Business Results for the Fiscal Year
Ended March 31, 2016

May 18, 2016
The Japan Steel Works, LTD.
Ikuo Sato, Representative Director & President

Cautionary Note•

The performance forecasts and other forward-looking statements included in this report are based on
the information that was available to The Japan Steel Works, LTD. (the “Company”) and certain
assumptions deemed to be reasonable at the time this report was prepared, and the actual results may
differ significantly from these forecasts due to a variety of reasons.

•

Unless otherwise noted, “previous forecast values” are those released on November 11, 2015, and“original forecast values” are those released on May 20, 2015.

Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

1

Contents
Forecast for Steel and Energy Products Business: By Major Products[Net sales, operating income, orders received]
Forecast for Industrial Machinery Products Business: By Major Products [Net5.
sales, operating income, orders received]

P1 Cautionary Note

P17

4.

P2 Contents

P18

P3 Structure and Products of Business Divisions

P19

P4 Medium-term Management Plan “JGP2017” (FY2015-2017)

P20 Section 3 Progress of Medium-term Management Plan “JGP2017”

6. Order Backlog

P5

Concerning Improper Accounting Practices at Consolidated Subsidiary FINE
CRYSTAL CO., LTD.

P21

1. Business Strategies

P6

Section 1 Actual Results for the Fiscal Year Ended March 31, 2016P22

2. Increase Profitability of Existing Businesses

P7

1. Consolidated Actual Results for FY2015

P24

3.

P8

2. Increase/Decrease In Operating Income (compared to the previous fiscal year)

P25

4. Reinforce Group Management and Promote Alliances

P9

3. Net Sales, Operating Income and Orders Received by Segment

P26

5. Financial Strategies

P10

4.

P27

6. Change in Assets of Steel and Energy Products Business Segment

P11
P12

Steel and Energy Products Business: By Major Products [Net sales, operating
income, orders received]
Industrial Machinery Products Business: By Major Products [Net sales,
5.
operating income, orders received]

Foster New Products & Businesses and Make Them Competitive As Soon As
Possible

P28 ― Corporate Vision and Management Philosophy ―6. Capital investment, Depreciation, Cash Flows and Financial Position

P13 Section 2 Projection for Fiscal Year Ending March 31, 2017P14

1. Projection for FY2016

P15

2.

P16

Forecast for Increase/Decrease in Operating Income (compared to FY2015
actual results)
Projected Net Sales, Operating Income and Orders Received3.
by Segment

Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

2

Structure and Products of Business Divisions
Business
Segments

Steel and Energy Products BusinessIndustrial Machinery Products Business

Product Business
Divisions

Steel Business Division

Machinery Business Division / Molding Machines Business
Division/ Ordnance Business Headquarters

Muroran Plant

Hiroshima Plant

Real Estate
andOther Businesses

Yokohama Plant

Production
Bases[Cast and Forged Steel [Steel Plates and Structures]
Products]○Pressure vessels for oil refineries○Electric and nuclear power

Products○Other•Steel rolls for steel
manufacturing•
Die steel[Plastics Machinery]○Plastic production and processing machinery ○Molding machines•
Plastic injection molding machines•
Pelletizers ・ Film and sheet equipment•
Blow molding machines•
Compounding twin-screw extruders(TEX/TEK)○Effective
use ofthe landowned bythe Company○Clad steel plates/ clad steel pipes[Other Machinery]○Light alloy injection molding
machines•
Magnesium alloy injection molding
machines[Wind Turbines]○IT equipment•
Laser annealing (ELA) systems•
Thin-film coating machines○Steel pressure vessel for hydrogenstorage○Defense equipment○Railway products

Markets

Electric powerand steelOil andnatural gas

Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

Natural energy Petrochemicals○Compressors

Industrial
Automobiles
machinery

IT

DefenseReal estate
rental3

Medium-term Management Plan JGP2017 (FY2015-2017)“Advancing toward Top Global & Niche Corporate Group”
Aiming to achieve top share at key points in customer value chains
Basic Policies
Policy 1.

Increase profitability of existing
businesses

Numerical Targets"Renew the Challenge: Net sales of ¥250.0 billion in 2020"◆Pursue product & service differentiation◆Strengthen total-cost competitiveness◆Develop service & solution businesses◆Reinforce initiatives in growth markets

Policy 2.

