Financial Performance (Consolidated)
Operating Results

Net Sales
Net sales decreased ¥714 million year on year, or 0.3%, to ¥220,653 million(US$2,346 million) in the reporting period. The decline was attributable to a downturn in the Steel and Energy Products Business.
Operating Income
Operating income declined ¥7,230 million, or 30.2%, to ¥16,680 million (US$177
million). The operating income margin stood at 7.6%, a 3.2 percentage-point decline
compared to the previous fiscal year.
Net Income

Sales by Region

31,50032,18536,633Operating Income

Net income decreased ¥4,310 million, or 34.2%, to ¥8,281 million (US$88 million).
millionThis equates to net income of ¥22.33 for the period on a ¥per-sharebasis.
42,00010,500Cash Flows

16,68023,911

28,495The Japanese market accounted for sales of ¥105,180 million (US$1,118 million),
the Chinese market for ¥27,131 million (US$288 million),with all other markets
21,000accounting for ¥88,341 million (US$939 million).

42

16,68023,91175,000Net cash provided
by operating activities amounted to ¥23,735
million(US$252 mil- 28
21,00036,000lion), compared with ¥32,507 million in the previous term. This was due mainly to
net income before
income taxes and other adjustments of37,500¥14,80218,000
million and other 14
10,500non-cash items such as depreciation and amortization.
0

0% of total sales02009 20122010 20132011 2012 20132009 2010 2011

134,368

35,00023,735

11,500128,61370,000120,8200

23,00032,507111,149

0

105,000

90,12521,774

14

34,50026,31918,00053,24228¥ million
140,000

45,66863,60742¥ million
46,000Net Assets%
56

Net Cash Provided by Operating Activities

52.3
65,685
115,472

53,388113,858

36,00049.8
58,440110,21154,00002009 2010 2011 2012 2013

53.5

46.6

93,90337,5000¥ million
72,00052.8

119,853

Interest-Bearing Debt

Overseas Sales

10,500112,500

75,00016,68023,911

21,00028,49532,18536,633Operating Income

31,500¥ million
150,000

002009 2010 20092011 20102012 20112013 2012 20132009 2010 2011 2012 2013

¥ million
42,00053,24263,607

115,472
65,68593,903

113,858
53,38854,000110,21158,440112,500

119,853

28,49532,185

Cash Flow from Operating Activities

Interest-Bearing Debt

Overseas Sales

31,50036,633Operating Income

Cash and cash equivalents stood at ¥50,972 million (US$5410 million) at the report2010 2011 2012 2013
ing term-end, up ¥2,865 million year on year after adjusting for 2009non-cashitems.
This was partially the result of a decline in capital expenditures and working capital,¥ million%¥ million¥ million
despite net income
before income taxes and other adjustments
decreasingto ¥14,802 56
150,000
53.5
42,00072,000
52.8
52.3
49.8
million, in comparison to ¥20,302 million the previous fiscal year. 46.6

02009 2010 20092011 20102012 20112013 2012 2013

% of total sales

Equity Ratio

134,368

128,613105,000

120,820

115,

110

113,

34,500¥ million
140,000

111,1
3

42

¥ million
46,00045,668112,500

49.8

%
56

Net Assets

46.6

52.3

Net Cash Provid

53.5

52.8

119,85

Overseas Sale

22

¥ million
150,000

%
50.0

37.5

43.8
39.2

Cash Flow from Investing Activities

53,24263,60765,68523,911

28,49536,00058,44054,00053,38832,18521,000Interest-Bearing Debt

31,500Cash Flow from Financing Activities

Net Assets

134,368

128,61363,60753,242%¥ million
24.0
140,000

28

12.0
70,00014

6.0
35,000

0

2012

0

2013

0

17.5

14.4

134,368

18.3

128,61318.0
105,000

120,820

2009 201020112009 2010 2011 2012 2013

43.8

39.2

2009 20102011 2012 20132009 2010 2011 2012 201390,125

0

0

42
39.2

0

34.0 35.3

12.5

34.0 35.3

111,149

115,47230.3

110,211

113,858

25.0

65,68543.8

37.5

120,820

49.8

%
56

ROE
Net Assets

46.6

52.3

30.3

58,44025.0
36,00053,388EquityInterest-Bearing
Ratio
Debt

134,368

128,61337.5
54,0000

53.5

111,149

90,12553,24263,60752.8

93,9030%50.0

119,853

112,500

37,5002009 2010 20112009 20122010 20132011 2012 20133

¥ million
150,000

Equity Ratio

Overseas Sales

0134,368

35,000%¥ million
50.0
72,00012.5
18,000075,00023,735

11,500128,61370,000111,149
32,50723,00090,12521,774

105,000

120,820

45,668034,50026,31914¥ million
140,000

Net Assets

28

Net Cash Provided by Operating Activities

42¥ million
46,000¥ million
140,000

2009 2010 20112009 20122010 20132011 2012 20132009 2010 2011 2012 2013

% of total sales

%
56

%
56

23,73516,680

00120,82035,00065,685
115,472

0

11,50010,500111,149
32,507 23,911

02009 2010 20112009 20122010 20132011 2012 2013

70,00023,00021,00058,440110,211

14

105,000

90,12528,49521,774

18,00034,50031,50032,18537,500052.3

45,66836,00053,24228

75,000¥ million
140,000

26,31942¥ million¥46,000
million42,00036,63363,60765,685
115,472

93,90353,388113,858

54,00049.8%
56

Net Assets

46.6

52.3

NetOperating
Cash Provided
Incomeby Operating Activities

53.5

58,440110,211

112,500¥ million

72,00052.8

119,853

Interest-Bearing Debt

Overseas Sales¥ million
150,000

53.5

53,388113,858

2009 2010 2011 2012 2013

93,903

0

119,853

10,500¥ million

72,00052.8

Total assets as of the end
49.8 of March 2013 stood at ¥303,970 million (US$3,232 mil46.6lion),
down¥21,683
million,or426.7%, from the previous
term-end. This was partially
112,500
105,000
54,000due to a decrease in current assets stemming from lower figures for work in processcoupledwith a decrease in property,
plant and equipment.
28
75,00070,00036,000Liabilities at the reporting term-end stood at ¥169,601 million (US$1,803 million),
down ¥27,438 million, or1413.9%, from the previous
term-end. This was largely
37,50035,00018,000attributable to a decrease in long-term debt. Interest-bearing debt stood at ¥53,242
million(US$566 million), down0 ¥10,364 million from0the previous fiscal year.
002009 20102011
20122009 2010 (US$1,428
2011 2012 2013
Net assets
at thetotaled ¥134,368 million
mil2009reporting2010 20132011 term-end
2012 2013% of total saleslion), up ¥5,755 million, or 4.5%, over the previous term-end.

16,68023,911

28,49521,000¥ million
150,000

Interest-Bearing Debt

Overseas Sales

31,50032,18536,633Operating Income¥ million
42,000Financial Position

16,680Net cash used in financing activities amounted to ¥15,259 million (US$162 million),compared with a net cash inflow of ¥6,846 million for the previous term. This was
10,50018,000due in a large part to ¥13,830 million in repayments for long-term borrowings mainlyin the form of syndicated loans and dividend payments amounting to ¥3,708 million,
002009 2010 offset
2011 201220132009 20102011 2012million.
2013
but was partiallyby proceedsfrom long-term borrowingsof ¥4,400

3

3

36,633Operating IncomeNet¥ million
cash used in investing activities amounted to ¥5,832¥ million million (US$62 million),
42,00072,000compared with ¥18,601 million for the previous term. This was due mainly to an
investment of ¥6,209 million in property, plant and equipment.

10.2
6.3

2009
2011 20122012 201320132009 20102010 2011% of total sales

34,500

18.0

43.8
39.2

18.3

17.5

Equity Ratio%
24.0

45,668¥ million
46,000

ROE

37.5

Net Cash Provid

Equity Ratio

%
50.0

%
50.0

37.5

43.8
39.2

23

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheets
March 31, 2013 and 2012

Thousands of
U.S. Dollars (Note 3)

Millions of Yen

Assets

2013

2012

2013

¥ 51,005¥ 48,148$  542,318

690
51,288199(225)
59,516
6,473
5,076
174,024

2,062
44,495370(314)
79,3486,400
4,139
184,652

7,337
545,327
2,116(2,392)632,812
68,82553,9711,850,335

Less accumulated depreciation ...........................................................
			 Property, plant and equipment, net..............................................

11,05096,883140,932
6,382
737
255,986(161,510)
94,476

11,05896,954
144,515
8,042
2,088
262,659(156,117)
106,541

117,491
1,030,122
1,498,480
67,8587,836
2,721,808(1,717,278)
1,004,530

Intangible assets....................................................................................

789

934

8,389

Investments and other assets:
Investments in unconsolidated subsidiaries and affiliates......................
Investment securities (Notes 16 and 17)...............................................
Long-term loans receivable..................................................................
Deferred tax assets (Note 20) ..............................................................
Other assets.........................................................................................
Less allowance for doubtful accounts ..................................................
			Total investments and other assets.........................................
			Total assets ..............................................................................

753
27,307
103
1,310
5,799
(594)
34,680¥303,970

868
25,434
241
1,932
5,471
(423)
33,524¥325,653

8,006
290,346
1,095
13,92961,659(6,316)
368,740$3,232,004

Current assets:
Cash on hand and in banks (Notes 14 and 16) ....................................
Notes and accounts receivable:
		 Unconsolidated subsidiaries and affiliates .......................................
		 Trade (Note 16) ...............................................................................
		Other ..............................................................................................
		 Less allowance for doubtful accounts .............................................
Inventories (Note 4) .............................................................................
Deferred tax assets (Note 20) ..............................................................
Other current assets ............................................................................
			Total current assets ....................................................................

