ANNUAL REPORT 2016

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

1
2
4
6
8
9
10
12
13
37
38
38

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

Consolidated Financial Highlights
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2016, 2015 and 2014

Net sales(Loss) profit attributableto owners of parent
Total assets
Total net assets(Loss) profit attributableto owners of parent per
share2
Cash dividends per share2

Millions of yen(except per share amounts)
2015
2016
¥ 617,525¥ 547,026¥

2014¥ 576,447

Percent change
2016/2015(11.4)%

Thousands of U.S.
dollars1(except per shareamounts)
2016$ 4,854,685(6,613)

16,947

17,759–(58,688)

708,167
217,978

770,591
271,997

741,750
215,958(8.1)%(19.9)%

6,284,762
1,934,487

177.72

–

15.00

0.0%

(60.33)40.00¥

160.5140.00¥$(0.53)
0.35

Notes: 1. Unless indicated otherwise, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into U.S. dollars, forconvenience only, at ¥112.68=US$1, the effective rate of exchange at March 31, 2016.
2. Per share amounts are in yen and U.S. dollars.

1

To Our Shareholders and Investors
Overview of the Fiscal Year Ended March 31, 2016
The Japanese economy started the fiscal year under review on a gradual recovery trend led by the manufacturing industry, due in part togovernment policy effects. Towards the end of the fiscal year, however, the Japanese economy showed increasing signs of instability as
the sentiment of economic slowdown in China and other emerging economies grew even stronger, which, combined with such factors as
the yen’s further appreciation and substantial falling in resource prices, caused concerns over the level of activity and performance inthe export industry.
In the steel industry, harsh conditions persisted, with weak domestic steel demand, particularly in the automotive and construction
sectors, and continued high levels of distributors’ inventory. Moreover, multiple negative factors were in play, including thedeterioration of market conditions in and outside of Japan due to the yen’s sharp appreciation and increasing steel exports from China,
driven by overproduction.
Under this operating environment, the Nisshin Group made steady progress on the 24th Medium-Term Consolidated Management
Plan, (“the 24th Medium-Term Plan”), and exerted a focused effort to maximize the synergies from the management integration with
Nippon Metal Industry Co., Ltd.
In terms of manufacturing, we completed renewal work on the steelmaking equipment at the Shunan Works (“Shunan”), which iscentral to our integration synergies, and started operations of our new continuous casting and other state-of-the-art facilities. We willleverage the full capacity of these cutting-edge facilities for expanding our manufacturing range and improving production efficiency
and strengthen our competitiveness both in cost and quality. In the field of special steel, our most-advanced ladle furnace (LF) came on
stream at the Kure Works (“Kure”) in October 2015 for the production of high-cleanliness steel to meet customers’ increasing needs forgood quality. By adding this new strength to the sophisticated manufacturing technologies we have developed in special steel, we will
cement our position in the relevant sheet market even further.
In parallel with these initiatives, we responded to the harsh management environment by implementing sweeping rationalization andoverall cost reduction programs and striving to streamline operations. Efforts included our using more low-priced feedstock andswitching the fuels for the heating furnace. We also responded to mounting electricity costs earnestly through measures such as stable
operation of energy cost-saving equipment, for example by increasing the ratio of our in-house power generation.
As to sales, we took steps to expand the ratio of high-margined products by promoting sales of the Nisshin Group’s profitable
original core products (ZAM®, special steel, stainless steel, and pre-painted steel sheet). We are developing additional demand for
ZAM®, our highly corrosion-resistant hot-dip coated steel sheet, which has won solid customer approval, by launching new productswith characteristics that will help expand its applications and enhance customer benefits. Production and sales of ZAM® have continued
steadily at Wheeling-Nisshin, Inc., a U.S. subsidiary that manufactures and sells surface-treated steel sheets, and we will proactively
continue to boost sales of ZAM® as one of the Company’s core products. In the field of pre-painted steel sheet, we also took steps tobroaden the market, such as launching sales of new products with superior heat insulation properties and weather resistance. With
regard to stainless steel, we undertook elaborate sales activities in response to demand trends and inventory levels. At the same time, ourSales and Products Development Divisions worked together in an effort to sell high functionality products using the capabilities of our
new steelmaking equipment.
Turning to consolidated operating results for the fiscal year ended March 31, 2016, the Nisshin Group focused intensely on joint
manufacturing and sales initiatives aimed at securing earnings and maximizing integration synergies. Nevertheless, our Group faced
temporary profit-reducing factors such as an inventory valuation loss caused by falling raw materials prices and a loss on devaluation ofshares of overseas investment companies. As a result, on a consolidated year-on-year basis net sales were ¥547,026 million, down
¥70,498 million, ordinary profit was ¥6,206 million, down ¥13,490 million, and loss attributable to owners of parent was ¥6,613 million,
down ¥23,561 million.

Outlook for the Fiscal Year Ending March 31, 2017
Looking ahead, the Japanese economy is expected to continue along a gradual recovery path, driven by strong corporate earnings anddemand for social infrastructure development associated with the 2020 Tokyo Olympics (and Paralympics), as well as the U.S. economy,
among other factors. On the other hand, there are concerns about factors that could affect the economy, such as prolonged slowdowns in
China and other emerging economies, changes in the European and U.S. business climates, trends in financial policies and exchange
rates in different countries, and intensifying geopolitical risks around the world.
The steel industry is likely to see demand growth related to construction and social infrastructure. However, a full-fledged recovery
in user industries, mainly the automotive sector, will take some time. In addition, no major improvement has been made on the issue ofover production in China, and harsh conditions are expected to remain in and outside Japan.
Under this operating environment, the Nisshin Group will make a concerted effort to complete the 24th Medium-Term Plan, which
ends in fiscal 2016, to maximize integration synergies, and to implement structural reforms with an eye to the future from fiscal 2017
onward.
First, with regard to the plan, we will steadily reap the results of the strategic investments we have made to date. The new steelmaking
equipment installed at Shunan last year continues to operate smoothly, and we will strive to strengthen our product competitiveness2

further and realize greater earnings by offering new types of steel that fully leverage the advantages of the new facilities and developing
new markets. We will also move to complete our management integration by maximizing integration synergies, continuing to build an
optimal production framework with operations concentrated at Shunan after closing steelmaking processes at Kinuura Works. With the
LF at Kure, we will seek to boost sales by leveraging the benefits of our expanded product repertoire in the special steel field to meetcustomers’ needs accurately while creating new demand. In addition, we will deepen our development and proposal capabilities bymaking optimal use of management resources, with such initiatives as proposing solutions that make full use of the strengths of ourGroup companies in processing and molding technologies and developing innovative fusion products of steel and some other materials.
The Nisshin Group will also steadily pursue structural reforms. On April 1, 2016, we integrated our coated building materials
operations with the business of our wholly owned subsidiary Nisshin A&C Co., Ltd., to form a new company called Nisshin Steel A&C
Co., Ltd. The new company will consolidate the management resources and abundant expertise of both companies in the NisshinGroup’s founding business of coated building materials to bolster its ability to provide comprehensive solutions to customers’
increasingly diverse and complex needs. We will work to develop our business flexibly, staying even more closely attuned to ourcustomers and the market environment and harnessing synergies with our materials development capabilities to realize original highfunctionality products and services as well as earnings growth. These fundamentals also govern Nisshin Stainless Steel Tubing Co., Ltd.,
which was formed in 2014.
Overseas, our joint venture special steel manufacturing and sales company in China – Zhejiang Nisshin Worthington Precision
Specialty Steel Co., Ltd. – established with Japanese and U.S. partners, is scheduled to start operations from July 2016, and will meetthe local procurement needs of Japanese, U.S., and European auto parts makers in China’s automobile market, which is forecast to growrapidly going forward. We have also established a new joint company in Taiwan called Taiwan Nisshin Precision Steel Co., Ltd. to
produce and sell precision-rolled stainless steel products to cater to a soaring demand, primarily in East Asia. The new company aims tostart operations in September 2016. We also consolidated the functions of our Bangkok office and our investee company in Thailand,
Nisshin-Jutha Wan Metal Co., Ltd., to set up a new company, Nisshin Steel（Thailand）Co., Ltd., in April 2016 that will lead ourbusiness expansion in the ASEAN market. By making strategic use of these new strongholds, and maintaining close links with otherones, we will strive to advance the Nisshin Group’s overseas activities even further as a source of its future growth.
On February 1, 2016, as new business reform themes, we decided to upgrade the No. 1 blast furnace and shut down the No. 2 blast
furnace at Kure and at the same time, decided to start discussions with Nippon Steel & Sumitomo Metal Corporation (NSSMC) inregard to the Company becoming a subsidiary of theirs by the end of March, 2017, and in regard to having slabs shipped from NSSMC
so as to ensure stable feedstock supply. Amid an increasingly challenging business environment surrounding the steel industry in Japanand overseas, with excessive production capacity mainly in Asia and the slowdown in the Chinese economy, these discussions will pave
the way for our joining the NSSMC Group, which aspires to become the largest comprehensive steel manufacturer in the world, and forconsolidating both companies’ management resources. With such arrangement, we seek to achieve further stabilization and sustainablegrowth of our Group’s business foundation. Besides, we have redefined core products, which form the central pillar of our Group’s
strategy by product type, as “those to satisfy the two objectives of dramatically creating our customers’ value-addition and ofsignificantly contributing to the Company’s cash flow.” By further developing this core product strategy through the business reform
initiative, we aim to build a strong corporate structure that can respond to any environmental changes and to strengthen the competitive
advantages. Moreover, with the shut-down of the No. 2 blast furnace, which is nearing its time for renewal, we will secure financial
resources for making strategic investments to further increase the added value of Kure on top of the important investments we havealready made there, such as the LF. This will further consolidate Kure’s position as key works supporting our core product strategy.
Fiscal 2016 will be the final year of the 24th Medium-Term Plan. In addition to achieving our medium-term plan targets this year, we
will decide on the new direction for the Nisshin Group in this year, including the abovementioned change of our status into a subsidiaryof NSSMC. We will continue to uphold our corporate philosophy to “bring to life the dreams and visions of customers with the use ofsteel” by utilizing our combined power to create new markets in collaboration with our customers. At the same time, we will takeappropriate measures to enhance our corporate governance, which is the cornerstone of all business activities. As we do so, we will
strive to continually increase our Company’s value, and to evolve day by day as a corporate group that has the trust of its customers anda strong presence in the market.

President & Chief Executive Officer3

Management’s Discussion and Analysis
Financial Position
Consolidated total assets at the close of the year ended March 31, 2016 stood at ¥708,167 million, down ¥62,423 million fromthe end of the previous year. This was due mainly to decreases in investments in securities (down ¥22,699 million), asset for
retirement benefits (down ¥20,661 million), and inventories (down ¥19,436 million).
Total liabilities declined ¥8,405 million to ¥490,189 million. This was due mainly to decrease in interest-bearing debt (down¥10,306 million).
Total net assets decreased ¥54,018 million to ¥217,978 million. This was due mainly to decreases in total accumulated othercomprehensive income (down ¥40,515 million), loss attributable to owners of parent ( ¥6,613 million), and cash dividends(¥6,038 million).

Cash FlowsNet cash provided by operating activities totaled ¥50,532 million. ¥26,539 million from depreciation and amortization anddecrease of ¥19,173 million in inventories were major contributors.
Net cash used in investing activities totaled ¥28,281 million, with ¥24,813 million spent on acquisition of property, plant andequipment.
Net cash used in financing activities totaled ¥16,579 million, mainly reflecting ¥10,307 million decrease in interest-bearing
debt and ¥6,024 million in cash dividends.
As a result of these developments, and including an effect of foreign currency translation adjustment on cash and cash
equivalents, the consolidated balance of cash and cash equivalents at the end of the year ended March 31, 2016 increased by¥5,156 million to ¥31,344 million.

