This document is an English translation of financial results report released on April 28, 2016 and written initially in Japanese.
The Japanese original should be considered as the primary version.

April 28, 2016

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2016
<under IFRSs>
Company name:
Listing:
Stock code:
URL:
Representative:
Contact:

Itochu Enex Co., Ltd.
Tokyo Stock Exchange, 1st Section
8133
http://www.itcenex.com/english/
Kenji Okada, Representative Director, President and CEO
Keisuke Hioki, General Manager, Finance & General Accounting Department
Tel: +81-3-6327-8010

Scheduled date of ordinary general meeting of shareholders:
Scheduled date to commence dividend payments:
Scheduled date to file annual securities report:
Preparation of supplementary results briefing material on financial results:
Holding of quarterly financial results presentation meeting:June 22, 2016
June 23, 2016
June 22, 2016
None
Yes (for institutional
investors and analysts)(Millions of yen with fractional amounts rounded, unless otherwise noted)

1. Consolidated financial results for the fiscal year ended March 31, 2016
(from April 1, 2015 to March 31, 2016)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Fiscal year ended
March 31, 2016
March 31, 2015

Net profit
attributable to
Itochu Enex’s
shareholders

Comprehensive
income%Millionsof yen%Millionsof yen

%

8,964

37.3

7,469

35.7

6,927

(2.2)

6,529

(18.9)

5,503(22.7)

7,087(11.0)

Total tradingtransactions

Profit fromoperatingactivities

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen1,071,629(22.0)

16,38425.1

15,00423.4

1,373,393(8.8)

13,10010.3

12,155(12.2)

Basic earnings per
share attributable
to Itochu Enex’s
shareholders

Profit before tax

Diluted earnings
per share
attributable to
Itochu Enex’s
shareholders

Net profit

Return on Equity
obtained as the net
profit attributable
to Itochu Enex' s
shareholders tototal shareholders'equity%Yen
Yen
Fiscal year ended
March 31, 2016
66.10
–
7.5
March 31, 2015
48.71
–
5.7
Reference: Share of profit (loss) of investments accounted for using equity method
For the fiscal year ended March 31, 2016:(672) million yen
For the fiscal year ended March 31, 2015:(357) million yen

Ratio of profit
before tax to total
assetsRatio of profit
from operating
activities to total
tradingtransactions

%

%

4.7
3.7

1.5
1.0

Note: ―Total trading transactions‖ are presented in accordance with the Japanese accounting practices and represent the total
amounts of transactions that the Company and its subsidiaries conducted as a party in contracts and for which they
acted as an agent.

(2) Consolidated financial position
Total assets
As ofMarch 31, 2016
March 31, 2015

Ratio ofshareholders’equity to total
assetsTotal shareholders’equityTotal equity

Millions of yen

Millions of yen

Millions of yen

304,053
329,059

117,162
112,947

100,526
97,432

Shareholders’equity per share
%

Yen

33.1
29.6

889.70862.30(3) Consolidated cash flows
Net cash flows from(used in) operating
activities
Fiscal year ended
March 31, 2016
March 31, 2015

Net cash flows from(used in) investing
activities

Net cash flows from(used in) financing
activities

Cash and cash
equivalents at end of
the period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

30,322
34,336(16,673)(20,410)(9,059)(12,115)

20,824
16,184

2. Cash dividends
Annual cash dividends per shareFirst
quarterend
Fiscal year ended
March 31, 2015
March 31, 2016
Fiscal year ending
March 31, 2017
(Forecast)Secondquarterend

Third
quarterend

Yen

Yen

Yen

Fiscalyear-end

Ratio of total
amount ofDividend
dividends topayout ratio
total(Consolidated) shareholders’equity(Consolidated)

Total cash
dividends(Total)

Total

Yen

Yen

Millions of yen

%

%

–
–

11.00
12.00

–
–

11.00
12.00

22.00
24.00

2,486
2,712

45.2
36.3

2.6
2.7

–

13.50

–

13.50

27.00

30.5

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2017(from April 1, 2016 to March 31, 2017)

Total tradingtransactions
Millions of yen

Six months ending
September 30, 2016
Fiscal year ending
March 31, 2017–
1,060,000

Profit from operating
activities% Millions of yen

–
(1.1)

–
17,500(Percentages indicate year-on-year changes.)
Basic earnings
Net profit
per share
Profit before tax attributable to Itochu attributable toEnex’s shareholders Itochu Enex’s
shareholders% Millions of yen

–
6.8

–
17,000% Millions of yen

–
13.3

–
10,000

%

Yen

–

–

33.9

88.5

Note: The Company’s performance is evaluated on a fiscal year basis. Accordingly, consolidated earnings forecasts for the
first six months of fiscal year are not prepared.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
(2) Changes in accounting policies and changes in accounting estimatesa. Changes in accounting policies required by IFRSs:
b. Changes in accounting policies other than the above:c. Changes in accounting estimates:

None
None
None

(3) Number of issued shares (common stock)a. Total number of issued shares at end of period (including treasury stock)
As of March 31, 2016

116,881,106 shares

As of March 31, 2015

116,881,106 sharesb. Number of treasury stock at end of period
As of March 31, 2016

3,891,809 shares

As of March 31, 2015

3,891,149 sharesc. Average number of outstanding shares during period
Fiscal year ended March 31, 2016

112,989,557 sharesFiscal year ended March 31, 2015

112,990,565 shares* Notes on financial results
Total trading transactions were less than the results for the previous fiscal year due mainly to sales prices
for petroleum products being lower than predicted after the effect of the stagnation of crude oil prices
continuing from the previous fiscal year.
* Indication regarding execution of audit proceduresThis financial results report is out of the scope of the audit procedures that are required by the Financial
Instruments and Exchange Act. At the time of disclosure of this financial results report, the audit
procedures for the financial statements pursuant to the Financial Instruments and Exchange Act are in
progress.
* Proper use of earnings forecasts, and other special notes
The forecasts and other forward-looking statements in this report are based on information currently
available to the Company and on certain assumptions deemed to be reasonable by the Company. Actual
business and other results may significantly differ from these forecasts due to various factors.
Please refer to ―1. Analysis of Operating Results and Financial Position, (1) Analysis of Operating Results‖
on page 2 of the attached materials for matters relating to earnings forecasts.

