions involve the risk of causing a significant modification on the measurement of defined benefit obligations
prospectively.
• Matters related to financial instruments (Note “3. Material Accounting Policies” and Note “40. Financial Instruments”)
The Group uses significant unobservable inputs for measuring the fair values of specified financial instruments. Unobservable
inputs may be affected by future uncertain changes in economic conditions and other factors. If a revision is necessary, it may
have a significant effect on the consolidated financial statements.
• Contingencies (Note “43. Contingent Liabilities”)
For contingencies, items that may have a significant effect on future businesses are disclosed after taking into account allavailable evidence as of the reporting date and considering the possibility and financial effect of the contingencies.

5. New IFRS Standards Not Yet Adopted
Major IFRS standards and interpretations newly established or amended by the approval date of the consolidated financial
statements that the Group has not yet adopted are as follows. The impact of the application of this standard on the consolidated
financial statements is currently being considered.
Mandatory
Standard

Name of standard(in and after the

Application date of theOverview of the new

fiscal year starting

Company

standard or revision

from)
IFRS 18

Presentation andJanuary 1, 2027

Disclosures in

Fiscal year ending March

A new standard to IAS 1,

31, 2028

which is the current

Financialaccounting standard on theStatements

presentation and disclosurein financial statements

ʊ21ʊ6. Segment Information(1) Overview of reportable segments
The Group organized under JFE Holdings executes commercial activities through three operating companies—JFE SteelCorporation, JFE Engineering Corporation, and JFE Shoji Trade Corporation—in accordance with the characteristics of theirrespective businesses.
Consolidated reportable segments, one for each operating company, are characterized by their constituent products and services.
There are no operating segments which were aggregated for reporting.
Each segment has its own respective products and services. The steel business produces and sells various steel products, processedsteel products, and raw materials, and provides transportation and other related businesses such as facility maintenance andconstruction. The engineering business handles engineering for energy, urban environment, steel structures and industrial machines,
recycling, and electricity retailing. The trading business purchases, processes, and distributes steel products, raw materials for steel
production, nonferrous metal products, and food.
(2) Information on reportable segments
The accounting treatments for the Group’s reportable segments are the same as those described in Note “3. Material Accounting
Policies.”
The Group assesses segment performance on the basis of segment profit. Segment profit is profit before tax excluding one-time
items of a materially significant value.
Intersegment transactions are based on market prices and the like.
Fiscal year ended March 31, 2023

Revenue
Revenue from externalcustomers
Intersegment revenue
Total
Segment profit (loss)

Adjustments(Note)

Steel

Engineering

Trading

Total

3,427,239

498,079

1,343,476

5,268,794–

5,268,794

453,900

14,421

170,661

638,982(638,982)–

3,881,139

512,500

1,514,137

5,907,777(638,982)

5,268,794

146,825

13,481

65,115

225,422(4,384)

221,038

Gain on sales of land
Impairment losses
Loss on liquidation ofsubsidiaries and associates
Restructuring expenses

4,105(3,542)(6,739)(4,578)

Profit before tax
Segment assets(million yen)Amountrecorded inconsolidated
financialstatements

210,282
4,529,302

504,9421,050,040

6,084,286(560,246)

5,524,040

Depreciation and amortization

240,577

17,105

13,180270,863(1,262)

269,600

Impairment losses(3,443)(99)–(3,542)–(3,542)Finance income

1,939

258

1,768

3,966

(288)

3,677

Other items

Finance costs(13,468)(770)(5,029)(19,268)786(18,481)
Share of profit of investments
accounted for using equity
25,521383
2,285
28,189(5,187)23,002
methodInvestments accounted for
415,484
17,283
22,375455,143
10,338465,482
using equity method
Capital expenditures
277,467
23,18327,650328,301(2,669)325,632
Note:
Adjustments are as follows: Adjustments to segment profit (loss) include corporate profit not allocated to a reportable segment: 52,383 million yen;elimination of dividend income from each reportable segment: (51,393) million yen; share of loss of investments

ʊ22ʊ

accounted for using equity method related to Japan Marine United Corporation: (5,453) million yen; and elimination ofother intersegment transactions: 78 million yen. Corporate profit is profit of the Company.
 Adjustments to segment assets: Corporate assets not allocated to a reportable segment: 87,439 million yen andelimination of intersegment receivables and payables: (647,685) million yen. Corporate assets are assets of theCompany.

Fiscal year ended March 31, 2024

Revenue
Revenue from externalcustomers
Intersegment revenue
Total
Segment profit

Steel

Engineering

Trading

Total

3,318,920

524,723

1,330,987

5,174,632

Adjustments(Note)

㸫(million yen)Amountrecorded inconsolidated
financialstatements
5,174,632

397,136

15,251

145,465

557,852(557,852)

㸫

3,716,057

539,975

1,476,452

5,732,485(557,852)

5,174,632

202,733

24,383

48,966

276,0833,523

279,607

Impairment losses(11,220)

Profit before tax

268,386

Segment assets

4,626,972

545,025

1,082,297

6,254,295(499,331)

5,754,964

Depreciation and amortization

242,438

16,75016,265

275,454(1,352)

274,101

Impairment losses(2,275)(5,038)(1,604)(8,918)(2,302)(11,220)

Finance income

2,668

527

2,125

5,321

(272)

5,048

Other items

Finance costs(15,329)(479)(8,230)(24,039)373(23,665)
Share of profit of investments
accounted for using equity
50,521
3,579
1,392
55,493666
56,160methodInvestments accounted for
486,556
40,26924,002550,827
10,649561,477
using equity method
Capital expenditures
269,377
60,27020,875350,524(4,412)
346,111
Note:
Adjustments are as follows: Adjustments to segment profit include corporate profit not allocated to a reportable segment: 51,102 million yen;elimination of dividend income from each reportable segment: (50,067) million yen; share of profit of investments
accounted for using equity method related to Japan Marine United Corporation: 1,262 million yen; and elimination ofother intersegment transactions: 1,225 million yen. Corporate profit is profit of the Company.
 Adjustments to segment assets: Corporate assets not allocated to a reportable segment: 180,065 million yen andelimination of intersegment receivables and payables: (679,397) million yen. Corporate assets are assets of theCompany.
(3) Information about the categories of products and services
The information is the same as information on reportable segments.
(4) Information about revenue from external customers by geographical areas
The information is provided in Note “28. Revenue.”ʊ23ʊ

(5) Information about non-current assets (excluding financial assets, retirement benefit asset, and deferred tax assets) by geographicalareas(million yen)
As of March 31, 2023

As of March 31, 2024

Japan

2,016,744

2,077,771

Other

184,347

195,5022,201,092

2,273,274

Total

Note: Non-current assets are based on the geographical location of each company of the Group.
(6) Information about major customers
The information of external customer that accounts for 10% or more of consolidated revenue of the Group is as follows:(million yen)
Fiscal year ended
Fiscal year ended
Relevant segments
March 31, 2023
March 31, 2024
Marubeni-Itochu Steel Inc.
Steel and trading
548,642532,641and its group companies

7. Cash and Cash Equivalents
The breakdown of cash and cash equivalents is as follows:(million yen)
As of March 31, 2023
Cash and bank deposits with maturities of three months or
lessAs of March 31, 2024

118,927

242,325

Negotiable certificates of deposit

450

737

Deposits paid

13

16

119,391

243,079

Total

Cash and cash equivalents are classified as financial assets measured at amortized cost.
The balance of cash and cash equivalents reported in the consolidated statement of financial position as of March 31, 2023 and2024 is consistent with that reported in the consolidated statement of cash flow.

8. Trade and Other Receivables
The breakdown of trade and other receivables is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Notes and accounts receivable–trade

713,074

704,123

Other

65,44260,645

Allowance for doubtful accounts(2,400)(2,339)

Total

776,115

762,428

Trade and other receivables are stated as net of allowance for doubtful accounts in the consolidated statement of financial position.
Trade and other receivables are classified as financial assets measured at amortized cost.

ʊ24ʊ

9. Inventories
The breakdown of inventories is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Merchandise and finished goods

686,488687,131Work in progress

37,12933,625

Raw materials and supplies

643,612627,6211,367,230

1,348,378

Total

Inventories recognized as an expense in cost of sales for the fiscal years ended March 31, 2023 and 2024 amounted to
4,091,697 million yen and 3,944,378 million yen, respectively.

10. Other Financial Assets(1) The breakdown of other financial assets is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Financial assets measured at amortized cost
Lease receivables (non-current)

20,847

17,578Other

38,49438,097

Allowance for doubtful accounts

(370)

(322)

Subtotal

58,97255,353

Derivative assets

29,29034,863

Other

4,116

4,151

33,40739,015120,067

124,808

7,090

7,050

Subtotal

127,157

131,858

Total

219,537

226,227

Current assets

18,937

18,778Non-current assets

200,599

207,448

219,537

226,227

Financial assets measured at fair value through profit or loss

Subtotal
Equity financial assets measured at fair value through othercomprehensive income
Equity securities
Investments in capital

Total

Other financial assets are stated net of allowance for doubtful accounts in the consolidated statement of financial position.

ʊ25ʊ

(2) Equity financial assets measured at fair value through other comprehensive income
The issuers and fair values of major equity financial assets measured at fair value through other comprehensive income are as
follows:(million yen)
Issuers

As of March 31, 2023

Formosa Ha Tinh (Cayman) Limited

19,300

Dongkuk Steel Mill Co., Ltd.

10,427Companhia Nipo-Brasileira de Pelotização

10,361

Central Japan Railway Company

4,360Japan Petroleum Exploration Co., Ltd.

4,125
(million yen)

Issuers

As of March 31, 2024

Formosa Ha Tinh (Cayman) Limited

25,505Companhia Nipo-Brasileira de Pelotização

10,052

Japan Petroleum Exploration Co., Ltd.

6,338

Dongkuk Steel Mill Co., Ltd.

5,461

Mizuho Financial Group, Inc.

4,586

Equity securities and investments in capital are held mainly for the purpose of maintaining and developing the Group’s business.
Therefore, they are designated as equity financial assets measured at fair value through other comprehensive income.
In order to promote the efficiency of held assets and to use them effectively, the Group has sold (derecognized) equity financial
assets measured at fair value through other comprehensive income.
The fair value and accumulated gains or losses recognized in other comprehensive income at the time of sale are as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Fair value

20,196

13,282

Accumulated gains or losses recognized in othercomprehensive income

8,568

5,757

ʊ26ʊ

11. Other Assets and Liabilities
The breakdown of other current assets, other non-current assets, other current liabilities, and other non-current liabilities is asfollows:(1) Other current assets and other non-current assets(million yen)
As of March 31, 2023

As of March 31, 2024

Consumption taxes refund receivable

17,36429,990Other

95,495

101,411

112,860

131,402

Current assets

96,759113,992

Non-current assets

16,10017,410112,860

131,402

Total

Total

(2) Other current liabilities and other non-current liabilities(million yen)
As of March 31, 2023

As of March 31, 2024

Accrued expenses

204,928

196,198

Other

76,64895,700281,576

291,898

Current liabilities

265,268

282,317

Non-current liabilities

16,3089,581

281,576

291,898

Total

Total

ʊ27ʊ

12. Assets Held for Sale(million yen)
As of March 31, 2023

As of March 31, 2024

Assets held for sale

40,929–Liabilities directly associated with assets held for sale

23,598–

Fiscal year ended March 31, 2023
Assets held for sale mainly include 26,745 million yen of trade and other receivables and 5,030 million yen of inventories. Liabilities
directly associated with assets held for sale mainly include 9,601 million yen of trade and other payables and 8,922 million yen ofbonds payable, borrowings, and lease liabilities (non-current).
Details of assets and liabilities classified as assets held for sale and liabilities directly associated with assets held for sale are as
follows.
(1) Transfer of shares in JFE Pipe Fitting Mfg. Co., Ltd.
JFE Steel Corporation (hereinafter, “JFE Steel”), a wholly-owned subsidiary of the Company, and the Company, at theirrespective board of directors meetings held on October 28, 2022 and November 4, 2022, resolved to transfer 76.6% of the issued
shares in JFE Pipe Fitting Mfg. Co., Ltd. (hereinafter, “JFE Pipe Fitting”), a subsidiary of JFE Steel, to Riken Corporation(hereinafter, “Riken”). Accordingly, JFE Steel Corporation has concluded a share purchase agreement with Riken as of November
4, 2022. Upon the conclusion of this agreement, assets related to JFE Pipe Fitting and liabilities directly associated with these assets,
which were included in the reportable segment of the steel business, were classified as assets held for sale and liabilities directly
associated with assets held for sale during the period until the completion of the share transfer.
At the time of reclassification, they were measured at the lower of the carrying amount and fair value less costs to sell, and werereclassified at the fair value less costs to sell. In line with this, the difference between the carrying amount and fair value less costs
to sell of 6,273 million yen was recognized as loss on liquidation of subsidiaries and associates. The fair value was determinedbased on the transfer price specified in the share purchase agreement with Riken, and was categorized as Level 3 within the fairvalue hierarchy.
The share transfer was completed on May 9, 2023.
(i) Purpose of the share transfer
JFE Pipe Fitting, since its foundation in 1935, has been engaged in the production of high-quality fittings and prefabricatedpiping under its Ring brand as a specialized manufacturer of piping systems within the JFE Group. With the Japanese
population now in decline, the domestic market for piping systems is expected to shrink over the long term. Under suchcircumstances, in order for JFE Pipe Fitting to achieve sustainable growth, strong measures are needed quickly, such as
developing new products, optimizing its production systems and generating new demand.
Riken manufactures automotive and industrial machinery parts, such as piston rings, as well as piping products. Under thebasic policy of its PLAN 2022 medium-term business plan, the company is working to expand its business in automotive fields
not centered on internal combustion engines, focusing on expanding the portfolio in business areas with which the company
has high affinity. The company expects to benefit from solid demand over the medium to long term in view of the importantroles that many of its piping products play in supporting critical infrastructure. Given the underlying potential for strong growththrough the development of new products, Riken aims to strengthen and expand its piping business as the company’s core field.
The Group has determined that the share transfer will create a wide range of synergistic opportunities for sustainable growthby allowing JFE Pipe Fitting to utilize the Riken Group’s resources in order to further enhance the competitiveness of its own
pipe-fitting products and high-performance casting products as well as to develop new products, thereby enabling strategic
business development.
(ii) Overview of the counterparty of the share purchase agreement
Company name:Riken Corporation

