JFE Holdings’ Financial Results for Fiscal Year 2018
ended March 31, 2019
— All financial information has been prepared in accordance with
International Financial Reporting Standards (IFRS) —(Note: The following is an English translation of an original Japanese document)

May 14, 2019
JFE Holdings, Inc.
Tokyo and Nagoya stock exchanges
5411
www.jfe-holdings.co.jp/en
Koji Kakigi, President and CEO
Hidetsugu Tawara, Manager, Public Relations Section
Investor Relations and Corporate Communications
Department+81-3-3597-3842
June 21, 2019
June 24, 2019
June 21, 2019
Yes
Yes
(Figures are rounded down to the nearest million yen)

Official name:
Listings:
Code:
English URL:
Representative:
Contact:

Phone:
Annual shareholders meeting (planned):
Dividend payment starting date:
Scheduled date to submit securities report:
Preparation of supplementary materials on results:
Results briefing:

1. Consolidated Results for Fiscal 2018 (April 1, 2018 to March 31, 2019)(1) Consolidated Operating Results (cumulative total)(Percentages indicate year on year change)
Revenue

Business
profit%(million yen)

Profitbefore tax%(million yen)

Profit%(million yen)(million yen)

Profitattributableto ownersof parent%%

Comprehensive
income%(yen)

FY 2018

3,873,662

6.8

232,070

6.3

209,313

FY 2017

3,627,248-

218,378-

152,877

Basic earnings per
share

Diluted earnings per
share

(yen)

(yen)

36.9
-

169,825 64.6

163,50967.5

126,378

1.8

103,153

97,635-

124,104-

Profit ratio to equity
attributable toowners of parent-

Profit before tax ratio
to total assets

Business profit ratio
to revenue

(%)

(%)

(%)

FY 2018

283.81283.76

8.6

4.6

6.0

FY 2017169.34169.34

5.4

3.5

6.0

(Reference): Equity in earnings of affiliates:

FY 2018: 42,685 million yen FY 2017: (10,173 million yen)

Note: Business profit is profit before tax excluding financial income and one-time items of a materially significant value.
(2) Consolidated Financial Position
Total assets

Total equity(million yen)(million yen)

Equity attributable toowners of parent(million yen)

Total equity
attributable toowners of parent

Equity attributable toowners of parent per
share

(%)

(yen)

FY 2018

4,709,201

1,991,759

1,926,337

40.9

3,345.22

FY 2017

4,487,173

1,922,065

1,862,707

41.5

3,230.96

Cash and cash
equivalents at end ofyear(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities(million yen)(million yen)(million yen)(million yen)

FY 2018

268,251(313,351)

51,88282,288FY 2017

328,358(216,454)(99,828)

75,117

2. Dividends
Dividend per share (yen)Interim

Total dividend
payoutDividend payout
ratio(million yen)(consolidated, %)Year-end

Dividend ratio of
equity attributable toowners of parent(consolidated %)FY 2017

80.00

30.00

50.00

46,13647.2

2.5

FY 2018

95.00

45.00

50.00

54,78133.5

2.9

FY 2019(forecast)

-

-

-

-

Note: Fiscal 2019 dividends are yet to be determined.

3. Forecasts of Consolidated Financial Results in Fiscal 2019 (April 1, 2019 to March 31, 2020)(Percentages indicate year on year changes)
Revenue

Business
profit%(million yen)%(million yen)

Profit before
tax

Profitattributable toownersof parent%(million yen)

Basic earnings per
share (yen)

%

(yen)

FY 2019--

180,000(22.4)

-

-

-

-

-

Notes
1. Changes in significant subsidiaries during the term (changes in designated subsidiaries resulting in changes in consolidated
structure): No
2. Changes in accounting policies and accounting estimates
1) Changes in the accounting policies required by IFRS: No
2) Changes in the accounting policies other than 1) above: No
3) Changes in accounting estimates: No
3. Number of outstanding shares (common stock)
1) Outstanding shares at the end of the term (including treasury stock)
As of March 31, 2019: 614,438,399 shares
As of March 31, 2018: 614,438,399 shares
2) Treasury stock at the end of the term
As of March 31, 2019: 38,590,471 shares
As of March 31, 2018: 37,919,494 shares
3) Average number of shares during the term
FY 2018: 576,117,212 shares
FY 2017: 576,572,979 sharesThis report is not subject to auditing by a certified public accountant or an audit corporation.
Explanation of Appropriate Use of Results Forecasts, and Other Matters of Note
1. As of the fiscal year under review, the Company adopted International Financial Reporting Standards (“IFRS”) in place ofJapanese generally accepted accounting principles (J-GAAP). Consolidated figures for the previous fiscal year are therefore alsopresented on an IFRS basis. For differences between IFRS and Japanese GAAP, please refer to the attachments under Firsttime adoption (Page 23) in the Notes to Consolidated Financial Statements.
2. Forecasts and other forward-looking statements herein are based on information available on the date of publication of thisdocument as well as rational assumptions that we have made regarding certain factors. Actual results may vary significantly fromthese forecasts due to a wide range of circumstances. For a description of the results forecasts, see (4) Outlook for Fiscal 2019
on Page 3 of the attachments.
3. The supplementary financial data will be published on our website.

Attachments
1. Qualitative Information(1) Overview of Business Results(2) Overview of Financial Position(3) Overview of Cash Flow in Fiscal 2018(4) Outlook for Fiscal 2019
2. Basic Rationale for Selection of Accounting Standards
3. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(2) Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income(3) Consolidated Statement of Changes in Equity(4) Consolidated Statement of Cash Flow
(5) Notes to Consolidated Financial Statements
Notes pertaining to the presumption of a going concern
Reporting entity
Basis of preparation
Significant accounting policies
Segment information
Per-share information
Material subsequent eventsFirst-time adoption
4. Supplementary Information

1

2
2
3
3
3
3
4
4
6
8
10
12
12
12
12
12
19
22
22
23
33

1. Qualitative Information
The JFE Group adopted IFRS from the fiscal year that ended on March 31, 2019. For the purposes of comparison, figures
for previous fiscal years appearing here have been converted to IFRS.

(1) Overview of Business Results
JFE Holdings, Inc., guided by its corporate mission of contributing to society with world-leading technology, continued toachieve sustainable growth and improved corporate value for shareholders and other stakeholders.
In fiscal 2018, the Japanese economy recovered moderately overall, supported by increases in exports and capital
investment, but signs of weakness in production and other areas have recently appeared. Overseas, the global economy
recovered modestly as a whole and in the United States in particular, but the outlook has grown increasingly uncertain
amid rising global trade tensions due to protectionism, the risk of an economic downturn in China and other emerging
economies, developments surrounding the UK’s exit from the EU, and so on.
Both business income and profit attributable to owners of the parent company increased year over year as the JFE Group
carried out the key measures set out under its sixth medium-term business plan: pursue growth with leading-edge
technologies, expand the profit base in Japan and strengthen manufacturing capabilities, advance overseas business andexpand the overseas profit base, and strengthen business structure for sustainable growth.

Operating results by segment were as follows.
Steel business: Consolidated annual crude steel production was 27.88 million tons, down from the previous fiscal year
owing to operating issues affecting blast furnace operations, natural disasters, and other factors. Revenue increased to2,830.6 billion yen, reflecting higher steel sales prices and despite lower sales volumes. Although the business continued
working to raise steel selling prices and improve earnings, segment profit was down to 161.3 billion yen owing to theimpact of operating issues and a sharp increase in costs due to rising prices of metals and other auxiliary raw materials,
materials costs, distribution costs, and the like.
Engineering business: Revenue increased sharply to a record high of 485.8 billion yen, reflecting aggressive efforts to win
orders for environmental, energy, and infrastructure building projects in Japan and overseas, as well as the smooth
execution of project orders already received. Segment profit rose to 20.1 billion yen.
Trading business: Despite a decline in crude steel production volume, revenue increased to 1,125.8 billion yen, driven byefforts to capture solid demand from the automotive field and Greater Tokyo area redevelopment projects as well as better
unit sales prices both in Japan and abroad. Segment profit increased to 35.7 billion yen on increased revenue andexpanding profitability at Group companies abroad, particularly in the United States.
Although Japan Marine United Corporation, which is accounted for using the equity method, recorded a significant deficit
in the last term, recorded profit in this term
On a consolidated basis incorporating earnings of the parent entity, both revenue and profits were up, with revenue of
3,873.6 billion yen and business income of 232.0 billion yen. Impairment losses also were booked, resulting in profit before
tax of 209.3 billion yen and profit attributable to owners of the parent company of 163.5 billion yen.

Note: Business income is profit before tax excluding financial income and one-time items of a materially significant
value. It is a benchmark indicator of the company’s consolidated earnings. The operating performance of eachsegment is presented in terms of segment profit, a measure including financial income in business profit.

2(2) Overview of Financial Position
Total assets at the end of fiscal 2018 (March 31, 2019) rose 222.0 billion yen from the previous yearend to 4,709.2 billion
yen, mainly due to an increase in property, plant and equipment. Total liabilities rose 152.3 billion yen from the previous
yearend to 2,717.4 billion yen, mainly due to increases in bonds payable, borrowings, and lease obligations. Total equity
rose 69.6 billion yen from the previous yearend to 1,991.7 billion yen, mainly due to an increase in retained earnings.

(3) Overview of Cash Flow in Fiscal 2018
Net cash provided by operating activities was 268.2 billion yen. Net cash used in investing activities was 313.3 billion yen,largely for the purchase of property, plant and equipment, intangible assets, and investment property. Aggregate free cash
flow thus came to an outflow of 45.1 billion yen.
Net cash provided by financing activities was 51.8 billion yen, primarily reflecting long-term borrowings.
Interest-bearing liabilities outstanding at fiscal year-end rose 132.6 billion yen to 1,523.8 billion yen. The balance of cash
and cash equivalents rose 7.1 billion yen to 82.2 billion yen.
Note: Interest-bearing liabilities are bonds payable, borrowings, and lease obligations.

(4) Outlook for Fiscal 2019
Steel business:
In Japan, we expect demand to remain solid overall with moderate economic growth. Internationally, we expect demand
to remain solid overall in view of firm growth in many overseas economies, but the risks posed by trade frictions willcontinue to bear close watching. Crude steel production dropped sharply in fiscal 2018 owing to issues at blast furnace
facilities, but in fiscal 2019 we will work to stabilize production and restore crude steel production levels.
Rising costs have had a major impact on earnings in recent years. Not only have costs been rising for key raw materials,
namely, iron ore and coking coal, costs also have risen for auxiliary raw materials and other materials as well as for
distribution and subcontracting. As we work to improve selling prices in this environment, we will be working closely withcustomers to gain their understanding and agreement. All told, we forecast segment profit of 105.0 billion yen in fiscal
2019.
In accordance with measures specified in our sixth medium-term business plan, we also will continue to focus on
strengthening our manufacturing capabilities to stabilize production and continue working resolutely to advance overseas
business.
Engineering business:
We expect revenue to rise as we steadily execute existing project orders, and segment profit is forecast to increase to
23.0 billion yen.
Trading business:
Although fiscal 2018’s one-time gains, primarily in the United States, will fall away, we forecast segment profit of 36.0
billion yen. This will be driven by a recovery in crude steel production as well as efforts to capture construction demand,
including that related to the Tokyo 2020 Olympic and Paralympic Games and strong demand from the automotive field.
JFE Group forecasts group-wide business income of 180.0 billion yen in fiscal 2019.