Property, plant and equipment, at cost (Notes 5 and 6):
Land ...................................................................................................
Buildings and structures.......................................................................
Machinery and equipment ...................................................................
Leased assets .....................................................................................
Construction in progress .....................................................................

The accompanying notes are an integral part of these statements.

24

Thousands of
U.S. Dollars (Note 3)

Millions of Yen

Liabilities AND NET ASSETS

2013

2012

2013

¥ 12,703
11,404¥ 12,885
15,190$  135,066
121,25537
42,1791,498
21,3892,373
19,710111,29637
41,634
1,749
32,615
4,141
21,396
129,649393
448,474
15,928227,422
25,231
209,569
1,183,371

29,13435,532309,771

9,419
124
1,128
18,49758,305

9,695
195
1,084
20,881
67,389100,149
1,318
11,994
196,672
619,936

19,694
5,425
107,861

19,694
5,426
103,288

209,399
57,682
1,146,847(413)
132,568(408)
128,000(4,391)
1,409,548

Accumulated other comprehensive income:		 Unrealized holding gain (loss) on securities.......................................
		 Unrealized gain (loss) from hedging instruments...............................
		Translation adjustments...................................................................
			 Total accumulated other comprehensive income.........................

1,475
(332)
(474)
668

385
(62)
(650)
(327)

15,683(3,530)(5,040)7,103

Minority interests ..............................................................................
		Total net assets .............................................................................
			Total liabilities and net assets...................................................

1,131
134,368¥303,970

940
128,613¥325,653

12,026
1,428,687$3,232,004

Current liabilities:
Short-term borrowings (Notes 8 and 16) .............................................
Current portion of long-term debt (Notes 8 and 16) .............................
Notes and accounts payable:
		 Unconsolidated subsidiaries and affiliates .......................................
		 Trade (Note 16) ...............................................................................
		Other ..............................................................................................
Advances received for products ..........................................................
Accrued income taxes (Note 20) .........................................................
Other current liabilities..........................................................................
			Total current liabilities...................................................................
Long-term liabilities:
Long-term debt (Notes 8 and 16).........................................................
Accrued retirement benefits (Note 19)
		For employees.................................................................................
		 For directors and corporate auditors................................................
Deferred tax liabilities (Note 20) ...........................................................
Other long-term liabilities......................................................................
			Total long-term liabilities..............................................................
Net assets:
	Shareholders’ equity (Note 13)
Common stock:		 Authorized — 1,000,000,000 shares
		 Issued — 371,463,036 shares.........................................................
Capital surplus ....................................................................................
Retained earnings................................................................................
	Treasury stock, at cost (632,211 shares in 2013 and621,564 shares in 2012) ...................................................................
			Total shareholders’ equity ...........................................................

25

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statements of Income
For the years ended March 31, 2013 and 2012

Millions of Yen

2013

2012

2013

Net sales.................................................................................................
Cost of sales (Note 9)..............................................................................
		Gross profit .....................................................................................
Selling, general and administrative expenses (Note 9) ........................
		Operating income............................................................................
Other income (expenses):
Interest and dividend income................................................................
Interest expense...................................................................................
Other, net (Note 10) ............................................................................

¥220,653
176,172
44,48027,79916,680¥221,368
169,733
51,63427,72323,911$2,346,124
1,873,174
472,940
295,577
177,352537(635)(1,780)(1,878)531(664)(3,476)(3,609)5,710(6,752)(18,926)(19,968)

Income before income taxes and minority interests............................
Income taxes (Note 20):
Current.................................................................................................
Deferred...............................................................................................
Income before minority interests...........................................................
Minority interests in net income of consolidated subsidiaries.............
Net income (Note 26)..............................................................................

14,802

20,302

157,384

6,049
272
8,479
198
¥  8,281

7,373
312
12,61625¥ 12,591

64,317
2,892
90,1542,105$   88,049

The accompanying notes are an integral part of these statements.

26

Thousands of
U.S. Dollars (Note 3)

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statements of Comprehensive Income
For the years ended March 31, 2013 and 2012

Millions of Yen

Income before minority interests...........................................................
Other comprehensive income:Unrealized holding gain (loss) on securities...........................................
Unrealized gain (loss) from hedging instruments...................................
Translation adjustments.......................................................................
Total other comprehensive income (Note 12)........................................
Comprehensive income.........................................................................
Total comprehensive income attributable to:Shareholders of The Japan Steel Works, Ltd. ......................................
Minority interests..................................................................................

Thousands of
U.S. Dollars (Note 3)

2013

2012

2013

¥8,479¥12,616$ 90,154

1,089
(269)
185
1,004
¥9,484

(302)
(164)
(68)
(535)
¥12,081

11,579(2,860)
1,967
10,675$100,840¥9,277¥  206¥12,060¥    21$ 98,639$  2,190

The accompanying notes are an integral part of these statements.

27

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statements of Changes in Net Assets
For the years ended March 31, 2013 and 2012

Thousands of
U.S. Dollars(Note 3)

Millions of Yen

2013

2013

Common stock:
Balance at beginning of year......

¥ 19,694 ¥ 19,694$  209,399

Balance at end of year...............

¥ 19,694 ¥ 19,694$  209,399

Capital surplus:
Balance at beginning of year......

¥  5,426 ¥  5,426

Disposal of treasury stock..........

(0)

(0)

(0)

$   57,693

Balance at end of year...............

¥  5,425 ¥  5,426$   57,682¥103,288 ¥ 94,779$1,098,224

Retained earnings:
Balance at beginning of year......
Cash dividends paid...................

(3,708)(4,082)(39,426)

Net income................................

8,281

12,591

88,049¥107,861 ¥103,288$1,146,847

Balance at end of year...............

Purchases of treasury stock.......
Disposal of treasury stock..........
Balance at end of year...............

¥   (408) ¥   (224) $    (4,338)
(5)
0

(184)
0

	Net changes in items other thanthose in shareholders’ equity....

¥128,000 ¥119,676$1,360,978(39,426)

Net income................................

8,281

12,591

88,049Purchases of treasury stock.......

(5)

(184)

(53)

Disposal of treasury stock..........

0

0

0

Balance at end of year...............

¥132,568 ¥128,000$1,409,548

1,089

(302)

¥  1,475 ¥    385

(2,860)(164)¥   (332) ¥    (62) $    (3,530)

Balance at end of year...............

¥   (650) ¥   (586) $    (6,911)
176

1,871

(64)

¥   (474) ¥   (650) $    (5,040)¥   (327) ¥    203995$    (3,477)
10,579(531)¥    668 ¥   (327) $    7,103

Minority interests:	Net changes in items other thanthose in shareholders’ equity....
Balance at end of year...............

¥    940 ¥    940191$    9,995

(0)

2,031

¥  1,131 ¥    940$   12,026¥128,613 ¥120,820$1,367,496

Total net assets:
Balance at beginning of year......
Cash dividends paid...................

(3,708)(4,082)(39,426)

Net income................................

8,281

12,591

88,049Purchases of treasury stock.......

(5)

(184)

(53)

$    4,094

Disposal of treasury stock..........

0

0

0

11,579

	Net changes in items other thanthose in shareholders’ equity....

1,187

(531)

12,621$   15,683

Balance at end of year...............

¥134,368 ¥128,613$1,428,687

Unrealized holding gain (loss) on
securities:¥    385 ¥    687

(269)$      (659)

Total accumulated othercomprehensive income:Balance at beginning of year......
(4,082)

Balance at end of year...............

Balance at beginning of year......

0(3,708)	Net changes in items other thanthose in shareholders’ equity....

Balance at end of year...............

¥    (62) ¥    102

Translation adjustments:

Balance at end of year...............

Cash dividends paid...................

Balance at beginning of year......

	Net changes in items other thanthose in shareholders’ equity....

	Net changes in items other thanthose in shareholders’ equity....

Total shareholders’ equity:
Balance at beginning of year......

Balance at beginning of year......

(53)¥   (413) ¥   (408) $    (4,391)

2013

2012

Unrealized gain (loss) fromhedging instruments:

Balance at beginning of year......

Treasury stock, at cost:
Balance at beginning of year......

Millions of Yen

2013

2012

Thousands of
U.S. Dollars(Note 3)

The accompanying notes are an integral part of these statements.

28

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statements of Cash Flows
For the years ended March 31, 2013 and 2012

Millions of Yen

Operating activities
Income before income taxes and minority interests..............................
Depreciation and amortization..............................................................
Loss on impairment of fixed assets (Note 11)
Interest and dividend income................................................................
Interest expense...................................................................................
Equity in (earnings) losses of affiliates...................................................
Loss on write-downs of investment securities.......................................
Loss on disposal of tangible and intangible assets...............................
(Gain) loss on sales of property, plant and equipment...........................
Gain on negative goodwill....................................................................
Changes in operating assets and liabilities:
		 Trade assets (Note 16).....................................................................
		Trade liabilities.................................................................................
		 Inventories (Note 4)..........................................................................
		Other...............................................................................................
			Subtotal.......................................................................................
Interest and dividends received............................................................
Interest paid.........................................................................................
Income taxes paid ...............................................................................
			 Net cash provided by operating activities ...............................
Investing activities
Increase in tangible and intangible assets.............................................
Decrease in tangible and intangible assets...........................................
Purchases of investment securities.......................................................
Reimbursement of long-term deposits on contracts.............................
(Increase) decrease in short-term loans receivable................................
Collection of long-term loans receivable...............................................
Payments for investments in capital of subsidiaries and affiliates..........
Purchase of investments in subsidiaries...............................................
	Proceeds from purchase of investments in subsidiaries resulting inchange in scope of consolidation.......................................................
Other....................................................................................................
			 Net cash used in investing activities .......................................
Financing activities (Notes 8 and 16)
Net decrease in short-term borrowings................................................
Increase in long-term debt ..................................................................
Decrease in long-term debt .................................................................
Cash dividends paid.............................................................................
Acquisition of treasury stock.................................................................
Repayments of finance lease obligations..............................................
Other....................................................................................................
			 Net cash provided by (used in) financing activities.................
Effect of exchange rate changes on cash and cash equivalents........
(Decrease) increase in cash and cash equivalents...............................
Cash and cash equivalents at beginning of the year............................
Cash and cash equivalents at end of the year (Notes 14 and 16).........