Business:

Manufacture and sale of automotive parts and other industrial parts

ʊ28ʊ

Head office:8-1 Sanbancho, Chiyoda-ku, Tokyo

Representative:

Yasunori Maekawa

Consolidated net sales(fiscal year ended Mach 31, 2022): 78,372 million yen
Capital:8,573 million yen

Employees (consolidated)(as of March 31, 2022):

4,332(iii) Schedule of the share transfer
Conclusion date of the share purchase agreement:
Date of executing the share transfer:November 4, 2022

May 9, 2023

(2) Integration of the domestic water engineering business between JFE Engineering Corporation and Tsukishima Kikai Co., Ltd.
JFE Engineering Corporation (hereinafter, “JFE Engineering”), a wholly-owned subsidiary of the Company, and the Company,at their respective board of directors meetings held on November 25, 2022 and December 2, 2022, resolved to integrate the domestic
water engineering business between JFE Engineering and Tsukishima Kikai Co., Ltd. (hereinafter, “TSK”). Accordingly, JFE
Engineering has concluded a joint-venture agreement dated December 5, 2022 with TSK. Upon the conclusion of this agreement,
assets related to the domestic water engineering business and liabilities directly associated with these assets, which were includedin the reportable segment of the engineering business, were classified as assets held for sale and liabilities directly associated withassets held for sale during the period until the completion of the business integration.
At the time of reclassification, they were measured at the lower of the carrying amount and fair value less costs to sell, and werereclassified at the carrying amount.
(i) Purpose of the business integration
The market of the domestic water engineering sector is currently remaining strong. However, with the market size shrinking andcompetition intensifying due to the declining population in Japan, the business environment is expected to be challenging. For thatreason, the Group recognizes that it is an urgent task to enhance its competitiveness through the development of countermeasuretechnologies and service improvements. The Group has decided to integrate this business as it believes this integration will enable
the permanent provision of water infrastructure, thereby making a greater contribution to society.
(ii) Overview of the counterparty of the joint-venture agreement
Company name:

Tsukishima Kikai Co., Ltd. (*1)

Business:

Design, construction, manufacture, sale, and maintenance of water purification plants,
wastewater treatment plants and equipment; industrial and non-industrial waste
treatment business; and design, construction, manufacture, sale of chemical, steel, food,and environment and energy-related plants and equipment

Head office:3-5-1 Harumi, Chuo-ku, Tokyo

Representative:

Yoshiyuki Fukuzawa

Consolidated net sales(fiscal year ended Mach 31, 2022): 93,077 million yen
Capital:

6,646 million yen

Employees (consolidated)(as of March 31, 2022):

2,765(iii) Schedule of the business integration
Conclusion date of the joint-venture agreement: December 5, 2022
Conclusion of an absorption-type company
split agreement on this business integration:

June 27, 2023

ʊ29ʊDate of executing the business integration:

October 1, 2023(*1) Tsukishima Kikai Co., Ltd., the counterparty of the joint-venture agreement has changed its trade name to TSUKISHIMAHOLDINGS CO., LTD., as a result of transitioning to a holding company structure, effective April 1, 2023.
Fiscal year ended March 31, 2024
In the fiscal year ended March 31, 2023, assets related to JFE Pipe Fitting and liabilities directly associated with these assets, whichwere included in the reportable segment of the steel business, and assets related to the domestic water engineering business andliabilities directly associated with these assets, which were included in the reportable segment of the engineering business wereclassified as assets held for sale and liabilities directly associated with assets held for sale. The share transfer of JFE Pipe Fitting wascompleted on May 9, 2023, and the business integration of the domestic water engineering business was completed on October 1,
2023. Accordingly, the Company has reported a gain of 2,764 million yen resulting from the business integration of the domestic water
engineering business through an absorption-type company split and has included it under “Other income” in the consolidated statementof profit or loss.

ʊ30ʊ

13. Property, Plant and Equipment
The movement of carrying amount for property, plant and equipment during the year is as follows:
Fiscal year ended March 31, 2023
(million yen)Tools,
Buildings and Machinery
furniture andstructures and vehicles
fixtures
Balance at the beginning of
the yearLand

Constructionin progress

Other

Total

361,655

974,51746,854386,423

74,246

7,081

1,850,779

29,216

193,273

19,458

1,061

10,8583,013

256,882

303

1,481

3

413

–

–

2,201

Sale or disposal(1,202)(2,199)(194)(4,392)(1,059)(29)(9,077)

Depreciation(29,473)(164,216)(17,793)(25)–(1,932)(213,441)(662)(1,200)

(8)

(320)

(1,254)–(3,447)(931)(1,257)(271)(2,762)(302)–(5,524)

2,352

5,443

504

3,747

467

164

12,680361,258

1,005,843

48,553384,144

82,9558,298

1,891,053

Acquisition
Acquisition throughbusiness combinations

Impairment losses
Transfer to assets held
for sale
Exchange differences ontranslation of foreign
operations
Balance at the end of theyear

Fiscal year ended March 31, 2024
(million yen)Tools,
Buildings and Machinery
furniture andstructures and vehicles
fixtures
Balance at the beginning of
the yearLand

Constructionin progress

Other

Total

361,258

1,005,843

48,553384,144

82,9558,298

1,891,053

Acquisition
Acquisition throughbusiness combinations

32,476

154,772

22,086

2,264

60,545

2,298

274,444

421

2,754

0

㸫

㸫

㸫

3,176

Sale or disposal(1,514)(10,897)

(319)

(296)

(947)

(31)

(14,007)

Depreciation(29,233)(162,232)(20,038)(21)

㸫

(1,972)(213,499)(3,055)(6,805)
(70)
(316)
(116)
(10,364)
㸫
Exchange differences ontranslation of foreign
534
5,778
824
1,016
8,937
323
17,414operations
Balance at the end of the360,887
989,21451,035
386,790
151,489
8,798
1,948,217
year
Notes: 1. Depreciation of property, plant and equipment is included in “Cost of sales” and “Selling, general and administrative
expenses” in the consolidated statement of profit or loss.
2. Acquisition of construction in progress represents an increase due to new acquisition, net of transfers to each item ofproperty, plant and equipment.
Impairment losses

ʊ31ʊThe cost, accumulated depreciation, accumulated impairment losses, and carrying amount of property, plant and equipment are as
follows:(million yen)
Buildings and Machinery
structuresand vehicles

Tools,
furniture andfixtures

Land

Constructionin progress

Other

Total

As of March 31, 2023
Cost

1,971,309

6,587,818

209,611

410,41785,83622,891

9,287,883

Accumulated
depreciation andaccumulated
impairment losses(1,610,051)(5,581,974)(161,057)(26,272)(2,881)(14,593)(7,396,830)

Carrying amount361,258

1,005,843

48,553384,144

82,9558,298

1,891,053

Cost

1,961,289

6,361,961

208,260

411,241

152,429

25,0309,120,211

Accumulated
depreciation andaccumulated
impairment losses(1,600,401)(5,372,746)(157,224)(24,450)(939)(16,232)(7,171,994)

Carrying amount

360,887

989,21451,035

386,790

151,489

8,798

1,948,217

As of March 31, 2024

ʊ32ʊ

14. Goodwill and Intangible Assets(1) Movement of goodwill and intangible assets
The movement of carrying amount for goodwill and intangible assets during the year is as follows:
Fiscal year ended March 31, 2023
(million yen)
Goodwill
Balance at the beginningof the year
Acquisition
Acquisition throughbusiness combinations

Software

Other

Total

8,174

98,545

10,002

116,721100

35,288

1,035

36,424

7,294

149

8,888

16,333

Sale or disposal

–

(426)

(4)

(430)

Amortization–(25,524)(1,245)(26,770)

Impairment losses

–

(94)

–

(94)

(756)

(131)

(893)

(1,781)

98

1,177

87

1,364

14,911

108,984

17,871

141,767

Transfer to assets held
for sale
Exchange differenceson translation offoreign operations
Balance at the end of theyear
Fiscal year ended March 31, 2024

(million yen)
Goodwill
Balance at the beginningof the year
Acquisition

Software

Other

Total

14,911

108,984

17,871

141,767㸫

42,097487

42,584

Sale or disposal㸫(1,043)(1)(1,044)

Amortization

㸫(27,940)(2,414)(30,355)

Impairment losses
(467)
(4)
(471)
㸫
Exchange differences
535
2,090
931
3,557
on translation offoreign operations
Balance at the end of the15,446
123,720
16,870156,038
year
Note: Amortization of intangible assets is included in “Cost of sales” and “Selling, general and administrative expenses” in the
consolidated statement of profit or loss.

ʊ33ʊ

The cost, accumulated amortization, accumulated impairment losses, and carrying amount of goodwill and intangible assets are
as follows:(million yen)
Goodwill

Software

Other

Total

As of March 31, 2023
Cost

19,537450,599

38,029508,166

Accumulated
amortization andaccumulated
impairment losses(4,625)(341,614)(20,158)(366,398)

Carrying amount

14,911

108,984

17,871

141,767

Cost

20,072479,688

42,157541,918

Accumulated
amortization andaccumulated
impairment losses(4,625)(355,967)(25,286)(385,879)

Carrying amount

15,446

123,720

16,870156,038

As of March 31, 2024

(2) Research and development expenses
Research and development expenses recorded in “Cost of sales” and “Selling, general and administrative expenses” for the fiscal
years ended March 31, 2023 and 2024 amounted to 43,018 million yen and 43,838 million yen, respectively.

ʊ34ʊ

15. Lease Transactions(1) Lease transactions as a lessee
The Group leases machinery, ships, buildings, and other assets as a lessee. Certain lease arrangements include renewal options,but no significant lease arrangements include escalation clauses. In addition, there are no material restrictions (such as restrictions
related to additional borrowings and additional leases) imposed by the lease arrangements.
(i) Disclosure on profit or loss and cash outflow for leases(million yen)
Fiscal year ended March 31, 2023 Fiscal year ended March 31, 2024
Depreciation of right-of-use assets
Buildings and structures

11,346

11,565

Machinery and vehicles

10,454

11,980Tools, furniture and fixtures

3,855

2,609

Land

1,901

2,127

Other

947

1,116

28,50629,399

502

511

3,886

3,714

Expense relating to leases of low-value assets

709

778

Income from subleasing right-of-use assets

1,474

1,430

Total cash outflow for leases

50,23258,090Total
Interest on lease liabilities
Expense relating to short-term leases(ii) Disclosure on the breakdown of the carrying amounts of right-of-use assets(million yen)
As of March 31, 2023

As of March 31, 2024

Buildings and structures

34,664

31,154

Machinery and vehicles

44,46847,112Tools, furniture and fixtures

2,660

2,860

Land

14,25914,099

Other

2,559

3,531

98,611

98,758Total

Right-of-use assets for the fiscal years ended March 31, 2023 and 2024 increased by 32,136 million yen and 28,922 million yen,respectively.
(2) Lease transactions as a lessor
The Group leases buildings and other assets as a lessor and receives security deposits as a risk management strategy.
(i) Income from operating leases(million yen)
Fiscal year ended March 31, 2023 Fiscal year ended March 31, 2024
Lease income

9,976

ʊ35ʊ

9,534

(ii) Maturity analysis of non-cancelable operating lease payments(million yen)
As of March 31, 2023

As of March 31, 2024

Within one year

1,523

1,399

Over one year and within two years

1,399

1,144

Over two years and within three years

1,144

891

Over three years and within four years

891

808

Over four years and within five years

808

189

Over five years

189

–

5,957

4,433

Total

(iii) Income from finance leases(million yen)
Fiscal year ended March 31, 2023 Fiscal year ended March 31, 2024
Finance income on the net investment in the lease

865

868

(iv) Maturity analysis of lease payments receivable(million yen)
As of March 31, 2023

As of March 31, 2024

Within one year

6,996

8,900

Over one year and within two years

7,890

10,995

Over two years and within three years

8,972

6,954

Over three years and within four years

6,119

1,058

Over four years and within five years

557

536

4,387

3,902

34,92432,348

Unearned finance income

4,251

3,041

Net investment in the lease

30,672

29,307

Over five years
Total

ʊ36ʊ

16. Investment Properties(1) Movement of investment properties
The movement of carrying amount for investment properties is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

57,66053,559Acquisition

190

159

Reclassification from property, plant and equipment

487

856

Reclassification to property, plant and equipment(2,588)

(225)

(882)

(847)

Impairment losses

㸫

(384)

Sale or disposal(1,307)(268)

Balance at the end of the year

53,55952,849

Cost (balance at the beginning of the year)

126,388

111,828

Accumulated depreciation and accumulated impairment
losses (balance at the beginning of the year)(68,728)(58,268)

Cost (balance at the end of the year)

111,828

112,213

Accumulated depreciation and accumulated impairment
losses (balance at the end of the year)(58,268)(59,363)