Contents of Attached Materials
1. Analysis of Operating Results and Financial Position ............................................................................. 2(1) Analysis of Operating Results.............................................................................................................. 2(2) Analysis of Financial Position .............................................................................................................. 5(3) Profit Distribution Policy and Dividends for the Fiscal Years Ended March 31, 2016 andEnding March 31, 2017 ........................................................................................................................ 6
2. Management Policies .................................................................................................................................. 7(1) Basic Management Policies .................................................................................................................. 7(2) Target Management Indicators ........................................................................................................... 7(3) Medium- and Long-Term Management Strategies ............................................................................ 7(4) Issues to Be Addressed.......................................................................................................................... 8
3. Basic concepts underlying selection of accounting standards ............................................................... 10
4. Consolidated Financial Statements .......................................................................................................... 11(1) Consolidated Statement of Financial Position .................................................................................. 11(2) Consolidated Statement of Comprehensive Income ........................................................................ 13(3) Consolidated Statement of Changes in Equity ................................................................................. 15(4) Consolidated Statement of Cash Flows ............................................................................................. 16(5) Notes to Consolidated Financial Statements .................................................................................... 18
Segment Information .......................................................................................................................... 18
Earnings per Share ............................................................................................................................. 21
Significant Events after the Reporting Period ................................................................................. 21

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1.

Analysis of Operating Results and Financial Position(1) Analysis of Operating Results
1)

Results of operations
Despite signs of weakness in some areas, thanks to improvements in employment and income
underpinned by the effects of government economic policies and ongoing monetary easing by the Bankof Japan, the Japanese economy maintained its moderate trend of recovery during the fiscal year ended
March 31, 2016. However, due to the impact of efforts to move toward monetary policy normalizationin the U.S. and concerns about slowing economies in China and other emerging countries, future global
economic prospects remain uncertain.
In the petroleum products distribution industry, the price of crude oil declined sharply during theprevious fiscal year. Although these prices rebounded to a rising trend, a decision by the Organizationof the Petroleum Exporting Countries (OPEC) not to cut production and other factors caused thepetroleum products market to slump once again. Domestic demand for petroleum products continues todecline. Due to unseasonably warm winter weather and other factors, sales volume fell from theprevious fiscal year, despite increased consumer willingness to buy after the consumption tax increasein the previous fiscal year and effects of the decline in fuel oil prices.
With regard to the power market, due to the impacts of falling costs of raw materials such as LNG
resulting from the decline in crude oil prices and the restarting of a nuclear power plant, the spot
average price was below that of the previous fiscal year.
In this operating environment, the Itochu Enex Group announced its two-year medium-term businessplan ―Moving 2016 —Sowing seeds for tomorrow—‖ in April 2015, and has been advancing its
business based on following three basic policies:<i>

Improvement of profitability<ii> Sowing seeds for long-term growth strategy<iii> Reinforcement of organizational strength and fundamental strength

As a part of efforts to advance these measures, we integrated the container pressure resistanceinspection business for LP gas and gas for industrial use in April of last year and launched J-Cylinder
Services Co., Ltd. By enhancing functions and increasing efficiency, we plan to complete containerpressure resistance inspections on 350,000 units a year, with the goal of achieving the No. 1 share in
the Kanto area.
In the asphalt business, in November of last year, we completed construction on our 12th asphalt
terminal in Japan in Mihara City, Hiroshima Prefecture. We will use this terminal, one of the largest
specialized asphalt facilities in Western Japan, to enhance sales in the Chugoku and Shikoku areas.
In the power electric business, Oji-Itochu Enex power retailing Co., Ltd., which was established withOji Green Resources Co., Ltd., a subsidiary of Oji Holdings Corporation, started operation in April oflast year. To address the full liberalization of the electricity retail market, through the facilitation ofinternal systems of the Itochu Enex Group, as well as alliances with corporate groups that havestrengths in their respective fields, we aim to be one of the leading Japanese Power Producers andSuppliers (PPS).
We plan to contribute to stable power supply in Japan through joint efforts involving our sales networkand business segments and group companies, centered on the Power & Utility Division.
As a result of the above activities and the impact of declining crude oil prices, revenue during the fiscal
year ended March 31, 2016, fell by 22.8% year on year to ¥723,645 million. Gross profit was ¥89,562
million (up 4.5% year on year), profit from operating activities was ¥16,384 million (up 25.1% year onyear), profit before tax was ¥15,004 million (up 23.4% year on year), and net profit attributable to
Itochu Enex’s shareholders was ¥7,469 million (up 35.7% year on year).

-2-

2)

Results of operations by segment
Home-Life Division
In the Home-Life Division, the sales volume of LP gas fell slightly from that of the previous fiscal year
even though the number of new customer residences increased, due to weather factors such as
unseasonably warm winter. Profit from operating activities increased from the previous fiscal year
despite the decline in the import price of LP gas, because of successful efforts to secure some profits
through the gas rate adjustment system.
On the other hand, for the full liberalization of the electricity retail market which started in April of thisyear, we have prepared to launch electricity retail sales at full scale. We are working with groupcompanies and operators to make the necessary preparations and enhancements to our sales systems
based on our nationwide LP gas sales network and sales expertise.
In overseas business, in October of last year, we established PT. ITC ENEX INDONESIA, a producer
and seller of industrial gas in Indonesia. Making use of business know-how in the industrial gas
business built up in Japan, we will promote business development in Indonesia.
As a result of these activities, revenue was ¥91,035 million (down 15.1% year on year), profit fromoperating activities was ¥3,367 million (up 16.8% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥788 million (down 15.4% year on year).