Thousands of
U.S. Dollars (Note 3)

2013

2012

2013

¥14,802
15,990
446
(537)
635
(0)
13
1,927
(30)
(57)

¥20,302
19,244
—
(531)
664
0
2,303
379
(53)
—

$157,384
170,016
4,742(5,710)
6,752
(0)
138
20,489(319)(606)(16,333)(422)
19,840(4,614)
31,662539(643)(7,823)23,735(1,720)(3,332)
2,776
3,827
43,859526(667)(11,210)32,507(173,663)(4,487)
210,952(49,059)
336,651
5,731(6,837)(83,179)
252,366(6,209)
88
(10)
(201)
(68)
35
(107)
(12)

(17,233)
236
(682)
(739)
(205)
—
—
—

(66,018)936(106)(2,137)(723)
372(1,138)
(128)

500
153
(5,832)—
22(18,601)

5,316
1,627
(62,010)

(281)
4,400
(13,830)(3,708)(23)(1,814)(1)(15,259)
222
2,865
48,107¥50,972

(235)
—
(635)
(4,082)(2)(1,869)(21)(6,846)(69)
6,990
41,116¥48,107(2,988)46,784(147,049)(39,426)(245)(19,288)(11)(162,243)
2,360
30,463
511,505$541,967

The accompanying notes are an integral part of these statements.

29

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Presentation
The Japan Steel Works, Ltd. (the “Company”) and its domestic subsidiaries maintain their books of account in conformity with the financial
accounting standards of Japan, and its foreign subsidiaries maintaintheir books of account in conformity with those of their respective
countries of domicile.
The accompanying consolidated financial statements have been
prepared in accordance with accounting principles generally acceptedin Japan, which are different in certain respects as to the applicationand disclosure requirements of IFRS, and have been compiled from theconsolidated financial statements prepared by the Company as requiredby the Financial Instruments and Exchange Law of Japan.
As permitted by the Financial Instruments and Exchange Law ofJapan, amounts of less than one million yen have been omitted. As
a result, the totals shown in the accompanying consolidated financial
statements (both in yen and in U.S. dollars) do not necessarily agreewith the sums of the individual amounts.
Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to the current year’s
presentation.
2. Summary of Significant Accounting Policies(a) Principles of consolidation and accounting for investments inunconsolidated subsidiaries and affiliates
The accompanying consolidated financial statements include theaccounts of the Company and any significant companies controlled
directly or indirectly by the Company.
Companies over which the Company exercises significant influencein terms of their operating and financial policies have been accounted
for by the equity method. All significant intercompany balances andtransactions have been eliminated in consolidation.
As of March 31, 2013, the numbers of consolidated subsidiaries,and subsidiaries and affiliates accounted for by the equity method were
35 and 1 (34 and 1 in 2012), respectively. Effective March 31, 2013,YPK Co., Ltd. was included in the scope of consolidation as a result ofadditional acquisition of shares. Fine Crystal Precision (S.Z.) Co., Ltd.
was included in the scope of consolidation as a result of establishmentof the company. Nikko Materials Co., Ltd. was excluded from the scopeof consolidation, after Nikko Materials Co., Ltd. was absorbed by Nikko
Techno Co., Ltd.
Certain foreign subsidiaries are consolidated on the basis of fiscal
periods ended December 31, which differ from that of the Company.
However, the necessary adjustments have been made if the effect ofthe difference is material.
Investments in subsidiaries and affiliates which are neither
consolidated nor accounted for by the equity method are carried at costor less. Where there has been a permanent decline in the value of suchinvestments, the Company has written them down.
Differences between the cost and the underlying net equity at fairvalue of investments in consolidated subsidiaries and in companies
accounted for by the equity method have been amortized by thestraight-line method over five years after acquisition and are included inselling, general and administrative expenses.
(b) Foreign currency translation
The balance sheet accounts of the foreign consolidated subsidiaries
are translated into yen at the rates of exchange in effect at the balance
sheet date, except for the components of net assets excluding minority
interests which are translated at their historical exchange rates.
Revenue and expense accounts are translated at the average rates of30

exchange in effect during the year. Differences arising from the translation are presented as translation adjustments and minority interests inthe consolidated financial statements.
Revenue and expense items arising from transactions denominatedin foreign currencies are generally translated into yen at the rates of
exchange in effect at the respective transaction dates.
All monetary assets and liabilities denominated in foreign currencies
are translated into yen at the rates of exchange in effect at the balance
sheet date and differences arising from the translation are included in
the consolidated statements of income.
(c) Cash equivalents
Short-term investments with a maturity of three months or less whenpurchased which can easily be converted to cash and are subject tolittle risk of change in value are considered to be cash equivalents.
(d) Inventories
Real estate held for sale, finished products and work in process arestated the lower of cost or net realizable value determined principallyby the specific identification method. Raw materials are stated at thelower of cost or replacement cost determined principally by the moving
average method.
(e) Investment securities
Marketable securities classified as other securities are carried at fairvalue with changes in unrealized holding gain or loss, net of the applicable income taxes, included directly in net assets. Non-marketablesecurities classified as other securities are carried at cost. Cost of
securities sold is determined by the moving average method.
(f) Allowance for doubtful accounts
The allowance for doubtful accounts is provided for possible bad debts
at an amount estimated based on the historical experience with bad
debts on normal receivables plus an additional allowance for specificuncollectible amounts determined by reference to the collectability of
individual doubtful accounts.
(g) Provision for warranties for completed construction
The Company provides a provision for warranties for completed
construction by estimating losses on possible future claims.
(h) Provision for loss on construction contracts
The Company provides a provision for loss on construction contracts,
which has not been delivered by the fiscal year end, by estimating theamount of total losses anticipated in the following fiscal year and thereafter to be incurred, when the amounts can be reasonably estimated.
(i) Property, plant and equipment and depreciation
Property, plant and equipment is stated on the basis of cost.
Depreciation of property, plant and equipment is determined by the
declining-balance method over the estimated useful lives of the respective assets, except for buildings to which the straight-line method isapplied.
Significant renewals and additions are capitalized at cost.
Maintenance and repairs are charged to income as incurred.
(j) Leases and depreciation
Finance lease transactions which do not stipulate the transfer of ownership of the leased assets to the lessee are accounted for as purchaseand sales transactions.

With regard to the depreciation method of leased assets, thestraight-line method is applied using the lease period as the estimateduseful life and a residual value of zero.
(k) Retirement benefits
An employee whose employment is terminated is entitled, in mostcases, to a lump-sum severance payment determined by reference tothe current basic rate of pay, length of service and the conditions underwhich the termination occurs.
Accrued retirement benefits for employees have been provided
primarily at an amount calculated based on the retirement benefit
obligation and the fair value of the pension plan assets at the balance
sheet date, as adjusted for prior service cost and unrecognized actuarial
gain or loss. The retirement benefit obligation is attributed to eachperiod by the straight-line method over the estimated years of service ofthe eligible employees.
Prior service cost is being amortized as incurred by the straight-line
method over ten years, which is shorter than the average remaining
years of service of the eligible employees.
Actuarial gain or loss is amortized in the year following the year inwhich the gain or loss is recognized by the straight-line method over ten
years, which is shorter than the average remaining years of service ofthe employees participating in the plans.
(l) Income taxes
Deferred tax assets and liabilities have been recognized in the
consolidated balance sheets with respect to the differences between
financial reporting and the tax bases of the assets and liabilities, and aremeasured using the enacted tax rates and laws which will be in effectwhen the differences are expected to reverse.
(m) Research and development expenses
Research and development expenses are charged to income whenincurred.
(n) Revenue and cost recognition
Revenues on sales of products are generally recognized at the time of
shipment.
Revenues and costs, of which the percentage of completion canbe reliably estimated, are recognized by the percentage-of-completion
method. The percentage of completion is calculated at the cost incurred
as a percentage of the estimated total cost. The completed-contract
method is applied to contracts for which the percentage of completioncannot be reliably estimated.
(o) Derivative financial instruments
Derivative financial instruments are carried at fair value. Gain or loss
on derivatives designated as hedging instruments is deferred as acomponent of net assets until the loss or gain on the underlying hedged
items is recognized. Foreign currency receivables and payables aretranslated at the applicable forward foreign exchange rates when certain
conditions are met. In addition, the related interest differential paid or
received under interest-rate swaps utilized as hedging instruments is
recognized over the terms of the swap agreements as an adjustment
to the interest expense of the underlying hedged items when certain
conditions are met.
(p) C onsumption tax
Accounting treatment of consumption tax is the tax exclusion method.