Foster new products & businesses andmake them competitive as soon as
possible◆Promote businesses based on core management
resources◆Optimize timeframe and systems for promoting new
products & businesses

Policy 3.

More than¥250.0 billion

Reinforce Group management andpromote alliances

More than¥220.0 billion¥194.6 billion
Operating Income:¥7.5 billion

FY2014

Operating income:More than ¥13.0 billion
ROA: Above 3%
ROE: Above 8%

Operating income:More than ¥20.0 billion
ROA: Above 4%
ROE: Above 10%

FY2017

FY2020* ROE has been revised upward from the original target value.

Strict management control based on Action Plan (implement PDCA)
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4

Concerning Improper Accounting Practices at Consolidated Subsidiary FINE CRYSTAL CO., LTD.

March 28, 2016 Established Internal Investigation Committee

April 25, 2016

Published Internal Investigation Committee Report

May 2, 2016

Submitted amended version of Securities Reports, etc., andpublished corrected Summary of Consolidated Financial Results,
etc., for the previous fiscal terms(1) Restructuring internal control and establishingcompliance awarenessMeasuresto prevent(2) Strengthening system for management of subsidiaries
recurrence(3) Enhancing audit function, etc.

Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

5Section 1
Actual Results for the Fiscal Year Ended March 31, 2016

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6

1. Consolidated Actual Results for FY2015
Although net sales and operating income were more than the previous forecast,
FY2015 ended in a loss due to the posting of an impairment loss.
(Unit: Billions of yen)
* On this page, “previous forecast” refers to the values published on February 8, 2016.

FY2014(A)

FY2015Previous
Actualforecast
results(B)(C)

Compared
to previousyear(C)-(A)

Compared
to previous
forecast(C)-(B)

Ordersreceived

205.9

210.0

211.6

5.7

1.6

Net sales

194.6

210.0

223.3

28.7

13.3

Operatingincome

7.5

12.0

14.4

6.9

2.4

(ratio)

3.9%

5.7%

6.5%

Ordinary
income

9.2

12.5

14.1

4.9

1.6

Profit (Loss)

(5.3)

7.2

(16.6)(11.3)(23.8)

Profit (Loss)per share (yen)(14.39)19.64(45.32)(30.93)(64.96)

Dividends per
share (yen)

4.0

5.0

5.0

1.0

0.0

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7

2. Increase/Decrease in Operating Income (compared to the previous fiscal year)
An increase in production and sales of clad steel pipes and industrial machinery
products contributed to achieving a significant 92% increase in operating income.
(Unit: Billions of yen)

+1.2
+1.5
Foreignexchange
gain

+4.0

+0.0

+0.2

Increase/decrease in
fixed costs

Increase/decrease in
unclassifiable
costs

14.4

Increase/decrease invariable costs

Operating income increased ¥６.９ billion

7.5
Increase/decreasein production,
sales and prices

FY2014
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FY20158

3. Net Sales, Operating Income and Orders Received by Segment
Net sales and operating income for both segments were mostly as forecast, butorders received deviated from the forecast.
(Unit: Billions of yen)

Steel and Energy Products Business
FY2014(A)

FY2015Previous
Actualforecast
results(B)(C)

Compared to Compared tothe previous
previous
year
forecast(C)-(A)(C)-(B)

Ordersreceived

68.4

52.5

39.7

(28.7)(12.8)Net sales

66.2

77.5

74.8

8.6

(2.7)

Operatingincome (loss)

(3.9)

(0.5)

0.7

4.6

1.2

(ratio)

-5.9%

-0.6%

0.9%

Industrial Machinery Products Business
FY2015Compared to Compared to
FY2014the previous
previous
Previous
Actualyear
forecast(A)
forecast
results(C)-(A)(C)-(B)(B)(C)
Orders
135.3
155.5
167.8
32.5
12.3
received
Net sales

126.3

130.5

144.3

18.0

13.8

Operatingincome

11.3

12.0

12.4

1.1

0.4

(ratio)

8.9%

9.2%

8.6%

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9

4. Steel and Energy Products Business: By Major Products [Net sales, Operating income, Orders received]
Orders received fell short of targets primarily due to a slump in orders related to nuclear
power and the delay of some clad steel pipe orders to the following fiscal year.
Net sales, Operating income

Orders received(Unit: Billions of yen)