2. Basic Rationale for Selection of Accounting Standards
JFE voluntarily adopted IFRS starting with full-year results for the fiscal year that ended on March 31, 2019. The JFE Group
does business globally, so by adopting IFRS it aims to improve the international comparability of its financial statements incapital markets and improve group management through standardized accounting methods.

33. Consolidated Financial Statements(1) Consolidated statement of financial position
Transition date
(April 1, 2017)

As ofMarch 31, 2018

(million yen)
As ofMarch 31, 2019

AssetsCurrent assets
Cash and cash equivalents

70,20975,11782,288Trade and other receivables

685,295

758,029754,679

Contract assets

132,500

126,935

124,039

Inventories

757,793

836,865

917,812

Income taxes receivable

6,796

1,766

19,076

Other financial assets

4,912

7,157

4,471

Other current assets

68,871

77,68486,290Total current assets

1,726,379

1,883,556

1,988,658

1,661,123

1,732,154

1,835,229

Goodwill

5,137

4,473

4,445

Intangible assets

66,91873,16382,567

Investment property
Investments accounted for using
equity method
Retirement benefit asset

60,40359,68259,425

332,428

289,223

315,064

11,224

16,45916,380

Deferred tax assets

27,674

24,46736,609Other financial assets

426,418

393,668

360,133

Other non-current assets

11,523

10,322

10,686

Total non-current assets

2,602,853

2,603,616

2,720,543

4,329,232

4,487,173

4,709,201

Non-current assets
Property, plant and equipment

Total assets

4Transition date
(April 1, 2017)

As ofMarch 31, 2018

(million yen)
As ofMarch 31, 2019

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

524,727

560,381584,939271,767

317,494

329,400

33,46553,58859,060

Income taxes payable, etc.

16,15543,601

16,399Provisions

8,622

8,594

14,336

Other financial liabilities

89,884

92,612

99,097

Other current liabilities

187,016

213,876

222,705

Total current liabilities

1,131,639

1,290,149

1,325,938

1,153,753

1,073,734

1,194,478

Non-current labilities
Bonds payable, borrowings, andlease obligations
Retirement benefit liability

123,989

128,341

133,999

Provisions

36,53735,91430,438Deferred tax liabilities

10,2795,162

3, 550

Other financial liabilities

27,588

22,10917,140

Other non-current liabilities

9,197

9,696

11,895

Total non-current labilities

1,361,346

1,274,959

1,391,503

2,492,986

2,565,108

2,717,442

Share capital

147,143

147,143

147,143

Capital surplus

646,582646, 634

646,793

Retained earnings

1,050,635

1,138,091

1,241,420

Treasury shares(178,853)(179,070)(180,670)

Other components of equity
Equity attributable to owners ofparentNon-controlling interests

115,941

109, 907

71,6501,781,449

1,862,707

1,926,337

54,79659,35765,422

Total equity

1,836,245

1,922,065

1,991,759

4,329,232

4,487,173

4,709,201

Total liabilities
EquityTotal liabilities and equity5(2) Consolidated statement of profit or loss and consolidated statement of comprehensive income
Consolidated statement of profit or loss
(million yen)
Fiscal 2018
(April 1, 2018 –March 31, 2019)

Fiscal 2017
(April 1, 2017 –March 31, 2018)
Revenue

3,627,248

3,873,662

Cost of sales(3,054,388)(3,328,475)

Gross profit

572,860

545,186

Selling, general and administrative expenses
Share of profit (loss) of entities accounted for using
equity method
Other income(336,949)(357,323)(10,173)

42,68530,61930,877

Other expenses(37,979)(29,355)

Business profit

218,378

232,070

Impairment losses(28,453)(10,252)

Loss on remeasurement of retained interest(18,717)－

Expenses for treatment of PCB waste(3,850)－Operating profit

167,357

221,818

Finance income

1,546

2,083

Finance costs(16,026)(14,588)

Profit before tax

152,877

209,313

Income tax expense(49,723)(39,488)

Profit103,153

169,825

Owners of parent

97,635

163,509

Non-controlling interests

5,518

6,315

103,153

169,825

Basic earnings per share (yen)169.34283.81

Diluted earnings per share (yen)169.34283.76

Profit attributable toProfitBasic earnings per share6Consolidated statement of comprehensive income(million yen)
Fiscal 2018
(April 1, 2018 –March 31, 2019)

Fiscal 2017
(April 1, 2017 –March 31, 2018)
Profit103,153

169,825

4,510(4,270)13,751(23,091)

602

(430)

18,864(27,793)

Exchange differences on translation of foreign
operations(2,098)(4,445)

Effective portion of cash flow hedges

2,649

(383)

1,535

(10,824)

2,086(15,653)

20,950(43,446)

124,104

126,378

Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans
Net change in fair value of equity instruments
designated as measured at fair value throughother comprehensive income
Share of other comprehensive income ofinvestments accounted for using equity method
Total of items that will not be reclassified to profit
or loss
Items that may be reclassified to profit or loss

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

Comprehensive income attributable to
Owners of parent

117,483

120,693

Non-controlling interests

6,621

5,685

Comprehensive income

124,104

126,3787

(3) Consolidated statement of changes in equity
Fiscal 2017 (April 1, 2017 – March 31, 2018)(million yen)
Equity attributable to owners of parent
Other components of equity
Net change infair value ofequityinstruments
Remeasurements
designated asof defined benefit
measured at
plans
fair value
through othercomprehensive
incomeCapitalsurplusRetainedearnings

Treasuryshares147,143646,582

1,050,635(178,853)－

119,153

Profit－－97,635－－－

Other comprehensive income

－

－

－

－

4,527

13,819

Share capital

Balance as of April 1, 2017

Comprehensive income－－

97,635－

4,527

13,819Purchase of treasury shares

－

－

－

(226)

－

－

Disposal of treasury shares

－

(4)

－

10

－

－

Change in treasury shares arising fromchange in equity in entities accounted forusing equity method

－

－

－

0

－

－

Dividends－－(34,605)－－－

Share-based payment transactions

－

－

－

－

－

－

－

56

－

－

－

－

－

－

24,427－(4,527)(19,900)

Transfer to non-financial assets

－

－

－

－

－

－

Other

－

－

－

－

－

－

－

52

(10,178)(216)(4,527)(19,900)

147,143646,634

1,138,091(179,070)－

113,073

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

Total transactions with owners
Balance as of March 31, 2018

Equity attributable to owners of parent
Other components of equity
Exchangedifferences on
Effective
translation of portion of cash
foreignflow hedges
operations
Balance as of April 1, 2017

Noncontrollinginterests

Total

Total equity

Total

－

(3,212)

115,941

1,781,449

54,796

1,836,245－－－

97,635

5,518

103,153

Other comprehensive income(1,805)

3,307

19,847

19,847

1,102

20,950Comprehensive income(1,805)

3,307

19,847

117,483

6,621

124,104

Purchase of treasury shares

－

－

－

(226)

－

(226)

Disposal of treasury shares

－

－

－

5

－

5

Change in treasury shares arising fromchange in equity in entities accounted forusing equity method

－

－

－

0

－

0

Dividends－－－(34,605)(2,176)(36,781)

Share-based payment transactions

－

－

－

－

－

－

－

－

－

56

(56)

－

－

－

(24,427)－－－

Transfer to non-financial assets－(1,454)(1,454)(1,454)－(1,454)

Other

－

－

－

－

172

172

－

(1,454)(25,882)(36,224)(2,060)(38,285)(1,805)(1,359)109,907

1,862,707

59,357

1,922,065

ProfitChanges in ownership interest in
subsidiaries
Transfer from other components of equity
to retained earnings

Total transactions with owners
Balance as of March 31, 20188

Fiscal 2018 (April 1, 2018 – March 31, 2019)(million yen)
Equity attributable to owners of parent
Other components of equity

Capitalsurplus

Share capital

Balance as of April 1, 2018

Retainedearnings

TreasurysharesNet change infair value ofequityinstruments
Remeasurements
designated asof defined benefit
measured at
plans
fair value
through othercomprehensive
income147,143646, 634

1,138,091(179,070)－

113,073

Profit－－163,509－－－

Other comprehensive income

－

－

－

－

(4,630)(23,108)

Comprehensive income－－

163,509－(4,630)(23,108)

Purchase of treasury shares

－

－

－

(1,627)

－

－

－

(16)

－

27

－

－

－

－

－

－

－

－

－

－

(54,784)

－

－

－

－

170

－

－

－

－

－

4

－

－

－

－

－

－

(5,396)

－

4,630

766

－

－

－

－

－

－

－

－

－

－

－

－

－

158

(60,181)(1,600)

4,630

766

147,143646,793

1,241,420(180,670)－

90,730

Disposal of treasury shares
Change in treasury shares arising fromchange in equity in entities accounted forusing equity method
Dividends
Share-based payment transactions
Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings
Transfer to non-financial assets
Other
Total transactions with owners
Balance as of March 31, 2019

Equity attributable to owners of parent
Other components of equity
Exchangedifferences on
Effective
translation of portion of cash
foreignflow hedges
operations
Balance as of April 1, 2018
Profit(1,805)(1,359)Noncontrollinginterests

Total

Total equity

Total

109,907

1,862,707

59,357

1,922,065－－－

163,509

6,315

169,825

Other comprehensive income(14,742)(334)(42,816)(42,816)(630)(43,446)

Comprehensive income(14,742)(334)(42,816)

120,693

5,685

126,378－－－(1,627)

－

1,627

－

－

－

10

－

10

－

－

－

－

－

－

－

－

－

(54,784)(1,972)(56,756)

－

－

－

170

－

170

－

－

－

4

(4)

－

－

－

5,396

－

－

－

－

(838)

(838)

(838)

－

(838)

－

－

－

－

2,356

2,356

Purchase of treasury shares
Disposal of treasury shares
Change in treasury shares arising fromchange in equity in entities accounted forusing equity method
Dividends
Share-based payment transactions
Changes in ownership interest in
subsidiaries
Transfer from other components of equity
to retained earnings
Transfer to non-financial assets
Other
Total transactions with owners
Balance as of March 31, 2019

－

(838)

4,558

(57,064)379(56,684)(16,547)(2,532)

71,6501,926,337

65,422

1,991,759

9

(4) Consolidated Statement of Cash Flow(million yen)
Fiscal 2018
(April 1, 2018 –March 31, 2019)

Fiscal 2017
(April 1, 2017 –March 31, 2018)
Cash flows from operating activities
Profit before tax

152,877

209,313

Depreciation and amortization

182,646

196,243

(724)

(23)