4

5

Consolidated Balance Sheets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
March 31, 2016 and 2015

Millions of yen
2015
2016

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

Investments and long-term receivables:
Investments in securities (Notes 6, 13, 19 and 20)
Deferred income taxes (Note 8)
Asset for retirement benefits (Note 9)
Other (Note 6)
Allowance for doubtful accounts
Total investments and long-term receivables
Property, plant and equipment, at cost:
Buildings and structures
Machinery, equipment and vessels
Accumulated depreciation
Land
Construction in progress
Total property, plant and equipment
Other assets
Total assets
The accompanying notes are an integral part of these financial statements.

6¥

31,44077,581
124,776
5,811
20,248(457)
259,400¥

26,30079,032
5,000
144,212
4,491
22,037(639)
280,433

Thousands of
U.S. dollars (Note 4)
2016$

279,020
688,507
1,107,348
51,570179,694(4,055)2,302,094

115,066
3,212
22,58529,813(735)
169,942

137,766
2,823
43,247
29,162(614)
212,385

1,021,175
28,505200,434
264,581(6,522)
1,508,182

290,061
1,006,929
1,296,990(1,108,722)
188,268
71,828
5,639
265,736

284,828
993,500
1,278,329(1,096,317)
182,01171,82813,850267,690

2,574,201
8,936,182
11,510,383(9,839,563)
1,670,820
637,451
50,044
2,358,324

13,08810,081

116,151

770,591$ 6,284,762

708,167¥

Thousands of
U.S. dollars (Note 4)
2016

Millions of yen
2015
2016

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

NET ASSETS
Shareholders’ equity:
Common stock, no par value at March 31, 2016 and 2015
Authorized: 430,000 thousand shares at March 31, 2016 and 2015
Issued: 109,843 thousand shares at March 31, 2016 and 2015
(Note 15)Additional paid-in capital
Retained earnings
Treasury stock, at cost (Note 15)
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized gain or loss on available-for-sale securities
Deferred gain or loss on hedges
Adjustment on revaluation of land (Note 14)
Foreign currency translation adjustment
Retirement benefits asset and liability adjustments
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets¥

787,43650,33835,693134
45,713219,316¥

88,576
59,133
19,539189
43,719211,158$

775,967
446,734
316,764
1,189
405,688
1,946,361

193,495
16,437211,161
15,332

1,717,208
145,873

244

386

2,165

8,590
1,165
48,3002,637
270,872
490,189

13,911
1,119
42,552
2,971
287,435
498,594

76,233
10,339428,647
23,402
2,403,904
4,350,275

30,00030,000266,240

76,34578,214(549)
184,010

91,09974,160(541)
194,719

677,538
694,124(4,872)
1,633,031

14,333(651)
405
15,698(2,102)
27,6846,283
217,978

23,356191
388
17,741
26,521
68,1999,078
271,997

127,200(5,777)
3,594
139,314(18,654)245,686
55,7591,934,487

770,591$ 6,284,762

708,167¥

Consolidated Statements of Income
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2016 and 2015

Net sales
Cost of sales (Note 5)
Gross profit
Selling, general and administrative expenses (Notes 11 and 12)
Operating profit
Non-operating profit and loss:
Interest and dividend income
Interest expense(Losses) earnings of unconsolidated subsidiaries and affiliates
accounted for using equity method
Foreign exchange (loss) gain
Gains on insurance
Gain on retirement adjustment
Service cost of temporarily transferred employees
Commission paid
Other, net
Ordinary profit
Special items:
Reversal of reserve for rebuilding furnaces
Gain on abolishment of retirement benefit plan
Special gains
Loss on sale and disposition of properties
Loss on impairment of fixed assets
Loss on sale of investments in securities
Loss on devaluation of investments in securities
Loss on fireSpecial losses(Loss) profit before provision for income taxes
Provision for income taxes (Note 8):
Current
Deferred
Total provision for income taxes(Loss) profit attributable to :Non-controlling interests
Owners of parent(Loss) profit attributable to owners of parent per share
Cash dividends per share

Millions of yen
2015
2016
¥ 617,525¥ 547,026
547,412489,145
70,112
57,88149,057
47,794
21,055
10,087

Thousands of
U.S. dollars (Note 4)2016$ 4,854,685
4,341,009
513,675
424,156
89,5182,310(4,208)

1,495(4,852)

20,500(37,344)(1,666)

3,195(14,785)

(153)
1,146
1,034
(2,026)
(318)
6,206

3,782
164
(1,912)(1,248)(1,984)
19,697(1,357)
10,1709,176(17,980)(2,822)55,076

5,413
5,413
709
7,093
104
5,212
13,120(1,499)

1,722
1,722
1,006
428
760
2,195
19,22448,03848,038
6,292
62,948922
46,254116,435(13,303)

1,614
4,047
5,662
(7,162)(548)(6,613)

2,190
(521)
1,668
17,555608
16,947

14,32335,91550,248(63,560)(4,863)(58,688)¥¥

Weighted average number of shares issued and outstanding(thousands)

Yen(60.33)
40.00
109,621

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

8¥¥160.51
40.00
105,585$

U.S. dollars (Note 4)$(0.53)
0.35

Consolidated Statements of Comprehensive Income
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2016 and 2015

(Loss) profit
Other comprehensive income (Note 18) :Unrealized gain or loss on available-for-sale securities
Deferred gain or loss on hedges
Foreign currency translation adjustment
Retirement benefits asset and liability adjustments
Share of other comprehensive income of companies accounted
for using equity method
Other, net
Total other comprehensive income
Comprehensive (loss) income
Total comprehensive (loss) income attributable to :Owners of parent
Non-controlling interests

Millions of yen
2015
2016
¥
17,555¥(7,162)Thousands of
U.S. dollars (Note 4)2016$ (63,560)(9,004)(976)(1,875)(28,526)

7,766
272
2,202
19,071(79,907)(8,661)(16,640)(253,159)

(792)

8,752

(7,028)23(41,151)(48,314)54
38,12055,676204(365,202)$ (428,771)

54,940735$ (418,042)(10,720)¥¥

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

9(47,105)(1,208)¥¥

Consolidated Statements of Changes in Net Assets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2016 and 2015
Millions of yen
Shareholders’ equity

Balance at April 1, 2014
Cumulative effects of changes inaccounting policies
Restated balance at April 1, 2014
Changes of items during the year
Cash dividends
Profit attributable to owners of parent
Acquisition of treasury stock
Disposal of treasury stock
Change in scope of equity method
Increase due to adjustment on revaluation of land
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at April 1, 2015
Changes of items during the year
Transfer to retained earnings from additional
paid-in capital
Cash dividends
Loss attributable to owners of parent
Acquisition of treasury stock
Changes in subsidiaries’ equity
Change in scope of equity method
Decrease due to adjustment on revaluation of land
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at March 31, 2016

Additional paid-in
Treasury stock, at
capitalRetained earnings
cost¥ 90,055¥ 66,242¥(8,741)

Common stock¥
30,000¥¥Total
shareholders’equity¥ 177,556––(7,544)–(7,544)30,00090,05558,698(8,741)

170,012

–
–
–
–
–
–
–
–
–
30,000

–
–
–
1,044
–
–
–
–
1,044
91,099(1,501)
16,947
–
–
(68)
0
84
–
15,462¥ 74,160

–
–
(9)
8,208
–
–
–
–
8,199
(541)

(1,501)
16,947
(9)
9,253
(68)
0
84
–
24,706¥ 194,719(12,310)

12,310(4,391)
–
–
1,947
–
–
–
–
(14,754)
76,345(1,646)(6,613)
–
–
27
(0)
(23)
–
4,053
¥ 78,214

¥

–
–
–
–
–
–
–
–
30,000¥¥–¥(6,038)(6,613)
(8)
1,947
27
(0)
(23)
–
(10,708)¥ 184,010

–
(8)
–
–
–
–
–
(8)
(549)

Millions of yen
Accumulated other comprehensive income
Unrealized
gain or loss
on availablefor-salesecurities

Balance at April 1, 2014
¥ 15,384
Cumulative effects of changes in–accounting policies
Restated balance at April 1, 2014
15,384
Changes of items during the year
Cash dividends–
Profit attributable to owners of parent–
Acquisition of treasury stock––
Disposal of treasury stock
Change in scope of equity method–
Increase due to adjustment on revaluation of land––
Other, net
Items other than changes in shareholders’ equity
7,971
Total changes of items during the year
7,971
Balance at April 1, 2015
¥ 23,356
Changes of items during the year
Transfer to retained earnings from additional–
paid-in capital
Cash dividends–
Loss attributable to owners of parent–
Acquisition of treasury stock–
Changes in subsidiaries’ equity–
Change in scope of equity method–
Decrease due to adjustment on revaluation of land–
Other, net–
Items other than changes in shareholders’ equity(9,022)
Total changes of items during the year
(9,022)
Balance at March 31, 2016
¥ 14,333

Foreigncurrencytranslation
adjustment

Retirement
benefits
asset andliability
adjustments

Total
accumulated
othercomprehensive income

Deferredgain or loss
on hedges

Adjustmentonrevaluationof land8,117¥ 215,958

–

–

–

–

–

(1)

(7,545)

(95)

360

7,279

7,355

30,284

8,115

208,412

–
–
–
–
–
–
–
287
287
191

–
–
–
–
–
–
–
28
28
388

–
–
–
–
–
–
–
10,461
10,461¥ 17,741

–
–
–
–
–
–
–
19,165
19,165¥ 26,521

–
–
–
–
–
–
–
37,91537,915¥ 68,199

–
–
–
–
–
–
–
962
962
9,078

(1,501)
16,947
(9)
9,253
(68)
0
84
38,87863,584¥ 271,997

–

–

–

–

–

–

–

–
–
–
–
–
–
–
(843)
(843)
(651)

–
–
–
–
–
–
–
16
16
405

–
–
–
–
–
–
–
(2,043)(2,043)¥ 15,698

–
–
–
–
–
–
–
(28,623)(28,623)¥ (2,102)

–
–
–
–
–
–
–
(40,515)(40,515)¥ 27,684

–
–
–
–
–
–
–
(2,794)(2,794)¥ 6,283(6,038)(6,613)
(8)
1,947
27
(0)
(23)
(43,309)(54,018)¥ 217,978

¥

¥

¥

(95)

10

¥

¥

¥

360

¥

7,279

¥

7,355

¥ 30,284

Noncontrollinginterests¥¥

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

Balance at April 1, 2015
Changes of items during the year
Transfer to retained earnings from additional
paid-in capital
Cash dividends
Loss attributable to owners of parent
Acquisition of treasury stock
Changes in subsidiaries’ equity
Change in scope of equity method
Decrease due to adjustment on revaluation of land
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at March 31, 2016

Total
shareholders’equity$ 1,728,070

Additional
paid-in capital$ 808,475

Retainedearnings$ 658,146–(109,247)

109,247

–

–

–
–
–
–
–
–
–
–
–
$ 266,240(38,968)––
17,279––––(130,937)$ 677,538(14,607)(58,688)
–
–
239
(0)
(204)
–
35,969694,124

–
–
(70)
–
–
–
–
–
(70)
(4,872)(53,585)(58,688)(70)
17,279
239
(0)
(204)
–
(95,030)$ 1,633,031

Common stock$ 266,240$

Treasury stock,at cost$(4,801)$Thousands of U.S. dollars (Note 4 )Accumulated other comprehensive income

Balance at April 1, 2015
Changes of items during the year
Transfer to retained earnings from additional
paid-in capital
Cash dividends
Loss attributable to owners of parent
Acquisition of treasury stock
Changes in subsidiaries’ equity
Change in scope of equity method
Decrease due to adjustment on revaluation ofland
Other, net
Items other than changes in shareholders’ equity
Total changes of items during the year
Balance at March 31, 2016

Unrealized
gain or loss
on availablefor-salesecurities

Deferredgain or loss
on hedges

Adjustmentonrevaluationof land

Foreigncurrencytranslation
adjustment

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
(80,067)(80,067)$ 127,200––(7,481)(7,481)$ (5,777)$ 207,277