Car-Life Division
In the Car-Life Division, despite the effects of weather-related factors including unseasonably warm
winter weather, in part, due to sales promotions relating to kerosene, etc., sales volume exceeded that ofthe previous year. In terms of profit and loss, profit from operating activities was below that of theprevious fiscal year, despite efforts to reduce costs, etc., due to a decrease in margins caused bydeteriorating market conditions.
As part of our retail strategy, we introduced the Rakuten Super Points system, a point service sharedwith Rakuten, Inc., along with efforts to promote the introduction of new POS systems. This enables
customer transfers between the member stores of Rakuten Super Points system in other sectors andacquisition of new customers to expand the number of customers of the Group as a whole.
In the automobile-related business, we organized a campaign for referring customers using the Car-Life
Stations*1 network of Nissan Osaka Sales Co., Ltd., which became a subsidiary two years ago, andstrived to create synergies.
The number of Car-Life Stations in the Itochu Enex Group as of March 31, 2016, was 1,973, marking a
net decrease of 66 stations from the end of the previous fiscal year. We lost 106 stations throughdisaffiliation of unprofitable and decrepit stations while adding 40 newly affiliated stations.
As a result of these activities, revenue was ¥493,160 million (down 17.7% year on year), profit fromoperating activities was ¥4,194 million (down 7.0% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥2,014 million (up 38.9% year on year).
*1 Car-Life Stations: Car-Life Stations are service stations offering multiple services provided by the Company.

Power & Utility Division
Within the Power & Utility Division, in the power generation area of the electricity and steam supply
business*2, we constructed new photovoltaic power generation facilities in Hofu City, Yamaguchi
Prefecture in January 2016. As a result of working to enhance Itochu Enex’s own power sources
through new construction of wind power generation facilities in Tainai City, Niigata Prefecture(October 2014) and expansion of coal-fired thermal power generation facilities in Hofu City,
Yamaguchi Prefecture (March 2015), etc., total power generation exceeded that of the previous fiscal
year.
In the electricity and steam supply business, as a result of promoting the expansion of retailing areas
and acquisition of new private demand, etc. in the existing power retailing system operated by theCompany, sales volume increased accordingly. In addition, as Oji-Itochu Enex power retailing Co., Ltd.,-3-

which was established with the Oji Group, began selling electricity this fiscal year, sales volume ofelectricity exceeded considerably that of the previous fiscal year. Profit in the electricity and steam
supply business exceeded that of the previous fiscal year thanks to increased electricity sales volume
and lower costs attributable to falling unit prices of electricity procured from the wholesale power
market.
In the heat supply business*3, although demand for indoor heating was sluggish due to the impacts of
unseasonably warm winter weather, sales volume remained unchanged from the previous fiscal year,
due to a slight increase in demand for indoor cooling at the beginning of this fiscal year. Due to efforts
to reduce the cost of fuel and raw materials, and other expenses, profit exceeded that of the previous
fiscal year.
Within this Division, we are strengthening ways to address the electricity sales business with the full
liberalization of the electricity retail market started from this April through a business alliance withTottori Citizen Electricity Co., Ltd. To expand the electricity business in the future, Sendai Power
Station Co., Ltd., which was established as a joint venture with Kanden Energy Solution Co., Inc.,
started construction of a coal-fired thermal power plant in Sendai City, Miyagi Prefecture. Start ofoperation is scheduled for October 2017.
In addition, in cooperation with Energy Trade Division, Car-Life Division, and Home-Life Division,
this Division is presenting a proposal to supply electricity to existing customers, and is preparing forelectricity retail sales, including combined sales with LP gas.
As a result of these activities, revenue was ¥42,463 million (up 22.2% year on year), profit fromoperating activities was ¥4,439 million (up 47.5% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥2,240 million (up 34.1% year on year).
*2 Electricity and steam supply business: The electricity and steam supply business supplies electricity and steam
generated at the time of power generation.
*3 Heat supply business: The heat supply business supplies cold and hot water for air conditioning to multiple officebuildings and other buildings from a heat source plant using pipes.

Energy Trade Division
In the Energy Trade Division, due to a structural decline in demand for domestic petroleum products,
sudden drops in crude oil and petroleum products prices, sluggish domestic market conditions, etc., thebusiness environment remained tough, but we worked to secure profits as a business division bysteadily amassing new transactions, as well as business portfolios, making use of the characteristics ofeach business.
Regarding specific priority initiatives of this Division to strengthen and optimize the distributionfunctions, we aimed to build the stable supply system and expand its functions in each business andeach area by expanding the network of supply bases nationwide in the AdBlue*4 sales business to 20
facilities, covering all of Japan from Hokkaido in the north to Okinawa in the south, as well as
expanding the number of asphalt terminals nationwide to 12 bases. In addition, regarding sales ofindustrial fuels and materials, we worked to enhance functions and transactions that satisfy the needs ofour customers by proposing solutions through a wide variety of industrial energies, such as electricity
and LNG, in addition to petroleum products.
Furthermore, we have been proactively addressing opportunities in various new businesses such as toreuse fly ash discharged from coal-fired thermal power plants of the Itochu Enex Group for building
materials, road materials, etc., to collect waste oil from ships for sale as recycled oil, participation in a
project to commercialize bio jet fuel in Japan, etc.
We will continue promoting business development to respond flexibly to changes in the market
environment by integrating all the strengths of the Itochu Enex Group.
As a result of these activities, revenue was ¥96,987 million (down 50.3% year on year), profit fromoperating activities was ¥3,774 million (up 41.7% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥2,514 million (up 59.0% year on year).
*4 AdBlue is a high-grade urea solution used in SCR systems, which detoxifies nitrogen compounds (NOx) containedin exhaust gases of diesel vehicles.