Balance at the beginning of the year

Depreciation(2) Fair values
The carrying amount and fair value of investment properties are as follows:(million yen)

Investment property

As of March 31, 2023

As of March 31, 2024

Carrying
amountCarrying
amount53,559Fair value
124,251

52,849Fair value
128,612

The fair value of investment properties is principally based on the real estate appraisal values provided by independent licensed
real estate appraisers.
The fair value hierarchy of investment properties is categorized within Level 3 because unobservable inputs are included.
Fair value hierarchy is described in Note “40. Financial Instruments.”(3) Income and expenses arising from investment properties
Rental income and direct sales expenses arising from investment properties are as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

9,976

9,534

2,716

2,750

25

19

Rental income
Direct sales expenses arising from investment properties
which generated income
Direct sales expenses arising from investment properties
which did not generate income

ʊ37ʊ

17. Impairment of Non-financial Assets
When the Group assesses whether there is an indication that non-financial assets may be impaired, in principle, the assets areclassified as idle assets, leased assets, assets for various projects and assets for business use, and then those classified assets aregrouped by the smallest unit that generates independent cash flows.
Fiscal year ended March 31, 2023
The carrying amount was reduced to the recoverable amount mainly for idle assets, and the reduction was recorded as an
impairment loss. Impairment losses in the consolidated statement of profit or loss totaled 3,542 million yen, consisting of
1,254 million yen of construction in progress and 2,287 million yen of machinery and vehicles. The recoverable amount of theseassets was primarily determined at their expected disposal price.
Fiscal year ended March 31, 2024
The carrying amount was reduced to the recoverable amount mainly for assets for business use (Tsu, Mie) at a subsidiary of JFE
Engineering Corporation for which the business environment had deteriorated and idle assets, and the reduction was recorded as an
impairment loss. Impairment losses in the consolidated statement of profit or loss totaled 11,220 million yen, consisting of 6,805
million yen of machinery and vehicles and 4,415 million of buildings and structures. The recoverable amount of these assets wasprimarily determined by their net sales value. Net sales value is determined mainly using the cost approach, a valuation techniquethat includes unobservable inputs. It is categorized as Level 3 within the fair value hierarchy.

18. Subsidiaries and Associates

Name

Address

Major business operations

JFE Steel Corporation

Chiyoda-ku,
Tokyo

Manufacture and sale of steel
products

JFE Bars & Shapes Corporation

Minato-ku, Tokyo

Manufacture and sale ofshaped steel and rebar
products

JFE Chemical Corporation

Taito-ku, Tokyo

Manufacture and sale ofchemical products

JFE Metal Products & Engineering,Inc.

Minato-ku, Tokyo

JFE Galvanizing & Coating Co.,Ltd.

Shinagawa-ku,
Tokyo

GECOSS Corporation

Bunkyo-ku,TokyoRental and sale of temporary
construction materials

JFE Logistics Corporation

Chiyoda-ku,
Tokyo

Various transportation andwarehousing businesses

JFE Container Co., Ltd.

Chiyoda-ku,
Tokyo

Manufacture and sale ofvarious containers

JFE Civil Engineering &Construction Corporation

Taito-ku, Tokyo

Contracting for civilengineering and construction
works(Consolidated subsidiaries)[Steel business]

Manufacture, processing, andsale of secondary steel
products
Manufacture, processing, andsale of secondary steel
products

ʊ38ʊ

Name

Address

Major business operations

Mining and exploitation,
processing and sale ofmineral products; andmanufacture and sale offunctional materials,
ferroalloys, and iron andsteel slag
Real estate, insurance
agency, and various service
businesses
Manufacture and sale ofmachinery and equipment,
and contracting for electricalconstruction,
telecommunications
construction, equipment
management, andconstruction works

JFE Mineral Company, Ltd.

Minato-ku, Tokyo

JFE Life Corporation

Taito-ku, Tokyo

JFE Plant Engineering Co., Ltd.

Taito-ku, Tokyo

JFE Systems, Inc.

Minato-ku, Tokyo

JFE Kozai Corporation

Chuo-ku, Tokyo

JFE Welded Pipe ManufacturingCo., Ltd.

Chuo-ku, Tokyo

JFE Precisions Co., Ltd.

Higashi-ku,
Niigata

JFE Advantech Co., Ltd.

Nishinomiya,
Hyogo

JFE Techno-Research Corporation

Chiyoda-ku,
Tokyo

JFE East Japan GS Co., Ltd.

Kawasaki-ku,
Kawasaki

Various service businesses

JFE Steel Australia Resources Pty.
Ltd.

Brisbane,
Australia

Investments in coal mines
and the iron ore mining
business in Australia

Philippine Sinter Corporation

Manila, The
Philippines

Manufacture and sale ofsintered ore

PT. JFE Steel Galvanizing
Indonesia

Bekasi, Indonesia

JFE Steel Galvanizing (Thailand)
Ltd.

Rayong, Thailand

Thai Coated Steel Sheet Co., Ltd.

Bangkok,ThailandNova Era Silicon S.A.

Belo Horizonte,
BrazilManufacture and sale offerroalloy

JFE Engineering Corporation

Chiyoda-ku,
Tokyo

Engineering business

J&T Recycling Corporation

Tsurumi-ku,
Yokohama

Total recycling business

JFE Project One Co., Ltd.

Mihama-ku,
Chiba

JFE Environment Technology
Company, Ltd.

Mihama-ku,
Chiba

Development and sale ofvarious computer systems
Shearing and fusing of steel
plates/sheets; and sale of steel
materials
Manufacture and sale ofelectric resistance weldedsteel pipes
Manufacture and sale offormed and fabricatedmaterials
Manufacture and sale ofmeasuring and weighing
instruments
Material analysis,
environmental research,technical information
surveys, and support for
intellectual properties

Manufacture and sale ofcold-rolled and hot-dip zincgalvanized steel products
Manufacture and sale of hotdip zinc galvanized steel
products
Manufacture and sale ofelectrogalvanized steel
products

112 other companies[Engineering business]

Design, construction, andmaintenance of oil refining,
petrochemical, and energyrelated plants
Design, procurement,
construction, operation
management, andmaintenance of various
environmental facilities

ʊ39ʊ

Name

Address

Major business operations

Asukasoken Co., Ltd.

Shinagawa-ku,Tokyo

Gas pipe burial and gas
facility construction works

JFE Technos Co., Ltd.

Tsurumi-ku,
Yokohama

Machinery and facility
maintenance

JFE Environmental Service
Corporation

Tsurumi-ku,
Yokohama

Operation, maintenance, andmanagement of waste
processing facilities, water
treatment facilities

Urban Energy Corporation

Tsurumi-ku,
Yokohama

Electricity retailing business

Mülheim,
Germany

Construction andmaintenance of waste power
plants, biomass power plants,
waste heat recovery power
plantsStandardkessel Baumgarte HoldingGmbH

73 other companies[Trading business]
Domestic and export/importtrade of steel products; rawmaterials forironmaking/steelmaking;non-ferrous metal products;
chemical products;
petroleum products; andvarious equipment andmaterials
Sale of construction material
products and equipment andmaterials for civilengineering/construction
works; metallic processing
business; and civilengineering/construction
works and various otherworks
Sale of semiconductor
products; and sale,installation, and maintenanceof device assembling andinspection equipment forelectronic components

JFE Shoji Corporation

Chiyoda-ku,
Tokyo

JFE Shoji Steel Construction
Materials Corporation

Chiyoda-ku,
Tokyo

JFE Shoji Electronics Corporation

Chiyoda-ku,
Tokyo

Kawasho Foods Corporation

Chiyoda-ku,
Tokyo

Domestic and import/export
trade of various foods

JFE Shoji Pipe & Fitting
Corporation

Chiyoda-ku,
Tokyo

Sale of steel pipe and pipematerial products

JFE Shoji Electrical Steel Co., Ltd.

Chiyoda-ku,
Tokyo

Processing and sale ofelectromagnetic steel sheets

JFE Shoji Kohnan Steel Center Co.,Ltd.

Higashinada-ku,
Kobe

Processing and sale of steel
sheetsJFE Shoji Coil Center Corporation

Kanazawa-ku,
Yokohama

Processing and sale of steel
sheetsK&I Tubular Corporation

Chiyoda-ku,
Tokyo

Export/overseas trade of
specialty pipes/tubes

JFE Shoji Machinery & Materials
Corporation

Chiyoda-ku,
Tokyo

Export/import and domestic
trade ofironmaking/industrial
materials

Zhejiang JFE Shoji Steel Products
Co., Ltd.

Pinghu, China

Processing and sale of steel
sheetsGuangzhou JFE Shoji Steel
Products Co., Ltd.

Guangzhou,
China

Processing and sale of steel
sheetsPT. JFE Shoji Steel Indonesia

Bekasi, Indonesia

Processing and sale of steel
sheetsDongguan JFE Shoji Steel Products
Co., Ltd.

Dongguan, China

Processing and sale of steel
sheets

ʊ40ʊ

Name

Address

Major business operations

JFE Shoji Steel America, Inc.

Los Angeles,
United States

Processing and sale of steel
sheetsCentral Metals (Thailand) Ltd.

Samut Prakan,
Thailand

Processing and sale of steel
sheetsJFE Shoji (Vietnam) Ltd.

Ho Chi Minh,
Vietnam

Export/import and domestic
trade of steel products, rawmaterials forironmaking/steelmaking,various equipment andmaterials

JFE Shoji (Hong Kong) Ltd.

Hong Kong,
China

JFE Shoji (Thailand) Ltd.

Bangkok,ThailandJFE Shoji (Shanghai) Co., Ltd.

Shanghai, China

JFE Shoji Power Canada Inc.

Burlington,
CanadaProcessing and sale ofelectromagnetic steel sheets

JFE Shoji America Holdings Inc.

Los Angeles,
United States

Business management ofsubsidiaries in the UnitedStatesVest Tube LLC

Los Angeles,
United States

Manufacture and sale ofwelded steel pipes

JFE Shoji America, LLC

Los Angeles,
United States

Export/import and domestic
trade of steel products andraw materials forironmaking/steelmaking

Kelly Pipe Co., LLC

Santa Fe Springs,
United States

Sale of steel pipes

CEMCO LLC

City of Industry,
United States

Processing and sale of steel
frames for construction

Japan-Brazil Niobium Corporation

Chiyoda-ku,
Tokyo

Investment in niobium
mining in Brazil

Setouchi Joint Thermal Power Co.,Ltd.

Fukuyama,
Hiroshima

Thermal power generation
business

Shinagawa Refractories Co., Ltd.

Chiyoda-ku,
Tokyo

Manufacture and sale ofvarious refractories, andcontracting for furnace
construction work

Nippon Chuzo K.K.

Kawasaki-ku,
Kawasaki

Manufacture and sale of caststeel products

Nippon Chutetsukan K.K.

Kuki, Saitama

Manufacture and sale of castiron pipes

EXA Corporation

Nishi-ku,
Yokohama

Development and sale ofvarious computer systems

Seikei Steel Pipe Corporation

Sano, Tochigi

K.K. JFE Sanso Center

Fukuyama,
Hiroshima

Export/import and domestic
trade of steel products,
chemical products
Export/import and domestic
trade of steel products, rawmaterials forironmaking/steelmaking,various equipment andmaterials
Export/import and domestic
trade of steel products, rawmaterials forironmaking/steelmaking,nonferrous metal products,
chemical products

77 other companies(Equity method associates)[Steel business]

Manufacture and sale of coldpress-formed square steel
pipes
Manufacture and sale ofoxygen gas, nitrogen gas,argon gas

ʊ41ʊ

Name

Address

Major business operations

Manufacture and sale of hotdip zinc galvanized steel
products
Manufacture and sale ofcold-rolled and hot-dip zincgalvanized steel products

Nucor-JFE Steel Mexico, S. Der. L.
Dec.V.

Silao, Mexico

Guangzhou JFE Steel Sheet Co.,Ltd.

Guangzhou,
China

BaoWu JFE Special Steel Co., Ltd.

Shaoguan, China

Manufacture and sale ofspecialty steel rods

Thai Cold Rolled Steel Sheet PublicCompany Limited

Bangkok,Thailand

Manufacture and sale ofcold-rolled steel sheets

California Steel Industries, Inc.

Fontana, UnitedStatesManufacture and sale of steel
products

JSW Steel Limited

Mumbai, India

Manufacture and sale of steel
products

Inner Mongolia Erdos EJM
Manganese Alloys Co., Ltd.

Ordos, China

Manufacture and sale offerroalloy

Bohai NKK Drill Pipe Co., Ltd.

Cangzhou, China

Processing, manufacture, andsale of drill pipes and drill
pipe accessories

TSUKISHIMA JFE AQUASOLUTION CO., LTD.

Chuo-ku, Tokyo

Design, manufacture, andconstruction of equipment
and plants for water
purification plants, sewage
treatment plants, biomass
usage facilities, and sludge
recycling facilities

Iwate Geothermal Power Co., Ltd.

Hachimantai,
Iwate

Geothermal power
generation business

JP Steel Plantech Co.*1

Kohoku-ku,
Yokohama*1

Design, manufacture, andinstallation of steelmaking
machinery

Hanwa Kozai Co., Ltd.

Yodogawa-ku,
Osaka

Processing and sale ofstainless steel products

MOBY Corporation

Ichikawa, Chiba

Processing and sale of steel
plates for containers

Ohmi Sangyo Co., Ltd.

Taisho-ku, Osaka

Processing and sale of steel
sheetsOSAKA KOWAZ Inc.

Taisho-ku, Osaka

Processing and sale of steel
sheetsSankyo Noritake Steel Co, Ltd.