$

1,695

11

$

$

Retirement
benefits
asset andliability
adjustments

Total
accumulated
othercomprehensive income

Noncontrollinginterests

–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–
141
(18,130) (254,020)
141(18,130) (254,020)
3,594 $ 139,314 $ (18,654)––(359,558)(359,558)$ 245,686

3,443 $ 157,445 $ 235,365–$ 605,244

Total net
assets$ 80,564 $ 2,413,888–(53,585)(58,688)(70)
17,279
239

–
(0)
–
(204)
(24,795)(384,353)(24,795)(479,392)$ 55,759 $ 1,934,487

Consolidated Statements of Cash Flows
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2016 and 2015

Cash flows from operating activities:(Loss) profit before provision for income taxes
Depreciation and amortization
Loss on impairment of fixed assets
Decrease in liability for retirement benefits(Increase) decrease in asset for retirement benefits(Decrease) increase in reserve for rebuilding furnaces
Losses (earnings) of unconsolidated subsidiaries and affiliates
accounted for using equity method
Interest and dividend income
Interest expense
Loss on sale and disposition of properties
Decrease in notes and accounts receivable
Decrease in inventories
Decrease in notes and accounts payable
Other, net

Thousands of
U.S. dollars (Note 4)
2016

Millions of yen
2015
2016
¥

(1,499)26,5397,093(376)(2,188)(5,320)¥19,224
24,173428(1,832)
324
188$(13,303)
235,525
62,948(3,336)(19,417)(47,213)

1,666(3,195)

14,785

Receipt of interest and cash dividends
Payment of interest
Payment of income taxes
Net cash provided by operating activities(2,310)
4,208
709
1,063
19,173(698)
3,755
51,815
4,285(4,236)(1,332)50,532(1,495)
4,852
1,009
1,439
387
(4,456)
5,663
46,711
4,239(6,384)(5,264)39,303(20,500)
37,344
6,292
9,433
170,154(6,194)33,324459,842
38,028(37,593)(11,821)448,455

Cash flows from investing activities:
Acquisition of investments in securities
Proceeds from sale of investments in securities
Acquisition of shares of subsidiaries and affiliates
Proceeds from sale of shares of subsidiaries and affiliates
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Other, net
Net cash used in investing activities(2,385)
3,493
(291)
45
(24,813)402(4,732)(28,281)(1,286)893(18)(25,664)502(3,794)(29,367)(21,166)
30,999(2,582)399(220,207)
3,567(41,995)(250,985)

Cash flows from financing activities:
Decrease in short-term loans, net
Proceeds from long-term debt
Repayment and redemption of long-term debt
Disposal of treasury stock
Acquisition of treasury stock
Cash dividends
Cash dividends paid to non-controlling interests
Other, net
Net cash used in financing activities(8,795)
20,400(21,911)(8)(6,024)(77)(161)(16,579)(1,328)54,900(87,084)
9,253(9)(1,499)(117)(193)(26,078)(78,052)
181,043(194,453)(70)(53,461)(683)(1,428)(147,133)

(514)

1,504

(4,561)

5,156
26,187(14,638)
40,69445,757
232,401

132-

Foreign currency translation adjustment of cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net increase in cash and cash equivalents from newly
consolidated subsidiaries
Cash and cash equivalents at end of year (Note 17)-

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

12¥

31,344¥

26,187$278,168

Notes to Consolidated Financial Statements
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2016 and 2015

1. Basis of Presenting the Financial Statements
The accompanying consolidated financial statements have been prepared from the accounts maintained by the Nisshin Steel Co.,
Ltd. (hereinafter, the “Company”) and its subsidiaries in conformity with accounting principles generally accepted in Japan,
which are different in certain respects in so far as the application and disclosure requirements of International Financial
Reporting Standards.
Certain items presented in the consolidated financial statements submitted to the Director of the Kanto Finance Bureau in
Japan have been reclassified for the convenience of readers outside Japan.

2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its 16 consolidated subsidiaries, listed below(together, the “Companies”):
Nisshin A&C Co., Ltd.
Nisshin Kokan Co., Ltd.
Shinwa Kigyo Co., Ltd.
Tsukiboshi Logistics Co., Ltd.
Nisshin Stainless Steel Tubing Co., Ltd.
Nisshin Stainless Steel Trading Co., Ltd.
Nisshin Koki Co., Ltd.
Tsukiboshi Art Co., Ltd.
Osaka Stainless Center Co., Ltd.
Tsukiboshi Shoji Co., Ltd.
Nisshin Holding, Inc.
Nisshin Steel USA, LLC
Wheeling-Nisshin, Inc.
Nisshin Automotive Tubing LLC
Nisshin France S.A.
NSA Metals Proprietary Limited
The fiscal year periods and the closing dates thereof for the financial statements of consolidated subsidiaries are inagreement with those of the Company, except for the six foreign consolidated subsidiaries: Nisshin Holding, Nisshin Steel USA,
Wheeling-Nisshin, Nisshin Automotive Tubing, Nisshin France and NSA Metals (with fiscal years ending on December 31). In
consolidating these foreign subsidiaries, the Company makes adjustments for any material transactions subsequent to December
31.
Regarding the elimination of investments in the stock of consolidated subsidiaries, together with the underlying equity inthe net assets of such subsidiaries, the Company follows the step-by-step acquisition approach to include equity in the profit(loss) of subsidiaries, subsequent to the date of acquisition, in the Consolidated Statements of Income and the Consolidated
Statements of Changes in Net Assets.
Valuation of the assets and liabilities of consolidated subsidiaries is made at their fair values in proportion to the parent
company’s equity in the subsidiaries upon each acquisition.
The difference between the cost of an investment in a subsidiary and the amount of underlying equity in the net assets of thesubsidiary is deferred as an asset or a liability as the case may be and amortized over a period of five years on a straight-line
basis.
Investments in unconsolidated subsidiaries and affiliates are accounted for using the equity method, except for those valued
at cost due to the lack of materiality.
The number of unconsolidated subsidiaries accounted for using the equity method was 11 at March 31, 2016 and included:
Nisshin Metal Working Co., Ltd.
Nisshin-Jutha Wan Metal Co., Ltd. became an unconsolidated subsidiary accounted for using equity method in the year
ended 31, 2016 due to the increase of the materiality. In addition, the company changed its trade name from “Nisshin-Jutha Wan
Metal Co., Ltd.” to “Nisshin Steel (Thailand) Co., Ltd.” at April 1, 2016.
The number of affiliates accounted for using the equity method was 16 at March 31, 2016 and included:

13

Nihon Teppan Co., Ltd.
Sanko Metal Industrial Co., Ltd.
Canox Corporation
Ningbo Baoxin Stainless Steel Co., Ltd.
Acerinox, S.A.
Foreign Currency Translation
Foreign currency transactions are generally translated using foreign exchange rates prevailing at the respective transaction dates.
Receivables and payables in foreign currencies are translated at the foreign exchange rates prevailing at the respective balance
sheets dates.
The assets and liabilities of overseas subsidiaries are translated into yen at the foreign exchange rates prevailing at therespective balance sheets dates, whereas net assets are translated at historical rates.
Investments in Securities
Investments in securities are classified into four categories:(1) Trading securities are valued at their fair values on the balance sheets date, and any unrealized gain or loss is charged toincome. The Companies had no trading securities at March 31, 2016.
(2) Held-to-maturity securities are stated at cost after the amortization of premiums or discounts on acquisition, which areamortized over the period to maturity. The Companies had no held-to-maturity securities at March 31, 2016.
(3) Investments in unconsolidated subsidiaries and major affiliates are accounted for using the equity method, except for thosevalued at cost due to their lack of materiality.
(4) Available-for-sale securities are valued at their fair values except for those valued at cost due to a lack of fair value
information. Applicable unrealized net-of-tax gains and losses are included in accumulated other comprehensive income.
Inventory Valuation
Inventories are valued at cost mainly using the weighted average method (the amounts on the Consolidated Balance Sheetsreflect the decrease in their value due to their decrease in profitability, if any), except for supplies which are valued at themoving-average cost (the amounts on the Consolidated Balance Sheets reflect the decrease in their value due to their decrease inprofitability, if any).
Property, Plant and Equipment
Depreciation is computed using the straight-line method.
The cost of maintenance, repairs and minor renewals is charged to operating profit as incurred. Major renewals andimprovements are capitalized. The cost of property, plant and equipment retired or otherwise disposed of and the corresponding
accumulated depreciation are eliminated from the related accounts, and the resulting profit or loss is reflected in income.
Leased Assets
Finance leases which do not involve the transfer of ownership rights are depreciated with the straight-line method, adopting thelease period as the useful life and assuming a residual value of zero.
Other Assets
Amortization of intangible assets including software is computed using the straight-line method. Software is amortized over theinternally estimated useful life, i.e., five years.
Allowance for Doubtful Accounts
The allowance for doubtful accounts is evaluated based on the actual bad debt rate in the past. For doubtful receivables, etc., thelikelihood of collection is evaluated in accounting for the allowance.
Employees’ Retirement Benefits
The retirement benefit obligation for employees is attributed to each period by the straight-line method over the estimated yearsof service of the eligible employees.
Actuarial gain or loss is recognized in expenses using the straight-line method over mainly 18 years. Prior service cost isrecognized in expenses using the straight-line method over mainly 18 years.

14

Allowance for Retirement Benefits for Directors and Corporate Auditors
The allowance for retirement benefits for directors and corporate auditors is calculated based on internal rules.
Reserve for Rebuilding Furnaces
Blast furnaces, including related machines, periodically require substantial component replacements and repairs. Such work
occurs normally every 10 years after blast furnaces are put into operation. The estimated future costs of such work are provided
for and charged to income on a straight-line basis over the periods to the date of the anticipated replacements and repairs. The
difference between such estimated costs and the actual costs is charged or credited to income at the time the work takes place. In
estimating such future costs for a specific furnace, the general price level increase and other economic factors are taken into
consideration.
Provision for Environmental Remediation
The provision for environmental remediation is estimated and recorded to provide for future potential costs, such as waste
management costs for stored PCB (polychlorinated biphenyl).
Sales Recognition
Sales of finished goods are generally recognized when goods are shipped to the customers.
Loss on impairment of fixed assets
In the year ended March 31, 2016, the Nisshin Group recognized loss on impairment of fixed assets for the following asset
group.
Location

PurposeType

Ichikawa, Chiba Prefecture

Business assets (production facilities of building material)

Machinery andequipment

Kure, Hiroshima Prefecture

Business assets (No. 2 blast furnace and related facilities)

Machinery andequipment, etc.

Machinery andequipment, etc.
The Group principally categorizes assets by segment for managerial accounting (by product group) for which cash flows continue
to be measured. Idle properties that are not expected to be used in the future are measured at an individual asset group level.
For the year ended march 31, 2016, their book value has been reduced to recoverable amounts largely because the Companies
have decided to discontinue use of some facilities in the future in accordance with business reforms. Recoverable amounts havebeen calculated by estimating the value in use, and the difference between the book values and the recoverable amounts has beenrecorded as loss on impairment of fixed assets (¥7,093 million (US$62,948 thousand)) in special loss. The loss on impairment of
fixed assets consisted of ¥6,166 million (US$54,721 thousand) of machinery and equipment, ¥488 million (US$4,330 thousand)of buildings and structures and ¥437 million (US$3,878 thousand) of others.
Value in use is calculated by applying a discount rate of 7% to future cash flows.
Shunan, Yamaguchi Prefecture

Business assets (continuous casting facilities)

In the year ended March 31, 2015, the Nisshin Group recognized loss on impairment of fixed assets for the following asset
group.
Location

PurposeType

Machinery andIdle properties (production facility of stainless steel pipes andtubes)
equipment, etc.
The Group principally groups assets by segment for managerial accounting (by product group) for which cash flows continue tobe measured. Idle properties that are not expected to be used in the future are measured at an individual asset group level.
In the year ended March 31, 2015, for idle properties including those that will be dormant, the book value of the asset group ofwhich the fair value significantly decreased was reduced to the recoverable amount, and the amount of the reduction wasrecorded as loss on impairment of fixed assets (¥428 million) in special loss. The loss on impairment of fixed assets consisted of¥418 million of machinery and equipment and ¥10 million of others.
Since it is difficult to divert or sell those assets, they were evaluated assuming that their net sales value was zero.
Hekinan, Aichi Prefecture

Loss on fireAn extraordinary loss has been recognized for restoration cost from the fire incident at the Kinuura Works polishing stainlessline in the year ended March 31, 2015.