-4-

3)

Forecasts of consolidated financial results for the fiscal year ending March 31, 2017
As a forecast of consolidated financial results for the fiscal year ending March 31, 2017, we areprojecting ¥1,060,000 million in total trading transactions, down 1.1% year on year, ¥17,500 million in
profit from operating activities, up 6.8% year on year, ¥17,000 million in profit before tax, up 13.3%
year on year, and ¥10,000 million in net profit attributable to Itochu Enex’s shareholders, up 33.9%
year on year.
Basic earnings per share attributable to Itochu Enex’s shareholders is projected at ¥88.50.

(2) Analysis of Financial Position
1)

Analysis of assets, liabilities, equity and cash flows

Assets, liabilities and equity
Total assets amounted to ¥304,053 million as of March 31, 2016, a decrease of ¥25,006 million fromMarch 31, 2015, mainly due to a decrease in trade notes and accounts receivable. Total liabilities
amounted to ¥186,891 million, a decrease of ¥29,221 million from March 31, 2015, mainly due to adecrease in trade notes and accounts payable. Total equity totaled ¥117,162 million, an increase of ¥4,215
million from March 31, 2015, due to factors including increased retained earnings.
We consequently ended the fiscal year with a ratio of shareholders’ equity to total assets of 33.1%.

Cash flows
Cash and cash equivalents (net cash) totaled ¥20,824 million as of March 31, 2016, up ¥4,640 million
from March 31, 2015, mainly due to a decrease in net cash used in investing activities.

Cash flows from operating activities
Operating activities earned net cash of ¥30,322 million. This was derived mainly from factors including
profit before tax of ¥15,004 million and depreciation and amortization of ¥12,608 million, as well as adecrease in funds required for trading of ¥3,098 million due to the decline in oil prices.

Cash flows from investing activities
Investing activities used net cash of ¥16,673 million. Major items included proceeds from sales ofproperty, plant and equipment and investment property and proceeds from sales of intangible assets of¥2,012 million, payments for purchase of property, plant and equipment and investment property andpurchase of intangible assets of ¥12,298 million, acquisition of subsidiaries of ¥1,690 million and increasein deposits paid of ¥4,000 million.

Cash flows from financing activities
Financing activities used net cash of ¥9,059 million. Major items included repayments of bonds andborrowings of ¥6,349 million and cash dividends paid of ¥2,709 million.

-5-

2)

Cash flow indicators
Fiscal year ended March 31,
Ratio of shareholders’ equity to total assets (%)
Ratio of shareholders’ equity to total assets at market
value (%)
Ratio of cash flow to interest-bearing debt (years)
Interest-coverage ratio (times)

2014
29.3

2015
29.6

2016
33.1

20.9

34.0

33.6

2.2
28.5

1.2
46.0

1.2
33.5

Ratio of shareholders’ equity to total assets: Total shareholders’ equity / Total assets
Ratio of shareholders’ equity to total assets at market value: Market capitalization / Total assets
Ratio of cash flow to interest-bearing debt: Interest-bearing debt / Cash flow
Interest-coverage ratio: Cash flow / Interest expense(Note 1.) All of the above ratios were calculated using consolidated financial statement data.
(Note 2.) Market capitalization was calculated by multiplying the fiscal-year-end closing share price by
the number of shares outstanding at fiscal year-end (net of treasury stock).
(Note 3.) ―Cash flow‖ is ―Cash provided by (used in) operating activities‖ on the Consolidated
Statement of Cash Flows.
(Note 4.) Interest-bearing debt is all debt, of the debt carried on the Consolidated Statement of
Financial Position, on which interest is payable.

(3) Profit Distribution Policy and Dividends for the Fiscal Years Ended March 31, 2016 and Ending
March 31, 2017
In terms of shareholder returns, we aim to maintain a consolidated dividend payout ratio of at least 30% in
accord with our policy of paying stable dividends on an ongoing basis while maintaining sustained
business growth.
For the fiscal year ended March 31, 2016, we plan to pay a year-end dividend of ¥12 per share. For the
fiscal year ending March 31, 2017, we plan to pay annual dividends of ¥27 per share (including an interim
dividend of ¥13.50 per share).
With respect to internally retained funds, our basic policy is to use such funds to invest in our business tostrengthen our operating foundation and further increase earnings.

-6-

2.

Management Policies(1) Basic Management Policies
The Itochu Enex Group is delivering energy to customers nationwide, centering on petroleum products,
LP gas and electricity, etc. under the corporate philosophy of ―The best partner for life and society -- with
Energy, with the Car, with the Home--.‖ We will respond to changes in the environment flexibly, and inevery era, as the ―best partner for life and society,‖ we will provide customers with optimal energy
solutions.
We will also strive to enhance such CSR and compliance functions as environmental consideration andstrengthening of security, which remains unchanged as an important theme for the Itochu Enex Group,
dealing in energy, and contribute to the development of a sustainable society.
Then, by further enhancement of the Corporate Governance System, we will pursue maximization ofgroup corporate value.

(2) Target Management Indicators
The Itochu Enex Group uses ROE (Return on Equity obtained as the net profit attributable to Itochu
Enex’s shareholders to total shareholders’ equity) as management indices and strives to improve asset
efficiency and capital efficiency.

(3) Medium- and Long-Term Management Strategies
The Itochu Enex Group is advancing its two-year medium-term business plan ―Moving 2016 —Sowing
seeds for tomorrow—‖ which started in FY2015.
While rapidly preparing a platform for the full liberalization of the electricity and gas business, which is
to be implemented during the period of this medium-term management plan, we aim to expand corporate
value further by implementing growth strategies.