Nishi-ku, Sakai

Processing and sale of steel
sheetsNishi-ku,
Yokohama

Design, manufacture, sale,installation, repair, andmaintenance of ships, naval
vessels, and marine
structures

24 other companies[Engineering business]

21 other companies[Trading business]

19 other companies*2[Other businesses]

Japan Marine United Corporation

Notes: 1. Equity-method associates include joint operations.
2. Changes in associates• JFE Shoji Machinery & Materials Corporation, Guangzhou JFE Shoji Steel Products Co., Ltd., and PT. JFE Shoji SteelIndonesia are listed as significant subsidiaries from the fiscal year ended March 31, 2024.
• Sankyo Noritake Steel Co, Ltd. is listed as an important equity-method associates from the fiscal year ended March 31,
2024.
•Regarding NKKTUBES K.K., which was listed in the table in the previous fiscal year, the liquidation was completed on
April 28, 2023.
• Regarding JFE Pipe Fitting Mfg. Co., Ltd., which was listed in the previous fiscal year, JFE Steel Corporation transferred
76.6% of the issued shares in JFE Pipe Fitting Mfg. Co., Ltd. to Riken Corporation on May 9, 2023.
• TSUKISHIMA JFE AQUA SOLUTION CO., LTD. became an equity-method associate of JFE Engineering Corporation
on October 1, 2023, due to succeeding the domestic water engineering business of JFE Engineering Corporation throughʊ42ʊ

an absorption-type company split.
•VEST Inc., which was listed in the previous fiscal year, changed its trade name to Vest Tube LLC on December 1, 2023.
• JFE ComService Co., Ltd., a subsidiary of JFE Steel Corporation and JFE Systems, Inc., transferred 20.0% of the issued
shares in GECOSS Corporation to Mizuho Leasing Company, Limited on May 10, 2024. As a result, GECOSSCorporation became an equity-method associate of JFE Steel Corporation.
3. *1 JP Steel Plantech Co. relocated to Nishi-ku, Yokohama, effective April 1, 2024.
4. *2 The other 19 equity-method associates of the trading business include three consolidated subsidiaries and one equitymethod associate of the steel business.

19. Investments Accounted for Using Equity Method(1) Material associates
JSW Steel Limited
JSW Steel, located in Mumbai, India, engages primarily in manufacture and sales of steel products. The condensed
consolidated financial statements of JSW Steel are as follows.
For JSW Steel, provisional financial statements are prepared based on December 31 as the reporting date because local
legislation imposes restrictions on when certain information becomes available to the Company.
However, in the accompanying notes, the condensed consolidated financial statements of JSW Steel that were already released
at the end of each fiscal year are disclosed. Accordingly, financial information as of September 30 is stated in the statement offinancial position, and financial information for the first nine months of the reporting period ended December 31 is stated in thestatement of profit or loss and the statement of comprehensive income.
(million yen)
As of March 31, 2023
Current assets

As of March 31, 2024
970,105

1,019,512

Non-current assets

2,193,206

2,694,620

Total assets

3,163,311

3,714,133

882,086

1,192,407

Non-current liabilities

1,262,175

1,224,863

Total liabilities

2,144,262

2,417,270

Total equity

1,019,049

1,296,862

Equity attributable to owners of parent

998,312

1,272,077

Non-controlling interests

20,73624,875Current liabilities(million yen)
Fiscal year ended March 31, 2023

Fiscal year ended March 31, 2024

Revenue

1,999,166

2,201,402

Net profit

6,686

130,832

Other comprehensive income(27,031)

20,434Comprehensive income(20,344)

151,266

ʊ43ʊAn adjustment between the amount of equity attributable to owners of parent in the above condensed consolidated financial
statements and the carrying amount of interests in JSW Steel Limited and the fair value of interests in JSW Steel Limited are as
follows:(million yen)
As of March 31, 2023
Equity attributable to owners of parent

As of March 31, 2024
998,312

1,272,077

15.0

15.0

149,746

190,811

7,765

9,662

157,511200,473409,555

559,710

Ownership interest (%)
Equity attributable to the Group
Consolidation adjustment
Carrying amount of interests in JSW
Steel Limited
Fair value of interests in JSW Steel
LimitedDividends received from JSW Steel Limited for the fiscal years ended March 31, 2023 and 2024 were 10,869 million yen and2,135 million yen, respectively.
(2) Immaterial associates and joint ventures
The carrying amount of investments in associates and joint ventures is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Associates

129,820

158,898

Joint ventures

178,149

202,105

Financial information on immaterial associates and joint ventures is as follows, which represents the amounts attributable to theGroup based on the Group’s interest in those associates and joint ventures.
(million yen)
Fiscal year ended March 31, 2023

Fiscal year ended March 31, 2024

Net profit

9,624

18,764

Other comprehensive income(1,585)343

Comprehensive income

8,038

19,108Net profit

3,900

8,272

Other comprehensive income

(263)

6,190

Comprehensive income

3,637

14,462

Associates

Joint ventures(3) Commitments to joint ventures
The Group has commitments to make equity investments or provide loans in certain jointly controlled entities. The amounts ofpotential new or additional capital contributions or loans by the Group under material equity investment or loan commitments were
4,785 million yen and 21,945 million yen as of March 31, 2023 and 2024, respectively.

ʊ44ʊ

20. Income Taxes(1) Deferred tax assets and deferred tax liabilities
The breakdown of deferred tax assets and deferred tax liabilities by major cause of accrual is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Deferred tax assets
Retirement benefit liability

29,936

26,767

Impairment losses

28,95623,858

Accrued bonuses

16,805

16,279Accrued expenses

10,438

11,427

Cash flow hedges

6,466

7,780

Unused tax loss carryforwards

2,546

6,700

Other

43,89734,368139,048

127,183

Retained earnings of subsidiaries and associates

25,34931,430Net change in fair value of equity instruments designatedas measured at fair value through other comprehensive
income16,42017,304

Cash flow hedges

6,744

8,031

Other

21,284

20,217

Total deferred tax liabilities

69,79976,984

Net deferred tax assets

69,24850,199Total deferred tax assets
Deferred tax liabilities

The breakdown of changes in net deferred tax assets (liabilities) is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

48,307

69,24822,212(9,128)(1,202)(1,634)(41)(3,375)(3,170)(6,554)

3,144

1,644

69,24850,199Balance at the beginning of the year
Deferred tax expense
Deferred taxes on items of other comprehensive income
Effective portion of cash flow hedges
Net change in fair value of equity instruments
designated as measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Other
Balance at the end of the year

ʊ45ʊDeductible temporary differences and unused tax loss carryforwards for which deferred tax assets are not recognized in the
consolidated statement of financial position are as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Deductible temporary differences

365,457

384,982

Unused tax loss carryforwards

295,301

191,795

Unrecognized deferred tax assets for the above deductible temporary differences were 111,916 million yen and 117,744 million
yen as of March 31, 2023 and 2024, respectively. Unrecognized deferred tax assets for the above unused tax loss carryforwards
were 26,000 million yen and 20,205-million yen as of March 31, 2023 and 2024, respectively.
The breakdown by expiration date of unused tax loss carryforwards for which deferred tax assets are not recognized in the
consolidated statement of financial position is as follows:(million yen)
As of March 31, 2023
Year one

As of March 31, 2024
41-

Year two to year five

53,077

20,720Over five years

212,328

139,596

No specified expiration date

29,85531,478295,301

191,795

Total

Taxable temporary differences arising from investments in subsidiaries and associates for which deferred tax liabilities were notrecognized as of March 31, 2023 and 2024 amounted to 42,378 million yen and 50,194 million yen, respectively.
Deferred tax liabilities are not recognized for such temporary differences, where the Group is able to control the timing of thereversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets of 20,654 million yen and 7,805 million yen were recognized as of March 31, 2023 and 2024, respectively,
for taxable entities that incurred net loss in the current or previous period, and whose recoverability of deferred tax assets depends
on future taxable income.
In assessing the recoverability of deferred tax assets, the Group considers the scheduled reversal of deferred tax liabilities,
projected future taxable income, and tax planning strategies.

(2) Income tax expense
The breakdown of income tax expense is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Current tax expense

65,74258,286

Deferred tax expense(22,212)9,128

43,53067,414

Total

ʊ46ʊ

(3) Reconciliation of effective tax rate
The breakdown by major cause of a difference between the effective statutory tax rate and the burden ratio of corporation tax
after application of tax effect accounting is as follows:(%)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

30.0

30.0

Items permanently not tax-deductible, such asentertainment expenses

0.8

0.7

Items permanently not taxable, such as dividend income

(0.2)

(0.1)

Share of profit (loss) of investments accounted for using
equity method

(3.3)

(6.3)

Tax credits

(4.2)

(2.1)

Other

(2.4)

2.9

Burden ratio of corporation tax after application of tax
effect accounting

20.7

25.1

Effective statutory tax rate
(Reconciliation)(4) Global Minimum Taxation
The Group has applied “International Tax Reform -Pillar Two Model Rules(Amendments to IAS 12 “Income Taxes"). ” These
amendments have clarified that IAS 12 applies to income taxes arising from tax law enacted or substantively enacted to implement
the BEPS Pillar Two GloBE (global minimum taxation) rules published by the OECD. However, the amendments also provide a
temporary exception for entities from the requirements to recognize and disclose deferred tax assets and liabilities related to income
taxes arising from the global minimum taxation rules. The Group has applied the temporary exception and neither recognized nor
disclosed deferred tax assets and liabilities related to income taxes arising from the global minimum taxation rules.
In Japan, the “Act for Partial Amendment of the Income Tax Act (Act No.3 of 2023)” was enacted on March 28, 2023 as part ofthe 2023 tax reforms to legislate the income inclusion rule among the global minimum taxation rules. Applicable from the businessyear starting on or after April 1, 2024, a top-up tax will be imposed on parent companies located in Japan until the tax burden of theparent company’s subsidiaries located in Japan reaches 15% of the base tax rate.
The impact of these laws on the consolidated financial statements is expected to be minimal.

21. Trade and Other Payables
The breakdown of trade and other payables is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Notes and accounts payable–trade636,527

608,991

Accounts payable–other

66,68458,081

703,212

667,072

Total

Trade and other payables are classified as financial liabilities measured at amortized cost.

ʊ47ʊ

22. Bonds Payable, Borrowings, and Lease Liabilities(1) The breakdown of bonds payable, borrowings, and lease liabilities is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Short-term borrowings (Note 1)

161,433

162,083

Current portion of long-term borrowings(Note 1)

134,290

160,701

Current portion of bonds (Note 2)

39,981

59,987

Commercial papers

19,999㸫

Bonds payable (Note 2)

264,224

204,390㸫

87,133

1,101,333

1,015,091

141,702140,890

1,862,966

1,830,278

397,026

426,428

1,465,939

1,403,849

1,862,966

1,830,278

Convertible bonds (Note 2)Long-term borrowings (Note 1)
Lease liabilities
Total
Current liabilities
Non-current liabilities
Total

Bonds payable, borrowings, and lease liabilities are classified as financial liabilities measured at amortized cost.
Bonds payable and borrowings are not subject to financial covenants that have significant effects on the financing activities of
the Group.
(Note 1) The weighted average interest rates and repayment dates for the balance of borrowings as of March 31, 2024 are as follows:(%)

Repayment date

Short-term borrowings

5.27

–

Current portion of long-termborrowings

1.11

–

Long-term borrowings

1.22

April 22, 2025 to March 22, 2083

ʊ48ʊ(Note 2) Terms and conditions of issuance of bonds and convertible bonds are summarized as follows:
Company
nameIssuers

Date ofissuance

The 21st
March 13,
unsecured2014
bond
The 22ndThe
September 19,
unsecured
2014
Companybond
The 25thThe
unsecured May 21, 2018
Companybond
The 26thThe
November 22,
unsecured
2018
Companybond
The 27thThe
unsecured May 27, 2019
Companybond
The 28thThe
unsecured May 27, 2019
Companybond
The 29thThe
unsecured May 27, 2019
Companybond
The 30thThe
September 20,
unsecuredCompany
2019bond
The 31stThe
September 20,
unsecured
2019
Companybond
The 32ndThe
September 20,
unsecured
2019
Companybond
The 33rdThe
unsecured July 14, 2020
Companybond
The 34thThe
unsecured July 14, 2020
Companybond
The 35thThe
unsecured July 14, 2020
Companybond
The 1stunsecuredbond withinterestThe
deferral and June 10, 2021
Companyearlyredemption
clauses(subordinated)
The 36thThe
unsecured June 9, 2022
Companybond
The 37thThe
unsecured June 9, 2022
Companybond
Zero Coupon
The
Convertible September 28,
Company Bonds due
2023
2028
The
Company

Total

–

–

As of March 31, 2023

(million yen)Interest rate
Collateral Redemption date
As of March 31, 2024
(%)

9,994

䠉

0.804

None

March 13, 2024

19,98519,995

0.703

None

September 19,
2024

19,973

19,985

0.260

None

May 21, 2025

9,993

㸫

0.150

None

November 22,
2023

29,971

29,996

0.170

None

May 27, 2024

9,979

9,985

0.260

None

May 27, 2026

19,93919,949

0.365

None

May 25, 2029

9,986

9,995

0.120

None

September 20,
2024

29,93929,956

0.250

None

September 18,
2026

19,936

19,946

0.320

None

September 20,
2029

19,992

-

0.050

None

July 14, 2023

29,94429,968

0.250

None

July 14, 2025

9,961

9,966

0.470

None

July 12, 2030

34,72334,728

0.680
(*1)

None

June 10, 2081

24,91324,933

0.330

None

June 9, 2027

4,971

4,974

0.579

None

June 9, 2032–

87,133–None

September 28,
2028

304,206

351,511––*1 The interest rate will be fixed until June 10, 2027, and variable after the following day, with a step-up in interest rates afterJune 11, 2031.