15

Income Taxes
The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequencesof temporary differences between the carrying amounts and the tax basis of assets and liabilities.
Consumption Tax
In Japan, consumption tax is imposed on domestic consumption of goods and services at the rate of 8%. The consumption tax
imposed on the Companies’ sales to customers is withheld by the Companies at the time of sale and paid to the national
government. The consumption tax withheld upon sale is not included in the amount of “Net sales” in the accompanying
Consolidated Statements of Income but is recorded as a liability. The balances of consumption tax withheld and consumption tax
paid (an asset item), which are paid by the Companies on the purchase of products, merchandise and services from vendors, areoffset, and the net balance is included in “Other current liabilities” in the Consolidated Balance Sheets.
Cash and Cash Equivalents
Cash and cash equivalents included in the Consolidated Statements of Cash Flows comprise cash on hand and in banks, deposits
that can be withdrawn upon demand and easily cashable short-term investments with a three-month or shorter redemption termthat carry a negligible risk of fluctuation in value.
Profit (loss) and Cash Dividends per Share
The computation of profit (loss) per share is based on the weighted average number of common shares issued and outstanding
during each year. Cash dividends per share shown for each year in the accompanying Consolidated Statements of Income arebased on cash dividends applicable to the profit (loss) of each year.
Standards Issued but not yet Effective(Implementation Guidance on Recoverability of Deferred Tax Assets)
On March 28, 2016, the Accounting Standard Board of Japan (“ASBJ”) issued “Implementation Guidance on Recoverability ofDeferred Tax Assets” (ASBJ Guidance No. 26).
(1) Overview
Authority on the Japanese Institute of Certified Public Accountants’ practical guidelines on accounting related to tax-effectaccounting and practical guidelines for auditing (sections related to accounting treatment) has been transferred to the ASBJ.
By following the methods of classifying entities into five categories and assessing the amount of deferred tax assets recorded
according to those classifications, ASBJ Guidance No. 26 basically follows the aforementioned practical guidelines’
framework for assessing recoverability of deferred tax assets principally provided by the Japanese Institute of Certified Public
Accountants Auditing Committee Report No. 66, “Audit Treatment for Judgment of Recoverability of Deferred Tax Assets.”
It does however make some necessary revisions to category conditions and the handling of the amount of deferred tax assets
recorded, and it provides guidance for the application of the “Accounting Standards for Tax-Effect Accounting” (BusinessAccounting Council) for the recoverability of deferred tax assets.
(2) Scheduled date of adoption
The revised Accounting Guidance is scheduled to be applied from the beginning of the fiscal year ending March 31, 2017.
(3) Impact of adopting revised accounting standards and guidance
The impact of adopting this revised Accounting Guidance on these consolidated financial statements is being evaluated.

3. Accounting Changes(Accounting Changes)
Concerning the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013), “AccountingStandard for Consolidated Financial Statements” (ASBJ Statement No. 22, September 13, 2013), and “Accounting Standard forBusiness Divestitures” (ASBJ Statement No. 7, September 13, 2013), etc., the Company adopted these accounting standards
from the fiscal year ended March 31, 2016, revising the method of recording changes in the Company’s ownership interest in a
subsidiary when the Company retains control over the subsidiary in which they are recognized as additional paid-in capital. In
addition, the changes in the presentation of profit (loss), etc. and the change of minority interests to non-controlling interests
have been implemented. To reflect these changes in presentation, the Company has reclassified the consolidated financial
statements for the previous fiscal year.
Application of the Accounting Standard for Business Combinations, etc. is in line with the transitional measures set out inParagraph 58-2 (4) of the Accounting Standard for Business Combinations, Paragraph 44-5 (4) of the Accounting Standard forConsolidated Financial Statements and Paragraph 57-4 (4) of the Accounting Standard for Business Divestitures, and its

16

effective date is from the beginning of the fiscal year ended March 31, 2016 onward.
As a result, ordinary profit decreased ¥491 million (US$4,357 thousand), and loss before provision for income taxes increased¥1,947 million (US$17,279 thousand) for the fiscal year ended March 31, 2016.
Additional paid-in capital increased ¥1,947 million (US$17,279 thousand) at the end of the fiscal year ended March 31, 2016.
The balance of additional paid-in capital at the end of the fiscal year ended March 31, 2016 in Consolidated Statements of
Changes in Net Assets increased ¥1,947 million (US$17,279 thousand).
(Changes in Presentation)
Consolidated Statements of Income“Gain on retirement adjustment” that was included in “Other, net” under “Non-operating loss” in the fiscal year ended March 31,
2015, is separately presented under “Non-operating profit” in the fiscal year ended March 31, 2016 due to its increased
quantitative materiality. To reflect this change in presentation, corresponding reclassifications have been made to theconsolidated financial statements in the fiscal year ended March 31, 2015.
This change resulted in a reclassification of “Other, net” under “Non-operating loss” of (¥1,819) million to “Gain on
retirement adjustment” of ¥164 million and “Other, net” under “Non-operating loss” of (¥1,984) million.
Consolidated Statements of Cash Flows“Loss on impairment of fixed assets” that was included in “Other, net” under “Cash flows from operating activities” in the fiscal
year ended March 31, 2015, is separately presented under “Cash flows from operating activities” in the fiscal year ended March
31, 2016 due to its increased quantitative materiality. To reflect this change in presentation, corresponding reclassifications havebeen made to the consolidated financial statements in the fiscal year ended March 31, 2015.
This change resulted in a reclassification of “Other, net” under “Cash flows from operating activities” of ¥6,092 million to“Loss on impairment of fixed assets” of ¥428 million and “Other, net” under “Cash flows from operating activities” of ¥5,663
million.
“Cash dividends paid to non-controlling interests” that was included in “Other, net” under “Cash flows from financing
activities” in the fiscal year ended March 31, 2015, is separately presented under “Cash flows from financing activities” in thefiscal year ended March 31, 2016 due to its increased qualitative materiality. To reflect this change in presentation,corresponding reclassifications have been made to the consolidated financial statements in the fiscal year ended March 31, 2015.
This change resulted in a reclassification of “Other, net” under “Cash flows from financing activities” of (¥310) million to“Cash dividends paid to non-controlling interests” of (¥117) million and “Other, net” under “Cash flows from financing
activities” of (¥193) million.

4. U.S. Dollar Amounts
U.S. dollar amounts included in the consolidated financial statements and notes thereto represent the arithmetical results oftranslating yen into dollars on the basis of ¥112.68 = US$1, the effective rate of exchange at March 31, 2016. The inclusion ofsuch dollar amounts is solely for convenience and is not intended to imply that the yen amounts have been or could be readily
converted, realized or settled in dollars at ¥112.68 = US$1 or at any other rate.

5. Inventories
Details of “Inventories” in the Consolidated Balance Sheets at March 31, 2016 and 2015 are as follows:
Millions of yen
2015
2016
¥
62,769¥49,95337,26037,84644,182
36,975¥ 144,212¥ 124,776

Finished goods
Work in process
Raw materials and other supplies
Total

Thousands of
U.S. dollars
2016$ 443,317
335,871
328,141$ 1,107,348

The amounts of inventories on the Consolidated Balance Sheets at March 31, 2016 and 2015 reflect the decrease in their value
due to their decrease in profitability (after setting off the reversal amount of reducing the book value at the end of the previous
consolidated fiscal year). “Cost of sales” in the Consolidated Statements of Income for the year ended March 31, 2016 and 2015
include ¥2,665 million (US$23,651 thousand) of such unrealized net loss of inventories and ¥1,149 million of such unrealized
net loss of inventories, respectively.

17

6. Investments in Unconsolidated Subsidiaries and Affiliates“Investments in securities” in the Consolidated Balance Sheets at March 31, 2016 and 2015 include investments inunconsolidated subsidiaries and affiliates are as follows:
Thousands ofMillions of yen
U.S. dollars
2015
2016
2016
Stocks of unconsolidated subsidiaries and affiliates¥
59,759¥57,696$ 512,034“Other” in “Investments and long-term receivables” in the Consolidated Balance Sheets at March 31, 2016 and 2015 include
investments in unconsolidated subsidiaries and affiliates as follows:
Thousands of
U.S. dollars
Millions of yen
2015
2016
2016
Equity in unconsolidated subsidiaries and affiliates¥
22,101¥
23,134$ 205,307

7. Short-term Loans and Long-term Debt
Short-term loans at March 31, 2016 and 2015 consisted of the following:
Millions of yen
2015
2016
Bank loans¥
59,133¥50,338It is a normal business custom in Japan for short-term loans to be rolled over.

Thousands of
U.S. dollars
2016$ 446,734

Long-term debt at March 31, 2016 and 2015 consisted of the following:

Loans from banks and other financial institutions
19th 2.20% unsecured bond of the Company due Jun. 2018
21st 0.62% unsecured bond of the Company due Jun. 2017
22nd 0.33% unsecured bond of the Company due Mar. 2017
23rd 0.64% unsecured bond of the Company due Mar. 2019
Total long-term debt
“Current portion of long-term debt” in the Consolidated
Balance Sheets“Long-term debt” in the Consolidated Balance Sheets*1

Millions of yen
2015
2016
¥ 180,700¥ 179,188
10,00010,00020,00020,00010,00010,00010,00010,000230,700
229,188(35,693)¥

193,495¥

Thousands of
U.S. dollars
2016$ 1,590,237
88,746
177,493
88,74688,7462,033,972(19,539)(316,764)

211,161$ 1,717,208*1. The following is the financial covenants in the syndicated loan contract that the Company agreed with a group of financial institutes(signed on September 28, 2012, ¥17,647 million included in long-term debt).
(Financial Covenants)(1) The amount of shareholders' equity in the Consolidated Balance Sheets at March 31, 2013, at the end of the following fiscal years,
and at the end of the following second quarters shall be maintained at least 75% of the amount at the end of the latest fiscal year orof the latest second quarter. Note that the above shareholders’ equity includes a portion judged as equity credit attributes by theJapan Credit Rating Agency of the 1st series unsecured, interest deferrable and early redeemable subordinated bonds solely for
qualified institutional investors.
(2) “Ordinary profit” in the Consolidated Statements of Income for the fiscal year ended March 31, 2013 and for the following fiscal
years shall not record loss for two consecutive years.
At March 31, 2016, Nisshin Steel Co., Ltd. had not breached the financial covenants.