(q) Provision for directors’ bonuses
Provision for directors’ bonuses is provided based on estimatedamounts to be paid in the subsequent period that are applicable to thecurrent period.
(r) Provision for directors’ retirement benefits
Provision for directors’ retirement benefits is provided based on
estimated amounts determined by internal rules.
(s) Standards issued but not yet effective
On May 17, 2012, the ASBJ issued “Accounting Standard for
Retirement Benefits” (ASBJ Statement No. 26) and “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25),
which replaced the Accounting Standard for Retirement Benefits that
had been issued by the Business Accounting Council in 1998 with aneffective date of April 1, 2000 and the other related practical guidance,
being followed by partial amendments from time to time through 2009.
The major changes are as follows:(i)	Treatment in the balance sheet — Actuarial gains and losses andprior service cost that have yet to be recognized in profit or loss shallbe recognized within net assets (accumulated other comprehensive
income), after adjusting for tax effects, and the deficit or surplus shallbe recognized as a liability (liability for retirement benefits) or asset(asset for retirement benefits).
(ii)	Treatment in the statement of income and the statement of comprehensive income — Actuarial gains and losses and prior service
cost that arose in the current period and have yet to be recognizedin profit or loss shall be included in other comprehensive income
and actuarial gains and losses and prior service cost that wererecognized in other comprehensive income in prior periods and thenrecognized in profit or loss in the current period shall be treated asreclassification adjustments.
This standard and related guidance are effective as of the end of fiscal years beginning on or after April 1, 2013. The Company is currently
evaluating the effect these modifications will have on its consolidated
results of operations and financial position.
3. U.S. Dollar Amounts
The translation of yen amounts into U.S. dollars is included solely forconvenience, as a matter of arithmetic computation only, at ¥94.05 =U.S.$1.00, the approximate rate of exchange prevailing on March 29,
2013. This translation should not be construed as a representation that
all amounts shown could be converted into U.S. dollars at such rate.
4. Inventories
Inventories at March 31, 2013 and 2012 consisted of the following:
Millions of Yen
2013
2012

Real estate held for sale ............
Finished products .....................
Work in process .......................
Raw materials and supplies ......
Total....................................

¥    18
1,363
53,428
4,705¥59,516¥    18
1,431
72,706
5,192¥79,348

Thousands of
U.S. Dollars
2013$    191
14,492568,081
50,027$632,812

Work in process related to construction contracts of which a loss
is anticipated to be incurred was offset with a provision for loss on
construction contracts of ¥2,035 million ($21,637 thousand) at March
31, 2013 and ¥2,391 million at March 31, 2012.

31

5. Depreciation
Depreciation expense on property, plant and equipment for the years
ended March 31, 2013 and 2012 were as follows:
Millions of Yen
2013
2012

Depreciation expense ...............

¥16,061¥19,252

Thousands of
U.S. Dollars
2013$170,771

6. Advanced Depreciation
Accumulated advanced depreciation related to government grants
received has been deducted directly from the acquisition costs ofcertain tangible fixed assets (plant, machinery and equipment). Suchaccumulated depreciation at March 31, 2013 and 2012 are summarized
as follows:
Millions of Yen
2013
2012

Accumulated advanced
depreciation expense..............

¥1,286¥1,287

Thousands of
U.S. Dollars
2013$13,674

7. Contingent Liabilities
Contingent liabilities at March 31, 2013 and 2012 consisted of thefollowing:
Millions of Yen
2013
2012

As endorsers of trade notes receivable:
Discounted to banks..............
Endorsed to other..................
As guarantors of loans:	Muroran Environmental Plant
Service Co., Ltd. .................
Gotsu Wind Power Co., Ltd. ....
	Uncollected receivables inleasing companies................
Employees and other.............

¥   3070¥   23
85

Thousands of
U.S. Dollars
2013Long-term debt

Year ending March 31,

Millions of Thousands of
Yen
U.S. Dollars

2014....................................
2015....................................
2016....................................
2017....................................
2018....................................
2019 and thereafter..............

¥    — $     — ¥10,530 $111,962
—
—
2,660
28,283
10,000 106,326
10,940 116,321
—
—
175
1,861
—
—
4,030
42,850————Year ending March 31,

Millions of Thousands of
Yen
U.S. Dollars

2014....................................
2015....................................
2016....................................
2017....................................
2018....................................
2019 and thereafter..............

¥874
598
389
220
105
16

Lease obligations

588
1,509

586
1,633

6,252
16,045

16
238

16
355

170
2,531

Thousands of
U.S. Dollars
2013¥28,335¥37,535$301,276(10,530)
2,203(13,670)
3,187(111,962)
23,424(874)(1,520)(9,293)

10,00010,000106,326¥29,134¥35,532$309,771$9,293
6,358
4,136
2,339
1,116
170

9. Research and Development Expenses
Research and development expenses included in manufacturing costs,
and selling, general and administrative expenses for the years ended
March 31, 2013 and 2012 were as follows:
Millions of Yen
2013
2012

Research and development
expenses.................................

Millions of Yen
2013
2012

32

Bonds
Millions of Thousands of
Yen
U.S. Dollars$   319744

8. Short-Term Borrowings and Long-Term Debt
All short-term borrowings, with interest at annual rates ranging from
0.57% to 2.1% at March 31, 2013 and 0.636% to 1.975% at March 31,
2012, were unsecured.
Long-term debt at March 31, 2013 and 2012 were as follows:

Loans from banks andinsurance companies withinterest at annual rates ranging
from 0.19% to 2.3%................
	Less those maturing within
one year...............................
Lease obligations.......................
	Less those maturing within
one year...............................
0.48% straight bonds,
due 2015.................................
Long-term indebtedness
reflected in the consolidatedbalance sheets........................

The aggregate annual maturities of long-term debt and lease obligations
subsequent to March 31, 2013 are summarized as follows:¥4,054¥4,626

Thousands of
U.S. Dollars
2013$43,105

10. Other Income (Expenses) — Other, Net
The details of “Other, net” in “Other income (expenses)” for the years
ended March 31, 2013 and 2012 were as follows:
Millions of Yen
2013
2012

Cancellation fee received...........
Amortization of negative
goodwill...................................
Equity in earnings of affiliates.....
Provision for warranties forcompleted construction...........
Gain on sales of property,
plant and equipment................
Gain on negative goodwill..........
Loss on sales or disposal ofproperty, plant andequipment...............................
Loss on write-downs ofinvestment securities...............
Loss on valuation ofmembership............................
Impairment loss.........................
Other, net..................................
Total....................................

Thousands of
U.S. Dollars
2013¥ 2,099¥   34$ 22,318

71
0

71
—

755
0

(2,393)(1,096)(25,444)

34
57

85
—

362
606

(1,931)(411)(20,532)(13)(2,303)

(138)

(6)
(446)
748
¥(1,780)

(12)
—
155
¥(3,476)(64)(4,742)
7,953$(18,926)11. Loss on Impairment of Fixed Assets
Loss on impairment of fixed assets recognized by the Company and acertain consolidated subsidiary for the year ended March 31, 2013 was
as follows:
Location
Use
Classification
Iruma-shi, Saitama prefecture
Idle assets Buildings and other
Guangdong province, China(a subsidiary engaged in the
Steel and Energy Products)

OperatingassetsBuildings and Structures.............................
Machinery...................................................
Equipment..................................................
Total........................................................

Millions ofYen

Thousands of
U.S. Dollars

¥356
87
3
¥446

$3,785925
32$4,742The Company and its consolidated subsidiaries principally use net
realizable value for calculating the recoverable amount.
12. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects
allocated to each component of other comprehensive income for theyear ended March 31, 2013 and 2012:
Millions of Yen
2013
2012

Unrealized holding gain (loss)
on securities:
	Amount arising during theyear......................................
	Reclassification adjustments
for gains and losses realized
in net income........................
		The amount of unrealized
holding gain (loss) on
securities before tax effect....
		Tax effect............................
		Unrealized holding gain
(loss) on securities.............
Unrealized gain (loss) fromhedging instruments:
	Amount arising during theyear......................................
		Tax effect............................
		Unrealized gain (loss) fromhedging instruments..........
Translation adjustments:
	Amount arising during theyear......................................
		Translation adjustments......
			Total other comprehensive
income...........................

¥1,672

Number of shares

Machinery and other

The Company and its consolidated subsidiaries group their assets
by classifying them into the smallest independent cash flow generating
units on the basis of managerial accounting, whereas idle assets aregrouped on an individual basis.
Regarding the above assets, the Company and its consolidated
subsidiaries marked down the book value of these asset groups, due
to their significant decline in profitability and/or market price, to theirrecoverable amounts.
The resulting impairment loss for the year ended March 31, 2013
was as follows:
Classification

13. Supplementary Information for Consolidated Statements of
Changes in Net Assets
Year ended March 31, 2013(a) Information regarding the number and type of shares issued andtreasury stock:¥(2,571)

Thousands of
U.S. Dollars
2013$17,778

13

2,013

138

1,686
(596)

(558)
256

17,927(6,337)

1,089

(302)

11,579

(433)
163

(272)
107

(4,604)
1,733

(269)

(164)

(2,860)

185
185

(68)
(68)

1,967
1,967

¥1,004¥  (535)$10,675

Shares issued:
Common stock.......
Treasury stock:	Common stock(Notes 1 and 2)......

Decreaseduringthe yearYear ended
March 31,2013

Year ended
March 31,
2012

Increaseduringthe year

371,463,036——

371,463,036

621,564

11,507860

632,211

Notes 1: The increase in treasury stock — common stock of 11,507
was due to the acquisition of fractional shares of less than oneunit.
2: The decrease in treasury stock — common stock of 860 was
due to sales of fractional shares of less than one unit.
(b) Dividends(i) Dividends paid to shareholders
		 ① Resolution:Annual general meeting ofshareholders held on June 26, 2012
			 Type of shares:
Common stock			Total amount ofdividends:¥1,854 million ($19,713 thousand)			 Dividends per share:¥5 ($0.053)
			 Cut-off date:
March 31, 2012
			 Effective date:June 27, 2012		 ② Resolution:				 Type of shares:				Total amount ofdividends:				 Dividends per share:				 Cut-off date:				 Effective date:Meeting of Board of Directors held on
October 29, 2012
Common stock¥1,854 million ($19,713 thousand)¥5 ($0.053)
September 30, 2012
December 3, 2012(ii)	Dividends of which the cut-off date was in the year ended March
31, 2013, but the effective date is in the following fiscal year
Resolution:Annual general meeting ofshareholders held on June 25, 2013
Type of shares:
Common stockTotal amount ofdividends:¥1,854 million ($19,713 thousand)
Dividends per share:¥5 ($0.053)
Cut-off date:
March 31, 2013
Effective date:June 26, 2013
	Source of dividends:
Retained earnings

33

Year ended March 31, 2012(a) Information regarding the number and type of shares issued andtreasury stock:
Number of sharesYear ended
March 31,2011

Shares issued:
Common stock.......
Treasury stock:	Common stock(Notes 1 and 2)......