FY2015FY2014 Previous(A)
forecast

Compared Comparedto thetoprevious previous
year
forecast(C)-(A)(C)-(B)(B)

Actualresults
(C)

27.4

21.0

19.2

(8.2)

(1.8)

4.2

3.0

1.4

(2.8)

16.2

39.0

39.3

Wind turbines

5.7

1.0

Other

7.0

Consolidated

FY2015FY2014 Previous(D)
forecast

Compared Comparedto thetoprevious previous
year
forecast(F)-(D)(F)-(E)(E)

Actualresults
(F)

14.7

17.5

14.6

(0.1)

(2.9)

(1.6)

3.0

3.0

1.1

(1.9)

(1.9)

23.1

0.3

42.1

18.0

11.2

(30.9)

(6.8)

1.2

(4.5)

0.2

(2.6)

0.5

(0.3)

2.3

(0.8)

6.5

6.9

(0.1)

0.4

5.5

7.0

6.2

0.7

(0.8)

5.7

7.0

6.8

1.1

(0.2)

5.7

6.5

6.9

1.2

0.4

Total

66.2

77.5

74.8

8.6

(2.7)

68.4

52.5

39.7

Operating income(loss)

(3.9)

(0.5)

0.7

4.6

1.2

Electric and nuclear
power
Pressure vessels
for oil refineries
Clad steel plates andclad steel pipes

Group companies, etc.

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(28.7) (12.8)

10

5. Industrial Machinery Products Business: By Major Products [Net sales, Operating income, Orders received]
Orders received grew year on year. All product groups performed strongly.
Net sales, Operating income

Orders received(Unit: Billions of yen)

FY2015FY2014 Previous(A)
forecast(B)

Actualresults(C)

Compared Comparedto thetoprevious previous
year
forecast(C)-(A)(C)-(B)FY2015FY2014 Previous(D)
forecast(E)

Actualresults(F)

Compared Comparedto thetoprevious previous
year
forecast(F)-(D)(F)-(E)

Plastic production andprocessing machinery

32.5

33.0

36.4

3.9

3.4

31.9

38.0

40.2

8.3

2.2

Molding machines(consolidated)

53.6

55.0

56.4

2.8

1.4

54.5

59.0

59.4

4.9

0.4

Other

25.0

26.5

32.6

7.6

6.1

31.9

38.5

49.3

17.4

10.8

Consolidated

15.2

16.0

18.9

3.7

2.9

17.0

20.0

18.9

1.9

(1.1)

126.3 130.5 144.3

18.0

13.8

135.3 155.5 167.8

32.5

12.3

11.3

1.1

0.4

Group companies, etc.

Total
Operating income

12.0

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12.4

11

6. Capital Investment, Depreciation, Cash Flows and Financial Position(Unit: Billions of yen)

[Capital investment and depreciation]

20
Capital investment

Depreciation

16.0

15

14.0

12.9
11.0

10.7
9.6

10

8.0

7.9
5.5

5.2

FY2012FY201350(Unit: Billions of yen)

FY2014FY2015FY2016(Forecast)[Cash flows]

Operating cash flows

Investing cash flows[Financial Position]

Free cash flows(Unit: Billions of yen)
25.0

Net assets

19.7
20.0

160.0

15.0

140.0

10.0

11.5
8.9

7.6

0.0

60.0
40.0

-2.6

-10.0
-12.1

-15.0

111.3

FY2015

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0.50

0.45

0.40

0.29

0.30

49.6

39.6

0.20

20.0

0.10

0.0

0.00

-9.5

-20.0
FY2014

D/E ratio
0.70
0.60

100.0
80.0

Net interest-bearing debt

138.2

120.0

5.0

-5.0

Interest-bearing debt

FY2014

-12.3

-0.10

FY201512

Section 2
Projection for Fiscal Year Ending March 31, 2017

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13

1. Projection for FY2016
Orders received and net sales are both expected to be ¥220.0 billion, but operating income
is expected to decline compared to the previous fiscal year.
(Unit: Billions of yen)

FY2016 forecast
FY2015(A)First
fiscal half

Secondfiscal half

211.6

98.0

122.0

220.0

8.4

223.3
14.4

110.0
5.0

110.0
7.0

220.0
12.0

(3.3)
(2.4)

(ratio)