8. Income Taxes
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 15 of 2016) and the “Act for Partial Amendment of the Local
Tax Act, etc.”(Act No. 13 of 2016) were enacted on March 29, 2016. As a result, the effective statutory tax rate used to measure theCompany’s deferred tax assets and liabilities was changed from 32.1% to 30.7% for the temporary differences expected to be realized or
settled for fiscal years beginning on or after April 1, 2016.
The effect of the announced reduction of the effective statutory tax rate was to decrease deferred tax liabilities, after offsetting deferred
tax assets, by ¥379 million (US$3,363 thousand), income taxes-deferred by ¥178 million (US$1,579 thousand), deferred gain on hedgesby ¥10 million (US$88 thousand), and retirement benefits asset and liability adjustments by ¥31 million (US$275 thousand), andincrease unrealized gain on available-for-sale securities by ¥242 million (US$2,147 thousand) as of and for the year ended March 31,
2016.
Furthermore, under the amended rules for tax loss carry forward applicable to the fiscal year beginning on or after April 1, 2016, thetax deductible amount using tax loss carry forwards was changed to “up to 60% of taxable income for the year before deducting tax loss

18

carry forwards,” and under those applicable to the fiscal year beginning on or after April 1, 2017, the tax deductible amount using tax
loss carry forwards was changed to “up to 55% of taxable income for the fiscal year before deducting tax loss carry forwards,” andunder those applicable to the fiscal year beginning on or after April 1, 2018, the tax deductible amount using tax loss carry forwards waschanged to “up to 50% of taxable income for the fiscal year before deducting tax loss carry forwards.” As a result, deferred tax assets
decreased by ¥281 million (US$2,493 thousand) and deferred income tax expense increased by ¥281 million (US$2,493 thousand).
Components of the Companies’ deferred income tax assets and liabilities at March 31, 2016 and 2015 are as follows:

Millions of yen
2015
2016

Deferred income tax assets:
Tax loss carry forwards
Retirement benefit liability
Loss on impairment of fixed assets
Loss on devaluation of investments in securities
Non-deductible portion of reserve for rebuilding furnaces
Other
Preliminary deferred income tax assets
Valuation allowance
Total deferred income tax assets¥

Deferred income tax liabilities:
Unrealized gain or loss on available-for-sale securities
Reserve for postponement of taxation on capital gains fromproperty
Other
Total deferred income tax liabilities
Net deferred income tax liabilities¥

38,890
9,549
4,645
4,442
2,637
8,632
68,796(63,733)
5,063¥

40,621
10,524
2,702
2,436
4,240
9,463
69,987(62,135)
7,852

Thousands of
U.S. dollars
2016$

345,136
84,744
41,222
39,421
23,40276,606
610,543(565,610)
44,932

5,317

8,874

47,186

1,629

1,758

14,456

5,530
12,477
7,413

5,238
15,8708,017

49,077110,729
65,788¥$The reconciliation of the statutory tax rate to the income tax rate reflected in the Consolidated Statements of Income for the
fiscal year ended March 31, 2015 is as follows.
2015
Statutory tax rate
35.5%
Reconciliation:
Valuation allowance(18.8)
Equity in earnings of unconsolidated subsidiaries and affiliates
(5.9)
Other
(2.1)
Effective rate of income tax expense
8.7%
The reconciliation of the statutory tax rate to the income tax rate reflected in the Consolidated Statements of Income for the
fiscal year ended March 31, 2016 is omitted because the Company recorded a loss before provisions for income taxes.

9.

Employees’ Retirement Benefits(Defined benefit plan)
The Company and most of its domestic consolidated subsidiaries have defined benefit plans, i.e., lump-sum severance benefit
payments and defined benefit pension plans.
The changes in the retirement benefit obligation during the years ended March 31, 2016 and 2015 are as follows.
Thousands of
U.S. dollars
Millions of yen
2015
2016
2016
Retirement benefit obligation at the beginning of the year¥
85,804¥
83,306$ 739,314
Cumulative effects of changes in accounting policies
7,646
Restated balance
93,45083,306739,314Service cost
3,155
3,127
27,751
Interest cost
1,152
1,000
8,874
Actuarial loss (gain)(403)
11,112
98,615Retirement benefit paid
(4,739)(6,360)(56,443)
Prior service cost
(1,019)Contribution by the Companies
(16)
(16)
(141)
Net increase from newly consolidated subsidiaries
213
Decrease due to partial abolishment of the plan
(8,707)
Other
221
291
2,582
Retirement benefit obligation at the end of the year¥
83,306¥
92,462$ 820,571

19

The changes in plan assets during the years ended March 31, 2016 and 2015 are as follows.
Millions of yen
2015
2016
¥
73,695¥84,001
1,465
1,672
18,979(16,651)886
565(3,193)(3,193)(8,053)221
352¥
84,001¥
66,747

Plan assets at the beginning of the year
Expected return on plan assets
Actuarial (loss) gainContribution by the Companies
Retirement benefit paid
Decrease due to partial abolishment of the plan
Other
Plan assets at the end of the year

Thousands of
U.S. dollars
2016$ 745,482
14,838(147,772)
5,014(28,336)3,123$ 592,358

The funded status of the plans and the amounts recognized in the consolidated balance sheets at March 31, 2016 and 2015 for
the Company’s and the consolidated subsidiaries’ defined benefit plans are as follows.
Thousands ofMillions of yen
U.S. dollars
2015
2016
2016
Funded retirement benefit obligation¥
40,784¥44,605$ 395,855
Plan assets at fair value(84,001)(66,747)(592,358)(43,216)(22,141)(196,494)
Unfunded retirement benefit obligation
42,52247,856
424,707
Net balance of liability and asset recognized(694)
25,715228,212on the Consolidated Balance Sheets
48,300(22,585)

Liability for Retirement benefits
Asset for retirement benefits
Net balance of liability and asset recognizedon the Consolidated Balance Sheets¥

25,715

428,647(200,434)

42,552(43,247)
¥

(694)

$

228,212The components of retirement benefit expense for the years ended March 31, 2016 and 2015 are as follows.
Millions of yen
2015
2016
¥
3,155
¥
3,127
1,152
1,000
(1,465)(1,672)906(307)(1,005)(975)(1,722)
11
¥
1,019
¥
1,183

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Gain on abolishment
Other
Retirement benefit expense

Thousands of
U.S. dollars
2016$
27,751
8,874(14,838)(2,724)(8,652)
97$
10,498

Note: Retirement benefit expense for consolidated subsidiaries adopting the simplified method are included in “Service cost”.
The components of retirement benefits liability adjustments included in other comprehensive income (before tax effect) at
March 31, 2016 and 2015 are as follows.
Thousands of
U.S. dollars
Millions of yen
2015
2016
2016
Prior service cost
¥
13
¥
(975)
$
(8,652)
Actuarial difference
19,220(27,998)(248,473)
Total¥
19,234¥ (28,974)$ (257,135)
The components of retirement benefits liability adjustments included in accumulated other comprehensive income (before tax
effect) at March 31, 2016 and 2015 are as follows.
Thousands of
U.S. dollars
Millions of yen
2015
2016
2016
Unrecognized prior service cost
¥
4,471
¥
3,495
$
31,017
Unrecognized actuarial difference
21,895(6,103)(54,162)
Total¥
26,367¥(2,607)$ (23,136)

20

The fair value of plan assets by major category as a percentage of total plan assets at March 31, 2016 and 2015 are as follows:
Millions of yen
Stocks
Bonds
Cash on hand and in banks
Other
Total

2016
64%
22
6
8
100%

2015
74%
16
6
4
100%

2016
0.3%
2.0%

2015
1.2%
2.0%

Assumptions used in the calculation of the above information are as follows:
Discount rate:
Expected rate of return on plan assets:(Defined Contribution plan)
The required contribution of the consolidated subsidiaries of the Company amounts to ¥125 million (US$1,109 thousand) and¥106 million for the years ended March 31, 2016 and 2015.

10. Contingent Liabilities
Contingent liabilities at March 31, 2016 and 2015 are as follows.

Guarantee of bank loans for employees
Guarantee of loans for others in the ordinary course ofbusiness
The Companies issued letters of guarantee for the future forothers in the ordinary course of businessMillions of yen
2015
2016
¥
511
¥
385

Thousands of
U.S. dollars
2016
$
3,416

4,712

7,615

41,817

17

23

150

11. Research and Development Expenses
Research and development expenses for the years ended March 31, 2016 and 2015 totaled ¥3,941 million (US$34,975 thousand)and ¥3,975 million, respectively. They were included in manufacturing cost, selling, general and administrative expenses.

12. Selling, General and Administrative Expenses
Principal selling, general and administrative expenses for the years ended March 31, 2016 and 2015 are as follows:
Thousands ofMillions of yen
U.S. dollars
2015
2016
2016
Freight out¥
17,946¥
16,769$ 148,819
Salaries, bonuses and allowances
10,446
10,25090,965
Research and development expenses
3,975
3,941
34,975Retirement benefit expense
731
558
4,952

13. Mortgaged Properties
Breakdown of properties pledged as collateral at March 31, 2016 and 2015 are as follows:
Thousands of
U.S. dollars
2016

Millions of yen
2015
2016

Properties pledged as collateral:
Investments in securities

¥

16

¥

16

$

141

14. Adjustment on Revaluation of Land
At March 31, 2002, some of the affiliates accounted for using the equity method revalued land in accordance with the Law
concerning Revaluation of Land. The Company’s share of a net-of-tax unrealized gains at March 31, 2016 and 2015 have beenrecorded as a separate component of accumulated other comprehensive income.

21

15. Net Assets
Number and types of stock at March 31, 2016 and 2015 are as follows:
Thousands of shares
Number of common
Number of treasury
stocks, issued
stocks109,843219–
6–
0109,843
225

March 31, 2015
Increase during the year
Decrease during the year
March 31, 2016

Increase in the number of treasury stocks consists of six thousand shares due to purchase of shares of less than one unit.
The decrease of less than one thousand shares in treasury stock consists of less than one thousand shares due to the change of theownership ratio for an affiliate accounted for using the equity method and less than one thousand shares due to the sales of theshares less than one unit by the Company upon requests by its shareholders.

16. Cash Dividends
Cash dividends declared are as follows:
Cash dividends payment in the year ending March 31, 2017
Amount of cash
Cash dividends
dividends paid
per share¥2,744 million¥25.0
May 13, 2016 Board of Directors’ Meeting
US$24,352 thousand
US$0.22
Cash dividends payment in the year ended March 31, 2016
Amount of cash
Cash dividends
dividends paid
per share¥4,391 million¥40.0
May 15, 2015 Board of Directors’ Meeting
US$38,968 thousand
US$0.35¥1,646 million¥15.0
Nov. 13, 2015 Board of Directors’ Meeting
US$14,607 thousand
US$0.13
Cash dividends payment in the year ended March 31, 2015
Amount of cash
dividends paid
May 19, 2014 Board of Directors’ Meeting¥1,501 million

Cash dividends
per share¥15.0

Record date

Effective dateMar. 31, 2016

Jun. 3, 2016

Record date

Effective dateMar. 31, 2015

Jun. 3, 2015

Sep. 30, 2015

Nov. 30, 2015

Record dateMar. 31, 2014

Effective dateJun. 9, 201417. Supplementary Cash Flow Information
The reconciliation of “Cash on hand and in banks” in the Consolidated Balance Sheets at March 31, 2016 and 2015 to “Cash andcash equivalents at end of year” in the Consolidated Statements of Cash Flows for the years then ended are as follows:
Thousands of
U.S. dollars
Millions of yen
2015
2016
2016
Cash on hand and in banks¥
26,300¥31,440$ 279,020
Time deposits and short-term investments with deposit terms
(5)
(5)
(44)
or maturity periods exceeding three months
Other
(107)
(91)
(807)
Cash and cash equivalents at end of year¥
26,187¥31,344$ 278,16822

18. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive
income for the years ended March 31, 2016 and 2015:
Thousands ofMillions of yen
U.S. dollars
2015
2016
2016
Unrealized gain or loss on available-for-sale securities:¥
10,012
Amount arising during the year
¥ (12,932)$ (114,767)
Reclassification adjustments for gains and losses included
–
384
3,407
in profit (loss) attributable to owners of parent
Amount before tax effect
10,012(12,547)(111,350)
Tax effect(2,245)3,543
31,443
Unrealized gain or loss on available-for-sale securities
7,766(9,004)(79,907)
Deferred gain or loss on hedges:
Amount arising during the year
Reclassification adjustments for gains and losses included
in profit (loss) attributable to owners of parent
Acquisition adjustment
Amount before tax effectTax effect
Deferred gain or loss on hedges
Foreign currency translation adjustment:
Amount arising during the year
Reclassification adjustments for gains and losses included
in profit (loss) attributable to owners of parent
Amount before tax effectTax effectForeign currency translation adjustment
Retirement benefits asset and liability adjustments:
Amount arising during the year
Reclassification adjustments for gains and losses included
in profit (loss) attributable to owners of parent
Amount before tax effectTax effect
Retirement benefits asset and liability adjustments
Share of other comprehensive income of companies
accounted for with the equity method:Amount arising during the year
Reclassification adjustments for gains and losses included
in profit (loss) attributable to owners of parent
Share of other comprehensive income of companies
accounted for with the equity method
Other, net:
Amount arising during the year
Reclassification adjustments for gains and losses included
in profit (loss) attributable to owners of parent
Amount before tax effectTax effect
Other, net
Total other comprehensive income