Overview of medium-term business plan
1. Plan Name:

Moving 2016
—Sowing seeds for tomorrow—

2. Period: 2 years (FY2015 to FY2016)
3. Basic policy:(i)

Improvement of profitability(ii) Sowing seeds for long-term growth strategy(iii) Reinforcement of organizational strength and fundamental strength
4. Quantitative plan (FY2016):(i)

Profit from operating activities: ¥17.5 billion(ii) Net profit attributable to Itochu Enex’s shareholders: ¥10.0 billion(iii) ROE: 9.0% or above
We formulated this medium-term business plan in April 2015 but, as a result of a review conducted due tochanges in the business environment, in the forecast for consolidated earnings in the fiscal year ending
March 31, 2017, profit from operating activities has been revised from ¥20,000 million initially plannedto ¥17,500 million. However, net profit attributable to Itochu Enex’s shareholders has not been changed
from that initially planned considering improved return on investment by the equity method, improved net
financial revenue through a drop in interest rates, prospects of impact due to decrease in corporate tax rate,
-7-

etc.
Regarding investments (facilities, shares of affiliated companies, etc.), we projected ¥35,000 million for
two years (FY2015 to FY2016) in the medium-term business plan, and the investment results in FY2015
became ¥14,300 million. Accordingly, we intend to continue making investments exceeding ¥20,000
million in FY2016.

(4) Issues to Be Addressed
Recently, we are confronted with a tough business environment in the domestic energy industry sector,
with such things as changes in consumer awareness, progress in energy saving and efficiency, and longterm decrease in demand as a result of the aging population combined with the low birthrate. Due to theintegration of domestic wholesalers provoked by such an environment, the Itochu Enex Group, which has
placed emphasis on both wholesale and retail in the oil distribution industry, is about to be put to the test
regarding its abilities to rise to the occasion.
In addition, the situation around energy has been rapidly changing, as seen in the full liberalization of theelectricity and gas retail market in Japan, and the economic trends in Europe, America, and the emerging
countries of Asia, and is predicted to accelerate even further.
In such an environment, the Itochu Enex Group will aim at realization of a growth strategy based on thebasic policies of its ―Moving 2016 —Sowing seeds for tomorrow—‖.
As part of these efforts, we reorganized the business divisions in April this year and launched a neworganization structure of two business groups with four divisions, that is, the ―Power & Gas BusinessGroup‖ consisting of the Home-Life Division and the Power & Utility Division and the ―Distribution &Energy Innovation Business Group‖ consisting of the Car-Life Division and the Energy Innovation
Division (formerly Energy Trade Division). In light of the normalized decline in the demand for
petroleum and the subsequent industrial reorganization, as well as a change in the management
environment following the full liberalization of the electricity and gas retail market, the Company aims tounify and expedite the establishment of strategies and the development of businesses by comprehensively
consolidating the related businesses.
Then, for the full liberalization of the electricity retail market, we named electricity supply services forhouseholds, which the Itochu Enex Group has been developing, ―e-koto denki!‖ and began retail sales in
April this year through group companies that sell LP gas, etc. The Itochu Enex group will also start thewholesale of electricity and the provision of supply/demand adjustment services to businesses that areconsidering selling electricity to households. It aims to create a balancing group*5 and expand its range ofelectricity retailing support services aimed at local governments and businesses from other sectors.
*5: In the balancing group, the representative of a group made up of multiple electricity retailing businesses adjusts the
supply and demand within the entire group. This reduces the risk of being subject to in-balance penalty payments
under the balancing system.

 Power & Gas Business Group
Home-Life Division
Continuing from the fiscal year ended March 31, 2016, we will work on strengthening and deepening thecore business. As action plans, we will focus on expanding the number of customers for direct sales, newbusiness groupings and increase of the joint delivery ratio for cylinder wholesale, and further
reinforcement of equipment sales and remodeling businesses.
In addition, toward the full liberalization of the electricity retail market, we will expand the number of
direct-sale residences by enhancing set menus that satisfy customers, while leveraging Enex’s own powersources. Furthermore, we will build primary sources of revenue on a medium- and long-term basis byexpanding our businesses with forays into overseas businesses, participation in city gas business, etc. We
have already established a business base to develop the industrial gas business in Indonesia, and aim atfull-fledged overseas expansion centering on Asia in the future. In addition, toward the full liberalizationof the retail market of city gas starting from FY2017, we aim to be a company that can makecomprehensive energy proposals by considering local strategies for city gas, LP gas, and electricity.

-8-Power & Utility Division
With the full liberalization of the electricity retail market in April this year, a tough environment with newentrants from other sectors and intensified competition among sector peer companies is predicted in the
power market.
This Division is working on expanding business based on strengths in integrated systems from power
generation to sales by making use of accumulated experience and know-how, with the aim of becoming a―Prime PPS*6‖ required by society.
In the power-generation area of the electricity and steam supply business, we will promote the expansionof our own power sources by developing new power sources including renewable energy, in addition tostable operations.
In the area of selling high-voltage power of the electricity and steam supply business, we have developed
electricity sales in eight areas except for Hokuriku and Okinawa. We aim to expand the scale of sales andoptimize overall revenues by supplying a variety of customers in each area.
In the heat supply business, we will promote the reinforcement of comprehensive energy service business,such as jointly supplying services of heat and electricity, management services in each area, etc., inaddition to the heat supply business as the main business.
This Division will promote business expansion by addressing changes in the business environment, suchas major structural changes in the electricity industry including the full liberalization of the electricity
retail market.
*6 Prime means ―(adj.) first, fundamental, major, best, excellent, and (n.) prime number.‖
PPS is an abbreviation for Power Production Supplier.
 Distribution & Energy Innovation Business Group
Car-Life Division
We recognize that demand for petroleum oil is projected to decline even further due to violent fluctuationsin prices of crude oil, further penetration of next-generation cars, the growing tendency for young people
not to use cars, the declining population of the car-user generation, and other factors.
In this Division, centering on retail strategies, such as marketing through new-type POS, management
improvements through ENEX ACT, etc. in businesses relating to Car-Life Stations, which is the corebusiness, we will work to maintain and expand the number of customers, aiming to build the ―Brand that
Customers Choose.‖ Furthermore, in car-related businesses, on which we have focused, centering on
Nissan Osaka Sales Co., Ltd., one of Japan’s leading car sales companies, which became a subsidiary of
Itochu Enex in 2014, we will strengthen the value chain covering from new car sales to after-sales
maintenance.
By building the ―Car Life Business that Customers Choose‖ through the provision of a high added-value
car life to customers, we will work to improve the profitability of dealers and group companies.