ʊ49ʊ

(2) Assets pledged as collateral and corresponding secured obligations
Assets pledged as collateral(million yen)
As of March 31, 2023

As of March 31, 2024

Cash and cash equivalents941

㸫

Trade and other receivables

9,475

㸫

Property, plant and equipment

8,808

8,369

149

152

4,721

9,610

771

283

24,86918,416

Right-of-use assets
Investments accounted for using equity method
Other financial assets (non-current)
Total

Note: Industrial foundation’s assets of property, plant and equipment as mortgage(million yen)
As of March 31, 2023
Property, plant and equipment

7,518

As of March 31, 2024
7,118

In addition, shares of consolidated subsidiaries have been pledged as collateral.
(million yen)
As of March 31, 2023
Shares of consolidated subsidiaries(carrying amount posted on the non-consolidated financial
statements of the consolidated subsidiaries)649

As of March 31, 2024
496

Corresponding secured obligations(million yen)
As of March 31, 2023
Trade and other payables

As of March 31, 2024

201

82

Bonds payable, borrowings, and lease liabilities (current)

1,145

758

Bonds payable, borrowings, and lease liabilities (noncurrent)

12,464

3,336

13,811

4,177

Total

Note: Those corresponding to the industrial foundation’s assets in the above obligations(million yen)
As of March 31, 2023

As of March 31, 2024

Bonds payable, borrowings, and lease liabilities (current)

559

559

Bonds payable, borrowings, and lease liabilities (noncurrent)

3,895

3,336

4,455

3,895

Total

ʊ50ʊ

23. Other Financial Liabilities
The breakdown of other financial liabilities is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Financial liabilities measured at amortized cost
Deposits received

158,855

136,598

Other

61,251

62,044

220,107

198,642

2,265

4,124

222,372

202,767

Current liabilities

181,046

149,300

Non-current liabilities

41,32553,467

222,372

202,767

Subtotal
Financial liabilities measured at fair value through profit orloss
Derivative liabilities
Total

Total

24. Provisions
The breakdown and movement of provisions are as follows:
Fiscal year ended March 31, 2024
(million yen)
Provision for loss on
disposal of inventories
Balance at the beginning of the year

Other provisions

Total

7,310

22,60029,910

Increase during the year400

23,55823,958Interest expense incurred over the
discount period

㸫

1

1

(1,457)(19,991)(21,448)

Decrease due to reversal㸫(3,039)(3,039)Exchange differences on translationof foreign operations

㸫

400

400

6,253

23,53029,784

㸫

12,191

12,191

Non-current liabilities

6,253

11,33817,592

Total

6,253

23,53029,784

Decrease due to intended use

Balance at the end of the year
Current liabilities

Provision for loss on disposal of inventories
A provision for loss is provided for possible losses on certain by-products that are expected to incur losses at the time ofdisposal, at an estimated amount of losses to be incurred from the following fiscal year onwards.
These expenses are expected to be paid primarily after one year.

ʊ51ʊ

25. Post-employment Benefits
The Group has adopted mainly retirement lump-sum payment plans, defined benefit pension plans, and defined contribution pension
plans. Retirement lump-sum payment plans and defined benefit pension plans are exposed to general investment risk, interest rate risk,
inflation risk, and other risks. However, the Group determines that those risks are immaterial.
The defined benefit pension plans are operated by corporate pension funds legally separated from the Group. The corporate pension
funds and pension fund trustees are required by laws and regulations to act in the best interests of the plan participants, and are
responsible for managing the plan assets in accordance with the designated policies.
(1) Reconciliation of defined benefit obligations and plan assets
The reconciliation of the defined benefit obligations and plan assets to the retirement benefit liability and asset recognized in the
consolidated statement of financial position is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Funded defined benefit obligations

165,468

163,158

Plan assets(121,800)(134,691)

43,66828,46753,47247,744

97,141

76,211Retirement benefit liability

120,663

105,706

Retirement benefit asset(23,521)(29,495)

Net defined benefit liability (asset) recognized in the
consolidated statement of financial position

97,141

76,211

Subtotal
Unfunded defined benefit obligations
Total
Amounts recognized in the consolidated statement offinancial position(2) Reconciliation of defined benefit obligations
The movement of defined benefit obligations is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Balance at the beginning of the year

235,339

218,941

Current service cost

13,968

12,969Interest expense

1,633

2,069

(248)

166

(13,485)(3,581)

2,581(1,524)

Past service cost

(3,179)(906)

Benefits paid

(14,864)(15,144)

Effects of business combinations and disposals(2,291)

㸫(511)(2,087)

218,941

210,902

Remeasurements
Actuarial losses arising from changes in demographic
assumptions
Actuarial losses arising from changes in financial
assumptions
Experience adjustments

Exchange differences on translation of foreign operations
Balance at the end of the yearʊ52ʊThe weighted average duration of defined benefit obligations is as follows:(years)
As of March 31, 2023
Weighted average duration

12.5

ʊ53ʊ

As of March 31, 2024
12.5

(3) Reconciliation of plan assets
The movement of plan assets is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

133,491

121,800

1,241

1,281

(1,403)

19,824Contribution to the plan by employer

2,256

2,143

Benefits paid

(9,485)(9,654)

Effects of business combinations and disposals(4,343)

㸫

44

(703)

121,800

134,691

Balance at the beginning of the year
Interest income
Remeasurements
Return on plan assets (excluding interest income)Exchange differences on translation of foreign operations
Balance at the end of the year

The Group expects to contribute 1,998 million yen to its defined benefit plans in the fiscal year ending March 31, 2025.
(4) Major breakdown of plan assets
The breakdown of the total plan assets by major category is as follows:(million yen)
As of March 31, 2023
With quoted
With no quoted
market price in an market price in an
active market
active market

As of March 31, 2024

Total

With quoted
With no quoted
market price in an market price in an
active market
active market

Total

Equity instruments
Domestic stocks

34,410323

34,73339,204412

39,616

Foreign stocks

7,662

660

8,323

9,212

917

10,129Domestic bonds

12,917

3,973

16,89013,2484,017

17,265

Foreign bonds

2,184

2,841

5,025

2,290

3,807

6,097

Cash and deposits

Debt instruments

19,015

㸫

19,01526,487

㸫

26,487

Life insurance generalaccounts㸫

35,48335,483

㸫32,99632,996

Other

㸫

2,328

2,328

㸫

2,097

2,097

76,18945,610121,800

90,442

44,248

134,691

Total

The Group’s management policy for the plan assets is to secure stable returns in the medium and long term for ensuring future
payments of defined benefit obligations pursuant to internal regulations. Specifically, the target rate of returns and the asset mix
ratio by investment asset class are determined within the acceptable risk range every fiscal year, and the plan assets are managedwith the asset mix ratio maintained.

ʊ54ʊ

(5) Actuarial assumptions
Major actuarial assumptions are as follows:(%)
As of March 31, 2023

As of March 31, 2024

Mainly 1.3

Mainly 1.6

Mainly 0.9 to 3.0

Mainly 0.9 to 3.0

Discount rate
Anticipated rate of salary increase

Note: The sensitivities of defined benefit obligations due to changes in the discount rate as of each fiscal year are as follows. Each ofthese sensitivities assumes that other variables are held constant; however, they do not always change independently. Negative
figures indicate a decrease in defined benefit obligations, while positive figures indicate an increase.
The Group does not expect any significant changes in the anticipated rate of salary increase.
(million yen)
Change in assumptions

As of March 31, 2023

As of March 31, 2024

Increase by 0.5%

(11,140)(10,332)

Decrease by 0.5%

11,901

11,083

Discount rate(6) Defined contribution pension plans
Contributions to the defined contribution pension plans are as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

37,04937,960Contributions to the defined contribution pension plans

The above amounts include contributions to employees’ pension insurance based on Japan’s Employees’ Pension Insurance Act.

ʊ55ʊ26. Equity and Other Equity Items(1) Share capital(i) Authorized shares
The number of authorized shares as of April 1, 2022, March 31, 2023, and March 31, 2024 was 2,298,000 thousand commonshares.
(ii) Fully paid and issued shares
The movement of the number of issued shares is as follows:
Number of issued common shares (thousand shares)
As of April 1, 2022

614,438

Increase (decrease)㸫

As of March 31, 2023

614,438

Increase (decrease)

25,000

As of March 31, 2024

639,438

Notes: 1. All the shares issued by the Company are non-par value common shares that have no restrictions on the rights.
2. During the fiscal year ended March 31, 2024, the Company issued new shares through an international offering (resolutionof the Board of Directors dated September 5, 2023).
(2) Treasury shares
The movement of the number of treasury shares is as follows:
Number of shares (thousand shares)
As of April 1, 2022

38,599As of March 31, 2023

33,494As of March 31, 2024

3,472

Notes: 1. Treasury shares as of March 31, 2023 and 2024 include the Company shares held in trust accounts for employee stock
ownership plans
2. During the fiscal year ended March 31, 2024, the Company disposed of treasury shares through an international offering(resolution of the Board of Directors dated September 5, 2023).
(3) Capital surplus and retained earnings
Under the Companies Act of Japan, at least one-half of the proceeds from issuance of shares shall be credited to share capital,
while the remainder of the proceeds shall be credited to capital reserves included in capital surplus. In addition, the Companies Act
of Japan provides that one-tenth of the dividends of retained earnings shall be appropriated as capital reserves or as retained earnings
reserves until their aggregate amount equals one-quarter of share capital.

ʊ56ʊ27. Dividends(1) Amounts of dividends paid
Fiscal year ended March 31, 2023

Resolution

Type of share

Total amount ofdividends(million yen)

Dividend per share(yen)

Record date

Effective dateOrdinary General
Meeting ofCommon stock
46,11880
March 31, 2022
June 27, 2022
Shareholders heldon June 24, 2022
Note: The total amount of dividends of 46,118 million yen includes dividends of the Company shares held in trust accounts for
employee stock ownership plans of 43 million yen.

Resolution

Type of share

Total amount ofdividends(million yen)

Dividend per share(yen)

Record date

Effective date

Board of Directors’Common stock
29,07950 September 30, 2022 December 2, 2022
Meeting held on
November 4, 2022
Note: The total amount of dividends of 29,079 million yen includes dividends of the Company shares held in trust accounts for
employee stock ownership plans of 26 million yen.
Fiscal year ended March 31, 2024

Resolution

Type of share

Total amount ofdividends(million yen)

Dividend per share(yen)

Record date

Effective dateOrdinary General
Meeting ofCommon stock
17,44730
March 31, 2023
June 28, 2023
Shareholders heldon June 27, 2023
Note: The total amount of dividends of 17,447 million yen includes dividends of the Company shares held in trust accounts for
employee stock ownership plans of 15 million yen.

Resolution

Type of share

Total amount ofdividends(million yen)

Dividend per share(yen)

Record date

Effective date

Board of Directors’Common stock
31,82750 September 30, 2023 December 4, 2023
Meeting held on
November 6, 2023
Note: The total amount of dividends of 31,827 million yen includes dividends of the Company shares held in trust accounts for
employee stock ownership plans of 24 million yen.

(2) Of the dividends for which the record date belongs to the fiscal year, those dividends for which the effective date will be after theend of the fiscal year
Fiscal year ended March 31, 2023

Resolution

Type of share

Total amount of
Source of funds
dividends
for dividends(million yen)

Dividend per
share
(yen)

Record date

Effective dateOrdinary General
Retained
Meeting ofCommon stock
17,44730 March 31, 2023
June 28, 2023
earnings
Shareholders heldon June 27, 2023
Note: The total amount of dividends of 17,447 million yen includes dividends of the Company shares held in trust accounts for
employee stock ownership plans of 15 million yen.

ʊ57ʊ

Fiscal year ended March 31, 2024

Resolution

Type of share

Total amount of
Source of funds
dividends
for dividends(million yen)

Dividend per
share
(yen)

Record date

Effective dateOrdinary General
Retained
Meeting ofCommon stock
31,82750 March 31, 2024
June 26, 2024
earnings
Shareholders heldon June 25, 2024
Note: The total amount of dividends of 31,827 million yen includes dividends of the Company shares held in trust accounts for
employee stock ownership plans of 24 million yen.

ʊ58ʊ

28. Revenue(1) Disaggregation of revenue
Fiscal year ended March 31, 2023
(million yen)
Steel BusinessEngineering
Business

Trading BusinessElimination ofintersegment
revenueJapan

2,404,246

456,345751,619(285,527)

3,326,684

Other

1,476,892

56,154

762,517(353,455)

1,942,110

3,881,139

512,500

1,514,137(638,982)

5,268,794

3,650,405

10,977

1,514,125(612,405)

4,563,104

230,734

501,52211(26,577)

705,690

3,881,139

512,500

1,514,137(638,982)

5,268,794

Steel BusinessEngineering
Business

Trading BusinessElimination ofintersegment
revenueJapan

2,340,770

466,431700,944(233,192)

3,274,953

Other

1,375,286

73,544

775,508(324,660)

1,899,678

3,716,057

539,975

1,476,452(557,852)

5,174,632

3,477,831

9,572

1,476,441(528,754)

4,435,090

238,225

530,402

11(29,098)

739,5423,716,057

539,975

1,476,452(557,852)

5,174,632

Total

RegionTotal
Transfer of goods orservices
At a point in time
Over time
Total

Fiscal year ended March 31, 2024
(million yen)
Total

RegionTotal
Transfer of goods orservices
At a point in time
Over time
Total(2) Contract balances(million yen)
As of April 1, 2022

As of March 31, 2023

As of March 31, 2024

Receivables from contracts withcustomers

742,836

713,074

704,123

Contract assets

123,888116,293

134,569

Contract liabilities

32,58048,54350,186

Contract assets consist primarily of rights on consideration received for construction contracts in the engineering business in
exchange for the portion of contract obligations fulfilled measured based on the percentage of completion at the end of the reporting
period, excluding receivables. They are reclassified to receivables when all performance obligations have been satisfied.
The amount recognized as receivables that was included in the opening balance of contract assets was 99,211 million yen and
67,073 million yen as of March 31, 2023 and 2024, respectively.
Contract liabilities consist primarily of the portion of consideration for construction contracts in the engineering business received
in stages during the contract period, apart from the satisfaction of performance obligations, that exceeds the amount recognized asrevenue. They are reclassified to revenue upon satisfaction of performance obligations.
The amount recognized as revenue that was included in the opening balance of contract liabilities was 31,674 million yen and
45,958 million yen as of March 31, 2023 and 2024, respectively.