23

¥

(901)

3,991

(7,996)

(54)

(1)

(479)

(474)
(1,430)453(976)(3,595)
395
(122)
272

(4,206)(12,690)
4,020(8,661)(1,875)2,202(16,640)–––(1,875)–(1,875)

2,202
–
2,202

(16,640)–(16,640)(27,691)

20,347(245,749)(1,283)(1,113)(11,386)(28,974)448(28,526)

19,234(163)
19,071(257,135)
3,975(253,159)

(680)

9,089

(6,034)

(111)

(336)

(985)

(792)

8,752

(7,028)

33

82

292

3

2

26

36
(13)
23
(41,151)

85
(30)
54
38,120

319
(115)
204
$ (365,202)¥

19. Financial Instruments
1. Status of financial instruments(1) Policy regarding financial instruments
The Companies’ cash is put mainly into short-term deposits, and temporary surplus is invested in highly secure financial
assets.
The Company obtains funds, which are deemed necessary according to its loan and investment plan, mainly from bankloans and bond issues. It also obtains short-term operating funds from bank loans and commercial paper. A group cash
management system has been implemented among the Company and major subsidiaries, which enables lending andborrowing of funds in both directions in a recurrent and continuous manner.
Derivatives are used to avoid interest rate risk for loans and foreign exchange risk for transactions in foreign currency.
The policy on derivatives of the Company and its consolidated subsidiaries restricts the use of derivative transactions to thoserelated to actual demands and forbids their use for the purpose of speculation.
(2) Types of financial instruments, their risk and risk management system
The Company is exposed to credit risk of customers arising from notes and accounts receivable. In order to manage such risk,
due dates and account balances of customers are controlled in accordance with the corporate management rules. The credit
status of major customers is also monitored in necessity.
Marketable securities and investment in securities are exposed to market value risk. Such securities are mainly those of
the corporations with which the Company has a business relationship. The Company monitors the market value as well as
financial situations of the issuing companies on a regular basis.
As loans and bonds have interest rate risk, the Company uses interest rate swap transactions for some loans, which meetthe exceptional requirements defined in Japanese generally accepted accounting principles for financial instruments.
Derivative transactions are made in accordance with the corporate management rules. The Company makes transactions
only with financial institutions with high ratings in order to reduce credit risk.
Liquidity risk of operating credit and loans is managed according to a method in which each group company prepares its
own cash-flow projections on a timely basis, etc.
2. Estimated fair value of financial instruments
Book value, estimated fair value and unrealized gains (losses) of financial instruments on the Consolidated Balance Sheets at
March 31, 2016 and 2015 are as follows. The table below does not include financial instruments for which it is extremely
difficult to determine the fair value.
(Year ended March 31, 2016)(1) Cash on hand and in banks(2) Notes and accounts receivable(3) Marketable securities and investments in securities
Stocks of subsidiaries and affiliates
Available-for-sale securities(4) Notes and accounts payable(5) Short-term loans(6) Bonds(7) Long-term loans
Loans from banks and other financial institutions(8) Derivative transactions

24

Book value¥ 31,440
77,581Millions of yen
Estimated fairvalue
¥ 31,440
77,581

Unrealized gain
(loss)¥––

41,721
52,631(87,436)(50,338)(50,000)

56,38852,631(87,436)(50,338)(50,696)

14,667–––(696)(179,189)(755)(186,566)(755)(7,376)–

(Year ended March 31, 2016)
Thousands of U.S. dollars
Estimated fair
Unrealized gain
Book value
value(loss)$ 279,020$ 279,020$–
688,507
688,507–(1) Cash on hand and in banks(2) Notes and accounts receivable(3) Marketable securities and investments in securities
Stocks of subsidiaries and affiliates
Available-for-sale securities(4) Notes and accounts payable(5) Short-term loans(6) Bonds(7) Long-term loans
Loans from banks and other financial institutions(8) Derivative transactions

370,260
467,083(775,967)(446,734)(443,734)

500,425
467,083(775,967)(446,734)(449,911)

130,165–––(6,176)(1,590,246)(6,700)(1,655,715)(6,700)(65,459)–

Book value¥ 26,300
79,032Millions of yen
Estimated fairvalue
¥ 26,300
79,032

Unrealized gain
(loss)¥––

42,02768,304(88,576)(59,133)(50,000)

85,07368,304(88,576)(59,133)(50,759)

43,046–––(759)(180,700)
674(185,719)
674(5,018)–(Year ended March 31, 2015)(1) Cash on hand and in banks(2) Notes and accounts receivable(3) Marketable securities and investments in securities
Stocks of subsidiaries and affiliates
Available-for-sale securities(4) Notes and accounts payable(5) Short-term loans(6) Bonds(7) Long-term loans
Loans from banks and other financial institutions(8) Derivative transactions

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

25

2. Financial instruments for which it is extremely difficult to determine the fair value
In “(3) Marketable securities and investments in securities: Stocks of subsidiaries and affiliates”, the fair value for unlisted
stocks (¥15,975 million (US$141,773 thousand) and ¥17,732 million in the Consolidated Balance Sheets at March 31, 2016
and 2015, respectively.) does not have to be disclosed because there is no market price for them, their future cash flow cannot
be estimated, and because it is deemed very difficult to determine their fair value.
In “(3) Marketable securities and investments in securities: Available-for-sale securities”, the fair value for unlisted
stocks (¥4,738 million (US$42,048 thousand) and ¥14,702 million in the Consolidated Balance Sheets at March 31, 2016 and2015 respectively.) and others (¥0 million (US$0 thousand) and ¥0 million in the Consolidated Balance Sheets at March 31,
2016 and 2015, respectively.) does not have to be disclosed because there is no market price for them, their future cash flow
cannot be estimated, and because it is deemed very difficult to determine their fair value.
The redemption schedule for receivables and marketable securities with maturities at March 31, 2016 and 2015 are as follows:(Year ended March 31, 2016)
Millions of yen
Over one year
Over five years
and within five
and within ten
Within one year
years
years
Over ten years
Cash on hand and in banks
¥
–
¥
–
¥
–
¥ 31,233
Notes and accounts receivable–––
77,581Marketable securities and investments insecurities
National and local governmental bonds, etc.
–
–
4
11
¥
–
Total
¥ 108,814¥
4¥
11(Year ended March 31, 2016)

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

Within one year
$ 277,183
688,507–$ 965,690

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

$

35
35

$

97
97

Over ten years
$
–
–

$

–
–

(Year ended March 31, 2015)

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

Within one year¥
26,11979,032¥

5,000–
110,151

26

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

¥

–
4
4

¥

–
11
11

Over ten years
¥
–
–

¥

–
–
–

20. Securities
Available-for-sale securities(Year ended March 31, 2016)

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

Millions of yen
Acquisition UnrealizedBook value
costgain (loss)

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

20,949$ 371,609$ 185,694$ 185,915

0

106

97

0

$ 371,725$ 185,791$ 185,924$ 107,294$ (15,237)

41,873¥20,924

12

¥

11

¥

41,886¥

20,935¥

20,950¥10,373¥12,090¥(1,717) $

4

4

35

35

0

¥
¥

367
10,74552,631¥¥

401
12,49633,432

¥
¥

(33)
3,257
(1,750) $ 95,358
19,199 $ 467,083

3,558$ 110,898$ 296,698(292)$ (15,530)$ 170,385(0)92,057(Year ended March 31, 2015)

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

Millions of yen
Acquisition UnrealizedBook value
costgain (loss)¥

62,331¥

30,24616¥

16

32,0840¥62,347¥30,262¥32,085

¥

534

¥

767

¥

(232)

¥
¥

421
5,000
5,956
68,304

¥
¥

470
5,000
6,237
36,500

¥
¥

(48)
–
(280)
31,804

Regarding available-for-sale securities for which fair value information was not available, their aggregate book value on theConsolidated Balance Sheets was ¥4,738 million (US$42,048 thousand) and ¥14,702 million at March 31, 2016 and 2015,
respectively.
Sale of securities classified as available-for-sale securities and the aggregate gain and loss for the years ended March 31, 2016
and 2015 are as follows:(Year ended March 31, 2016)
Thousands ofMillions of yen
U.S. dollars
Sale proceeds¥
1,677$ 14,882
Aggregate gain
870
Aggregate loss
104
922
(Year ended March 31, 2015)
Millions of yen
¥
893
–
–

Sale proceeds
Aggregate gain
Aggregate loss

27

21. Derivative Transactions
The policy on derivatives of the Company and its consolidated subsidiaries restricts the use of derivative transactions to thoserelated to actual demands and forbids their use for the purpose of speculation. The Company and its consolidated subsidiaries
use derivative transactions for the purpose of reducing the impact on earnings caused by future market fluctuations, hedging
losses, reducing procurement costs and fixing costs. In the years ended March 31, 2016 and 2015, the Company and its
consolidated subsidiaries used interest rate swaps, forward exchange contracts and currency options to hedge the risk against rate
fluctuations or reduce the interest rates of bank loans, bonds and other means of financing.
Under the hedge accounting method, hedging instruments and hedged items for the year ended March 31, 2016 and 2015
are as follows:• The deferral hedge accounting method is adopted for hedging transactions. As for interest swaps, when the amounts, index
and period meet the conditions for hedged items, the exceptional method defined in Japanese generally accepted accounting
principles for financial instruments is applied.
• Hedging instruments are interest rate swaps, forward exchange contracts, currency options and currency swaps.
• Hedged items are the interest of bank loans, bonds and other means of financing and forecasted foreign currency
denominated transactions.
(1) Currency-related transactions(Year ended March 31, 2016)

Deferral hedge
accounting*

Principle
hedged items
Forward exchange
Forecasted
contracts andforeign currency
currency options
denominated
Buy: U.S. dollars transactions

Millions of yen
Contract
Contract amountamountover one year

Fair value

¥

–

¥

(755)

–

¥

(755)

14,685¥

Total¥
14,685¥
Measurement method for fair value
Fair values are calculated based on price presented by correspondent financial institutions.

(Year ended March 31, 2016)

Deferral hedge
accounting
Total

Principle
hedged items
Forward exchange
Forecasted
contracts andforeign currency
currency options
denominated
Buy: U.S. dollars transactions

Thousands of U.S. dollars
Contract
Contract amountamountover one year

Fair value$ 130,324$–$(6,700)130,324$–$(6,700)$(Year ended March 31, 2015)

Deferral hedge
accounting*

Principle
hedged items
Forward exchange
Forecasted
contracts andforeign currency
currency options
denominated
Buy: U.S. dollars transactions
Forward exchange
Forecasted
contracts andforeign currency
currency options
denominatedSell: U.S. dollars transactions

Millions of yen
Contract
Contract amountamountover one year

Fair value¥¥

24,867

¥

45

Total
¥
24,913¥
Measurement method for fair value
Fair values are calculated based on price presented by correspondent financial institutions.

28

–

–
–

675

(0)
¥

674

(2) Interest-related transactions(Year ended March 31, 2016)

Special treatment forinterest rate swaps*

Principle
hedged items
Interest of bank
Interest rate swaps:
loans, bonds andReceive floating/payother means of
fixed
financing

Millions of yen
Contract
Contract amountamountover one year

Fair value¥¥

36,407¥

36,107*

Total¥
36,407¥
36,107¥*
Fair value of interest rate swaps which are accounted for using special treatment is included in that of corresponding
hedged long-term borrowings as those interest rate swaps are recorded as an adjustment to interest expense of hedged
instruments under the special treatment.