Energy Innovation DivisionThis Division changed its name from the ―Energy Trade Division‖ to the ―Energy Innovation Division‖from this fiscal year. This aims to ensure the further expansion of business portfolios that address changes
in the external environment by exploiting transactions and become the groundwork for the future byadopting new approaches and continuing their steady implementation as businesses, as well as aiming tostrengthen the existing business base by taking advantage of functions in a business environment that
continues to change.
We proactively aim to build a new revenue base that will contribute to the group through exploring andconsidering the possibilities of business development in Japan and overseas, including transactions thatare being developed through collaborations with other divisions or business partners without being boundto the frameworks of each division.
-9-

3.

Basic concepts underlying selection of accounting standards
The Itochu Enex Group adopted IFRS (International Financing Reporting Standards) from the fiscal year
ended March 2014, in order to improve international comparability and the convenience of financial
information in capital markets.

- 10 -

4.

Consolidated Financial Statements(1) Consolidated Statement of Financial Position
As ofMarch 31, 2015
ASSETS
Current assets
Cash and cash equivalents
Trade receivables
Other current financial assets
Inventories
Trade advances paid
Other current assets
Total current assets
Non-current assets
Investments accounted for by the equity method
Other investments
Non-current financial assets other than investments
Property, plant and equipment
Investment property
Goodwill
Intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets- 11 -(Millions of yen)
As ofMarch 31, 2016

16,18498,44911,431
27,794
2,332
1,518

20,824
71,968
16,52925,1601,781
1,603

157,708

137,865

10,551
8,924
9,987
88,836
14,369108
23,474
13,448
1,653

8,786
8,029
9,895
88,311
13,262588
24,329
11,622
1,366

171,351

166,188

329,059

304,053

As ofMarch 31, 2015
LIABILITIES AND EQUITYCurrent liabilities
Short-term bonds and borrowings
Trade payables
Other current financial liabilities
Income taxes payable
Advances from customers
Other current liabilities
Total current liabilities
Non-current liabilities
Non-current bonds and borrowings
Other non-current financial liabilities
Non-current liabilities for employee benefits
Deferred tax liabilities
Provisions
Other non-current liabilities(Millions of yen)
As ofMarch 31, 2016

14,208104,564
9,784
2,489
7,078
11,3205,299
80,745
5,229
3,351
6,637
10,736

149,443

111,997

26,74622,283
9,350
2,747
4,961
582

32,36624,384
10,127
2,103
5,396
518

Total non-current liabilities

66,66974,894

Total liabilities

216,112

186,891

EquityCommon stock
Capital surplus
Retained earnings
Other components of equity
Treasury stock

19,87818,74362,223(1,661)(1,751)

19,87818,74066,024(2,364)(1,752)

Total shareholders’ equity

97,432

100,526

Non-controlling interests
Total equity
Total liabilities and equity- 12 -

15,515

16,636112,947

117,162

329,059

304,053

(2) Consolidated Statement of Comprehensive Income
Fiscal year ended
March 31, 2015

(Millions of yen)
Fiscal year ended
March 31, 2016

Revenue
Cost of sales

936,841(851,121)

723,645(634,083)

Gross profit

85,72089,562Other expense
Selling, general and administrative expenses
Loss from tangible assets, intangible assets and goodwill
Other – net(71,184)(1,825)389(73,226)(593)
641

Total other expense(72,620)(73,178)

Profit from operating activities

13,10016,384

Financial income and costs
Interest income
Dividends received
Interest expense
Other financial income and costs – net

53
236
(878)
8

54
242
(1,004)0Total financial income and costs

(581)

(708)

Share of loss of investments accounted for by the equity method

(357)

(672)

Loss from sales of investments in subsidiaries and associates(7)–

12,15515,004(5,626)(6,040)

6,529

8,964

5,503
1,026

7,469
1,495

Profit before tax
Income tax expense
Net profit
Net profit attributable to Itochu Enex’s shareholders
Net profit attributable to non-controlling interests- 13 -

Fiscal year ended
March 31, 2015
Other comprehensive income (net of tax effect)
Items that will not be transferred to profit or loss
FVTOCI financial assets
Remeasurement of net defined benefit liability
Other comprehensive income in associates accounted for by theequity method
Items that may be transferred to profit or loss
Exchange differences on translating foreign operations
Cash flow hedges
Other comprehensive income in associates accounted for by theequity method
Total other comprehensive income (net of tax effect)
Comprehensive income
Comprehensive income attributable to Itochu Enex’s shareholders
Comprehensive income attributable to non-controlling interests

Fiscal year ended
March 31, 2016

685
199

(384)
(714)

0

2

83
(463)

(14)
107

54

(1,034)558(2,037)

7,087

6,927

5,880
1,207

5,697
1,230
(Yen)

Earnings per share attributable to Itochu Enex’s shareholders
Basic
DilutedTotal trading transactions(Note)

48.71–

1,373,393

66.10–(Millions of yen)
1,071,629

Total trading transactions are presented in accordance with the Japanese accounting practices and represent the total
amounts of transactions that the Company and its subsidiaries conducted as a party in contracts and for which they
acted as an agent. This item is voluntarily disclosed by the Company for investors’ convenience and is not required tobe disclosed under International Financial Reporting Standards (―IFRSs‖).