6.5%

4.5%

6.4%

5.5%

Ordinary income

14.1

5.0

7.0

12.0

(2.1)

Profit (Loss)(16.6)

3.0

5.0

8.0

24.6

Profit (Loss)per share (yen)(45.32)

8.19

13.65

21.84

67.16

Dividends per
share (yen)

5.0

2.5

2.5

5.0

0.0

Ordersreceived
Net sales
Operating income

ROE

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-

Full year（B)

Compared tothe previous
year(B)-(A)

Approximately

7％

-

14

2. Forecast for Increase/Decrease in Operating Income (compared to FY2015 actual results)
A rebound decline from large volume sales for clad steel pipes in the Steel and Energy
Products Business has a substantial impact.

14.4

Increase/decreasein production,
sales and prices(Unit: Billions of yean)+3.1

Increase/decrease in
unclassifiable
costs

12.0
-1.3
+0.4
+2.3
Foreignexchangegain-6.9
FY2015
Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

Increase/decrease in
fixed costs

Increase/decrease invariable costs

FY2016
forecast

15

3. Projected Net Sales, Operating Income and Orders Received by Segment
The Industrial Machinery Products Business is expected to remain on track for increased
revenue and profit, while the Steel and Energy Products Business will again post a loss.
(Unit: Billions of yen)

Steel and Energy Products Business
FY2015(A)

FY2016
forecast（B）

Compared to theprevious year(B)-(A)

Ordersreceived

39.7

56.0

16.3

Net sales

74.8

58.0

(16.8)

Operating income(loss)

0.7

(2.0)

(2.7)

(ratio)

0.9%

-3.4%

Industrial Machinery Products Business
FY2015(A)
Ordersreceived
Net sales
Operating income(ratio)Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

FY2016
forecast（B）

Compared to theprevious year(B)-(A)

167.8

162.0

(5.8)

144.3
12.4

160.0
15.0

15.7
2.6

8.6%

9.4%

16

4. Forecast for Steel and Energy Products Business: By Major Products [Net sales, Operating income, Orders received]

Net sales, Operating income

FY2015(A)
Electric and nuclear
power
Pressure vessels
for oil refineries
Clad steel plates andclad steel pipes

FY2016
forecast(B)

Orders received

Compared tothe previous
year(B)-(A)FY2015(C)

FY2016
forecast(D)

Compared tothe previousyear(D)-(C)

19.2

21.0

1.8

14.6

18.5

3.9

1.4

1.5

0.1

1.1

1.5

0.4

39.3

20.0

(19.3)

11.2

22.5

11.3

Wind turbines

1.2

3.0

1.8

(0.3)

0.5

0.8

Other

6.9

6.0

(0.9)

6.2

6.5

0.3

Consolidated

6.8

6.5

(0.3)

6.9

6.5

(0.4)

Total

74.8

58.0

(16.8)

39.7

56.0

16.3

Operating income(loss)

0.7

(2.0)

(2.7)

Group companies, etc.

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175. Forecast for Industrial Machinery Products Business: By Major Products [Net sales, Operating income, Orders received]
Net sales, Operating income

FY2015(A)

FY2016
forecast(B)

Compared tothe previous
year(B)-(A)

Orders received

FY2015（C)

FY2016
forecast(D)

Compared tothe previousyear(D)-(C)

Plastic production andprocessing machinery

36.4

40.0

3.6

40.1

42.0

1.9

Molding machines(consolidated)

56.4

58.0

1.6

59.4

58.0

(1.4)

Other

32.6

43.0

10.4

49.4

42.0

(7.4)

Consolidated

18.9

19.0

0.1

18.9

20.0

1.1

Total

144.3

160.0

15.7

167.8

162.0

(5.8)

Operating income

12.4

15.0

2.6

Group companies, etc.