371,463,036

299,234

Increaseduringthe year

Decreaseduringthe year—322,733—

403

Year ended
March 31,2012

621,564(b) Dividends(i) Dividends paid to shareholders
		 ① Resolution:Annual general meeting ofshareholders held on June 24, 2011
			 Type of shares:
Common stock			Total amount ofdividends:¥2,226 million
			 Dividends per share:¥6			 Cut-off date:
March 31, 2011
			 Effective date:June 27, 2011				 Type of shares:				Total amount ofdividends:				 Dividends per share:				 Cut-off date:				 Effective date:Meeting of Board of Directors held on
November 7, 2011
Common stock¥1,855 million¥5
September 30, 2011
December 5, 2011(ii)	Dividends of which the cut-off date was in the year ended March
31, 2012, but the effective date is in the following fiscal year
Resolution:Annual general meeting ofshareholders held on June 26, 2012
Type of shares:
Common stockTotal amount ofdividends:¥1,854 million
Dividends per share:¥5
Cut-off date:
March 31, 2012
Effective date:June 27, 2012
	Source of dividends:
Retained earnings

34

Millions of Yen
2013
2012

371,463,036

Notes 1: T he increase in treasury stock — common stock of 4,960 was
due to the acquisition of fractional shares of less than one unit
and common stock of 317,773 was due to the repurchase ofshares held by lost shareholders.
2: T he decrease in treasury stock — common stock of 403 wasdue to sales of fractional shares of less than one unit.

		 ② Resolution:

14. Cash Flow Information(a) Cash and cash equivalents
The reconciliation between cash and cash equivalents in the accompanying consolidated statements of cash flows and cash on hand and inbanks in the accompanying consolidated balance sheets at March 31,
2013 and 2012 are summarized as follows:

Cash on hand and in banks
in the consolidatedbalance sheet..........................
Investments with maturities ofthree months or less from thedate of acquisition...................
Time deposits with maturities ofmore than three months..........
Cash and cash equivalents inthe consolidated statement ofcash flows...............................

Thousands of
U.S. Dollars
2013¥51,005¥48,148$542,318

—

31

—

(32)

(72)

(340)

¥50,972¥48,107$541,967(b) Significant transactions without cash flows
Assets and liabilities corresponding to finance lease transactions thathave been recorded by the Company and its domestic consolidated
subsidiaries at March 31, 2013 and 2012 were as follows:
Millions of Yen
2013
2012

Thousands of
U.S. Dollars
2013

Lease assets.............................

¥732

¥646

$7,783

Lease obligations.......................

766

675

8,145

(c) Summary of assets acquired and liabilities assumed through theacquisition of shares of YPK Co., Ltd. for the year ended March 31,
2013, relating acquisition costs and net proceeds:

Current assets............................................
Noncurrent assets......................................
Current liabilities.........................................
Noncurrent liabilities....................................
Negative goodwill.......................................
Company’s interest prior to the date ofacquisition................................................
Acquisition costs of YPK Co., Ltd. .............
Cash and cash equivalents(YPK Co., Ltd.).........................................
Net proceeds from acquisition of
YPK Co., Ltd............................................

Millions ofYen

Thousands of
U.S. Dollars¥6,285394(5,926)(225)(55)$66,826
4,189(63,009)(2,392)
(585)

(308)
164

(3,275)
1,744

(665)

(7,071)¥  500$ 5,316

15. Leases
Year ended March 31, 2013
Future minimum lease payments subsequent to March 31, 2013 under
non-cancelable operating leases are summarized as follows:Year ending March 31,

2014.........................................
2015 and thereafter...................
Total....................................

Millions of Yen

Thousands of
U.S. Dollars¥2,846
5,291¥8,138$30,260
56,257$86,528

Year ended March 31, 2012
Future minimum lease payments subsequent to March 31, 2012 under
non-cancelable operating leases are summarized as follows:Year ending March 31,

2013.........................................
2014 and thereafter...................
Total....................................

Millions of Yen¥ 2,819
7,373¥10,193

16. Financial Instruments
Overview(a) Policy for financial instruments
In consideration of plans for operations and capital investment, theCompany and its consolidated subsidiaries (collectively, the “Group”)
utilize funds provided by operating cash flows first. The Group uses
bond issuances and bank borrowings in order to raise additional funds,
if needed. The Company manages temporary cash surpluses throughlow-risk financial assets. The Company uses derivatives for the purposeof reducing risks and does not enter into derivatives contracts for
speculative or trading purposes.
(b) Types of financial instruments and related risk
Trade receivables — trade notes and accounts receivable — areexposed to credit risk in relation to customers. In addition, the Company
is exposed to foreign currency exchange risk arising from receivables
denominated in foreign currencies. The foreign currency exchange risks
deriving from the trade receivables denominated in foreign currencies
are hedged by forward foreign exchange contracts, if needed.
Investment securities are exposed to market risk. These securities
are mainly composed of the shares of companies with which theCompany has business relationships.
Trade payables — trade notes and accounts payable — have payment due dates within one year. Since the Company is exposed to foreign currency exchange risk arising from those payables denominatedin foreign currencies, forward foreign exchange contracts are arranged
to reduce the risk, if needed.
Loans payable and bonds are used to raise funds mainly in connection with capital investments. The repayment dates of the long-term
debts extend up to five years from the balance sheet date. Long-term
debt with variable interest rates is exposed to interest rate fluctuation
risk. However, to reduce such risk and fix the interest payments forlong-term debt with variable rates, the Company utilizes interest rate
swap transactions as hedging instruments.
Regarding derivatives, the Company enters into forward foreignexchange contracts to reduce the foreign currency exchange risk arisingfrom the receivables and payables denominated in foreign currencies.
The Company also enters into interest rate swap transactions to reduce
the fluctuation risk of interest payments for long-term debt with variable
rates.
Information regarding the method of hedge accounting, hedging
instruments and hedged items, hedging policy, and the assessment of
the effectiveness of hedging activities is found in Note 2 (o).

(c) Risk management for financial instruments(i)	Monitoring of credit risk (the risk that customers or counterparties
may default)
In accordance with the internal policies of the Company for
managing credit risk arising from receivables, each related divisionmonitors credit worthiness of their main customers periodically,
and monitors due dates and outstanding balances by individual
customer. In addition, the Company is making efforts to identify
and mitigate risks of bad debts from customers who are having
financial difficulties. The consolidated subsidiaries also manage
credit risk using the Company’s internal policies and methods.
The Company also believes that the credit risk of derivatives
is insignificant as it enters into derivative transactions only withfinancial institutions which have a high credit-rating.
(ii)	Monitoring of market risk (the risk arising from fluctuations inforeign exchange rates, interest rates and others)
For trade receivables and payables denominated in foreign
currencies, the Company identifies the foreign currency exchange
risk for each currency on a monthly basis and enters into forward
foreign exchange contracts to hedge such risk. In order tomitigate the interest rate risk for loans payable bearing interest at
variable rates, the Company may also enter into interest rate swap
transactions.
For investment securities, the Company periodically reviews
the fair values of such financial instruments and the financial
position of the issuers. In addition, the Company continuously
evaluates whether securities should be maintained taking into
account their fair values and relationships with the issuers.
In conducting derivative transactions, the division in chargeof each derivative transaction follows the internal policies, which
set forth delegation of authority. Monthly reports including actual
transaction data are submitted to top management for theirreview. The consolidated subsidiaries also conduct derivativetransactions using the Company’s internal policies.
(iii)	Monitoring of liquidity risk (the risk that the Company may not beable to meet its obligations on scheduled due dates)
Based on the report from each division, the Company preparesand updates its cash flow plans on a timely basis to manage
liquidity risk. The consolidated subsidiaries manage the liquidity
risk using cash flow plans and report to the Company periodically.
(d) Supplementary explanation of the estimated fair value of financial
instruments
The fair value of financial instruments is based on their quoted market
price, if available. When there is no available quoted market price, fairvalue is reasonably estimated. Since various assumptions and factors
are reflected in estimating the fair value, different assumptions and factors could result in different fair value. In addition, the notional amountsof derivatives in Note 18 Derivative Transactions are not necessarily
indicative of the actual market risk involved in derivative transactions.

35

Estimated Fair Value of Financial Instruments
Carrying value of financial instruments on the consolidated balance
sheet as of March 31, 2013 and estimated fair value are shown in thefollowing table. The following table does not include financial instruments for which it is extremely difficult to determine the fair value (Pleaserefer to Note (ii) below).
Year ended March 31, 2013
Millions of Yen

AssetsCash on hand and in banks......
	Trade notes and accounts
receivable...............................
Securities:
		Other securities.....................
Total assets.................................
Liabilities	Trade notes and accounts
payable..................................
Short-term borrowings.............
	Current portion of long-term
debt .......................................
	Bonds......................................
Long-term debt........................
Total liabilities..............................
Derivatives (*)...............................