- 14 -

(3) Consolidated Statement of Changes in Equity
Fiscal year ended
March 31, 2015

(Millions of yen)
Fiscal year ended
March 31, 2016

EquityCommon stock
Balance at the beginning of the period

19,87819,878

Balance at the end of the period

19,87819,87818,737
6

18,743(3)

18,74318,74059,3785,503(60)(2,599)62,223
7,469(1,069)(2,599)62,22366,024(2,098)(1,661)377(1,772)

Capital surplus
Balance at the beginning of the period
Acquisition of subsidiary shares from non-controlling interests
Balance at the end of the period
Retained earnings
Balance at the beginning of the period
Net profit attributable to Itochu Enex’s shareholders
Transfer from other components of equity
Cash dividends paid to Itochu Enex’s shareholders
Balance at the end of the period
Other components of equity
Balance at the beginning of the period
Other comprehensive income attributable to Itochu Enex’s
shareholders
Transfer to retained earnings
Balance at the end of the period
Treasury stock
Balance at the beginning of the period
Purchase and disposal of treasury stock
Balance at the end of the period
Total shareholders’ equity
Non-controlling interests
Balance at the beginning of the period
Net profit attributable to non-controlling interests
Other comprehensive income attributable to non-controllinginterests
Cash dividends paid to non-controlling interests
Changes due to additional acquisition and sale of interests in
subsidiaries
Balance at the end of the period
Total equity- 15 -

60

1,069(1,661)(2,364)(1,750)(1)(1,751)(1)(1,751)(1,752)

97,432

100,526

9,419
1,026

15,515
1,495

181

(265)

(215)

(110)

5,105

–

15,515

16,636112,947

117,162(4) Consolidated Statement of Cash Flows(Millions of yen)
Fiscal year ended
March 31, 2015

Fiscal year ended
March 31, 2016

Cash flows from operating activities
Profit before tax
Depreciation and amortization
Loss from tangible assets, intangible assets and goodwill
Financial income
Share of loss of investments accounted for by the equity method
Loss from sales of investments in subsidiaries and associates
Decrease in trade receivables
Decrease in inventories
Decrease in trade payables
Other – net
Interest and dividends received
Interest expense
Income taxes paid

12,155
10,535
1,825
581
357
7
42,785
1,944(31,493)
2,426
513
(747)
(6,552)

15,004
12,608
593
708
672
–
24,4382,659(23,999)
1,842
434
(906)
(3,731)

Net cash flows provided by operating activities

34,33630,322(5,363)

(14)

2

12

(598)
972
(2,430)(2,903)
2,987(5,147)4,490(1,690)(191)
350(14,054)(10,609)

1,495

1,942

(1,857)82–
1,257(1,689)70(4,000)(197)(20,410)(16,673)

Cash flows from investing activities
Purchase of investments accounted for by the equity method
Proceeds from sales of investments accounted for by the equity
methodPurchase of investments
Proceeds from sales of investments
Acquisition of subsidiaries, net of cash acquired
Payment for loans receivableCollection of loans receivable
Payments for purchase of property, plant and equipment andinvestment property
Proceeds from sales of property, plant and equipment andinvestment property
Purchase of intangible assets
Proceeds from sales of intangible assets
Increase in deposits paid – net
Other – net
Net cash flows used in investing activities- 16 -

(Millions of yen)
Fiscal year ended
March 31, 2015

Fiscal year ended
March 31, 2016

Cash flows from financing activities
Proceeds from bonds and borrowings
Repayments of bonds and borrowings
Net decrease in short-term borrowings
Equity transactions with non-controlling interests
Cash dividends paid to Itochu Enex’s shareholders
Cash dividends paid to non-controlling interests
Other – net

5,058(4,041)(9,840)(478)(2,599)
(215)
0

8,315
(9,472)(5,192)–(2,599)(110)(1)

Net cash flows used in financing activities(12,115)(9,059)Net increase in cash and cash equivalents

1,811

4,590

Cash and cash equivalents at the beginning the period

14,251

16,184

Effect of exchange rate changes on cash and cash equivalents

122

(27)

Increase in cash and cash equivalents resulting from merger–

77

16,184

20,824

Cash and cash equivalents at the end of the period- 17 -

(5) Notes to Consolidated Financial Statements
Segment Informationi) Outline of Reportable Segments
The reportable segments of the Group are components of the Group whose separate financial
information is available. These segments are periodically evaluated by the Board of Directors indeciding how to allocate management resources and in assessing performance.
The Group has adopted the business division system. Each business division plans strategies for eachcategory of target customers and markets and develops business activities. The Group has four
reportable segments that correspond to the business divisions, namely the ―Home-Life Division,‖ ―CarLife Division,‖ ―Power & Utility Division,‖ and ―Energy Trade Division.‖
The Home-Life Division is engaged in the sale of LP gas, high-pressure gas, equipment (combustion,
kitchen, air conditioning, other household equipment, etc.), next-generation energy equipment(photovoltaic power generation systems, fuel cells, residential lithium-ion electricity storage system,etc.), pressure resistance inspection operations, and other lifestyle products, and rendering of homerelated services.
The Car-Life Division is engaged in the sale of gasoline, kerosene, diesel oil, fuel oil and lubricants,
and the sales and business services to consumers, mostly through Car-Life Stations, including the saleof automobiles and automobile products, motor-vehicle inspections, auto maintenance and rental car
business.
The Power & Utility Division is engaged in the electricity and steam supply business (electricity, steam,etc.) and heat supply business.
The Energy Trade Division is engaged in the supply of industrial energy and materials, sale of asphalt
and high-grade urea solution (AdBlue), sale of marine fuel and lubricating oil, sales of LNG (Liquefied
Natural Gas), the import/export and domestic supply/demand adjustment trading of petroleum products,
chartering and operation of tankers, and provisions of logistics functions, such as petroleum storage
facilities.