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18

6. Order Backlog

Order backlog in “Electric and nuclear power”

Order backlog by segment（Unit: Billions of yen）

（Unit: Billions of yen）

Electric and nuclear power

Steel and Energy Products BusinessIndustrial Machinery Products Business

300.0

Real Estate and Other Businesses

100.0

250.0

200.0

199.7
0.7

150.0

96.5

210.9
0.7

199.2
0.6

199.2
0.6

129.1

131.1

105.6

55.2
50.0

42.5

37.8

100.0

50.0

102.4

35.3

104.6

69.5

67.5

FY2015FY2016
forecast

0.0

0.0

FY2013

FY2014

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FY2013

FY2014FY2015FY2016
forecast

19

Section 3
Progress of Medium-term Management Plan “JGP2017”

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20

1. Business Strategies
Steel and Energy
Products Business

Reduce invested
capital• Rationalize facilities• Reallocate personnel• Promote cost reduction
measures

Strategy for steadybusiness growth andrenewed growth after
JGP2017 through“defensive
management”

Industrial Machinery
Products Business

Identify growth
opportunities andaccelerate businessexpansion through“offensive
management”

FY2016Plan

FY2017Plan

Net sales¥74.8 bil.

Net sales¥58.0 bil.

Net sales
More than¥60.0 bil.

Operatingincome¥0.7 bil.

Operatingloss¥(2.0) bil.

FY2015
ActualReview businessdomains• Strengthen “profit-type products”• Secure volume of “operatingtype products”• Expand new products• Review unprofitable businesses

Pursue strategic
investment• Reinforce production capacity at
Hiroshima and Yokohama plants• Reinforce personnel• Promote strategic alliances

Expand businessdomains• Strengthen service businesses• Acquired South Korea’s SM PLATEK• Acquired “simultaneous biaxial
stretching machine business” for film
and sheet manufacturing equipment
business• Expand sales of J-ADS series• Expand thin-film coating business
OthersCopyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

Operating loss is expected
in FY2016 due to adecrease of approximately¥20.0 billion in net sales
compared to FY2015.

FY2015
Actual

FY2016Plan

Net sales¥144.3 bil.

Net sales¥160.0 bil.

Operatingincome¥12.4 bil.

Operatingincome¥15.0 bil.

Net sales and operating income
for FY2016 are both expected
to meet the final-year targets ofthe medium-term management
plan ahead of schedule, backed
by strong orders.

OperatingincomeMore than¥0.0 bil.

Until FY2020

RenewedgrowthProfitability will be achieved in the
final year of the medium-term
management plan throughcontinued efforts to increase net
sales by strengthening orders andefforts to reduce costs.
FY2017Plan
Net sales
More than¥158.0 bil.
Operating
IncomeMore than¥14.0 bil.

Until FY2020

Sustainablegrowth

Numerical targets for the final
year of the medium-term
management plan will berevised in light of FY2016
results forecasts.

21

2. Increase Profitability of Existing Businesses (JGP2017 Basic Strategy 1) 1) Steel and Energy Products Business
Product GroupStrengthen
competitiveness

・設備の合理化 (Nuclear power) Orders received
・人材再配置stagnated due to weak and limited
Electric
and・原価低減策の推進
demand worldwide.
nuclear power

Business
optimization

FY2016 Outlook and Challenges(Nuclear power) Strengthen sales activities while
monitoring demand trends domestically andoverseas in Japan, China and the U.K.

(Thermal power) Firm. Securedorders received mainly in China.

(Thermal power) Firm demand in Japan, China,
and Southeast Asia for thermal power
generation that takes into account environmental
measures. Focus efforts on capturing actual
demand from heavy electric machinery
manufacturers.

(Steel pipes) Some orders received
for natural gas development
projects were delayed to the next
fiscal year.

(Steel pipes) Orders are expected toincrease year on year. Demand isanticipated in the Middle East and Africa,
etc.

(Steel plates) Struggled amid impactof low oil prices.

(Steel plates) Cultivate demand by
expanding areas for sales activities.

Large industrial
forged steel
products

Developed large press components,
anvils for pile-driving hammers used
in offshore wind power development,
and stress joints for offshore
structures.

Use the manufacturing technology for large
forged steel products cultivated throughelectric and nuclear power products tosecure demand in other industrial fields.

Pressure vessels
for oil refineriesProfitable orders were limited.

Continue to move ahead with specialization inareas of competitive advantage and expansionof service and maintenance business.

Small forgedsteel products

Promoted transfer of technology to
L&T Special Steels and Heavy
Forgings Pvt. Ltd. (LTSSHF) in India.

Continue to respond to and deepen
localization through alliances (India, Brazil)Wind turbines

Pushed ahead with work to repair
defects (provisions for loss on wind
power generator business decreased
from ¥16.0 billion to ¥8.6 billion).