(Year ended March 31, 2016)

Special treatment forinterest rate swaps
Total

Principle
hedged items
Interest of bank
Interest rate swaps:
loans, bonds andReceive floating/payother means of
fixed
financingThousands of U.S. dollars
Contract
Contract amountamountover one year

Fair value$ 323,100$ 320,438$*$$ 320,438$*

323,100(Year ended March 31, 2015)

Special treatment forinterest rate swaps*

Principle
hedged items
Interest of bank
Interest rate swaps:
loans, bonds andReceive floating/payother means of
fixed
financing
Interest of bank
Interest rate swaps:
loans, bonds andReceive fixed /payother means offloating
financing

Millions of yen
Contract
Contract amountamountover one year

Fair value¥¥

42,3292,000¥

42,129

–

*

*

Total
¥
44,329¥42,129¥*Fair value of interest rate swaps which are accounted for using special treatment is included in that of corresponding
hedged long-term borrowings as those interest rate swaps are recorded as an adjustment to interest expense of hedged
instruments under the special treatment.

22. Segment Information
The Companies operate solely in the steel business segment, so the disclosure of business segment information has been
omitted.
Products and services information(Year ended March 31, 2016)
Steel Products¥ 514,409

Sales to third parties

Millions of yen
Other¥ 32,617

Total¥ 547,026(Year ended March 31, 2016)
Steel Products$ 4,565,220

Sales to third parties

29

Thousands of U.S. dollars
Other
Total
$ 289,465$ 4,854,685

(Year ended March 31, 2015)
Steel Products¥ 583,603

Sales to third parties

Millions of yen
Other¥ 33,922

Total¥ 617,525

Geographical information(Year ended March 31, 2016)
Millions of yen
Sales to third partiesJapan¥ 435,422

North
America¥ 51,505

Other
24,532

Total¥ 547,026

Japan$ 3,864,235

Thousands of U.S. dollars
North
America
East Asia
Other$ 457,090$ 315,637$ 217,713

Total$ 4,854,685

Japan¥ 484,356

North
America¥ 56,057

East Asia¥ 35,566¥(Year ended March 31, 2016)

Sales to third parties

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

(Year ended March 31, 2015)
Millions of yen
Sales to third parties

East Asia¥ 49,733¥

Other27,378Total¥ 617,525

23. Related Party Transactions
Material transactions of the Company with related companies and individuals, excluding transactions with consolidated
subsidiaries which are removed from the consolidated financial statements and other than those disclosed elsewhere in thesefinancial statements, for the years ended March 31, 2016 and 2015 are as follows:(Year ended March 31, 2016)

Name ofRelatedcompany

Paid-in capital

Principal
business

Equity ownership
percentage by the
consolidated
subsidiary atMar. 31, 2016

Nihon TeppanCo., Ltd.

¥1,300 million
Sale of$11,537 thousand coated steel

50.0%

Canox
Corporation¥2,310 million
Sale of$20,500 thousand coated steel

16.0%

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

2016

Account

2016¥64,296$570,607

Accounts receivable¥7,608$67,518¥37,973$336,998

Accounts receivable¥4,425$39,270(Year ended March 31, 2015)

Name ofRelatedcompany

Paid-in capital

Principal
business

Equity ownership
percentage by the
consolidated
subsidiary atMar. 31, 2015

Nihon TeppanCo., Ltd.

¥1,300 million

Sale ofcoated steel

50.0%

Canox
Corporation¥2,310 million

Sale ofcoated steel

16.1%

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

30

Millions of yen
Resulting accounting balance

2015

Account

2015¥71,794

Accounts receivable¥4,576¥41,646

Accounts receivable¥4,837Material transactions of the Company and the consolidated subsidiaries with related companies and individuals, excludingtransactions with consolidated subsidiaries which are removed from the consolidated financial statements and other than those
disclosed elsewhere in these financial statements, for the years ended March 31, 2016 and 2015 are as follows:(Year ended March 31, 2016)

Name ofRelatedcompany
Nihon TeppanCo., Ltd.

Paid-in capital

Principal
business¥1,300 million
Sale of$11,537 thousand coated steel

Equity ownership
percentage by the
consolidated
subsidiary atMar. 31, 2016
50.0%

Millions of yen/Thousands of U.S. dollars
Resulting accounting balance
Transaction
Description of theconsolidated
subsidiary’s
transactions
Purchase of thesteel products by
Tsukiboshi Shoji
Co., Ltd.

2016

Account

2016¥18,232$161,803

Accounts payable¥6,855$60,835(Year ended March 31, 2015)

Name ofRelatedcompany
Nihon TeppanCo., Ltd.

Paid-in capital¥1,300 million

Principal
business
Sale ofcoated steel

Equity ownership
percentage by the
consolidated
subsidiary atMar. 31, 2015
50.0%

Millions of yen/Thousands of U.S. dollars
Resulting accounting balance
Transaction
Description of theconsolidated
subsidiary’s
transactions
Purchase of thesteel products by
Tsukiboshi Shoji
Co., Ltd.

2015

Account

2015¥19,255

Accounts payable¥7,581The significant related company in the year ended March 31, 2016 and 2015 is Acerinox, S.A. Summary of the consolidated
financial condition of Acerinox, S.A. are as follows:
Millions of euros
2015
2016
Total current assets
€
2,159
€
1,808
Total non-current assets
2,270
2,317
Total current liabilities
1,293
1,106
Total non-current liabilities
1,279
995
Total equity
1,856
2,023
4,221
66
32

Revenues
Profit from ordinary activities
Net profit attributable to the Group

4,380
243
136

24. Business Combinations(Transactions under Common Control)
Since Tsukiboshi Shoji Co., Ltd. changed its shareholder rights into different treatment depending on each shareholder,
Nisshin Steel’s ownership interest to Tsukiboshi Shoji Co., Ltd. increased, and on the other hand non-controlling interests
decreased. As a result, additional paid-in capital increased. This matter was accounted for as transactions pursuant to the“Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013) and the “Guidance on
Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No.
10, September 13, 2013).

31

25. Other
Information on the consolidated cumulative and quarterly results for the year ended March 31, 2016 is as follows:

Cumulative results
Net sales
Profit (loss) before provision for income taxes
Profit (loss) attributable to owners of parent
Profit (loss) attributable to owners of parent
per share*1
Quarterly results
Profit (loss) attributable to owners of parent
per share*1

Cumulative results
Net sales
Profit (loss) before provision for income taxes
Profit (loss) attributable to owners of parent
Profit (loss) attributable to owners of parent
per share*1
Quarterly results
Profit (loss) attributable to owners of parent
per share*1

Millions of yen(except per share)
2Q
3Q

1Q

4Q

¥

137,225
1,803
1,243

¥

276,759
4,107
2,007

¥

409,9203,042
0¥547,026(1,499)(6,613)

¥

11.34

¥

18.31

¥

0.00

¥

(60.33)

¥

11.34

¥

6.97

¥

(18.31)¥(60.33)Thousands of U.S. dollars(except per share)
2Q
3Q

1Q

4Q

$ 1,217,829
16,001
11,031$ 2,456,150
36,44817,811$ 3,637,912
26,9960$ 4,854,685(13,303)(58,688)

$

0.10

$

0.16

$

0.00

$

(0.53)

$

0.10

$

0.06

$

(0.16)$(0.53)*1. Per share amounts are in yen and U.S. dollars.

26. Major Subsequent Events(Company split)
On April 1, 2016, the Company conducted an absorption-type company split in which its steel plate production and sales
business which engages in the coatings and building materials market and includes the Ichikawa Works (hereinafter, the“Combined Entity”) was spun off and succeeded by its wholly owned subsidiary Nisshin A&C Co., Ltd., which consequently
changed its trade name to Nisshin Steel A&C Co., Ltd.
Transactions under Common Control
1. Outline of the company split(1) Name of the Combined Entity and nature of its business operations
The Company’s steel plate production and sales business which engages in the coatings and building materials market
and includes the Ichikawa Works(2) Date of the business combination
April 1, 2016
(3) Legal form of the business combination
Absorption-type company split whereby the Company is the splitting company, and Nisshin A&C Co., Ltd. is the
succeeding company in the absorption-type split(4) New trade nameNisshin Steel A&C Co., Ltd.
(5) Main reason for the business combination
The business combination is being undertaken so that in the steel plate production and sales business serving thecoatings and building materials market, which is the Company’s founding business, the Company will be able toswiftly address needs and create a business structure that makes product and market development possible. To that end,
the Group will strengthen the Combined Entity’s cost competitiveness, development prowess and marketing strengths,
by launching a company that provides one-stop solutions which enlist the materials development prowess, costcompetitiveness and sales channels of the Combined Entity held by the Company, and accordingly bringing suchstrengths together with Nisshin A&C Co., Ltd.’s capacity for serving manufacturers of housing materials through its
light-gauge steel shapes, and its appeal to building contractors and other such entities, which it has amassed through its
operations involving sales of metal siding.

32

2.

The newly launched company will create construction demand on its own by offering new forms of value tocustomers, and will accordingly strive to act as an innovative steel building materials manufacturer that conceives newfeatures and added value with respect to buildings.
Accounting Method
This acquisition will be accounted for as transactions under common control pursuant to the “Accounting Standard forBusiness Combination” (ASBJ Statement No. 21, September 13, 2013) and the “Revised Guidance on Accounting Standard
for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, September 13,2013).

(Conclusion of key contracts)
On February 1, 2016, the Company entered into a memorandum of understanding with Nippon Steel & Sumitomo Metal
Corporation (hereinafter, “NSSMC”), pursuant to which the parties are to commence discussions regarding matters that include
making the Company a subsidiary of NSSMC. Since then, the two parties have been proceeding with discussions in that regard.
As a result of the discussions, the companies reached agreement on particulars such as specific means of making the Company a
subsidiary of NSSMC and conditions for NSSMC’s capital contribution to the Company. Accordingly, based on resolutions
adopted at the Company’s Board of Directors’ meeting held on May 13, 2016, the Company and NSSMC formally entered into
an agreement on the same day, with respect making the Company a subsidiary of NSSMC and other such matters.
Going forward, the Company is slated to become a subsidiary of NSSMC (hereinafter, the “Proposed Transaction”) byaround March 2017 through NSSMC’s acquisition of shareholdings of 51.00% of the total number of outstanding shares of theCompany. To that end, NSSMC will complete procedures (hereinafter, the “Transaction”) entailing a tender offer for theCompany’s common stock (hereinafter, the “Tender Offer”) and payment on a capital increase by third-party allotment by theCompany (hereinafter, the “Capital Increase by Third-party Allotment”), after having finalized certain procedures undertaken
pursuant to domestic and foreign competition laws. We intend to maintain the Company’s listing on the First Section of theTokyo Stock Exchange, even after this series of transactions has been completed.
1. Purpose of the Proposed Transaction, etc.
Through the completion of Proposed Transaction, NSSMC and the Company will strengthen the position of the NSSMCGroup as the “Best Steelmaker with World-Leading Capabilities” with the addition of the Company, and will thereby intend
to achieve sustainable growth and enhance their corporate value in the mid- to long-term. In addition, in order to increase
their competitiveness, the companies will implement the constant supply of steel slabs by NSSMC to the Company subject
to the completion of the Proposed Transaction. Both companies wish to better serve their customers by putting thesemeasures into effect, which may also help them to contribute to the creation and development of a more prosperous society.
Specifically, the companies will strive to implement the measures and achieve the objectives outlined below:(1) Creating a synergy effect by exploiting the management resources of both Groups
The Company’s strengths are customer and market readiness enabled by meticulous development marketing (such as
suggesting solutions from the design stage for customers), and other activities in line with customer needs. NSSMC’s
strengths are global top-level technological superiority and product readiness, cost competitiveness centering on ironand steel-making, and capability of being global. NSSMC and the Company will bring together these management
resources and create synergies, exploiting their respective strengths. Thus, they will provide better products,
technologies, and services that would meet customer needs, on a domestic and global basis, and will thereby seek toenhance their profitability.
(2) Promoting alliance measures
After consummating the Proposed Transaction, NSSMC and the Company will promote various alliance measures,
including, without limitation, the improvement of efficiency through mutual alliances in the areas of their operations,
technologies, facilities, procurement of raw materials, resources and equipment and manufacturing site management(including in the areas of safety, the environment, disaster prevention and maintenance matters) in addition to
implementing the supply of steel slabs, as they work to achieve a level of cost-competitiveness necessary for survival
in an environment of fierce global competition.
(3) Maximizing corporate value and improving evaluations by shareholders and capital markets
Through the Proposed Transaction, NSSMC and the Company will establish stable financial condition through theefficient use of their funds and assets, looking to help ensure healthy and sustainable growth, and maximize theircorporate value in the mid- to long-term, as well as endeavoring to earn higher evaluations from current shareholders
and other participants in the capital markets.