Interest and dividend income(9,427)(10,627)

Interest expenses

15,446

13,648Decrease (increase) in trade and otherreceivables(72,082)

2,533

Decrease (increase) in inventories(78,270)(82,525)

Increase (decrease) in trade and other payables

30,01019,691

Other

132,500(669)

Subtotal

352,977

347,585

Interest and dividends received

16,35519,014

Interest paid

(12,906)(12,606)

Income taxes paid

(28,067)(85,741)

Cash flows from operating activities

328,358

268,251(268,379)(312,578)

2,994

488

(10,847)(8,394)

Proceeds from sale of investments

64,798

6,889

Other

(5,020)243(216,454)(313,351)

Changes in allowance

Cash flows from investing activities
Purchase of property, plant and equipment,
intangible assets, and investment property
Proceeds from sale of property, plant andequipment, intangible assets, and investment
property
Purchase of investments

Cash flows from investing activities

10(million yen)
Fiscal 2018
(April 1, 2018 –March 31, 2019)

Fiscal 2017
(April 1, 2017 –March 31, 2018)
Cash flows from financing activities
Net increase (decrease) in short-term borrowings

4,556

18,752

Increase (decrease) in commercial papers(1,999)77,000

Proceeds from long-term borrowings

378,474

213,499

Repayments of long-term borrowings(398,061)(200,487)

Proceeds from issuance of bonds

20,00030,000

Redemption of bonds(50,000)(15,000)(226)(1,627)

Dividends paid to owners of parent(34,510)(54,640)

Other(18,060)(15,614)

Cash flows from financing activities(99,828)

51,882(7,167)

388

Payments for purchase of treasury shares

Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

4,908

7,170

Cash and cash equivalents at beginning of period

70,20975,117

Cash and cash equivalents at end of period

75,11782,28811

(5) Notes to Consolidated Financial Statements
Notes Pertaining to the Presumption of a Going Concern
There is no item for this period.
Reporting entity
JFE Holdings, Inc. (the “Company”) is an incorporated company established under Japan’s Companies Act and islocated in Japan.
The consolidated financial statements of the Company, as of March 31, 2019, encompass the Company and its
subsidiaries (the “Group”) and its interests in affiliates and joint arrangements of the Company.
Details of the Group's business are described in “Segment Information.”
Basis of preparation(1) Statement of compliance with IFRS and notes on first-time adoption
The Company meets the requirements of a “specified company complying with designated international accounting
standards” as specified in Article 1-2 of the Regulation on Terminology, Forms, and Preparation Methods ofConsolidated Financial Statements (Ministry of Finance Order No. 28 of October 30, 1976; “Consolidated Financial
Statements Regulations”), and the Company therefore prepares its consolidated financial statements in accordancewith IFRS, in accordance with Article 93 of the Consolidated Financial Statements Regulations.
The Group adopted IFRS for the first time in the fiscal year ended March 31, 2019. The date of transition to IFRS(“transition date”) is April 1, 2017. The effects of the transition to IFRS on the financial position, business results, andcash flows of the Group as of the transition date and comparative year are described in “First-time adoption.”With the exception of IFRSs not adopted early and the exemptions permitted under IFRS 1, “First-time Adoption ofInternational Financial Reporting Standards” (“IFRS 1”), the Group's accounting practices are in compliance withIFRS effective as of March 31, 2019. Exemptions used are described in “First-time adoption”(2) Basis of measurement
The Group’s consolidated financial statements have been prepared based on acquisition cost, with the exception offinancial instruments, etc., described in “Significant accounting policies.”(3) Functional currency and reporting currency
The Group’s consolidated financial statements are presented in Japanese yen, which is the Company’s functional
currency. Amounts less than one million yen are rounded down.
Significant accounting policies(1) Basis of consolidation(i) Subsidiaries
Subsidiaries are those companies over which the Company has control. If the Group has an exposure or right tovariable returns from involvement in the investee, and has the ability to use its power over the investee to affect theamount of returns, then it is regarded as controlling the investee.
The financial statements of subsidiaries are included in the consolidated financial statements of the Group from thedate of acquisition of control to the date of loss of control.
If there is a change in equity interest in a subsidiary without loss of control, it is accounted for as a capital transaction.
If there is a change in equity interest in a subsidiary accompanied by a loss of control, the subsidiary's assets andliabilities, non-controlling interests related to the subsidiary, and other components of equity are derecognized, withany gain or loss resulting therefrom recognized in profit or loss.
For subsidiaries whose reporting periods end on a date that differs from that of the parent entity, provisional financial
statements as of the consolidated reporting date are used.
(ii) Associates and joint arrangements
Associates: An entity in which the Group owns at least 20% and at most 50% of the voting rights is considered an
associate unless it can be clearly demonstrated that the Company cannot exercise influence over financial andoperating policy decisions of the entity. An entity in which the Group owns less than 20% of the voting rights is
considered an associate if the Company can exercise influence over financial and operating policy decisions of theentity. Investments in associates are accounted for using the equity accounting method.
A joint arrangement is an arrangement in which two or more parties have joint control such that decisions about therelevant activities of the arrangement require the unanimous consent of the parties sharing control. If the parties thatshare joint control have rights to the assets and obligations for the liabilities relating to the arrangement, it is called ajoint operation. If the parties that share joint control have rights to the net assets of the arrangement, it is called a joint
venture. In relation to its interest in a joint operation, the Group recognizes its share of assets, liabilities, revenue,
and expenses. Joint ventures are accounted for using the equity accounting method.
For associates whose reporting periods end on a date that differs from that of the parent entity, provisional financial
statements as of the consolidated reporting date are prepared.
For JSW Steel Limited, provisional financial statements are prepared based on December 31 as the reporting datebecause local legislation imposes restrictions on when certain information becomes available to the Company.
Necessary adjustments have been made for material transactions or events disclosed between JSW Steel Limited’s
provisional reporting date and the consolidated reporting date.
(iii) Consolidation eliminations
The balances of receivables and payables and transactions within the Group, and unrealized gains and losses arising12

from transactions within the Group, have been eliminated when preparing consolidated financial statements.
(2) Business combinations
Business combinations are accounted for using the acquisition method.
Identifiable assets acquired through business combinations, liabilities assumed, non-controlling interests of theacquiree, and goodwill are recognized on the acquisition date (the date on which the acquirer obtains control of theacquiree). As a general rule, identifiable assets acquired and liabilities assumed are measured at fair value.
If the total value of the fair value of consideration (including contingent consideration) transferred in the businesscombination, the amount of any non-controlling interests of the acquiree, and the fair value of the acquirer’s previously
held equity interest in the acquiree (“Value A”) exceeds the net value (usually the fair value) of the acquiree's
identifiable assets and liabilities assumed (“Value B”), the excess is recognized as goodwill. If, on the other hand,
Value A is less than Value B, the difference is recognized in profit or loss as of the acquisition date.
Acquisition costs incurred are recognized as expenses when incurred.
For each individual transaction, the Company chooses to measure non-controlling interests at fair value or as aproportionate share of the fair value of identifiable net assets of the acquiree.
(3) Foreign currency translation(i) Translation of foreign currency transactions
Foreign currency transactions are translated into the functional currency of each company using the exchange rateor similar rate prevailing on the transaction date. Monetary items denominated in foreign currencies at the end of thereporting period are translated into the functional currency at the exchange rate prevailing at the end of the reporting
period, and the resulting exchange differences are recognized in profit or loss. When the valuation difference of a
non-monetary item is recognized in other comprehensive income, any exchange component is recognized in othercomprehensive income, and when a non-monetary item is recognized in profit or loss, any exchange component isrecognized in profit or loss.
(ii) Translation of foreign operations
Assets and liabilities of foreign operations are translated at the exchange rates prevailing at the end of the reporting
period. In addition, revenues and expenses of foreign operations are translated at the average exchange rates forthe reporting period unless exchange rates fluctuated significantly during the period. Exchange differences arisingfrom translation are recognized in other comprehensive income, and the accumulated amount is included in othercomponents of equity.
When disposing of foreign operations, the cumulative amount of exchange differences related to the foreign
operations is recognized in profit or loss at the time of disposal. Note that the Group has used the exemption specified
in IFRS 1 that permits it to transfer the cumulative exchange differences that existed at the IFRS transition date toretained earnings.
(4) Financial instruments(i) Financial assets
a. Initial recognition and measurement
Financial assets are classified either as financial assets measured at amortized cost at the time of initial recognition
or as financial assets measured at fair value. The Group recognizes a financial asset on the transaction date on
which it becomes a party to the contractual provisions of the financial asset.
Financial assets that meet the following conditions are classified as financial assets measured at amortized cost:• The asset is held in a business model of which the objective is to hold the asset in order to collect its
contractual cash flows• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding
Financial assets other than financial assets measured at amortized cost are classified as financial assets measured
at fair value.
With the exception of equity financial assets held for trading purposes that must be measured at fair value throughprofit or loss, equity financial assets measured at fair value are individually classified either as measured at fairvalue through profit or loss or as measured at fair value through other comprehensive income, with thatclassification being made when the asset is initially recognized and applying continuously thereafter.
With the exception of financial assets measured at fair value through profit or loss, financial assets are measured
at fair value at initial recognition plus transaction costs directly attributable to the acquisition. Financial assets
measured at fair value through profit or loss are measured at fair value at initial recognition, and transaction costs
directly attributable to the transaction are recognized in profit or loss.
b. Measurement subsequent to initial recognition(a) Financial assets measured at amortized cost
After initial recognition, measurement is the amortized cost using the effective interest method.
(b) Financial assets measured at fair value through profit or loss
After initial recognition, measurement is the fair value with subsequent changes recognized in profit or loss.
(c) Equity financial assets measured at fair value through other comprehensive income
After initial recognition, measurement is the fair value with subsequent changes recognized in othercomprehensive income.
Amounts recognized in other comprehensive income are transferred to retained earnings when an asset isderecognized or its fair value declines significantly (except when recovery is deemed probable); they are nottransferred to profit or loss. Dividends derived from such financial assets are recognized as profit or loss.
13