ʊ59ʊFor performance obligations satisfied or partially satisfied in previous periods, the amount recognized as revenue was 1,554 million
yen and 4,833 million yen as of March 31, 2023 and 2024, respectively.
(3) Remaining performance obligations(million yen)
As of March 31, 2023
Transaction price allocated to performance obligations thatare unsatisfied or partially unsatisfied as of the end of the
fiscal year

As of March 31, 2024

1,113,306

1,131,162

Within one year

381,439

409,070

Over one year

731,867

722,092

Expected timing of revenue recognition

These obligations are mainly related to the engineering business.

29. Selling, General and Administrative Expenses
The breakdown of selling, general and administrative expenses is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Employee benefit expenses

157,071

158,849

Product shipping-related expenses

90,78691,901

92

44

144,496

157,886

392,446

408,682

Provision of allowance for doubtful accounts
Other
Total

30. Employee Benefit Expenses
Employee benefit expenses are as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

538,491528,287

Employee benefit expenses

Employee benefit expenses include salaries, bonuses, legal welfare expenses, and retirement benefit expenses, and are recorded in“Cost of sales” and “Selling, general and administrative expenses.”

ʊ60ʊ

31. Share-based Payment
The Company has instituted a share-based payment plan through which a portion of the compensation of directors (excluding outside
directors) and executive officers (excluding non-residents under income tax law) (hereinafter referred to collectively as the“Directors/Officers”) of the Company and its operating companies is provided in the form of employee stock ownership plans. The
Group’s objective is to establish a clear link between compensation and the Group’s operating performance and equity value andencourage the sharing of value with shareholders, thereby creating a greater incentive to contribute toward enhancing shareholder value
over the medium and long term.
The plan is a compensation plan whereby shares in the Company are acquired through a trust funded by cash contributed by theCompany, and the Company’s shares and an amount of cash equivalent to the market price of the Company’s shares (hereinafter referred
to as the “Company’s Shares”) are provided through the trust to the Directors/Officers, pursuant to the Stock Grant Regulations for
Officers established by the Company and its operating companies.
The Company’s Shares are granted to the Directors/Officers, in principle, upon their retirement.
Compensation under the plan is granted to the Directors/Officers as consideration for their execution period of duties, provided the
Directors/Officers have been in office for at least a month during the period specified as follows (the “Execution Period”):• Directors of the Company: From the date of the Ordinary General Meeting of Shareholders of the Company for the respective year
to the date of the Ordinary General Meeting of Shareholders of the Company for the following year
• Others: From April 1 of the respective year to March 31 of the following year
The Company and its operating companies calculate points equivalent to the performance-linked portion and the service-length portionfor each Execution Period and grant them to the Directors/Officers.
The points granted for each Execution Period are accumulated until retirement, and the number of the Company’s Shares is calculated
by converting the accumulated points as “one point = one share.”Part of the plan that provides the Company’s Shares is accounted for as an equity-settled share-based payment transaction while partof the plan that provides cash is accounted for as a cash-settled share-based payment transaction.
Expenses recognized for the plan as “Selling, general and administrative expenses” in the consolidated statement of profit or loss are
as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,2024

Equity-settled

158

162

Cash-settled

64

193

223

356

Total

The carrying amount of liabilities for the plan is as follows:(million yen)
As of March 31, 2023
Other non-current liabilities

192

As of March 31, 2024
343

The number of points granted and the weighted-average fair value of points at the grant date for the equity-settled portion of the plan
are as follows:

Number of points granted (points)

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

95,085

96,124Weighted average fair value of points at the
1,679
1,703
grant date (yen)Note: The fair value of points granted approximates the share price at the grant date, and thus represents the share price at the grant
date.

ʊ61ʊ

32. Other Income
The breakdown of other income is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

5,637

5,464

Foreign exchange gains

9,058

14,897

Rental income

5,904

5,179

Other

17,46021,94038,06047,482

Dividend income
Equity financial assets measured at fair value through othercomprehensive income

Total

The breakdown of dividend income from equity financial assets measured at fair value through other comprehensive income is asfollows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Financial assets derecognized during the year

413

316

Financial assets held as of the reporting date

5,223

5,148

33. Other Expenses
The breakdown of other expenses is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Loss on retirement of fixed assets

16,28725,822

Loss on disposal of inventories

8,477

3,444

Other

17,43323,65442,19852,921Total

34. Loss on Liquidation of Subsidiaries and Associates
Fiscal year ended March 31, 2023
Losses were recorded due to the transfer of shares in JFE Pipe Fitting Mfg. Co., Ltd., one of the consolidated subsidiaries of thesteel business. The information is provided in Note “12. Assets Held for Sale.”ʊ62ʊ

35. Restructuring Expenses
Fiscal year ended March 31, 2023
Expenses were recorded due to the shutdown of the upstream processes and hot rolling equipment at East Japan Works of JFE
Steel Corporation (Keihin district), one of the consolidated subsidiaries of the steel business. They comprise mainly of compensation
expenses paid to partner companies.

36. Finance Income and Finance Costs(1) Finance income
The breakdown of finance income is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

3,677

5,048

3,677

5,048

Interest income
Financial assets measured at amortized cost
Total(2) Finance costs
The breakdown of finance costs is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

16,757

21,351

2

1

1,721

2,312

18,481

23,665Interest expenses
Financial liabilities measured at amortized cost
Other
Other
Total

ʊ63ʊ

37. Other Comprehensive Income
The amount arising during the year, reclassification adjustments to profit or loss, and tax effects for each component of othercomprehensive income are as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

11,31424,554

Before tax effects

11,31424,554

Tax effects(3,170)(6,554)Remeasurements of defined benefit plans

8,144

18,000(8,609)15,074(8,609)15,074(41)(3,375)(8,651)

11,69818,26322,545(23)

24

18,23922,569㸫㸫

18,23922,569Amount arising during the year

14,80822,976

Reclassification adjustments(11,782)(16,306)

Before tax effects

3,026

6,669

Tax effects(1,202)(1,634)

Effective portion of cash flow hedges

1,823

5,035

Amount arising during the year

18,23530,936

Reclassification adjustments

(729)

(647)

17,50530,28837,06187,592Remeasurements of defined benefit plans
Amount arising during the year

Net change in fair value of equity instruments designated asmeasured at fair value through other comprehensive income
Amount arising during the year
Before tax effects
Tax effects
Net change in fair value of equity instruments designated asmeasured at fair value through other comprehensive income
Exchange differences on translation of foreign operations
Amount arising during the year
Reclassification adjustments
Before tax effects
Tax effects
Exchange differences on translation of foreign operations
Effective portion of cash flow hedges

Share of other comprehensive income of investments accounted
for using equity method

Share of other comprehensive income of investments
accounted for using equity method
Total other comprehensive income

ʊ64ʊ

38. Earnings per Share(1) Basic earnings per share and diluted earnings per share
Fiscal year ended March 31,
2023

Fiscal year ended March 31,2024

Basic earnings per share (yen)280.68323.33

Diluted earnings per share (yen)280.52315.09Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

162,621

197,421㸫㸫

162,621

197,421㸫

219

162,621

197,640

579,382

610,581

Share-based payments (thousand shares)

337

418

Convertible bonds (thousand shares)

㸫16,245

579,719627,244(2) Basis for calculation of basic earnings per share and diluted earnings per share

Profit attributable to owners of parent (million yen)Amount not attributable to common shareholders of parent(million yen)
Profit used in calculation of basic earnings per share (million
yen)Profit adjustments (million yen)
Profit used in calculation of diluted earnings per share(million yen)
Weighted average number of common shares used in
calculation of basic earnings per share (thousand shares)
Impact of dilutive potential common shares

Weighted average number of common shares used in
calculation of diluted earnings per share (thousand shares)

Note: The Company shares held in trust accounts for employee stock ownership plans are included in treasury shares, which are
excluded from the calculation of the weighted average number of shares used in the calculation of basic earnings per share.
The weighted average number of treasury shares excluded from the calculation of basic earnings per share for the fiscal years
ended March 31, 2023 and 2024 is 534 thousand and 498 thousand, respectively.

ʊ65ʊ

39. Supplemental Information on the Consolidated Statement of Cash Flow
The movement of liabilities arising from financing activities is as follows:
Fiscal year ended March 31, 2023
(million yen)
Liabilities arising fromfinancing activities

Balance at the
beginning of theyear

Non-cash changes

Changes fromfinancing cash
flows

Increase due to
new leases

Balance at the endof the year

Other

Short-term borrowings

149,834(4,576)–

16,175

161,433

Current portion of long-termborrowings

128,134(129,444)–

135,601

134,290

Current portion of bonds

19,990(20,000)–

39,991

39,981–

19,999––19,999274,197

30,000–(39,973)

264,224

1,133,287

104,376–(136,329)

1,101,333

Lease liabilities

144,021(45,139)

42,326494

141,702

Total

1,849,466(44,784)

42,326

15,9591,862,966

Commercial papers
Bonds payable
Long-term borrowings

Note: “Other” in non-cash changes mainly includes the transfer of long-term borrowings due within one year to current portion of
long-term borrowings and the transfer of bonds payable to current portion of bonds.

Fiscal year ended March 31, 2024
(million yen)
Liabilities arising fromfinancing activities

Balance at the
beginning of theyear

Non-cash changes

Changes fromfinancing cash
flows

Increase due to
new leases

Balance at the endof the year

Other

Short-term borrowings

161,433(13,970)

㸫

14,620162,083

Current portion of long-termborrowings

134,290(130,654)

㸫

157,065

160,701

Current portion of bonds

39,981(40,000)

㸫

60,00559,987

Commercial papers

19,999(19,999)㸫㸫㸫Bonds payable

264,22490,000㸫

(62,700)

291,524

1,101,333

60,347

㸫(146,589)

1,015,091

Lease liabilities

141,702(53,085)

51,2381,033

140,890

Total

1,862,966(107,362)

51,23823,435

1,830,278

Long-term borrowings

Note: “Other” in non-cash changes mainly includes the transfer of long-term borrowings due within one year to current portion of
long-term borrowings and the transfer of bonds payable to current portion of bonds.

ʊ66ʊ

40. Financial Instruments(1) Capital management
The Group’s capital management principle is to enhance capital efficiency and ensure sound financial conditions in order toachieve sustainable growth and the medium- to long-term improvement of corporate value.
The Group’s major indicators for capital management are as follows:
As of March 31, 2023

As of March 31, 2024

ROE*1

7.9%

8.6%

D/E ratio*2

67.8%

58.0%

Debt / EBITDA multiple*4

3.7x

3.2x

Notes: 1.
2.

3.

*1 ROE = Profit attributable to owners of parent / Equity attributable to owners of parent*2 D/E ratio = Bonds payable, borrowings, and lease liabilities / Equity attributable to owners of parent
For debt with an equity component*3, a portion of its issue price is deemed to be equity attributable to owners of parent,
as assessed by rating agencies.
*3 Debt with an equity component (subordinated loans and bonds payable)(million yen)
Borrowing date/Amount borrowed/
Assessment
Amount deemed
Bond issuance dateAmount issuedof equity content
to be equity
June 30, 2016
167,500
50%
83,750March 19, 2018
100,000
50%
50,000June 10, 2021
March 20, 2023

4.