33

2.

Overview of Nippon Steel & Sumitomo Metal Corporation (as of March 31, 2016)(1) Name

Nippon Steel & Sumitomo Metal Corporation(2) Location

6-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo(3) Name and title of the representative

Kosei Shindo
Representative Director and President(4) Description of business activities

1.

Steelmaking and steel fabrication (Manufacturing andsales of steel products)

2.

Engineering and construction

3.

Chemicals

4.

New materials

5.

System solutions(5) Capital¥419,524 million (US$3,723,145 thousand)(6) Date of establishment

April 1, 1950

(7) Issued shares

950 million shares(8) Operating results and financial conditions (consolidated basis)3.

Net assets¥3,009,075 million (US$26,704,605 thousand)Total assets¥6,425,043 million (US$57,020,260 thousand)Net sales¥4,907,429 million (US$43,551,908 thousand)Operating profit¥167,731 million (US$1,488,560thousand)Ordinary profit¥200,929 million (US$1,783,182thousand)Profit attributable to owners of parent¥145,419 million (US$1,290,548thousand)Information Regarding the Proposed Transaction(1) Overview of the Transaction
The aim of the Transaction is NSSMC’s acquisition of the Company shares to reach the ownership ratio of 51.00% of
the total number of outstanding shares of the Company, by means of a combination of the Tender Offer and (ifnecessary) the Capital Increase by Third-Party Allotment. Because of the nature of a tender offer, NSSMC’s shareownership ratio (meaning the ratio of the shares owned by NSSMC in comparison to the total number of outstanding
shares of the Company; hereinafter, the same shall apply) after the implementation of the Tender Offer will not be fixed
before the settlement is completed; therefore, it is contemplated that if the Tender Offer results in a share ownership
ratio for NSSMC of less than 51.00%, which is the target ratio in the Tender Offer, the Proposed Transaction will be
realized through NSSMC purchasing the Company shares through the Capital Increase by Third-Party Allotment. The
Company and NSSMC view the Tender Offer and the Capital Increase by Third-Party Allotment as related procedures
designed to achieve the Proposed Transaction and view the Capital Increase by Third-Party Allotment as a supplement
to the Tender Offer.
(2) Implementation of the Tender Offer
When the conditions (including, without limitation, the completion of certain procedures required under domestic andforeign competition laws) are satisfied, NSSMC will promptly conduct the Tender Offer prior to the payment for the
Capital Increase by Third-Party Allotment (the timing of the Tender Offer may vary depending on the time of thesatisfaction of these conditions precedent; however, at present, we assume that the Tender Offer will start by aroundFebruary 2017). In implementing the Tender Offer, the proposed purchase price for the Tender Offer is planned to be¥1,620 (US$14.37) per share of the Company.
The maximum number of shares to be purchased during the Tender Offer is planned to be 46,896,300 shares, thenumber of shares needed for the shares owned by NSSMC to represent 51.00% of the total outstanding shares of theCompany at the time of the completion of the settlement for the Tender Offer (units of less than 100 shares shall be
rounded up), when combined with 9,124,200 shares (NSSMC’s shareholding ratio: 8.31%), the number of theCompany shares owned by NSSMC as of the submission date of the tender offer statement.
(3) Payment on the Capital Increase by Third-party Allotment
In the event of a possible scenario where the number of shares owned by NSSMC does not reach 51.00% of the total
number of outstanding shares of the Company at the time of completion of the settlement for the Tender Offer, the34Company is to carry out the Capital Increase by Third-party Allotment, with the Company issuing offered shares and
NSSMC acting as the subscriber thereof, with the payment period thereof from December 1, 2016, to June 23, 2017(95,706,600 shares of common stock at ¥1,620 per share for a total (maximum) of ¥155,045 million (rounded to thenearest million Japanese yen)). Only where the Tender Offer does not result in NSSMC’s acquisition of such maximum
number of shares, NSSMC will make a payment only to the extent needed for the number of shares owned by NSSMC
upon completion of the purchase in the Capital Increase by Third-Party Allotment to be the number of shares calculated
by multiplying the total number of outstanding shares of the Company at that time by 51.00%.
(4) Supply of steel slabs
After the realization of the Proposed Transaction through the Transaction, NSSMC will commence the constant supply(for consideration) of steel slabs to the Company approximately within fiscal year 2019, and the Company willpurchase such steel slabs. The specific terms and conditions, such as the timing of the commencement of supply andthe volume, price, etc. of supply shall be separately determined through mutual consultation between the companies.
(5) Number of the Company shares to be newly obtained by NSSMC, etc.
As set forth in 3. (2) above, the maximum number of shares to be purchased during the Tender Offer is scheduled to be
only the number of shares necessary to make the number of shares owned by NSSMC 51.00% of the total number ofthe outstanding shares of the Company as of the time of completion of the settlement for the Tender Offer, whencombined with the number of shares owned by NSSMC as of the submission date of the tender offer statement (units ofless than 100 shares shall be rounded up). As of the submission date of the Securities Report, NSSMC owns 9,124,200
shares of the Company (a share ownership ratio of 8.31%). Based on this, the maximum number of shares to bepurchased shall be 46,896,300 shares (a share ownership ratio of 42.69%) and, the number of shares scheduled to beowned by NSSMC after the Tender Offer shall be 56,020,500 shares (a share ownership ratio of 51.00%). In addition,
as described in 3. (3) above, the Company will offer 95,706,600 common shares in the Capital Increase by Third-Party
Allotment. NSSMC will pay only for the offered shares in the number necessary to make its shareholding 51.00% of
the total number of outstanding shares of the Company upon completion of the purchase in the Capital Increase by
Third-Party Allotment, and if NSSMC comes to own 51.00% of the total number of outstanding shares of the Company
through the Tender Offer alone, NSSMC will not make any payment for the Capital Increase by Third-Party Allotment.
Therefore, the minimum number of the Company shares to be newly obtained by NSSMC through the Transaction
shall be 46,896,300 shares when the subscription for the Tender Offer reaches the maximum number of shares to bepurchased and the payment for the Capital Increase by Third-Party Allotment is not made, and the maximum number
shall be 95,706,600 shares when payment regarding the Capital Increase by Third-Party Allotment is conducted in full.

35

(Capital increase by third-party allotment)
As noted in the above subsection, “Conclusion of key contracts,” at the Board of Directors’ meeting held on May 13, 2016, theCompany adopted a resolution to conduct an offering of shares by means of a third-party allotment (hereinafter, the “Capital
Increase by Third-party Allotment”) with Nippon Steel & Sumitomo Metal Corporation (hereinafter, “NSSMC”) as thesubscriber.
(1) Method of offering

Third-party allotment(2) Class and number of shares to be issued

95,706,600 shares of common stock *1(3) Issue price¥1,620 (US$14.37) per share(4) Total issue price¥155,044 million (US$1,375,967 thousand) *1(5) Total capitalization¥77,522 million (US$687,983 thousand) *1(6) Payment date

From December 1, 2016 (Thu.) to June 23, 2017 (Fri.) *2(7) Allottee

Nippon Steel & Sumitomo Metal Corporation(8) Use of proceeds

Investment for the Company’s facility
repayment of interest-bearing liabilities, etc.

(9) Other

As noted in the above subsection, “Conclusion of key
contracts,” NSSMC is to make payment for the Capital
Increase by Third-party Allotment, subject to thesatisfaction of conditions stipulated in the agreement
between the Company and NSSMC related to making theCompany a subsidiary of NSSMC, including thecompletion of settlement by NSSMC with respect to thetender offer of the Company common stock.

renewal,*1. It has been determined that NSSMC will purchase only the number of shares needed to bring NSSMC’s ownership ratio to51.00% of the total number of outstanding shares of the Company upon completion of the purchase in the Capital Increaseby Third-Party Allotment (with units of less than 100 shares rounded up). Therefore, there is a possibility of there being nopurchase, or partial purchase, of the offered shares subscribed to by NSSMC, depending on the results of the tender offer of
the Company common stock (hereinafter, the “Tender Offer”), which is to be conducted before the payment for the Capital
Increase by Third-party Allotment.
*2. The Company adopted a resolution to set the payment period under the Companies Act for the Capital Increase by
Third-Party Allotment as the period from December 1, 2016 (Thu.) to June 23, 2017 (Fri.); therefore, such payment period
is given as the payment date. The Company decided on such a long payment period (i.e., December 1, 2016 (Thu.) to June23, 2017 (Fri.)) because the payment for the Capital Increase by Third-Party Allotment will be made after the completionof settlement of the Tender Offer, meaning the timing of the Tender Offer and the payment date for the Capital Increase by
Third-Party Allotment will vary depending on, among other factors, when approvals are obtained for the Proposed
Transaction from domestic and foreign competition authorities because the implementation of the Tender Offer isconditioned on, among other conditions, the obtaining of such approvals.
Also, a subscription agreement for the Capital Increase by Third-party Allotment has been concluded with NSSMC, and
NSSMC is a Special Subscriber as defined in Article 206-2, paragraph (1) of the Companies Act. Given that, a proposal toapprove the subscription agreement pursuant to Article 206-4 and Article 206-5 was submitted and adopted at the annual
shareholders meeting of the Company held on June 24, 2016.

36

37

Board of Directors, Corporate Auditors and Executive Officers(As of June 24, 2016)
Directors

Toshinori Miki*1

Yukio Nariyoshi *1

Koji Mizumoto *1

Katsuhisa Miyakusu *1

Kinya Yanagawa

Yukio Uchida

Hideo Tanaka

Nobuhiro Miyoshi

Sonoko Hatchoji

Isao Endo
2

Audit and Supervisory Board Members

Kazuhisa Obama *Yukihiro Ito

Yoshiaki Nanbo

Tatsu Katayama

President and Chief Executive Officer

Toshinori Miki

Vice-President and Executive Officers

Yukio Nariyoshi

Koji Mizumoto

Katsuhisa Miyakusu

Kinya Yanagawa

Yukio Uchida

Hideo Tanaka

Nobuhiro Miyoshi

Masahiro Sasaki

Takayuki Kondo

Junya Hayakawa

Tatsuji Tomiyasu

Shigeru Matsunaga

Kiyoshi Yasui

Toshiaki Naganuma

Atsushi Tsuchiya

Tetsuo Kaharu

Managing Executive Officers*1 Representative Director*2 Senior Audit and Supervisory Board Member

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

Shin Kokusai Building, 4-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo
100-8366, Japan
Telephone: (81)-3 3216-5566 Facsimile: (81)-3 3216-5546

Year of Establishment

2012

Common Stock(As of March 31, 2016)

Authorized: 430,000 thousand shares
Issued: 109,843 thousand shares
Capital: ¥30,000,000 thousand

Common Stock Price Range(Tokyo Stock Exchange)

2016

First Quarter

2015

High

Low

High

¥ 1,757¥ 1,423¥ 1,358

Low
¥

875

Second Quarter

1,559

991

1,452

991

Third Quarter

1,425

1,049

1,240

823

Fourth Quarter

1,446

1,077

1,690

1,052

Note: Years ended March 31.
Number of Shareholders

43,825

Independent Certified Public Accountants

Ernst & Young ShinNihon LLC

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

38