Carrying
amountEstimated
fair value

Difference¥ 51,005¥ 51,005¥ —51,97051,967(3)

25,715¥128,691

25,715¥128,687—¥  (3)¥ 42,216
12,703¥ 42,216
12,703¥ ——10,53010,562
10,00010,03417,805
17,929¥ 93,255 ¥ 93,446¥   (534) ¥   (534)

32
34
124
¥190
—

AssetsCash on hand and in banks......
	Trade notes and accounts
receivable...............................
Securities:
		Other securities.....................
Total assets.................................
Liabilities	Trade notes and accounts
payable..................................
Short-term borrowings.............
	Current portion of long-term
debt .......................................
	Bonds......................................
Long-term debt........................
Total liabilities..............................
Derivatives (*)...............................

Estimated
fair value

Difference$  542,318 $  542,318$   —

552,578

552,547(32)

273,418
273,418$1,368,325 $1,368,283—$   (32)$  448,868 $  448,868
135,066
135,066$   ——

111,962
112,302106,326
106,688
189,314
190,633$  991,547 $  993,578$    (5,678) $    (5,678)

340
362
1,318
$2,020—(*) The value of assets and liabilities arising from derivatives is shown at
net value, with the amount in parentheses representing net liability
position.

36

Millions of Yen

AssetsCash on hand and in banks......
	Trade notes and accounts
receivable...............................
Securities:		Other securities withmaturities............................
		Other securities.....................
Total assets.................................
Liabilities	Trade notes and accounts
payable..................................
Short-term borrowings.............
	Current portion of long-term
debt .......................................
	Bonds......................................
Long-term debt........................
Total liabilities..............................
Derivatives (*)...............................

Carrying
amountEstimated
fair value

Difference¥ 48,148¥ 48,148¥ —46,52046,515(5)

31
24,087¥118,788

31
24,087¥118,783

—
—
¥ (5)

¥ 41,672
12,885¥ 41,672
12,885¥ ——13,67013,67910,00010,02723,86524,068¥102,092 ¥102,332¥    (100) ¥    (100)

9
27
203
¥240
—

(*) The value of assets and liabilities arising from derivatives is shown at
net value, with the amount in parentheses representing net liability
position.
(i) Method to determine the estimated fair value of financial instruments
and other matters related to securities and derivative transactions

Thousands of U.S. Dollars
Carrying
amountYear ended March 31, 2012

AssetsCash on hand and in banks
The carrying amount is used for bank deposits without maturities,
because the fair value approximates the carrying value. The fair valueof time deposits in banks with maturities is calculated based on thepresent value of the total principal and interest discounted at a rate
supposing a newly made deposit.
Trade notes and accounts receivables
The fair value is calculated by categories of the remaining periodsof the receivables based on the present value using discount rates
determined by the period to maturity and credit risk.
Securities
The carrying amount is used for other securities with maturities,
because the fair value approximates the carrying amount.
		 Quoted market price is used for other securities.
Liabilities
Trade notes and accounts payable and short-term borrowings
The carrying amount is used for these items because the fair value
approximates the carrying amount.
Current portion of long-term debt, bonds and long-term debt
The fair values are calculated by applying a discount rate, based on
the assumed interest rate if a similar new debt is issued, to the totalof the principal and interest. The current portion of long-term debt
and long-term debt with variable interest rates are subject to thespecial treatment of interest rate swaps and is calculated by applying
a discount rate, based on the assumed interest rate if a similar new
debt is issued, to the total of the principal and interest including thatof the interest rate swap.
Derivative Transactions
Please refer to Note 18, Derivative Transactions, of the notes to theconsolidated financial statements.

(ii) Financial instruments for which it is extremely difficult to determine
the fair value
Millions of Yen
2013
2012

Unlisted stocks..........................

¥1,949Thousands of
U.S. Dollars
2013¥1,967$20,723

Because the fair values of these financial instruments are extremely
difficult to determine, given that they do not have quoted market prices
and future cash flows cannot be estimated, they are not included in“Securities” in the preceding table.
(iii) Redemption schedule for receivables and securities with maturities at
March 31, 2013 and 2012.
Year ended March 31, 2013
Millions of Yen
Due after
one year
Due in one through five
years
year or less

Cash on hand and in banks.........
Trade notes and accounts
receivable..................................
Total............................................

¥ ——51,275¥102,280

695
¥695

—
—

Thousands of U.S. Dollars
Due after
one year
Due in one through five
years
year or lessDue after
five years

$   —

—

7,390
$7,390——Year ended March 31, 2012
Millions of Yen
Due after
one year
Due in one through five
years
year or less

Cash on hand and in banks.........
Trade notes and accounts
receivable..................................
Securities:
	Other securities withmaturities...............................
Total............................................

Millions of Yen

Due in 1 year or less....................
Due after 1 year through2 years......................................
Due after 2 years through3 years......................................
Due after 3 years through4 years......................................
Due after 4 years through5 years......................................
Due after 5 years.........................

Due after
five years¥48,148¥  ——

45,709811—

31¥93,889

—
¥811

—
—

Bonds

Long-term
loans

Lease
obligations¥    —¥10,530

¥874

—

2,660

598

10,00010,940

389

—

175

220

—
—

4,030
—

105
16

Thousands of U.S. Dollars

Due after
five years¥ 51,005

Cash on hand and in banks......... $  542,318
Trade notes and accounts
receivable..................................
545,189
Total............................................ $1,087,507(iv) The redemption schedule for long-term debt
Year ended March 31, 2013

Due in 1 year or less....................
Due after 1 year through2 years......................................
Due after 2 years through3 years......................................
Due after 3 years through4 years......................................
Due after 4 years through5 years......................................
Due after 5 years.........................

Bonds

Long-term
loans

Lease
obligations$     —

$111,962$9,293—28,283

6,358

106,326

116,321

4,136

—

1,861

2,339

—
—

42,850
—

1,116
170

Year ended March 31, 2012
Millions of Yen

Due in 1 year or less....................
Due after 1 year through2 years......................................
Due after 2 years through3 years......................................
Due after 3 years through4 years......................................
Due after 4 years through5 years......................................
Due after 5 years.........................

Bonds

Long-term
loans

Lease
obligations¥     —

¥13,670¥1,520—10,370

783

—

2,550

474

10,00010,830

251

—
—

115
—

109
48

17. Securities
Other securities:
March 31, 2013
Millions of Yen

Carrying amount exceeding theacquisition cost:
Stocks......................................
Carrying amount not exceeding
the acquisition cost:
Stocks......................................
		
Total...............................

Acquisition
cost

Carrying
amountUnrealized
gain (loss)¥ 5,410¥10,457¥5,047

17,663¥23,073

14,900¥25,357(2,763)¥2,28437

Thousands of U.S. Dollars

Carrying amount exceeding theacquisition cost:
Stocks......................................
Carrying amount not exceeding
the acquisition cost:
Stocks......................................
		
Total...............................

Acquisition
cost

Carrying
amountUnrealized
gain (loss)$ 57,523$111,186$53,663

187,804$245,327

158,426$269,612(29,378)$24,285

March 31, 2012
Millions of Yen

Carrying amount exceeding theacquisition cost:
Stocks......................................
Carrying amount not exceeding
the acquisition cost:
Stocks......................................
		
Total...............................

Acquisition
cost

Carrying
amountUnrealized
gain (loss)¥ 8,475¥11,746¥3,271

14,393¥22,869

11,720¥23,466(2,673)¥  597

When their fair values have declined by 50% or more, impairment losses
are recorded on those securities. When their fair values have declined
by 30% up to 50%, impairment losses are recorded on those securities
on an individual basis to the values considered to be recoverable.
18. Derivative Transactions(a) Derivatives not subject to hedge accounting
Year ended March 31, 2013
None applicableYear ended March 31, 2012
None applicable(b) Derivatives subject to hedge accounting
The contract amounts or the amount corresponding to principal as specified by the contract as of the date of the closing of the consolidated
accounts is shown below by type of hedge accounting method.
(i) Currency-related transactions
Year ended March 31, 2013
Hedge accounting method

Allocation method

Hedge accounting method

Allocation method

Type of derivative

Foreign exchange forward contracts Notes and accounts receivable
Sell:
U.S. dollars........................................................................................
Euros................................................................................................
Canadian dollars ...............................................................................
Hong Kong dollars.............................................................................
Foreign exchange forward contracts Notes and accounts payable
Buy:
U.S. dollars........................................................................................
Euros................................................................................................
Sterling pound...................................................................................
Hong Kong dollars.............................................................................

Type of derivative

Principal items hedged

Foreign exchange forward contracts Notes and accounts receivable
Sell:
U.S. dollars........................................................................................
Euros................................................................................................
Canadian dollars ...............................................................................
Hong Kong dollars.............................................................................
Foreign exchange forward contracts Notes and accounts payable
Buy:
U.S. dollars........................................................................................
Euros................................................................................................
Sterling pound...................................................................................
Hong Kong dollars.............................................................................

Note: Calculation of fair value is based on the forward exchange rates.
38

Principal items hedged

Millions of Yen
Contract amount

Fair valueOver one year
¥8,284
751
22
12

¥298
84
—
—

¥(774)(44)
0(1)¥5,003
521
120
7

—
—
—
—

¥ 229
48
8
(0)

Thousands of U.S. Dollars
Contract amount
Fair valueOver one year
$88,081
7,985
234
128

$3,169893——$(8,230)
(468)
0
(11)

$53,195
5,540
1,276
74

—
—
—
—

$ 2,435510
85(0)Year ended March 31, 2012
Hedge accounting method

Allocation method

Type of derivative

Principal items hedged

Foreign exchange forward contracts Notes and accounts receivable
Sell:
U.S. dollars........................................................................................
Euros................................................................................................
Foreign exchange forward contracts Notes and accounts payable
Buy:
U.S. dollars........................................................................................
Euros................................................................................................
Sterling pound...................................................................................