35,000205,000

50%
50%

17,500102,500*4 Debt / EBITDA multiple = Bonds payable, borrowings, and lease liabilities / EBITDA
EBITDA: Business income + Depreciation and amortization

These indicators are monitored as necessary and appropriate.
The Group is not subject to material capital regulation.
(2) Basic policy on financial risk management
The Group is exposed to financial risks (credit risk, liquidity risk, foreign exchange risk, interest rate risk, and market pricefluctuation risk) in the course of business activities. In order to mitigate these risks, the Group conducts risk management undercertain policies. The Group uses derivative transactions to avoid or mitigate the risks described later and does not use them for
speculative purposes.
(3) Credit risk(i) Credit risk management
Trade receivables held by the Group are exposed to the credit risks of customers. To manage such risks, each company of theGroup conducts regular reassessments of the financial standing of business partners.
The Group does not have excessive concentration of credit risk on any particular counterparty.
(ii) Maximum exposure to credit risk
Other than undrawn loan commitments and guaranteed obligations, the Group’s maximum exposure to credit risk is the
carrying amount of financial assets less impairment losses in the consolidated statement of financial position.
The maximum exposure to the credit risk of loan commitments and financial guarantee contracts is as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Loan commitments

4,736

525

Financial guarantee contracts

35,23541,419ʊ67ʊ

(iii) Movement of allowance for doubtful accounts(million yen)
Fiscal year ended March 31, 2023
Lifetime expected credit losses
Allowance for doubtful
Allowancefor doubtful
accounts measured at an
Allowance for doubtful
accounts for trade
amount equal to 12-monthaccounts for credit-impaired
receivables,
contract
assets,expected credit losses
financial assets
and lease receivables
Balance at the beginning of
the year

184

795

1,656

Increase during the year

63

213

117

–

(9)

(158)

(58)

(165)

(122)

Other

32

24

197

Balance at the end of the year

221

858

1,691

Decrease during the year
(intended use)
Decrease during the year
(reversal)(million yen)
Fiscal year ended March 31, 2024
Lifetime expected credit losses
Allowance for doubtful
Allowance for doubtful
accounts measured at an
Allowance for doubtful
accounts for trade
amount equal to 12-monthaccounts for credit-impaired
receivables, contract assets,
expected credit losses
financial assets
and lease receivables
Balance at the beginning of
the year

221

858

1,691

Increase during the year

54

127

292

(0)

(3)

(44)

(72)

(228)

(250)

5

15

(6)

208

771

1,682

Decrease during the year
(intended use)
Decrease during the year
(reversal)
Other
Balance at the end of the year

Note: An increase during the year and decrease during the year (reversal) in allowance for doubtful accounts for trade receivables,
contract assets, and lease receivables (lifetime expected credit losses) resulted from an increase and decrease in trade andother receivables mainly due to sale and collection.
(iv) Carrying amounts (before deducting allowance for doubtful accounts) of financial assets and receivables for which allowancefor doubtful accounts is provided(million yen)
As of March 31, 2023

As of March 31, 2024

Financial assets with allowance for doubtful accounts
measured at an amount equal to 12-month expected credit
losses76,016

66,841

Trade receivables, contract assets, and lease receivables

858,706

866,659

1,718

1,718

Credit-impaired financial assets

ʊ68ʊ

(v) Analysis of credit risk
Credit risk ratings are almost similar among financial assets with allowance for doubtful accounts measured at an amount equal
to 12-month expected credit losses.
Past due information on trade receivables, contract assets, and lease receivables is as follows:(million yen)
As of March 31, 2023
Not past due

As of March 31, 2024

843,924

853,588

Past due within 30 days

9,808

8,561

Past due between 30 days and 90 days

2,070

2,660

Past due over 90 days

2,902

1,849

858,706

866,659

Total(4) Liquidity risk(i) Liquidity risk management
Liquidity risk is the risk that the Group may become unable to meet its payment obligations on their due date, including for
trade payables and borrowings, owing to deterioration in the financing environment and other factors.
The Group raises the necessary funds mainly through bank loans and the issuance of commercial papers and bonds, taking into
consideration the stability and cost of funds, while the due dates of those obligations are managed so as to avoid concentrationof payments in view of the liquidity risk. In addition, the Group manages the funds of the domestic Group companies intensively
and efficiently in an attempt to mitigate the liquidity risk.
The Group also maintains sufficient liquidity by setting commitment lines with financial institutions (500,000 million yen at
the end of the fiscal year ended March 31, 2024).
(ii) Financial liabilities (including derivative financial instruments) by maturity date
As of March 31, 2023
(million yen)Over one year Over two years Over three years Over four years
Within one year and within two and within three and within four and within five Over five years
years
years
years
years

Carrying
amountContractual
cash flows

703,212703,212703,212

–

–

–

–

–

1,721,263

1,797,464

375,522

227,884

172,677

277,936

218,887

524,555

48,216

48,95818,3984,465

19,559

2,362

3,598

573

Lease liabilities

141,702

143,740

41,53735,60826,775

15,5697,241

17,008Subtotal

2,614,395

2,693,376

1,138,671

267,957

219,012295,868

229,727

542,137

2,265

2,279

2,188

90

–

–

–

–

2,616,661

2,695,655

1,140,860

268,048

219,012295,868

229,727

542,137

Non-derivative
financial liabilities
Trade and otherpayablesBonds payable andborrowings
Installment
payablesDerivative liabilities
Total

ʊ69ʊ

As of March 31, 2024
(million yen)Over one year Over two years Over three years Over four years
Within one year and within two and within three and within four and within five Over five years
years
years
years
years

Carrying
amountContractual
cash flows

667,072

667,072

667,072

㸫

㸫

㸫

㸫

㸫

1,689,388

1,759,268

404,902214,172

283,544219,808

206,230

430,60948,12149,0195,515

23,736

8,502

7,659

3,605

㸫

Non-derivative
financial liabilities
Trade and otherpayablesBonds payable andborrowings
Installment
payablesLease liabilities

140,890

143,467

44,43639,191

23,89810,5184,930

20,492

Subtotal

2,545,472

2,618,828

1,121,926

277,100

315,945

237,986

214,766

451,102

4,124

4,123

4,121

2

㸫

㸫

㸫

㸫

2,549,597

2,622,952

1,126,048

277,102

315,945

237,986

214,766

451,102

Derivative liabilities
Total(5) Foreign exchange risk(i) Foreign exchange risk management
Financial instruments denominated in foreign currencies held by the Group are exposed to foreign exchange rate fluctuation
risk. Hedge transactions, including forward exchange contracts, are entered into as necessary for the net balance of foreign
currencies received from exports of products and foreign currencies paid for imports of raw materials under transactions
denominated in the relevant foreign currencies.
(ii) Foreign exchange sensitivity analysis
The financial impact on profit before tax in the case of a 1% appreciation of Japanese yen against foreign currencies forfinancial instruments held by the Group at the end of each fiscal year is as follows. The analysis is based on the assumption that
all other variables are held constant.
The sensitivity does not include the effects of translating financial instruments and the assets and liabilities of foreign
operations denominated in the functional currency into the presentation currency.
(million yen)

Impact on profit before tax

Currency

Fiscal year ended March
31, 2023

Fiscal year ended March
31, 2024

U.S. dollar

(665)

(878)

ʊ70ʊ

(6) Interest rate risk(i) Interest rate risk management
Borrowings with floating interest rates held by the Group are exposed to interest rate fluctuation risk. Hedge transactions,
including interest rate swaps, are entered into for certain borrowings to cope with interest rate fluctuations and to reduce interest
rate payments.
(ii) Interest rate sensitivity analysis
The financial impact on profit before tax in the case of a 1% increase in interest rate for financial liabilities with floatinginterest rates held by the Group at the end of each fiscal year is as follows. The analysis is based on the assumption that all othervariables are held constant.
The sensitivity does not include borrowings with floating interest rates which are converted to fixed rates by derivativetransactions, including interest rate swap agreements.
(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024(7,481)(7,379)Impact on profit before tax(7) Share price fluctuation risk(i) Share price fluctuation risk management
Equity instruments (stock) held by the Group are exposed to market price fluctuation risk. Most of the equity instruments areequities of the companies with which business relationships are maintained, and the fair values of such equities are regularly
monitored.
(ii) Share price fluctuation sensitivity analysis
The financial impact on other comprehensive income (before tax) in the case of a 1% decrease in quoted price for equity
financial assets (stock) in an active market held by the Group at the end of each fiscal year is as follows.
(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

(494)

(568)

Impact on other comprehensive income (before tax)(8) Carrying amounts and fair values of financial instruments(million yen)
As of March 31, 2023
Carrying amount

As of March 31, 2024

Fair value

Carrying amount

Fair value

Long-term borrowings

1,101,333

1,099,373

1,015,091

1,011,732

Current portion of bonds

39,98140,06459,98760,035

Bonds payable

264,224

263,173

204,390

202,443㸫㸫87,13387,280Convertible bonds

The fair value of financial assets and financial liabilities measured at amortized cost other than long-term borrowings, current
portion of bonds, bonds payable, and convertible bonds are not included as they are close to their carrying amount.
Financial instruments measured at fair value on a recurring basis are also not included as the fair value and the carrying amountare equal.
The fair value of long-term borrowings is determined by discounting the total of principal and interest to present value with theestimated interest rate on a similar new loan.
The fair value of current portion of bonds and bonds payable is based on market prices. The fair value of convertible bonds isʊ71ʊ

determined by discounting to present value with the yields of similar bonds without an equity conversion option.
Long-term borrowings, current portion of bonds, bonds payable, and convertible bonds are categorized as Level 2 within the fairvalue hierarchy.
(9) Fair value hierarchy of financial instruments
The fair value hierarchy of financial instruments measured at fair value on a recurring basis after initial recognition is categorized
into the following three levels depending on the observability and materiality of inputs used in the measurement.
Level 1: Fair value measured using market prices in active markets for identical assets or liabilities
Level 2: Fair value measured using observable inputs other than those categorized within Level 1, either directly or indirectly
Level 3: Fair value measured using significant unobservable inputs.
When two or more inputs are used for the measurement of fair value, the level of fair value measurement is determined based on
the lowest level input that is significant to the entire measurement.
Transfers between levels of the fair value hierarchy are determined at the end of each fiscal year.
There were no transfers between Level 1 and Level 2 for the fiscal years ended March 31, 2023 and 2024.

As of March 31, 2023
(million yen)
Level 1

Level 2

Level 3

Total

Financial assets
Financial assets measured at fairvalue through profit or loss
Derivative assets–

29,290–29,290

Other

–

4,116

–

4,116

49,493–70,574

120,067

–

–

7,090

7,090

49,49333,407

77,664

160,565

–

2,265

–

2,265

–

2,265

–

2,265

Equity financial assets measured atfair value through othercomprehensive income
Equity securities
Investments in capital
Total
Financial liabilities
Financial liabilities measured at fairvalue through profit or loss
Derivative liabilities
Total

ʊ72ʊ

As of March 31, 2024
(million yen)
Level 1

Level 2

Level 3

Total

Financial assets
Financial assets measured at fairvalue through profit or loss
Derivative assets

㸫

34,863

㸫

34,863

Other

㸫

4,151

㸫

4,151

56,827

㸫

67,980124,808

㸫

㸫

7,050

7,050

56,82739,01575,030170,873

㸫

4,124

㸫

4,124

㸫

4,124

㸫

4,124

Equity financial assets measured atfair value through othercomprehensive income
Equity securities
Investments in capital
Total
Financial liabilities
Financial liabilities measured at fairvalue through profit or loss
Derivative liabilities
Total• Equity securities and investments
Listed equity securities are categorized within Level 1 as their fair value is determined based on the market price.
Unlisted equity securities and investments in capital are categorized within Level 3 as their fair value is determined using thecomparable peer company analysis or other appropriate valuation techniques, where one or more significant inputs are not basedon observable market data. The major significant unobservable input is a discount for illiquidity. The fair value decreases as a
discount for illiquidity due to unlisted nature increases. A 30% illiquidity discount has been applied.

ʊ73ʊ• Derivative assets and derivative liabilities
Derivative transactions, such as forward exchange contracts and interest rate swaps, are categorized within Level 2 as theirfair value is determined based on the quoted prices from counterparty financial institutions.
The fair value of financial instruments categorized within Level 3 is determined by each Group company which directly holds
the relevant equity securities and other instruments, in accordance with the valuation policy and procedures for fair value
measurements established by the Group. The results of fair value measurements are approved by an appropriate responsible person.
The movement of financial instruments measured at fair value on a recurring basis that are categorized within Level 3 for the
fiscal years ended March 31, 2023 and 2024 is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

Balance at the beginning of the year

77,05577,664

Other comprehensive income (Note 1)

(718)

6,968

Acquisition

1,946

80

Sale

(569)

(7,666)

Transfer from Level 3 (Note 2)㸫(2,575)

Change due to changes in the scope of consolidation

㸫

578

Other

(48)

(18)

77,66475,030

Balance at the end of the year
Notes: 1.
2.

The amount is included in “Net change in fair value of equity instruments designated as measured at fair value throughother comprehensive income” in the consolidated statement of comprehensive income.
The transfer from Level 3 recognized during the fiscal year ended March 31, 2024, was due to the listing of the investee.

(10) Derivative transactions and hedging activities
Derivative transactions used by the Group carry risks of market price fluctuations in the future, including that of currencies,
interest rates The Group uses derivatives that are only based on actual demand, such as export and import transactions, and bonds
payable and borrowings. Accordingly, these risks are limited within the scope of loss of opportunity gains. Furthermore, as theGroup conducts derivative transactions only with financial institutions with high credit ratings, the risk of failure to perform
contracts due to bankruptcy of the counterparty, is considered to be close to non-existent. The Company has established the internal
rule on derivative transactions, and conducts transactions related to derivatives pursuant to the rule. On each actual transaction, theCompany conducts a transaction upon authority by the Corporate Officer for Finance pursuant to the rule stated above. Balances,market prices, and losses/gains on valuation of derivatives are to be reported to the management council regularly. The consolidated
subsidiaries also conduct derivative transactions pursuant to the respective internal rules.
If the risk management objective for a hedging relationship is altered, the application of hedge accounting is discontinued.
(i) Cash flow hedges
The Group uses forward exchange contracts and interest rate swaps primarily to hedge the fluctuation risk of the cash flows
associated with foreign exchange fluctuations in foreign currency-denominated transactions and interest rate fluctuations inborrowings, and designates such derivative transactions as cash flow hedges.
The amount recognized in profit or loss for the hedge ineffectiveness portion and the portion excluded from the assessment ofhedge effectiveness was immaterial for the fiscal years ended March 31, 2023 and 2024.