c. Derecognition
Financial assets are derecognized when the contractual rights to receive cash flows have expired or when thecontractual rights to receive cash flows have been transferred and substantially all risks and rewards of ownershipof the financial asset are transferred to another entity.
d. Impairment
For financial assets measured at amortized cost, the Company recognizes allowances for doubtful accounts basedon expected credit losses.
Allowances for doubtful accounts are calculated as the present value of the difference between the contractual
cash flows due to the Group and the cash flows that the Group expects to receive.
The Group determines whether the credit risk on each financial asset has increased significantly since initialrecognition on each reporting date, and if the credit risk has not increased significantly since initial recognition, theamount of the allowance for doubtful accounts is assessed based on the expected credit losses (expected credit
losses over 12 months) resulting from default events that may occur within 12 months. If, on the reporting date,credit risk on a financial asset has increased significantly since initial recognition, the amount of the allowance for
doubtful accounts is assessed based on the expected credit losses arising from all possible default events over the
expected lifetime of the financial asset (expected credit losses over full lifetime). However, in the case of tradereceivables, contract assets, and lease receivables that do not contain a significant financing component,
regardless of the above, the amount of the allowance for doubtful accounts is always measured using the expectedcredit losses for the instrument’s full lifetime.
Provisions for allowances for loan losses on financial assets are recognized in profit or loss. If the case of events
that reduce the allowance for loan losses, reversals of allowances for loan losses are recognized in profit or loss.
Estimates of allowances for doubtful accounts relating to financial assets reflect the following.
• Unbiased probability-weighted amounts calculated by evaluating a range of possible outcomes• Time value of money• Rational and supportable information about past events, current conditions, and forecasts of future economic
conditions, available at the reporting date without undue cost or effort(ii) Financial liabilities
a. Initial recognition and measurement
Financial liabilities are classified either as financial liabilities measured at amortized cost at the time of initialrecognition or as financial liabilities measured at fair value through profit or loss. The Group initially recognizes
issued debt securities on the date of issue, and other financial liabilities are initially recognized on the transaction
date on which the Group becomes a party to the contractual provisions of the financial liability.
Financial liabilities measured at amortized cost are measured at fair value at the time of initial recognition minustransaction costs directly attributable to the issue of the instruments. However, financial liabilities measured at fairvalue through profit or loss are measured at fair value at the time of initial recognition.
b. Measurement subsequent to initial recognition(a) Financial liabilities measured at amortized cost
After initial recognition, measurement is the amortized cost using the effective interest method.
(b) Financial liabilities measured at fair value through profit or loss
After initial recognition, measurement is the fair value with subsequent changes recognized in profit or loss.
c. Derecognition
Financial liabilities are derecognized when the financial liabilities expire; that is, when the liabilities are discharged,
are cancelled, or expire.
(iii) Derivative and hedge accounting
The Group enters into derivative transactions such as forward exchange contracts and interest rate swaps in orderto hedge foreign exchange risk, interest rate risk, and the like.
At the inception of the hedge, the Group formally designates and documents the risk management purpose andstrategy for the hedging relationship and the implementation of the hedge. This documentation identifies the hedging
instrument, the item or transaction being hedged, the nature of the risk being hedged, and the method of evaluating
the effectiveness of the hedging instrument in offsetting the exposure to changes in the fair value or cash flows of thehedged item due to the risk being hedged. The Group expects these hedges to be highly effective in offsettingchanges in fair value or cash flows due to the risks being hedged; however, the hedges are assessed on an ongoingbasis to determine whether they have actually been highly effective or note throughout the hedging periods.
Derivatives are initially recognized at fair value. After initial recognition, fair value is measured and subsequentchanges are treated as shown immediately below.
a. Fair value hedges
Changes in the fair value of derivatives used as hedging instruments are recognized in profit or loss or othercomprehensive income. Changes in the fair value of the hedged item corresponding to the hedged risk arerecognized in profit or loss or other comprehensive income, with the carrying amount of the hedged item being
adjusted.
b. Cash flow hedges
The portion of the change in the fair value of derivatives used as hedging instruments that is determined to be aneffective hedge is recognized in other comprehensive income, and the cumulative amount is included in other14

components of equity. The portion of hedges that is ineffective is recognized in profit or loss. Amounts accumulated
in other components of equity are reclassified from other components of equity to profit or loss in the accounting
period in which the transaction being hedged affects profit or loss. However, if the forecast transaction being
hedged subsequently results in the recognition of a non-financial asset or non-financial liability, the amountaccumulated in other components of equity is treated as an adjustment to the initial book value of that non-financial
asset or non-financial liability.
Hedge accounting is discontinued prospectively when the hedging instrument expires, is sold, or is terminated or
exercised, or if the derivative no longer meets the requirements for hedge accounting. When the forecast
transaction is no longer expected to occur, the amount accumulated in other components of equity is immediately
reclassified from other components of equity to profit or loss.
c. Derivatives not designated as hedges
Changes in the fair value of such derivatives are recognized in profit or loss.
(iv) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset and presented at net when the Group has a legally enforceable
right to offset the recognized amounts and intends to settle on a net basis or intends to realize the asset and settle
the liability simultaneously.
(5) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, readily available deposits, and short-term investments maturing
within three months that are readily convertible to cash and subject to an insignificant risk of changes in value.
(6) Inventories
Inventories are measured at the lower of cost and net realizable value. Cost consists of material costs, direct laborcosts, other direct costs, and an appropriate allocation of related manufacturing overhead costs. Net realizable value
is calculated by deducting the estimated selling costs from the estimated selling price. Cost is mainly calculated basedon the weighted-average method.
(7) Property, plant and equipment (excluding leased assets)
The Group uses the cost model to measure the carrying value of property, plant and equipment subsequent to its
recognition. Under this model, property, plant and equipment is carried at its cost less any accumulated depreciation
and any accumulated impairment losses.
Property, plant and equipment other than land and construction in progress are mainly depreciated using the straightline method.
The estimated useful lives of major asset items are as follow:• Buildings and structures: 2–75 years• Machinery and vehicles: 2–27 years
The estimated useful lives, depreciation methods, and residual values of property, plant and equipment are reviewed
at the end of each fiscal year.
(8) Goodwill and intangible assets(i) Goodwill
Goodwill is not amortized; it is tested for impairment annually or whenever an indication of impairment exists.
Impairment losses on goodwill are recognized in the consolidated statement of profit or loss and are not subsequently
reversed.
Goodwill is carried at book value less accumulated impairment losses.
(ii) Intangible assets (excluding leased assets)
Intangible assets acquired separately are measured at cost at the time of initial recognition. Intangible assets acquiredin business combinations are measured at fair value as of the acquisition date.
The Group uses the cost model to measure the carrying value of intangible assets subsequent to their recognition.
Under this model, intangible assets are carried at cost less any accumulated amortization and any accumulated
impairment losses.
Intangible assets whose useful lives can be determined are amortized using the straight-line method over theirestimated useful lives. Intangible assets mainly comprise software for internal use and have estimated useful lives of
2–10 years.
(9) Leases
Leases for which all risks and rewards of ownership have effectively been transferred to the Group are classified as
finance leases, and leases other than finance leases are classified as operating leases.
(i) Finance leases
Assets and lease liabilities related to finance leases are recognized at the commencement date of the lease basedon the lesser of the fair value of the leased property and the present value of the minimum lease payments.
Property, plant and equipment acquired as a finance lease are depreciated using the straight-line method over the
shorter of the estimated useful life of the asset or the lease term.
Lease payments are allocated to finance costs and repayments of lease obligations based on the interest method,and finance costs are recognized in the consolidated statement of profit or loss.
(ii) Operating leases
15

Operating lease payments are recognized on a straight-line basis over the lease term.
(10) Investment property
Investment property is real estate held for the purpose of earning rental income, capital gains, or both.
The Group uses the cost model to measure the carrying value of investment property subsequent to its recognition.
Under this model, investment property is carried at cost less any accumulated depreciation and any accumulated
impairment losses.
Investment property other than land is depreciated mainly using the straight-line method over the estimated usefullife. The estimated useful life of the Company’s main investment properties is 26 years.
The estimated useful lives, depreciation methods, and residual values of investment properties are reviewed at theend of each fiscal year.
(11) Impairment of non-financial assets
For property, plant and equipment and intangible assets, if there is any indication at the end of each reporting periodthat an asset may be impaired, the asset is assessed based on its recoverable value, being the higher of fair valueless costs to sell and its value in use; if the carrying value of the asset exceeds its recoverable value, then the asset
is impaired and is written down to its recoverable value.
Goodwill and intangible assets with indefinite useful lives are tested for impairment annually and whenever there is
any indication of impairment.
Impairment losses recognized on assets other than goodwill in previous years are assessed at the end of eachreporting period to determine whether there is any indication that the recognized impairment loss may no longer exist
or may have decreased. If any such indication exists, the recoverable amount is estimated, and if the recoverable
amount exceeds the carrying amount of the asset or the cash-generating unit to which the asset belongs, animpairment reversal is recognized and the carrying amount is increased to the recoverable amount subject to thecondition that the carrying amount of the asset may not exceed the carrying amount (net of accumulated depreciationor accumulated amortization) that would have been determined had no impairment loss been previously recognized.
Impairment losses recognized on goodwill are not reversed in subsequent periods.
(12) Post-employment benefits(i) Defined benefit plans
Defined benefit plans are any retirement benefit plans other than defined contribution plans. For each separate plan,the defined benefit obligation is calculated by estimating the future benefits earned as compensation for services
provided by employees in previous and current fiscal years, and discounting that amount to the present value. The
fair value of plan assets is deducted from the result of that calculation. The discount rate is determined with reference
to the market yields of high quality corporate bonds that are denominated in the same currency as the expected
benefit payment and that have approximately the same maturity as the Group's defined benefit obligation.
If a retirement benefit plan is revised, costs related to the variable portion of benefits related to employees’ past
service are immediately recognized in profit or loss.
The Group recognizes changes in net defined benefit liability (asset) due to remeasurement in other comprehensive
income and immediately transfers the amounts to retained earnings.
(ii) Defined contribution plans
Expenses related to defined contribution plans are recognized as expenses in the period in which the employees
provide the services.
(13) Share-based payment
The Company has instituted share-based payment plans through which a portion of the compensation of directors(excluding outside directors) and executive officers (excluding non-residents under income tax law) of the Company
and its operating companies is provided in the form of cash-settled share-based payments and equity-settled sharebased payments through employee stock ownership plans. The Group’s objective is to establish a clear link between
compensation and the Group’s operating performance and equity value and encourage the sharing of value withshareholders, thereby creating a greater incentive to contribute toward enhancing shareholder value over the medium
and long term.
For equity-settled share-based payments, compensation for services received is measured with reference to the fairvalue of Company shares granted. The calculated consideration for services is recognized as an expense, and thesame amount is recognized as an increase in equity.
For cash-settled share-based payments, the fair value of the amount paid is recognized as a liability, and changes in
the fair value of the liability are recognized in profit or loss over the period up until an unconditional right tocompensation is established.
(14) Provisions
Provisions are recognized when the Company has a present obligation (legal obligation or constructive obligation)
resulting from past events, it is likely that an outflow of resources embodying economic benefits will be required tosettle the obligation, and a reliable estimate of the amount of the obligation can be made.
If the impact of the time value of money is material, provisions are measured at a discounted amount calculated using
a discount rate that reflects the risks specific to the liability.
(15) Revenue
With the exception of interest, dividend income, etc., under IFRS 9 Financial Instruments, the Group uses thefollowing five-step approach in recognizing revenue that reflects the amount of consideration to which the Company
16

expects to be entitled in exchange for the transfer of goods and services to customers:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to a distinct performance obligation of the contract
Step 5: Recognize revenue when the performance obligation is fulfilled (or as it is fulfilled).