- 18 -

ii) Information on Reportable Segments
Fiscal year ended March 31, 2015
(Millions of yen)
Reportable segment
Home-Life

Car-Life

Power &
Utility

Energy
Trade

Total

Other

Total

Revenue fromexternal customers

107,276599,550

34,746

195,171936,74398

936,841–

936,841

Intersegment revenue

633

2,654

–

759

4,046

190

4,236

(4,236)–

107,909602,204

34,746

195,930

940,789288

941,077(4,236)

936,841

Gross profit

24,922

47,218

5,570

7,911

85,62199

85,720–85,720

Selling, general andadministrative
expenses(22,276)(41,666)(2,425)(4,858)(71,225)(58)(71,283)99(71,184)

Profit (loss) fromtangible assets,intangible assets andgoodwill

28(1,186)

(491)

(72)

(1,721)(0)(1,721)(104)(1,825)

Other profit (loss)

209

144

356

(317)

392

(9)

383

6

389

Profit fromoperating activities

2,883

4,510

3,010

2,664

13,06732

13,0991

13,100Financial income(costs)

56

(450)

(138)

(83)

(615)

(3)

(618)

37

(581)

Share of profit (loss)of investments
accounted for by theequity method

(256)

13

(112)

4

(351)

–

(351)

(6)

(357)

Loss from sales ofinvestments in
subsidiaries andassociates

(7)

–

–

–

(7)

–

(7)

–

(7)

Profit before tax

2,676

4,073

2,760

2,585

12,09429

12,12332

12,155

Net profit (loss)
attributable to
Itochu Enex’s
shareholders

931

1,450

1,671

1,581

5,633

(3)

5,630

(127)

5,503

(3,375)(2,942)(3,086)(627)(10,030)(4)(10,034)(501)(10,535)

Adjustment Consolidated

Revenue

Total revenue

Other items
Depreciation andamortization(46)(1,314)

(201)

(15)

(1,576)–(1,576)(104)(1,680)Total assets

61,069131,256

55,72066,839314,8842

314,886

14,173

329,059

Investments
accounted for by
the equity method

6,722

179

3,080

102

10,083–

10,083468

10,551

Capitalexpenditures

3,897

2,438

8,750

623

15,70812

15,720191

15,911

Total tradingtransactions

111,588638,848

38,743584,078

1,373,257

136

1,373,393–

1,373,393

Impairment loss

(Note)

Intersegment transactions have been conducted at ordinary transaction prices.
The adjustment of negative ¥127 million to net profit attributable to Itochu Enex’s shareholders represents corporate
profit not allocated to reportable segments.
The adjustment of ¥14,173 million to total assets represents corporate assets not allocated to reportable segments.
Total trading transactions are unaudited items voluntarily disclosed by the Company and represent the amount ofsales in accordance with Japanese accounting practices.

- 19 -

Fiscal year ended March 31, 2016
(Millions of yen)
Reportable segment
Home-Life

Car-Life

Power &
Utility

Energy
Trade

Total

Other

Total

Revenue fromexternal customers

91,035493,160

42,46396,987

723,6450723,645–

723,645

Intersegment revenue

586

3,093

302

851

4,832

–

4,832

(4,832)–

Total revenue

91,621

496,253

42,765

97,838728,4770728,477(4,832)

723,645

Gross profit

26,22147,362

7,435

8,544

89,562089,562–

89,562

Selling, general andadministrative
expenses(23,158)(42,895)(2,985)(4,721)(73,759)(0)(73,759)533(73,226)

Profit (loss) fromtangible assets,intangible assets andgoodwill

39

(612)

(24)

(30)

(627)

–

(627)

34

(593)

Other profit (loss)

265

339

13

(19)

598

1

599

42

641

Profit fromoperating activities

3,367

4,194

4,439

3,774

15,774

1

15,775609

16,384

Financial income(costs)

20

(427)

(267)

(74)

(748)

0

(748)

40

(708)

Share of profit (loss)of investments
accounted for by theequity method

(756)

(17)

41

60

(672)

–

(672)

–

(672)

Profit before tax

2,631

3,750

4,213

3,760

14,3541

14,355649

15,004

Net profit (loss)
attributable to
Itochu Enex’s
shareholders

788

2,014

2,240

2,514

7,556

1

7,557

(88)

7,469

Depreciation andamortization(4,232)(3,371)(3,867)(679)(12,149)–(12,149)(459)(12,608)

Impairment loss

(5)

(682)

–

–

(687)

–

(687)

–

(687)

Total assets

60,404116,484

55,14450,284282,316–

282,316

21,737304,053

Investments
accounted for by
the equity method

5,821

99

2,370

496

8,786

–

8,786

0

8,786

Capitalexpenditures

4,545

2,573

4,638

352

12,108–

12,108191

12,299Total tradingtransactions

95,126534,156

43,495

398,852

1,071,629

0

1,071,629–

1,071,629

Adjustment Consolidated

Revenue

Other items(Note)

Intersegment transactions have been conducted at ordinary transaction prices.
The adjustment of negative ¥88 million to net profit attributable to Itochu Enex’s shareholders represents corporate
profit not allocated to reportable segments.
The adjustment of ¥21,737 million to total assets represents corporate assets not allocated to reportable segments.
Total trading transactions are unaudited items voluntarily disclosed by the Company and represent the amount ofsales in accordance with Japanese accounting practices.

- 20 -

iii) Products and Services Information
This information is omitted because the classification of products and services is the same as theclassification of reportable segments.

iv) Geographic Information
This information is omitted because revenue from external customers in Japan accounts for a large
percentage of the revenue recorded in the consolidated statement of comprehensive income for the
fiscal years ended March 31, 2015 and 2016.

v) Major Customers Information
This information is omitted because there is no major external customer from which revenue accounts
for 10% or more of the revenue recorded in the consolidated statement of comprehensive income forthe fiscal years ended March 31, 2015 and 2016.

Earnings per Share
Basic earnings per share for the fiscal years ended March 31, 2015 and 2016, were calculated asfollows:
Fiscal year ended
March 31, 2015

Fiscal year ended
March 31, 2016

Net profit attributable to Itochu Enex’s shareholders(Millions of yen)

5,503

7,469

Weighted-average number of ordinary shares outstanding(Thousands of shares)

112,991

112,990

Basic earnings per share attributable to Itochu Enex’s shareholders
(Yen)

48.71

66.10

(Note)

Diluted earnings per share attributable to Itochu Enex’s shareholders are not presented because there were no
dilutive potential shares.

Significant Events after the Reporting Period
No items to report- 21 -