Millions of Yen
Contract amount

Fair valueOver one year
¥7,957
275

¥290
66

¥(200)(8)¥2,697
954
116

¥ 84
—
—

¥  69
31
8

Note: Calculation of fair value is based on the forward exchange rates.
(ii) Interest-related transactions
Year ended March 31, 2013
Hedge accounting method

Special treatment forinterest rate swaps

Type of derivative

Principal items hedged

Receive/floating and pay/fixed

Hedge accounting method

Type of derivative

Fair valueOver one year
Current portion of long-termborrowings
Long-term borrowings................

Special treatment forinterest rate swaps

Millions of Yen
Contract amountPrincipal items hedged¥14,100¥4,000(*)

Thousands of U.S. Dollars
Contract amount
Fair value

Receive/floating and pay/fixedOver one year
Current portion of long-termborrowings
Long-term borrowings................

$149,920$42,531(*)(*) Since interest rate swap contracts accounted for by the special treatment for interest rate swaps are treated together with the long-term borrowings subject to hedging, the estimated fair value of such interest rate swap contracts is included in the estimated fair value of the corresponding long-term borrowings.
Note: C alculation of fair value is based on the stated price by financial institutions.
Year ended March 31, 2012
Hedge accounting method

Special treatment forinterest rate swaps

Type of derivative

Principal items hedged

Millions of Yen
Contract amount

Receive/floating and pay/fixed

Fair valueOver one year
Current portion of long-termborrowings
Long-term borrowings................

¥23,000¥10,000(*)(*) Since interest rate swap contracts accounted for by the special treatment for interest rate swaps are treated together with the long-term borrowings subject to hedging, the estimated fair value of such interest rate swap contracts is included in the estimated fair value of the corresponding long-term borrowings.
Note: C alculation of fair value is based on the stated price by financial institutions.

39

19. Employees’ Retirement Benefit Plans
The following table sets forth the funded and accrued status of theplans, and the amounts recognized in the accompanying consolidatedbalance sheets at March 31, 2013 and 2012 for the Company’s and theconsolidated subsidiaries’ defined benefit pension plans:

Retirement benefit obligation.....
Plan assets at fair value.............
Unfunded retirement benefit
obligation.................................
Unrecognized actuarial loss.......
Unrecognized prior service
cost.........................................
Net retirement benefit
obligation.................................
Accrued retirement benefits.......
Prepaid pension cost.................

Millions of Yen
2013
2012

Thousands of
U.S. Dollars
2013¥(25,153) ¥(26,300)
16,012
14,381$(267,443)
170,250(9,141)
2,611(11,918)
4,351(97,193)
27,762

274

414

2,913

(6,254)(7,152)(9,419)(9,695)¥  3,164 ¥  2,543(66,497)(100,149)$  33,642

The components of retirement benefit expenses for the years ended
March 31, 2013 and 2012 are outlined as follows:
Millions of Yen
2013
2012

Service cost...............................
Interest cost..............................
Expected return onplan assets..............................
Amortization of actuarial loss.....
Amortization ofprior service cost.....................
Retirement benefit expenses.....

Thousands of
U.S. Dollars
2013¥1,549289¥1,847
312$16,470
3,073

(204)
440

(206)
1,152

(2,169)4,678

140¥2,214140¥3,246

1,489$23,541

The assumptions used in accounting for the above plans were as
follows:
Discount rate...........................................
Expected rate of return on plan assets....

2013

2012

1.50%
1.50%

1.50%
1.50%

20. Income Taxes
The significant components of the Company’s deferred tax assets andliabilities at March 31, 2013 and 2012 were as follows:
Millions of Yen
2013
2012

Deferred tax assets:
Accrued enterprise taxes........
Accrued bonuses...................
	Unrealized gain on
intercompany transactions....
	Accrued retirement benefits
for employees.......................
	Accrued retirement benefits
for directors and corporate
auditors................................
	Loss on revaluation of
inventory items.....................
	Loss on revaluation offinancial instruments.............
Impairment loss......................
Depreciation...........................
	Amortization of deferredassets..................................
	Amortization of long-term
prepaid expenses.................
	Provision for warranties forcompleted construction........
	Provision for loss on
construction contracts..........
	Less allowance for doubtful
accounts...............................
Asset retirement obligations....
	Percentage-of-completion
method................................
Tax loss carry forwards..........
Deferred loss on hedges........
	Unrealized loss on
investment securities............
Other......................................
Gross deferred tax assets..........
Valuation allowance................
Total deferred tax assets...........
Deferred tax liabilities:	Reserve for advanced
depreciation.........................
	Reserve for special
depreciation.........................
Prepaid pension cost..............
	Disposal cost with asset
retirement obligations...........
	Unrealized gain on
investment securities............
Deferred gain on hedges........
Other......................................
Total deferred tax liabilities.........
Net deferred tax assets.............

40

Thousands of
U.S. Dollars
2013¥   2391,144¥   3261,215$  2,541
12,164

592

784

6,295

4,453

4,565

47,347

69

111

734

1,492

1,521

15,864

274
184
1,107

263
56
876

2,913
1,956
11,770

36

67

383

105

94

1,116

1,202

576

12,780

1,351

2,021

14,365

145
490

111
462

1,542
5,210

256
2,085
319

99
1,800
93

2,722
22,169
3,392

974
354
16,882(3,676)
13,205944
278
16,272(2,661)
13,611

10,356
3,764
179,500(39,086)
140,404

1,853

1,931

19,702

1,342
1,120

1,999
900

14,26911,909

289

297

3,073

1,794
117
34
6,551
¥ 6,653

1,156
55
23
6,363
¥ 7,248

19,075
1,244
362
69,654$ 70,739

The reconciliation between the effective tax rates reflected in the
consolidated statement of income and the statutory tax rates for theyears ended March 31, 2013 and 2012 were as follows:
Statutory tax rates.....................
Effect of:
Change in valuation allowance....
Tax credit...................................
Other.........................................
Effective tax rates......................

2013

2012

37.8%

40.5%

6.9
(1.9)
0.0
42.7%

(5.2)
(1.0)
3.7
37.9%

21. Business Combinations
Business combination through acquisition(a) Outline of business combination① Name and business of acquired company
Name: YPK Co., Ltd.
Business: S ales of injection molding machines, blow-molding
machines, extruders, vacuum forming machines andpowder processing machines, etc.
Installation services and international trading services② Main reason for the business combination
In order to increase its market share and improve businessefficiency of the group as a whole③ Date of business combination
April 1, 2012
④ Legal form of business combination
Cash payment in exchange for shares⑤ Name of company after business combinationYPK Co., Ltd.
⑥ Percentage of voting rights acquired
Percentage of voting rights held before the business combination:
46%
Percentage of voting rights acquired on the date of businesscombination: 54%
Percentage of voting rights held after the business combination:
100%⑦ Primary reason for determining the acquiring company
The Company was determined to be the acquiring company
because it acquired the shares in exchange for cash.
(b) Period for which earnings of the acquired company were included in
the consolidated financial statements
The earnings of the acquired company for the period from April 1, 2012
through March 31, 2013 are included in the Company’s consolidated
statement of income for the year ended March 31, 2013.
(c) Acquisition cost and breakdown
Acquisition price: ¥404 million ($4,296 thousand)Costs incurred directly in the acquisition: ¥2 million ($21 thousand)Acquisition cost: ¥407 million ($4,327 thousand)(d) Difference between the acquisition cost of the acquired company
and the aggregate acquisition cost of each transaction until thecompany was acquired¥65 million ($691 thousand)(e) Amount and reason for gain on negative goodwill① Amount¥120 million ($1,276 thousand)② Reason
The negative goodwill was generated because the fair value ofthe net assets acquired on the date of the business combination
exceeded the acquisition cost.

(f) Assets acquired and liabilities assumed at the date of businesscombination
Current assets: ¥6,285 million ($66,826 thousand)Fixed assets: ¥394 million ($4,189 thousand)Total assets: ¥6,680 million ($71,026 thousand)Current liabilities: ¥5,926 million ($63,009 thousand)Long-term liabilities: ¥225 million ($2,392 thousand)Total liabilities: ¥6,152 million ($65,412 thousand)Transactions under common control(a) Information on companies in business combinationi) Combination between Nikko Techno Co., Ltd. and Nikko Materials
Co., Ltd.
① Name and business of companies
Name of surviving company: Nikko Techno Co., Ltd.
Business: Machine processing, finishing turning, assembling ofiron, nonferrous metals and special alloys
Manufacturing and sales of processed products
Name of absorbed company: Nikko Materials Co., Ltd.
Business: Manufacturing, processing and sales of wooden moldand metal mold for iron castings, steel castings andcastings② Date of business combination
October 1, 2012
③ Legal form of business combination
Absorption-type merger with Nikko Techno Co., Ltd. as thesurviving company④ Name of company after business combination
Nikko Techno Co., Ltd.
⑤ Purpose and outline of transactions
The Company intends to construct an efficient and rational
operating structure. In addition, the Company plans to enhance
productivity and profitability, the effective use of humanresources and support a responsive organization.
ii) Establishment of Fine Crystal Precision (S.Z.) Co., Ltd.
① Name and business of companies
Name of companies: Fine Crystal (H.K.) Co., Ltd., Fine Crystal
Precision (S.Z.) Co., Ltd.
Business: Processing of low-pass filter for single-lens camera② Date of business combination
December 11, 2012
③ Legal form of business combination
Investment in kind in Fine Crystal Precision (S.Z.) Co., Ltd. bytransferring fixed assets possessed by Fine Crystal (H.K.) Co.,Ltd.
④ Name of company after business combination
Fine Crystal Precision (S.Z.) Co., Ltd.
⑤ Purpose and outline of transactions
Fine Crystal (H.K.) Co., Ltd. established a wholly owned
enterprise in connection with the change of the type of contract
with its contract manufacturer.
(b) Outline of the accounting treatment
The Company accounted for the transactions as transactions undercommon control based on the Accounting Standard for Business
Combinations (Accounting Standards Board of Japan (ASBJ),
Statement No. 21 issued on December 26, 2008) and the Guidanceon Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures (ASBJ Guidance No. 10, issued on
December 26, 2008).