With respect to sales of steel products, etc. in the steel business, revenues mainly are recognized at the point ofshipment, when the customer assumes the significant risk and economic value of ownership of the product being
physically transferred and the right to receive payment is confirmed.
With regard to construction contracts, etc. in the engineering business, we mainly estimate the progress of fulfilling
performance obligations, and revenue is recognized over a fixed period based on the degree of progress.
With respect to the sale of steel products, etc. in the trading business, revenues are recognized at the point of physicaltransferring ownership rights and physical ownership of the product to the customer, and the significant risk andeconomic value associated with ownership, and the right to receive payment is confirmed. In addition, for certaintransactions in the trading business, the company has the responsibility to carry out work as an agent.
Revenue is measured at the amount that deducts price reduction and rebates, etc. from the promised value in thecontract with the customer.
When the Group is engaged in a transaction as a party to the transaction, revenue is presented as the total
consideration received from the customer. When the Group is engaged in transactions as an agent for a third party,
revenue is presented as a fee, calculated as the total amount of consideration received from the customer minus theamount collected for the third party.
(16) Business profit
Business profit is profit before income taxes excluding financial income and one-time items of materially significant
value. It is a benchmark indicator of the Company’s consolidated earnings.
(17) Finance income and costs
Finance income consists mainly of interest income, and finance costs consist mainly of interest expenses. Interest
income is recognized as income when it is incurred using the effective interest method. Interest expense is recognized
as an expense when it is incurred using the effective interest method.
(18) Dividend income
Dividend income is recognized in profit or loss when the right to receive the dividend is established.
Of the shares and investments held by the Group, dividends received on those held for the purpose of facilitating
business transactions are included in other income.
(19) Income taxes
Income tax expense consists of current tax expense and deferred tax expense. These items are recognized in profit
or loss except when they arise from items that are directly recognized in other comprehensive income or equity andwhen they arise from business combinations.
Current tax expense is measured in an amount that reflects the amount the Company expects the tax authorities torefund or expects to pay to the tax authorities. The tax rate and tax law used to calculate the amount of tax are thosethat are enacted or substantively enacted at the end of the reporting period.
Deferred tax assets and deferred tax liabilities are recognized for temporary differences, which are the differences
between the carrying amounts and tax bases of assets and liabilities, and for unused tax losses and unused tax
credits. They are measured using the tax rate and tax law applicable to the fiscal year in which the temporary
difference, etc., is expected to be resolved.
Deferred tax liabilities are recognized for taxable temporary differences excluding the following:• Temporary differences arising from initial recognition of goodwill• Temporary differences resulting from the initial recognition of an asset or liability in a transaction that is not abusiness combination and does not affect accounting income or taxable income at the time of the transaction• Taxable temporary differences arising from investments in subsidiaries and associates, and interests in joint
arrangements, when the Company is able to control the timing of the reversal of the temporary difference and it
is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognized for deductible temporary differences, unused tax losses, and unused tax credits,but only to the extent that it is probable that future taxable profit will be available against which the deductible
temporary difference, etc., can be utilized, except when the deductible temporary difference, etc., results from theinitial recognition of an asset or liability in a transaction that is not a business combination and does not affectaccounting income or taxable income at the time of the transaction.
Deferred tax assets are recognized for deductible temporary differences arising from investments in subsidiaries andassociates, and interests in joint arrangements, only when it is probable that the temporary difference will reverse in
the foreseeable future and it is probable that taxable profit will be available against which the deductible temporary
difference can be utilized.
Deferred tax assets and deferred tax liabilities are offset only there is a legally enforceable right to offset income taxes
payable and income taxes receivable and either of the following criteria is met:
• The deferred tax assets and the deferred tax liabilities relate to income tax levied on the same taxable entity
17

by the same tax authority• The deferred tax assets and deferred tax liabilities relate to income tax levied on separate taxable entities by
the same tax authority, and the taxable entities intend to settle income taxes receivable and income taxes
payable on a net basis or realize the assets and settle the liabilities simultaneously.
(20) Equity(i) Share capital and capital surplus
Capital paid in by shareholders is recognized in share capital or capital surplus.
(ii) Treasury shares
When treasury shares are acquired, the consideration paid, including direct transaction costs, is recognized as contraequity.
(21) Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the parent company by theweighted average number of common shares on issue during the fiscal year.
Diluted earnings per share is calculated by adjusting for the impact of all dilutive potential shares.

18

Segment information(1) Overview of reportable segments
The Group organized under JFE Holdings executed commercial activities through three operating companies—JFE
Steel Corporation, JFE Engineering Corporation and JFE Shoji Trade Corporation—in accordance with thecharacteristics of their respective businesses. Consolidated reporting segments, one for each operating company, werecharacterized by their constituent products and services.
Each segment had its own respective products and services. The steel business produced and sold various steel
products, processed steel products and raw materials, and provided transportation and other related businesses suchas facility maintenance and construction. The engineering business handled engineering for energy, urban environment,
steel structures and industrial machines, recycling and electricity retailing. The trading business purchased, processedand distributed steel products, raw materials for steel production, nonferrous metal products, and food, etc.
(2) Information on reportable segments
The accounting treatments for the Group's reported business segments are generally the same as described in thesection “Significant accounting policies.”
The Group assesses segment performance on the basis of segment profit. Segment profit is profit before tax excluding
one-time items of a materially significant value.
Intersegment transactions are based on market prices and the like.
Transition date (April 1, 2017)

Steel

Segment assets

3,713,843

Engineering

387,541

Trading

630,927(million yen)Amountrecorded in
Total
Adjustments1 consolidated
financialstatements
4,732,313(403,080)
4,329,232

Other assets
Investments accounted for
257,164
9,537
10,460277,162
55,265
332,428
using equity method
1 Adjustments to segment assets include corporate assets not allocated to a reportable segment: 116,803 million yen
and elimination of intersegment receivables and payables, etc.: -519,884 million yen. Corporate assets are assetsof the Company.

19

Fiscal 2017 (April 1, 2017 to March 31, 2018)

Steel

Engineering

Trading

Total(million yen)Amountrecorded in
Adjustments1 consolidated
financialstatements

Revenue
Revenue from externalcustomers
Intersegment revenue

2,378,107

391,223

857,917

3,627,248－

357,669

10,296

141,451

509,417(509,417)

－

Total

2,735,777

401,519

999,368

4,136,666(509,417)

3,627,248

187,240

18,73635,186

241,163(37,264)

203,898

Segment profit
Impairment losses
Loss on remeasurement ofremaining interest
Expenses for treatment of PCB
waste
Profit before tax
Segment assets

3,627,248(28,453)(18,717)(3,850)152,877
3,826,432

384,232

711,849

4,922,513(435,340)

4,487,173

3

182,646

Other items
Depreciation andamortization
Impairment losses

168,985

7,540

6,117

182,643(23,071)(2,797)(2,584)(28,453)－(28,453)

Finance income

1,151

111

510

1,772

(226)

1,546

Finance costs(13,888)(704)(2,010)(16,603)577(16,026)
Share of profit of entities
accounted for using equity
20,087
1,051
1,439
22,577(32,751)(10,173)
methodInvestments accounted for
9,648
12,787265,941
23,281
289,223
243,505
using equity method
Capital expenditures
282,245
11,4956,570
300,3101
300,311
1 Adjustments are as follow:(1) Adjustments to segment profit include corporate profit not allocated to a reportable segment: 18,010 million
yen, elimination of dividend income from each reportable segment: -17,780 million yen, and share of loss ofentities accounted for using equity method related to Japan Marine United Corporation: -31,827 million yen;elimination of other intersegment transactions: -5,667 million yen. Corporate profit is profit of the Company.
(2) Adjustments to segment assets include corporate assets not allocated to a reportable segment: 41,866 million
yen and elimination of intersegment receivables and payables, etc.: -477,207 million yen. Corporate assets
are assets of the Company.

20

Fiscal 2018 (April 1, 2018 to March 31, 2019)

Steel

Engineering

Trading

Total(million yen)Amountrecorded in
Adjustments1 consolidated
financialstatements

Revenue
Revenue from externalcustomers
Intersegment revenue

2,441,696

471,673

960,292

3,873,662－

388,953

14,142

165,568

568,663(568,663)

－

Total

2,830,649

485,815

1,125,861

4,442,326(568,663)

3,873,662

161,383

20,10435,761

217,250

2,315

219,566

Segment profit

3,873,662

Impairment losses(10,252)

Profit before tax

209,313

Segment assets

3,951,109

416,079

756,258

5,123,448(414,246)

4,709,201

Other items
Depreciation andamortization
Impairment losses

182,343

7,878

6,020

196,2412

196,243(9,736)

(470)

(44)

(10,252)－(10,252)

Finance income

1,451

141

717

2,311

(228)

2,083

Finance costs(11,399)(701)(2,885)(14,986)398(14,588)
Share of profit of entities
accounted for using equity
38,7771,351
1,075
41,205
1,480
42,685methodInvestments accounted for
268,568
10,415
13,814
292,798
22,265315,064
using equity method
Capital expenditures
306,285
11,648
11,571
329,504
1
329,505
1 Adjustments are as follows.
(1) Adjustments to segment profit include corporate profit not allocated to a reportable segment: 104,233 million
yen, elimination of dividend income from each reportable segment: -103,928 million yen, and share of profit
of entities accounted for using equity method related to Japan Marine United Corporation: 219 million yen;elimination of other intersegment transactions: 1,791 million yen. Corporate profit is profit of the Company.
(2) Adjustments to segment assets: Corporate assets not allocated to a reportable segment: 61,666 million yen
and elimination of intersegment receivables and payables, etc.: -475,913 million yen. Corporate assets areassets of the Company.

21

Per-share information(1) Basic earnings per share and diluted earnings per share
Fiscal 2017
(April 1, 2017
– March 31, 2018)

Fiscal 2018
(April 1, 2018
– March 31, 2019)

Basic earnings per share (yen)169.34283.81

Diluted earnings per share (yen)169.34283.76(2) Basis for calculation of basic earnings per share and diluted earnings per share
Fiscal 2017
(April 1, 2017
– March 31, 2018)
Profit used in calculation of basic earnings per share anddiluted earnings per share
Profit attributable to owners of the parent company(million yen)Amount not attributable to common shareholders of
the parent company (million yen)
Profit used in calculation of basic earnings per share(million yen)
Profit adjustments (million yen)
Profit used in calculation of diluted earnings per share(million yen)
Weighted average number of common shares used in
calculation of basic earnings per share and diluted
earnings per share
Weighted average number of common shares used in
calculation of basic earnings per share (thousand
shares)
Impact of dilutive potential common shares(thousand shares)
Share-based payments
Weighted average number of common shares used in
calculation of diluted earnings per share (thousand
shares)Fiscal 2018
(April 1, 2018
– March 31, 2019)

97,635

163,509－－

97,635

163,509－－

97,635

163,509576,572

576,117－

114

576,572

576,231

Note: Company shares held in trust accounts for employee stock ownership plans are included in treasury shares, which
are excluded from the calculation of the weighted average number of shares used in the calculation of basic
earnings per share. The weighted average number of treasury shares excluded from the calculation of basic
earnings per share for the current consolidated fiscal year is 378,000.
Material subsequent events
There is no item for this period.