ʊ74ʊ

(ii) Fair value of hedging instruments to which hedge accounting is applied(million yen)
As of March 31, 2023

As of March 31, 2024

AssetsAssetsLiabilities

Liabilities

Cash flow hedges
Forward exchange transactions

1,879

1,654

3,193

121

Interest rate swap transactions

1,849

99

3,066

25

Cross-currency interest rate swap transactions

22,481–

26,771㸫Commodity futures transactions

2,258

–

1,246

2,808

28,4691,754

34,278

2,955

Total

The fair value of the hedging instrument as an asset is recognized in “Other financial assets (current assets)” and “Other
financial assets (non-current assets)” in the consolidated statement of financial position. The fair value of the hedging instrument
as a liability is recognized in “Other financial liabilities (current liabilities)” and “Other financial liabilities (non-current
liabilities)” in the consolidated statement of financial position.
(iii) Notional amount and average price of hedging instruments to which hedge accounting is applied
The notional amount of hedging instruments to which hedge accounting is applied(million yen)
As of March 31, 2023
Within one year

As of March 31, 2024

Over one year

Within one year

Over one year

Cash flow hedges
Forward exchange transactions

197,780

4,417

154,7312,185Interest rate swap transactions

9,450

17,038

10,950

6,088

Cross-currency interest rate swap transactions

15,60857,351

5,134

52,216

Commodity futures transactions

22,291–

31,258㸫

ʊ75ʊ

The average forward exchange rate of major currencies under forward exchange transactions and the average paid interest rate
under interest rate swap transactions and cross-currency interest rate swap transactions are as follows:
As of March 31, 2023

As of March 31, 2024

Cash flow hedges
Forward exchange transactions
U.S. dollar

133.03 yen

146.60 yen

Euro

133.65 yen

135.16 yen

0.67%

0.52㸣

103.19 yen

104.29 yen

0.40%

0.22㸣

Interest rate swap transactions
Receive floating / pay fixed
Cross-currency interest rate swap transactions
U.S. dollar
Receive floating / pay fixedʊ76ʊ

(iv) Other components of equity and gains or losses on hedging instruments of cash flow hedges
Fiscal year ended March 31, 2023
(million yen)
Forwardexchangetransactions

Interest rate
swap
transactions

Cross-currencyinterest rate
swap
transactions

1,945

(253)

262

2,162

4,116

2,392

75

8,586

(982)

10,071(312)

196(8,131)–(8,247)(3,749)

–

–

(472)

(4,221)

275

18

718

707

1,719

Forwardexchangetransactions

Interest rate
swap
transactions

Cross-currencyinterest rate
swap
transactions

Commodity
futurestransactions

275

18

718

707

1,719

5,021

113

10,093

1,220

16,449(1,263)

58(10,209)㸫(11,414)(2,844)㸫㸫

(3,880)(6,725)

1,188

190

602

(1,952)

29

Balance at the beginning of
the yearHedging gains or losses
recognized in othercomprehensive income
Reclassification adjustments
to profit (Note)
Reclassification amount tocost of non-financial assets
Balance at the end of the year

Commodity
futurestransactions

Total

Fiscal year ended March 31, 2024
(million yen)

Balance at the beginning of
the yearHedging gains or losses
recognized in othercomprehensive income
Reclassification adjustments
to profit (Note)
Reclassification amount tocost of non-financial assets
Balance at the end of the year

Total

Note: Major line items for reclassification adjustments in the consolidated statement of profit or loss for the fiscal year ended March
31, 2023 are “Other income” for forward exchange transactions and “Finance costs” for interest rate swap transactions and crosscurrency interest rate swap transactions.
Major line items for reclassification adjustments in the consolidated statement of profit or loss for the fiscal year ended March
31, 2024 are “Other income” for forward exchange transactions and “Finance costs” for interest rate swap transactions and crosscurrency interest rate swap transactions.
(11) Transfer of financial assets
As of March 31, 2023 and 2024, trade receivables transferred without satisfying conditions for derecognition of financial assetsof 5,652 million yen and 5,341 million yen were recognized in “Trade and other receivables,” respectively, and the amounts received
due to the transfer of 5,652 million yen and 5,341 million yen were recognized in “Bonds payable, borrowings, and lease liabilities,”
respectively.
With regard to these trade and other receivables, the Group will assume the payment obligations in case the drawer of the notesor the debtor fails to make payment. For this reason, it has been determined that the Group holds almost all of the risks and rewards
related to ownership of the transferred assets.

ʊ77ʊ

41. Related Parties
Compensation for key management personnel is as follows:(million yen)
Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2024

1,738

1,814

134

154

1,872

1,968

Compensation and bonuses
Share-based payment
Total

42. Commitments
Commitments for the acquisition of assets after the reporting date are as follows:(million yen)
As of March 31, 2023
Acquisition of property, plant and equipment

As of March 31, 2024

215,711

202,648

43. Contingent Liabilities(1) Guarantees of obligations
Guarantees for borrowings from financial institutions to companies other than subsidiaries are as follows:(million yen)
As of March 31, 2023

As of March 31, 2024

Joint ventures

21,71825,083

Associates

3,310

5,108

Other

1,156

1,955

26,18532,148Total

In addition to the above, guarantees of obligations that may arise in the future for associates are as follows:(million yen)
As of March 31, 2023
Guarantee limit for associates

9,050

As of March 31, 2024
9,271

(2) Litigation
There is no applicable item.

44. Subsequent Events
JFE Steel Corporation, the consolidated subsidiary in the steel business, and the Company both passed resolutions at their boardof directors meetings, held on April 17, 2024 and April 24, 2024, respectively, to approve the share transfer of a portion of common
stock held by JFE Steel Corporation in GECOSS Corporation, a consolidated subsidiary of JFE Steel Corporation, to Mizuho Leasing
Company, Limited. JFE Steel Corporation and the Mizuho Leasing Company, Limited entered into share-transfer and shareholders’agreements on April 25, 2024. JFE ComService Co., Ltd., a consolidated subsidiary of JFE Steel Corporation, also concluded ashare-transfer agreement with Mizuho Leasing Company, Limited on April 25, 2024 for the transfer of its holdings of common stock
in GECOSS Corporation and has transferred its holding of common stock.
(1)

Reason for transfer of shares

ʊ78ʊTo strengthen the business of GECOSS Corporation and expand its growth areas as well as maximize its corporate
value, GECOSS Corporation and Mizuho Leasing Company, Limited will form a capital and business alliance. To
ensure the smooth implementation of this alliance, common shares of GECOSS Corporation will be transferred toMizuho Leasing Company, Limited.
(2)

Overview of the transferee
Name: Mizuho Leasing Company, Limited(3)

Transfer date: May 10, 2024

(4)

Name and business of the subsidiary(i) Name of subsidiary: GECOSS Corporation(ii) Business: Rental and sale of temporary construction materials(5) Number and transfer price of shares, profit/loss from transfer, and equity ratio after transfer(i) Number of shares to be transferred: 6,760,000 shares(ii) Transfer price: Approx. 7.5 billion yen(iii) Profit/loss on transfer:
Loss of about 5.0 billion yen (A loss of about 15 billion yen related to the sale of shares in subsidiaries is expected tobe recorded as an exceptional item, of which includs a loss of about 10 billion yen from the remeasurement of theresidual interest, and the Company plans to apply the equity method to GECOSS Corporation after the share transfer.)(iv) Shareholding ratio after transfer: 39.47%(2) Other(Significant lawsuits)
There is no applicable item.
(Quarterly information for the fiscal year ended March 31, 2024)(Cumulative period)
Revenue (million yen)
Profit before taxes (million
yen)Profit attributable toowners of parent (million
yen)
Basic earnings per share(yen)(Accounting period)
Basic earnings per share(yen)

Three months ended
June 30, 2023

Six months ended
September 30, 2023

Nine months ended
December 31, 2023

Fiscal year ended
March 31, 2024

1,262,086

2,576,588

3,865,747

5,174,632

79,883

155,363

226,351

268,386

59,602110,091

162,922

197,421102.60186.97270.20323.33Three months ended
June 30, 2023

Three months ended
September 30, 2023

Three months ended
December 31, 2023

Three months ended
March 31, 2024

102.60

84.89

83.07

54.25

ʊ79ʊ

Independent Auditor’s Report
The Board of Directors
JFE Holdings, Inc.

The Audit of the Consolidated Financial Statements
OpinionWe have audited the accompanying consolidated financial statements of JFE Holdings, Inc. (theCompany) and its subsidiaries (the Group), which comprise the consolidated statement of financial
position as at March 31, 2024, and the consolidated statements of profit or loss, comprehensive
income, changes in equity, and cash flows for the year then ended, and notes to the consolidated
financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2024, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards (IFRSs).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of theGroup in accordance with the ethical requirements that are relevant to our audit of the consolidated
financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordancewith these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of Non-financial Assets in the Steel Business
Description of Key Audit Matter

Auditor’s Response

JFE Steel Corporation, a consolidated
subsidiary in the steel business segment,
recognized property, plant and equipment of
1,324,492 million yen.

We performed following audit procedures toassess the appropriateness of the Company’s
judgment regarding indications of impairment
on non-financial assets of JFE SteelCorporation, among others;

In the event the Company determines thatindications of impairment exist on a nonfinancial asset or cash generating unit as ofthe end of each reporting period, the Company
measures the recoverable amount of the
cash-generating unit at the higher of its fairvalue less costs of disposal or its value in use.
Furthermore, the Company reduces the carrying
amount of the asset to its recoverable amount,
if the carrying amount exceeds the recoverable
amount.

In order to assess the effectiveness of theestimation process by the management, we
compared business plans in the past years
with actual results. In addition, we reviewed
relevant documents and materials including
analysis of actual results of executed capital
investments.

In the steel business, the Company supplies
various industries with steel products withsales volumes and selling prices highly
affected by supply and demand conditions indomestic and overseas markets, especially the
Asian steel market. The prices of key raw
materials such as iron ore, coking coal andferrous scrap, are highly volatile, due to global
market dynamics, as well as possible natural
disasters or accidents in sourcing countries.
Furthermore, the prices of electricity andnatural gas used in the steelmaking process
have fluctuated greatly due to the strengtheningof environmental regulations and international
conflicts. The Company’s projected cost
reduction or sales promotion may not be
achieved due to potential delay of a facility
launch or unexpected changes in demand forsteel products, while the Company executes
significant capital investments.
In order to identify indicators of impairment
on non-financial assets, the Company needs
to consider multiple factors to understand thecurrent business environment and its own
financial performance such as the effects ofshutting down upstream processes at East
Japan Works (Keihin district), steel
production, shipment volume, selling pricesof steel products, the price trends for iron ore,coking coal, ferrous scrap, electricity andnatural gas.
Given that these are subject to significant
uncertainty and require management’s
judgment, we determined the valuation of
non-financial assets in the steel business to bea key audit matter.

In order to understand the business environment
and assess the effects of shutting down
upstream processes at East Japan Works(Keihin district), we discussed with the
management and examined the management
response by reviewing relevant documents andmaterials and comparing their consistency
with publicly disclosed information.
In order to examine whether any significant
changes that could decrease the recoverable
amount of the assets are expected to occur,
we performed following procedures.
㺃 We discussed steel production and shipment
volume with the management and examined
the management response by reviewing
relevant documents and materials, and bycomparing it with available external data.
㺃 We inquired of the management regarding
metal spreads (selling prices of steel products
minus costs of raw materials) and compared
the management response with historicalmarket data in the past years. We also
examined selling prices and material prices
such as iron ore, coking coal, ferrous scrap,
as well as prices for electricity and natural
gas by reviewing relevant documents andmaterials, and by comparing suchinformation with available external data.
㺃 We inquired of the management regarding
status of major capital investments. In
addition, we examined the management
response by reviewing relevant documents
and materials.

Other Information
The other information comprises the information included in the Financial Report that contains
audited consolidated financial statements but does not include the consolidated financial
statements and our auditor’s report thereon. Management is responsible for preparation anddisclosure of the other information. The Audit & Supervisory Board Member and the Audit &Supervisory Board are responsible for overseeing the Group’s reporting process of the otherinformation.
Our opinion on the consolidated financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is toread the other information and, in doing so, consider whether the other information is materiallyinconsistent with the consolidated financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management, Audit & Supervisory Board Member and Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with IFRSs, and for such internal control as management determines isnecessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as required by IFRSs, mattersrelated to going concern.
The Audit & Supervisory Board Member and the Audit & Supervisory Board are responsible foroverseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:࣭ Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
࣭ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the consolidated financial statements is not expressing an opinion on the effectiveness of theGroup’s internal control.
࣭ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
࣭ Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
࣭ Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent theunderlying transactions and events in a manner that achieves fair presentation in accordancewith IFRSs.
࣭ Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the groupaudit. We remain solely responsible for our audit opinion.

We communicate with the Audit & Supervisory Board Member and the Audit & Supervisory
Board regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit & Supervisory Board Member and the Audit & Supervisory Board
with a statement that we have complied with the ethical requirements regarding independence
that are relevant to our audit of the consolidated financial statements in Japan, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, actions taken to eliminate threats or safeguards applied toreduce threats to an acceptable level.
From the matters communicated with the Audit & Supervisory Board Member and the Audit &Supervisory Board, we determine those matters that were of most significance in the audit of theconsolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.

Fee-related Information
The fees for the audits of the financial statements of JFE Holdings, Inc. and its subsidiaries andother services provided by us and other EY member firms for the year ended March 31, 2024 are
667 million yen and 200 million yen, respectively.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
Ernst & Young ShinNihon LLC
Tokyo, Japan
July 26, 2024

Yusuke Nakamura
Yusuke Nakamura
Designated Engagement Partner
Certified Public Accountant

Tetsuya Yoshida
Tetsuya Yoshida
Designated Engagement Partner
Certified Public Accountant

Keiichi Wakimoto
Keiichi Wakimoto
Designated Engagement Partner
Certified Public Accountant

Taichi Fujio
Taichi Fujio
Designated Engagement Partner
Certified Public Accountant