41

22. Asset Retirement Obligations
The following table presents the changes in asset retirement obligations
for the years ended March 31, 2013 and 2012:
Millions of Yen
2013
2012

Balance at beginning of year......
Liabilities incurred due to theacquisition of property, plantand equipment........................
Accretion expense.....................
Liabilities settled........................
Other.........................................
Balance at end of year...............

23. Investment and Rental Properties
The Company has omitted the disclosure of investment and rental
properties due to immateriality for the years ended March 31, 2013 and2012.

Thousands of
U.S. Dollars
2013¥1,299¥1,371$13,812

—
19
(47)
100
¥1,371

—
19
(78)
(12)
¥1,299

—
202
(500)
1,063
$14,577

24. Segment Information
The reportable segments of the Group are components for which discrete financial information is available and whose operating results are regularly
reviewed by the Executive Committee to make decisions about resource allocation and to assess performance.
The Steel and Energy Products segment includes steel castings and forgings, steel plates, pressure vessels and steel structures. The Industrial
Machinery Products segment includes injection molding machines, film and sheet machinery, blow molding machines, magnesium injection molding
machines, waste treatment equipment and manufacturing equipment for electronic products. The Real Estate and Other Businesses segment
includes regional development.
Millions of Yen
Reportable segments

Year ended March 31, 2013

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total

Sales and operating income:Sales to third parties .....................................................
Intra-segment sales and transfers .................................
Total sales..........................................................................
Operating income ..............................................................

¥ 88,275
4,972
93,248¥   (534)¥130,138
2,164
132,302¥ 16,784¥ 2,2393,071
5,310¥   840¥220,653
10,207
230,861¥ 17,090¥     —
(10,207)(10,207)¥  (410)¥220,653—
220,653¥ 16,680

Assets, depreciation, and capital expenditures:
Total assets ..................................................................
Depreciation and amortization.......................................
Capital expenditures .....................................................

¥120,250
13,056
2,575¥ 96,895
2,580
2,860

¥13,396291
73¥230,542
15,928
5,509¥73,427
133
60¥303,970
16,061
5,570

Adjustments
andeliminations Consolidated

Thousands of U.S. Dollars
Reportable segments

Year ended March 31, 2013

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total

Sales and operating income:Sales to third parties .....................................................
Intra-segment sales and transfers .................................
Total sales..........................................................................
Operating income ..............................................................

$  938,596 $1,383,711
52,86523,009991,473
1,406,720$    (5,678) $  178,458$ 23,806
32,65356,459$  8,931$2,346,124
108,527
2,454,662$  181,712$      —
(108,527)(108,527)$  (4,359)$2,346,124—
2,346,124$  177,352

Assets, depreciation, and capital expenditures:
Total assets ..................................................................
Depreciation and amortization.......................................
Capital expenditures .....................................................

$1,278,575
138,820
27,379$142,435
3,094
776$2,451,271
169,357
58,575$780,723
1,414
638$3,232,004
170,771
59,224$1,030,250
27,43230,409Adjustments
andeliminations Consolidated

Notes 1: Adjustments and eliminations for segment profit of ¥410 million ($4,359 thousand) include elimination of inter-segment profit on inventories
and corporate general administration expense which are not allocable to a reportable segment.
2: A djustments and eliminations for segment assets of ¥73,427 million ($780,723 thousand) include offset of inter-segment debt and credit,
and corporate assets which are not allocable to a reportable segment.
3: Adjustments and eliminations for depreciation and amortization of ¥133 million ($1,414 thousand) include depreciation and amortization forcorporate assets.
		 Adjustments and eliminations for capital expenditures of ¥60 million ($638 thousand) include capital expenditures for corporate assets.

42

Millions of Yen
Reportable segments

Year ended March 31, 2012

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total

Sales and operating income:Sales to third parties .....................................................
Intra-segment sales and transfers .................................
Total sales..........................................................................
Operating income ..............................................................

¥105,001
4,285
109,286¥ 11,517¥113,959
3,335
117,294¥ 11,542¥ 2,407
2,983
5,390¥   776¥221,368
10,603
231,972¥ 23,837¥    —(10,603)(10,603)¥    74¥221,368—
221,368¥ 23,911

Assets, depreciation, and capital expenditures:
Total assets ..................................................................
Depreciation and amortization.......................................
Capital expenditures .....................................................

¥147,283
16,0836,238¥ 93,133
2,706
1,896

¥13,540
301
78¥253,956
19,091
8,213¥71,696
161
42¥325,653
19,252
8,256

Adjustments
andeliminations Consolidated

Notes 1: Adjustments and eliminations for segment profit of ¥74 million include elimination of inter-segment profit on inventories and corporate general administration expense which are not allocable to a reportable segment.
2: A djustments and eliminations for segment assets of ¥71,696 million include offset of inter-segment debt and credit, and corporate assets
which are not allocable to a reportable segment.
3: Adjustments and eliminations for depreciation and amortization of ¥161 million include depreciation and amortization for corporate assets.
		 Adjustments and eliminations for capital expenditures of ¥42 million include capital expenditures for corporate assets.
(a) Product and service information
Millions of Yen

Year ended March 31, 2013

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total

Sales to third parties....

¥88,275¥130,138¥2,239¥220,653(c) Significant customer information
The Company has omitted the disclosure of significant customer
information for the years ended March 31, 2013 and 2012 because no
individual customer accounted for more than 10% of net sales in the
consolidated statement of income.
(d) Information on loss on impairment of fixed assets
Impairment loss on fixed assets by reportable segment for the years
ended March 31, 2013 and 2012 are summarized as follows:Year ended March 31, 2013

Thousands of U.S. Dollars

Year ended March 31, 2013

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total

Sales to third parties....

$938,596 $1,383,711$23,806$2,346,124

Year ended March 31, 2012

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total

Sales to third parties....

¥105,001¥113,959¥2,407¥221,368

Millions of Yen
Steel andEnergyProducts

Millions of Yen

Impairment loss..........

(b) Geographical information(i) Sales

Japan....................................
China.....................................
Others...................................
Consolidated.........................

¥105,180
27,131
88,341¥220,653¥111,156
32,03878,173¥221,368

Thousands of
U.S. Dollars
2013

¥59

—

¥300

Total

¥446

Thousands of U.S. Dollars

Impairment loss..........
Millions of Yen
2013
2012

¥87

Industrial Real Estate Adjustments
andMachinery and Other
Products Businesses eliminations

Steel andEnergyProducts

Industrial Real Estate Adjustments
andMachinery and Other
Products Businesses eliminations

$925

$627

—

$3,190Total$4,742

Year ended March 31, 2012
None applicable$1,118,341
288,474
939,298$2,346,124

Note: Net sales information above is based on customer location.
(ii)	Tangible assets
The Company has omitted the disclosure of tangible assets bycountry or region as of March 31, 2013 and 2012 because theamount of tangible assets in Japan accounted for more than 90%of the carrying amount in the consolidated balance sheet.

43

(e) Amortization and balance of goodwill
The following table presents the amortization and balance of negative
goodwill arising from business combinations on or prior to March 31,
2010 as of and for the years ended March 31, 2013 and 2012 byreportable segment:
Millions of Yen
Industrial Real Estate Adjustments
andMachinery and Other
Products Businesses eliminations

Total

—

¥ 71

—

—

¥ 71

—

143

—

—

143

Steel andEnergyYear ended March 31, 2013 Products

Amortization...............
Balance as ofMarch 31..................

Thousands of U.S. Dollars
Steel andEnergyYear ended March 31, 2013 Products

Amortization...............
Balance as ofMarch 31..................

Industrial Real Estate Adjustments
andMachinery and Other
Products Businesses eliminations

Total

—

$  755——$  755

—

1,520

—

—

1,520

Steel andEnergyYear ended March 31, 2012 Products

Industrial Real Estate Adjustments
andMachinery and Other
Products Businesses eliminations

Total

Amortization...............
Balance as ofMarch 31..................

—

¥ 71

—

—

¥ 71

—

214

—

—

214

(f) Information on gain on negative goodwill
Year ended March 31, 2013
In the Industrial Machinery Products segment, YPK Co., Ltd. became
a consolidated subsidiary as a result of additional acquisition of shares.
This resulted in a gain on negative goodwill of ¥55 million ($585
thousand) in the fiscal year ended March 31, 2013. Furthermore, theCompany acquired additional shares of Meiki Co., Ltd., a consolidated
subsidiary. This also resulted in a gain on negative goodwill of ¥1 million($11 thousand) in the fiscal year ended March 31, 2013.

44

26. Amounts per Share
Net income per share is calculated based on the net income available
for distribution to shareholders of common stock and the weightedaverage number of shares of common stock outstanding during theyear. Net assets per share are calculated based on the number ofshares of common stock outstanding at year end. Amounts per shareat March 31, 2013 and 2012 and for the years then ended were as
follows:Yen

Net income................................
Net assets.................................

Millions of Yen

Year ended March 31, 2012
None applicable

25. Shareholders’ Equity
The Corporation Law of Japan provides that an amount equal to 10%of the amount to be disbursed as distributions of capital surplus (otherthan the capital reserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve and the legal reserve,
respectively, until the sum of the capital reserve and the legal reserve
equals 25% of the capital stock account. Such distributions can bemade at any time by resolution of the meeting of shareholders, or by the
Board of Directors if certain conditions are met.

2013

2012

U.S. Dollars
2013¥ 22.33
359.29¥ 33.93344.28$0.24
3.82

Independent Auditor’s Report45