22

First-time adoption
Starting from the fiscal year ended March 31, 2019, the Group is disclosing IFRS-compliant consolidated financial
statements. The most recent consolidated financial statements prepared in accordance with Japanese GAAP are forthe year ended March 31, 2018, and the date of transition to IFRS is April 1, 2017.
(1) Exemptions under IFRS 1
In principle, IFRS 1 requires companies applying IFRS for the first time to apply IFRS retrospectively, but some option
exemptions are available.
Of the exemptions from retrospective application of IFRSs permitted by IFRS 1, the Group has elected the following:(i) Business combinations
An entity may elect not to retrospectively apply IFRS 3 Business Combinations to business combinations that
occurred before the date of transition to IFRS. The Group has elected not to apply IFRS 3 retroactively. The amountof goodwill arising from business combinations before the transition date is based on the carrying amount underJapanese GAAP, and that goodwill has been tested for impairment as of the transition date regardless of whether
any indications of impairment exists.
(ii) Deemed cost
An entity may measure property, plant and equipment and investment property at fair value at the date of transition
to IFRS. The Group uses the fair value as of the transition date as the deemed cost under IFRS for certain property,
plant and equipment and certain investment properties.
(iii) Exchange differences on translation of foreign operations
An entity may elect to reset cumulative exchange differences on translation of foreign operations to zero as of thetransition date. The Group has reset its cumulative exchange differences on translation of foreign operations tozero as of the transition date, with the entire amount being transferred to retained earnings.
(iv) Leases
An entity may elect to determine whether any arrangement contains a lease based on the facts and circumstances
existing at the transition date. The Group has made such determinations based on the facts and circumstances
existing at the transition date.
(v) Borrowing costs
An entity may elect to start capitalization of borrowing costs relating to qualifying assets on the date of transition to
IFRS. The Group has elected to start capitalization of borrowing costs relating to qualifying assets on the transition
date.
(vi) Designation of financial instruments recognized before the transition dateAn entity may elect to make designations in accordance with IFRS 9 Financial Instruments based on the facts andcircumstances existing at the transition date. The Group has made such designations based on the facts andcircumstances existing at the transition date.

23

(2) Reconciliations
The following reconciliations are required for first-time adoption of IFRS:
Items that do not affect retained earnings and comprehensive income are shown under “Reclassifications” and items
that affect retained earnings or comprehensive income are shown under “Recognition and measurement differences.”
Figures based on Japanese GAAP (J-GAAP) as of the date of transition to IFRS and for the previous fiscal year
reflect the retroactive application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018).
Reconciliation of equity as of April 1, 2017 (transition date)(million yen)
J-GAAP item

J-GAAP

Recognition
Reclassificati
andmeasurement
ons
differences

IFRS

Notes

IFRS item

AssetsAssetsCurrent assets
Cash and deposits

69,936(553)

825

70,209(1)

Notes and accounts
receivable – trade

798,058(91,762)(21,000)

685,295(2)(4)(6)

122,985

9,514

132,500(4)

Current assets
Cash and cash
equivalents
Trade and otherreceivables
Contract assets

313,368

459,562(15,138)

757,793(3)(16)Inventories

50,834(50,834)(3)

408,728(408,728)(3)

Merchandise andfinished goods
Work in progress
Raw materials andsupplies

4,106

805

4,912

(1)(5)(6)

Income taxes
receivable
Other financial assets

Other
Allowance for
doubtful accounts

131,625(43,021)(19,732)

68,871(2)

Other current assets(1,416)

1,416

Total current assets

1,771,135

－

6,827

Non-current assets
Property, plant andequipment
Intangible assets
Investments andother assets
Investments
securities
Shares of
subsidiaries andassociates
Net defined
benefit assets

1,650,879

78,368

(30)

6,796

(6)
(44,755)

1,726,379(63,001)

73,246

1,661,123

5,137

－

5,137

Non-current assets
Property, plant andequipment
Goodwill(7,916)(3,533)

66,918Intangible assets

63,001(2,598)60,403(7)(9)(14)(7)(9)(14)(16)

372,196(372,196)

349,864(876)(16,559)

332,428

13,067－(1,843)

11,22432,011(4,337)

27,674(12)

403,537

22,881

426,418(5)(6)(15)(4,417)

11,523

Other

78,591(62,650)

Allowance for
doubtful accounts(2,953)

2,953

Non-current assets

2,540,014－

62,8382,602,853

4,311,149－

18,083

4,329,232

Total assets

Total current assets

Investment property

Investments
accounted for using
equity method
Retirement benefit
asset
Deferred tax assets
Other financial assets
Other non-current
assets(6)24

Total non-current
assetsTotal assets

J-GAAP item

J-GAAP

Recognition
Reclassificati
andmeasurement
ons
differences

IFRS

Notes

IFRS item
Liabilities and equity

Liabilities

Liabilities

Current liabilities
Notes and accounts
payable – trade

Current liabilities
Trade and otherpayablesBonds payable,borrowings, and leaseobligations

Short-term loans
payableCommercial papers
Current portion of
bonds

Other
Total current
liabilities

446,645

53,59724,484

524,727

204,379

59,396

7,991

271,767

8,000(8,000)50,000(50,000)
33,569(103)

33,465

15,346809

16,155

8,561

61

8,622

88,347

1,536

89,884(5)

330,432(200,818)

57,402

187,016(4)(8)(10)

1,039,457－

92,182

1,131,639

(8)

(4)

Total current liabilities

Non-current liabilities
Bonds payable

1,153,753－

244

123,989

50,483(13,945)

36,537(11)

Retirement benefit
liability
Provisions

18,941(8,662)

10,279(14)

Deferred tax liabilities

25,1772,410

27,588(5)

100,581(97,407)

6,023

9,197

(10)

1,346,534－

14,812

1,361,346

2,385,991－

106,994

2,492,986

Share capital

147,143－－

147,143

Share capital

Capital surplus

646,582－－646,582

Capital surplus

Retained earnings

1,129,981－(79,346)

1,050,635

Treasury shares
Accumulated othercomprehensive
income(178,853)－－(178,853)

124,330－(8,388)

115,941

Deferred tax
liabilities for land
revaluation

Other
Total non-current
liabilities
Total liabilities

1,050,012

1,038,089(1,038,089)

123,745

Non-current labilities
Bonds payable,borrowings, and leaseobligations

28,741Long-term
borrowings
Net defined benefit
liabilities

75,000Contract liabilities
Income taxes payable,
etc.
Provisions
Other financial
liabilities
Other current liabilities

9,118(9,118)Other financial
liabilities
Other non-current
liabilities
Total non-current
labilities
Total liabilities

Net assets

Equity(13)(17)

Retained earnings
Treasury shares(13)(14)(15)

Other components ofequity1,781,449

Total equity attributable toowners of parent
Non-controlling interests

Non-controllinginterests

55,972－(1,176)54,796

Total net assets

1,925,157－(88,911)

1,836,245

Total equity

Total liabilities and net
assets4,311,149－

18,083

4,329,232

Total liabilities andequity25

Reconciliation of equity as of March 31, 2018 (previous fiscal year)(million yen)
J-GAAP item

J-GAAP

Recognition
Reclassificati
andmeasurement
ons
differences

IFRS

Notes

IFRS item

AssetsAssetsCurrent assets
Cash and deposits

76,111

(886)

(107)

75,117(1)

Notes and accounts
receivable – trade855,730(78,251)(19,449)

758,029(2)(4)(6)

110,491

16,443

126,935(4)

Current assets
Cash and cash
equivalents
Trade and otherreceivables
Contract assets

351,961498,378(13,474)

836,865(3)(16)Inventories

60,292(60,292)(3)

438,086(438,086)(3)

Merchandise andfinished goods
Work in progress
Raw materials andsupplies

4,976

2,181

7,157

(1)(5)(6)

Income taxes
receivable
Other financial assets

Other
Allowance for
doubtful accounts

148,125(39,644)(30,795)

77,684(2)

Other current assets(2,188)2,188

Total current assets

1,928,119

－

1,127

Non-current assets
Property, plant andequipment
Intangible assets
Investments andother assets
Investments
securities
Shares of
subsidiaries andassociates
Net defined
benefit assets

639

1,766

(6)
(44,562)

92,187

1,883,556(7)(9)(14)
1,732,154
(16)
4,473

1,702,248(62,280)
3,157

1,316

83,724(6,232)(4,328)73,16362,280(2,598)59,682(7)(9)(14)(325,413)

312,880(1,662)(21,994)289,223

18,082－(1,622)

16,45929,296(4,828)24,467354,10239,566393,668 (5)(6)(15)(6,872)

10,322

72,134(54,939)

Allowance for
doubtful accounts(1,691)

1,691

Non-current assets

2,512,791－

90,8252,603,616

4,440,910－

46,262

4,487,173

Non-current assets
Property, plant andequipment
Goodwill
Intangible assets

325,413

Other

Total assets

Total current assets(12)

Investment property

Investments
accounted for using
equity method
Retirement benefit
asset
Deferred tax assets
Other financial assets
Other non-current
assets(6)26

Total non-current
assetsTotal assets

J-GAAP item

J-GAAP

Recognition
Reclassificati
andmeasurement
ons
differences

IFRS

Notes

IFRS item
Liabilities and equity

Liabilities

Liabilities

Current liabilities
Notes and accounts
payable – trade

Current liabilities
Trade and otherpayablesBonds payable,borrowings, and leaseobligations

Short-term loans
payableCommercial paper
Current portion of
bonds

Other
Total current
liabilities

471,897

55,93832,546560,381285,542

22,421

9,530

317,494

6,000(6,000)15,000(15,000)
52,5471,040

53,58844,051(450)

43,601

8,148

446

8,594

90,713

1,898

92,612411,846(252,820)

54,850213,876 (4)(8)(10)

1,190,286－

99,862

(8)

(4)

(5)

1,290,149

Total current liabilities

Non-current liabilities
Bonds payable
Long-term
borrowings
Net defined benefit
liabilities

Deferred tax
liabilities for land
revaluation

Other
Total non-current
liabilities
Total liabilities

80,000956,474

944,376(944,376)

127,435

Contract liabilities
Income taxes payable,
etc.
Provisions
Other financial
liabilities
Other current liabilities

Non-current labilities
Bonds payable,borrowings, and leaseobligations

37,259

1,073,734－

905

128,341

41,394(5,479)35,914(11)

Retirement benefit
liability
Provisions

13,624(8,461)

5,162

(14)

Deferred tax liabilities

18,451

3,658

22,109(5)

79,786(76,454)

6,363

9,696

(10)

1,240,712－

34,246

1,274,959

2,430,999－

134,1092,565,1089,113(9,113)
Other financial
liabilities
Other non-current
liabilities
Total non-current
labilities
Total liabilities

Net assets

EquityShare capital

147,143－－

147,143

Share capital

Capital surplus

646,639－(4)

646,634

Capital surplus

Retained earnings

1,211,796－(73,704)

1,138,091

Treasury shares
Accumulated othercomprehensive
income(179,070)－－(179,070)

123,065－(13,157)

109,907(13)(17)

Retained earnings
Treasury shares(13)(14)(15)

Other components ofequity1,862,707

Total equity attributableto owners of parent
Non-controlling interests

Non-controllinginterests

60,337－(980)

59,357

Total net assets

2,009,911－(87,846)

1,922,065

Total equity

4,487,173

Total liabilities andequityTotal liabilities and net
assets4,440,910－

46,26227

Notes to reconciliation of equity
Reclassifications
Reclassifications consist mainly of the following:(1) Cash and cash equivalents
Time deposits with a term of more than three months, which were included in “Cash and deposits” under Japanese
GAAP, are included in “Other financial assets (current)” under IFRS.
(2) Trade and other receivables
Accounts receivable included in “Other” in current assets under Japanese GAAP are included in “Trade and otherreceivables” under IFRS.
(3) Inventories“Merchandise and finished goods”, “Work in progress,” and “Raw materials and supplies” were presented as
separate items under Japanese GAAP; under IFRS, they are presented in “Inventories.”(4) Contract assets and contract liabilities
Some receivables included in “Notes and accounts receivables - trade” under Japanese GAAP are reclassified to“Contract assets” under IFRS; and advances received included in “Other” in current liabilities under Japanese
GAAP are reclassified to “Contract liabilities” under IFRS.
(5) Other financial assets and other financial liabilities
In accord with IFRS presentation requirements, “Other financial assets” and “Other financial liabilities” arepresented as separate items.
(6) Allowance for doubtful accounts“Allowance for doubtful accounts (current)” was presented as a separate item under Japanese GAAP; under IFRS,
it is deducted directly from “Trade and other receivables” and “Other financial assets (current)” and thus presented
on a net basis. Similarly, “Allowance for doubtful accounts (non-current)” is deducted directly from “Other financial
assets (non-current)” and thus presented on a net basis.
(7) Investment property
In accord with IFRS presentation rules, “Investment property” has been reclassified from “Property, plant andequipment.”(8) Trade and other payables
Accounts payable included in “Other” in current liabilities under Japanese GAAP are included in “Trade and otherpayables” under IFRS.
Recognition and measurement differences
Recognition and measurement differences consist mainly of the following:(9) Deemed cost
The Group has elected to use the exemption that permits it to measure some property, plant and equipment andsome investment property at fair value at the date of transition to IFRS. “Property, plant and equipment” and“Investment property” decreased as a result.
The fair value at the transition date and the Japanese-GAAP carrying amounts for property, plant and equipment
and investment property for which deemed cost is use are, respectively, 42,047 million yen and 83,425 million yen.
Fair value is based on a valuation by an independent valuer who holds a recognized and relevant professional
qualification, and is classified as Level 3.
(10) Paid leave payable, etc.
Paid leave payable was not recognized as a liability under Japanese GAAP; under IFRS, it is recognized as aliability and “Other current liabilities” has therefore increased. Rewards and the like granted based on years ofservice were not recognized as a liability under Japanese GAAP; under IFRS, they are recognized as a liability and“Other non-current liabilities” has therefore increased.
(11) Provisions
Under Japanese GAAP, future expenses that met certain requirements were recognized as provisions; some ofthese provisions have been cancelled because they did not meet the IFRS requirements for provisions. Also, somefuture expenses that were not recognized as provisions under Japanese GAAP meet the IFRS requirements forprovisions and are therefore now recognized as provisions. All told, these changes have caused “Provisions” todecrease.
(12) Deferred tax assets and deferred tax liabilities
Under Japanese GAAP, the deferred method was applied to the tax effects of eliminations of internal unrealized
gains; under IFRS, the asset-liability method is applied. Also, in conjunction with its adoption of IFRS, the Company
has reevaluated the recoverability of deferred tax assets. As a result of the above, “Deferred tax assets” has28decreased.
(13) Other components of equity
The Group has elected to use the exemption for first-time adopters specified in IFRS 1 that permits it to transfer
the cumulative exchange differences on translation of foreign operations as of the date of transition to IFRS toretained earnings. Also, under Japanese GAAP, actuarial differences arising from defined benefit plans areamortized over a fixed period starting from the year following that in which they occurred; under IFRS, they arerecognized in other comprehensive income when they occur and immediately transferred to retained earnings.
(14) Revaluation reserve for land
Under Japanese GAAP, some land for business purposes was revaluated based on the Act on Revaluation of Land
(Act No. 34 of March 31,1998) and the Act for the Partial Revision of the Act on Revaluation of Land (Act No. 19 ofMarch 31, 2001), with the amount equivalent to the tax on the valuation difference recognized in “Deferred tax
liabilities for revaluation” in liabilities, and the “Land revaluation difference” recognized as a component of net
assets. On the date of transition to IFRS, “Deferred tax liabilities for revaluation” and “Land revaluation difference”
were reversed and the book value of the land reverted to its book value before revaluation. As a result, “Property,
plant and equipment,” “Investments accounted for using equity method,” “Deferred tax liabilities,” and “Other
components of equity” decreased.
(15) Unlisted equity securities and investments
Under Japanese GAAP, unlisted equity securities and investments were valued using the moving-average cost
method; under IFRS, they are measured at fair value, and thus “Other financial assets (non-current)” and “Other
components of equity” have increased.
(16) Replacement parts, spare equipment, and maintenance equipment
Some replacement parts, spare equipment, and maintenance equipment included in “Supplies” under Japanese
GAAP meet the definition of property, plant and equipment under IFRS and are therefore recognized in “Property,
plant and equipment.” As a result, “Production supplies” has decreased and “Property, plant and equipment” hasincreased.
(17) Retained earnings(million yen)Transition datePrevious fiscal year

April 1, 2017

March 31, 2018

Deemed cost

(40,866)(40,866)

Reconciliation of paid leave payable, etc.

(21,002)(22,716)

Reconciliation of provisions
Reconciliation of deferred tax assets and deferred
tax liabilities
Reconciliation of other components of equity

14,858

7,488(13,450)(11,396)(8,558)

4,526

Other

(10,326)(10,739)

Total reconciliations to retained earnings(79,346)(73,704)

Note: The reconciliation amounts for each items reflect tax effects.

29

Reconciliation of profit/loss and comprehensive income for the previous fiscal year (April 1, 2017 – March 31, 2018)
Consolidated statement of profit or loss items(million yen)
Recognition
Reclassifica
andJ-GAAP item
J-GAAPIFRS
Notes
IFRS itemtions
measurement differences
Net sales
3,678,612(337)(51,025)
3,627,248 (3) Revenue
Cost of sales
Gross profit
Selling, general andadministrative expenses(3,096,019)

230

41,400(3,054,388)(3)

582,592(107)(9,624)572,860(335,923)

(756)

(269)

(336,949)(8,732)(1,441)(10,173)(1)

Cost of sales

30,811(191)

30,619(1)

Gross profit
Selling, general andadministrative expenses
Share of loss of entities
accounted for using theequity method
Other income(38,455)476(37,979)(1)

Other expenses(28,496)43(28,453)(1)－(18,717)(18,717)(4)(3,850)－(3,850)(1)

246,669(49,586)(29,725)

167,357

Non-operating income

32,303(32,303)(1)

Non-operating expenses(62,633)

62,633(1)

Ordinary income

216,339

218,378

Operating income

Business profit

Extraordinary income

29,388(29,388)(1)

Extraordinary losses(32,346)

32,346(1)

30,880(29,334)(15,338)(687)(16,026)

Impairment losses
Loss on remeasurement ofretained interest
Expenses for treatment of
PCB waste
Operating profit

1,546 (1)(5) Finance income(1)

Finance costs

Profit before income
taxes
Income taxes - current

213,381(756)(59,747)

152,877(60,616)(2,021)

12,913(49,723) (2)(6) Income tax expense

Income taxes - deferred(2,777)

2,777

Profit149,987－

Profit before tax(2)(46,834)

103,153

ProfitProfit attributable toProfit attributable toowners of parent
Profit attributable to noncontrolling interests

144,638－(47,003)

97,635

Owners of parent

5,349

－

169

5,518

Non-controlling interests

30

Consolidated statement of comprehensive income items
Recognition
Reclassifica
andJ-GAAP item
J-GAAPtions
measurement differences
ProfitOther comprehensive
income149,987－(46,834)(million yen)
IFRS

Notes

103,153IFRS item
ProfitOther comprehensive income
Items that will not bereclassified to profit or loss

Remeasurements ofdefined benefit plans,
net of tax
Valuation difference
on available-for-salesecurities

Foreign currencytranslation adjustment
Deferred gains(losses) on hedges
Share of othercomprehensive
income of investments
accounted for using
the equity method
Total othercomprehensive
incomeComprehensive income

5,657

－

(1,146)－35,487

13,751

1,380

(778)

602

234

－

(2,332)(2,098)

(286)

－

2,935

2,649

(21,736)

Remeasurements of defined
benefit plans

4,510

(5)

Net change in fair value ofequity instruments
designated as measured atfair value through othercomprehensive income
Share of othercomprehensive income ofinvestments accounted forusing equity method
Items that may be reclassified
to profit or loss
Exchange differences ontranslation of foreign
operations
Effective portion of cash
flow hedges

15,745(1,380)(12,829)

1,535

Share of othercomprehensive income ofinvestments accounted forusing equity method

(385)

－

21,336

20,950Total other comprehensive
income149,602－(25,498)

124,104

31

Comprehensive income

Notes to reconciliation of profit/loss and comprehensive income
Reclassifications
Reclassifications consist mainly of the following:(1) Reconciliation of display items
Of those items presented in “Non-operating income,” “Non-operating expenses,” and “Extraordinary income”
under Japanese GAAP, finance-related gains and losses are recognized in “Finance income” and “Finance costs”
under IFRS, and other items are presented in “Other income,” “Other expenses” and “Share of loss of entities
accounted for using the equity method.” Items presented in “Extraordinary loss” under Japanese GAAP arepresented in “Impairment losses” and “Expenses for treatment of PCB waste” under IFRS.
(2) Income tax expense
Under Japanese GAAP, “Income taxes - current” and “Income taxes - deferred” were presented as separate
items; under IFRS, they are presented collectively in “Income tax expense.”
Recognition and measurement differences
Recognition and measurement differences consist mainly of the following:(3) Revenue and cost of sales
Under Japan GAAP, the total amount of transactions in which the Group is involved as an agent is presented
as sales; under IFRS, revenue in presented on a net basis for transactions in which the Group is determined
to be involved as an agent. As a result, “Revenue” and “Cost of sales” have decreased. In adopting IFRS,
the Group also reviewed the scope of application of the equity method. Some companies to which the equity
method was applied under Japanese GAAP are now recognized as joint operations, resulting in an increasein “Revenue” and “Cost of sales.”(4) Loss on remeasurement of remaining interest
Under Japanese GAAP, remaining interests in investments for which application of the equity method was
discontinued were accounted for by recognizing the difference between the carrying amount and the carrying
amount on the separate balance as a decrease in retained earnings. Under IFRS, such residual interests
are measured fair value, and difference versus the carrying amount is recognized in profit or loss.
(5) Finance income
Under Japanese GAAP, gains and losses on sales of equity financial assets were recognized in net profit
and loss. Under IFRS, changes in fair value are recognized in other comprehensive income, resulting in adecrease in “Finance income.”(6) Income tax expense
The amount of “Income tax expense” has been adjusted owing to temporary differences arising from thetransition from Japanese GAAP to IFRS. This resulted in a decrease in “Income tax expense.”
Reconciliation of cash flows for the previous fiscal year (April 1, 2017 – March 31, 2018)
The differences between the consolidated cash flow statements disclosed under Japanese GAAP and the consolidated
cash flow statements disclosed under IFRS are mainly attributable to some replacement parts, spare equipment, andmaintenance equipment included in “Supplies” under Japanese GAAP being recognized in “Property, plant andequipment” under IFRS because they meet the definition of property, plant and equipment under IFRS. As a result,cash flow from operating activities increased and cash flows from investing activities decreased.

32

4. Supplementary information(1) Consolidated financial performance
For reference
IFRS
Fiscal 2018

ActualActualFull year

Full year(billion yen)

2,735.7
401.5
999.3(509.4)
3,627.2

Steel BusinessEngineering BusinessTrading Business
Adjustments
Revenue*1
1*2

Business profit
Finance income/costs
Segment profit
Steel BusinessEngineering BusinessTrading Business
Adjustments
Total
Exceptional Items
Profit before tax

J-GAAP

Fiscal 2017

A
B

A+B
2

ChangeFiscal 2019

Fiscal 2018

Forecast

ActualFull year

Full year

Full year(billion yen)(billion yen)(billion yen)

2,830.6
485.8
1,125.8(568.6)
3,873.6

94.9
84.3
126.5
(59.2)
246.4

218.3(14.4)

232.0(12.5)

13.7
1.9

180.0

187.2
18.7
35.1
(37.2)

161.3
20.1
35.7
2.3

(25.9)
1.4
0.6
39.5

105.0
23.0
36.0
1.0

203.8

219.5

15.7

165.0

(51.0)
152.8(10.2)
209.3

40.8
56.5

(55.2)(45.8)

9.4(billion yen)

Steel BusinessEngineering BusinessTrading Business
Adjustments
Net sales *１

2,808.3
485.6
2,060.0(1,392.3)
3,961.7

Operating income
Non-operating income

191.2
29.9

Steel BusinessEngineering BusinessTrading Business
Adjustments
Ordinary income *2
Extraordinary income (loss)
Profit before income taxes
Tax expense and profit (loss)
attributable to non controlling interests

Tax expense and Profit (loss)
attributable to non-controlling interests

164.6
20.2
35.7
0.6

221.1
(11.2)
209.9(45.7)

Profit attributable to owners of parent

Profit attributable to owners of parent

97.6

163.5

65.9

164.2

1. Business profit: Profit that excludes financial income and exceptional items from profit before tax. It is a benchmark
indicator of the company’s consolidated earnings.
2. Exceptional Items: One-time items of a materially significant value.

Transition from J-GAAP to IFRS
*1
Net sales /Revenue
Japanese GAAP
Reclassifications
Finance income
Recognition andmeasurement differences
Transactions as agent etc.
Retirement benefit liability etc.
IFRS

*2
Ordinary income /Business profit

3,961.7

221.1

-

12.5

(88.1)

-

-

(1.6)
232.0

3,873.633

(2) Consolidated Financial Indices
For referenceIFRS

J-GAAP

Fiscal 2017

Fiscal 2018

ActualActualReturn of Sales (ROS)

6.0%

6.0%

0.0%

Return of Sales (ROS)

Return on Assets (ROA)

5.0%

5.0%

0.0%

Return on Assets (ROA)

5.1%

Return on Equity (ROE)

5.4%

8.6%

3.3%

Return on Equity (ROE)

8.3%

400.9 billion yen

428.2 billion yen

27.3 billion yen

EBITDA

ChangeFiscal 2018
ActualEBITDA*1

Interest-bearing debt outstanding

5.6%

405.9 billion yen*1

1,391.2 billion yen

1,523.8 billion yen

132.6 billion yen

Debt outstanding

1,449.9 billion yen

1,862.7 billion yen

1,926.3 billion yen

63.6 billion yen

Shareholders’ equity

63.7%

68.2%

4.5%

*2

Equity attributable to owners of parent

D/E Ratio
Notes:*2

2,012.7 billion yen

D/E Ratio

62.0%

ROS: Business income / Revenue

ROS: Ordinary income / Net sales

ROA: Business Income / Total assets
ROE: Profit attributable to owners of the parent company/ Equity

ROA: (Ordinary income + Interest expense) / Total assets
ROE: Profit attributable to owners of the parent company/ Shareholders’ equity

EBITDA: Business income + Depreciation and Amortization

EBITDA: Ordinary income + Interest expenses + Depreciation

D/E ratio: Interest-bearing debt / Equity attributable to owners of parent

D/E ratio: Debt outstanding / Shareholders’ equity

For debt having a capital component, a portion of its issue price is deemed to be capital, as assessed by rating agencies.
Debt with an equity component (subordinated borrowings)
Borrowing dateAmount borrowed
Assessment of
Amount deemed
equity content
to be equity
June 30, 2016
March 19, 2018

200.0 billion yen
300.0 billion yen

25%
25%

50.0 billion yen
75.0 billion yen

Transition from J-GAAP to IFRS
*1Borrowings, bonds payable,
etc. / Balance of interestbearing debt
Japanese GAAP
Lease obligations
Change in scope of consolidation etc.
Deemed cost of fixed assets
Paid leave payable etc.
IFRS

*2
Shareholders’ equity / Equity
attributable to owners of theparent

1,449.9
51.3
22.6

2,012.7(40.1)(46.3)
1,926.3

1,523.8(3) Key financial/revenue targets under sixth medium-term business plan
For reference
IFRS
Group-wide

Operatingcompanies

Business profit
Profit attributable toowners of the parent
Debt / EBITDA multiple
Segment profit
Steel BusinessEngineering BusinessTrading Business290.0 billion yen / year
200.0 billion yen / year
Approximately 3x
220.0 billion yen / year
30.0 billion yen / year
35.0 billion yen / year

34

Japanese GAAP
Consolidated ordinary income
280.0 billion yen / year
Profit attributable to200.0 billion yen / year
owners of the parent
Debt / EBITDA multiple
Approximately 3x
Consolidated ordinary income
Steel Business220.0 billion yen / year
Engineering Business30.0 billion yen / year
Trading Business35.0 billion yen / year

(4) Crude Steel Production (JFE Steel)
1Q
FY 2017 Non-consolidated
Consolidated
FY 2018 Non-consolidated
Consolidated

1H
14.10
14.91
14.04
14.84

2Q
7.12
7.53
7.10
7.51

6.98
7.38
6.94
7.33

3Q

4Q
7.23
7.63
6.39
6.79

2H
14.37
15.15
12.27
13.04

7.14
7.52
5.88
6.25

(million tons)
Full year
28.46
30.06
26.31
27.88

(5) Shipments (JFE Steel on non-consolidated basis)

1Q
FY 2017
FY 2018

1H

2Q
6.14
6.13

6.28
5.93

3Q

4Q

12.42
12.06

12.88
11.72

(million tons)
Full year
25.30
23.78

45.5
40.1

(%)
Full year
44.4
41.7

111.2
111.9

(JPY/USD)
Full year
111.2
110.7

2H

6.38
6.24

6.50
5.48

(6) Export Ratio on Value Basis (JFE Steel on non-consolidated basis)

1Q
FY 2017
FY 2018

2Q

1H

42.1
42.4

3Q

44.2
44.2

4Q

43.2
43.3

2H

45.1
43.5

45.9
36.0

(7) Foreign Exchange Rate

1Q
FY 2017
FY 2018

2Q
111.5
108.1

1H
110.9
110.9

3Q
111.2
109.5

4Q
112.6
113.4

2H
109.7
110.3

(8) Average Selling Price (JFE Steel on non-consolidated basis)

1Q
FY 2017
FY 2018

2Q
74.4
79.3

1H
73.3
81.9

3Q
73.8
80.6

4Q
77.0
82.9

2H
76.5
82.0

(9) Engineering Business Orders (including intersegment transactions, IFRS basis)a. Orders(billion yen)
Fiscal 2017 Fiscal 2018
ChangeField
ActualActualEnvironment
227.3
212.6
(14.7)
Energy
126.9
132.8
5.9
Infrastructure and other
134.4
137.4
3.0
Total
488.7
482.8
(5.9)

b. Order backlog
End-Fiscal
2017

673.4

End-Fiscal
2018(billion yen)
Change614.5

35(58.9)(thousand yen/ton)
Full year
76.8
75.3
82.5
81.5

(10) Capital Investment and Depreciation and Amortization Cost (JFE Holdings, billion yen)

Capital investment
Depreciation and amortizationIFRS
FY 2017
FY 2018
ActualActual
300.3
329.5
182.6
196.2

(For reference)
J-GAAPFY 2018
Actual287.6
172.1

Transition from J-GAAP to IFRS:
Changes due to the transfer of productions supplies to be used for over one year to fixed assets, recording ofleased equipment in non-current assets, and changes in scope of consolidation

For reference: Amount of investment under sixth medium-term business plan
Group-wide, total investment
Steel Business,domestic capital investmentIFRS

J-GAAP

Approximately 1,200.0 billion yen / 3 years

Approximately 1,000.0 billion yen / 3 years

Approximately 1,000.0 billion yen / 3 years

Approximately 850.0 billion yen / 3 years(11) Breakdown of Changes in Segment Profit (IFRS)
a. FY 2018 actual vs. FY 2017 actual
Steel BusinessCost(billion yen)

Sales prices and raw materials

0.0 Cost reductions +22.0, One-off effect due to operational
troubles -22.0(40.0) Crude steel production -2.15 million tons (28.46 million →26.31 million)
72.0

Metals and minerals(55.0)

Infrastructure maintenance cost

(30.0)

Sales volume and mix

Unrealized gains on inventories

10.0

Other
Total for Steel Business17.1 Group companies abroad etc.
(25.9)Engineering BusinessTrading Business
Adjustments

1.4
0.6
39.5 Significant deficit of shipbuilding and other affiliatedcompanies accounted for by equity method in FY 2017

b. FY 2019 forecast vs. FY 2018 actual
Steel Business
Cost
Sales volume and mix

60.0 Cost reductions +38.0, No one-off effects +22.0 in
FY 2018
50.0

Sales prices and raw materials(75.0)

Unrealized gains on inventories(40.0)

Materials prices etc.

(15.0)

Increased costs of materials, distribution, subcontracting, etc.

Other(36.3)

Increased depreciation costs related to infrastructure
maintenance, group companies, etc.

Total for Steel Business(56.3)Engineering Business, Trading Business,
Adjustments

1.836