Complete work to repair defects.
Rebuild business model.

products

Business
expansion

FY2015 Status

Clad steel plates
and clad steel
pipes

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22

2. Increase Profitability of Existing Businesses (JGP2017 Basic Strategy 1) 2) Industrial Machinery Products Business
Product Group

Performance will remain strong.
Respond to increased capacity, etc.,
through differentiated technologies.

Orders received grew significantly
due to favorable demand for liquid
crystal panel manufacturing use andexpanded demand for organic EL
panel manufacturing use.

Keep an eye on expansion of the organic EL
market, and respond with differentiatedtechnologies for large models, highperformance and high productivity, etc.

Film and sheet
equipment

Demand rose sharply for use in
manufacturing LiB separator film.

Demand will remain strong, mainly for use
in manufacturing LiB separator film.
Respond with diverse stretching
technologies.

Medium-sized andlarge injection
molding machines

In addition to strong demand for the
automotive field, demand increasedin the miscellaneous goods andcontainers field.

Performance will remain strong.
Reinforcement of production capacity(+30%) is scheduled to be completed in July.
Strengthen collaboration with Meiki Co., Ltd.

Compounding twinscrew extruders

Performance was strong due toexpansion of the market forengineering plastics and other highfunction plastics.

Expand range of applications for plastics
through technological development (carbon
fiber reinforced composite materials, etc.)

Strengthened production system
based on long-term plan.

Respond in a timely and accurate manneraccording to demand.

Shared platform as first step in joint
development with Toyo Machinery &Metal Co., Ltd.

Launch and commence sales of new small
ADS series.

Strengthen
competitiveness

Laser annealing
systems

Defense-related
equipment

Business
optimization

FY2016 Outlook and Challenges

Strong performance backed by
growing demand for polyolefin.

Pelletizers

Business
expansion

FY2015 Status

Small injection
molding machines

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23

3. Foster New Products & Businesses and Make Them Competitive as Soon as Possible (JGP2017 Basic Strategy 2)
Company-wide efforts toward achieving ¥30.0 billion in new business by 2020
― Promotion process and overview of company-wide commercialization project ―• R&D themes

Company-wide commercialization project activities• JSW Group synergies• Alliances• Intellectual property
strategy

Targeted field
Next-generationenergy field

Prioritized projects

Strategic projects

Commercializationin short to medium term

Commercialization
in medium to long term

Name of prioritized project

Outline of FY2016 initiatives

Hydrogen business• Development of highly reliable steel pressure vessels and hydrogencompressors for use at hydrogen stations• Development of fuel cell systems

Offshore-related equipment business• Development of offshore structure components and welding technologies fordeep-sea use• Development of sealing film forming equipment for flexible panels

Electronics andInformation andcommunications
field
Automotive andaerospace field

Organic EL-related business• Development of excimer laser annealing systems adapted for high definition

High-value-added film business• Development of film processing equipment for high-endurance, heatresistant lithium ion batteries

Semiconductor business• Development of manufacturing equipment for gallium nitride crystals andcrystal-related technologies

Carbon fiber business• Development of manufacturing equipment for carbon fiber composite parts

Aircraft components business• Entry into aircraft components business

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24

4. Reinforce Group Management and Promote Alliances (JGP2017 Basic Strategy 3)
Seek maximum synergy effects
Foster new products& businesses andmake them competitive
as soon as possible

Increase profitability ofexisting businesses

Continue and strengthen further
FY2015 Initiatives
Reallocation at Hiroshima
Plant factory(to be completed in July
2016)

Formulated Corporate
Governance Policy

Expand and evolve further
FY2015 Initiatives

Pressed ahead with
Muroran Restructuring
Project(improved production
efficiency, etc.)

Made Meiki Co., Ltd.
a wholly owned
subsidiary

ReinforceGroup management
Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

(Film and sheet equipment)
Acquired simultaneous
biaxial stretching
technologies(Compounding twinscrew extruders)Acquired South Korea’s
SM PLATEK(Large cast and forgedsteel products)(Molding machines)

Alliance with India’s
LTSSHF
Joint venture with Brazil’s
GerdauJoint development ofsmall machinery with
Toyo Machinery & Metal
Co., Ltd.

Promote alliances25

5. Financial Strategies
Increase shareholder value by strengthening cash generation and effective cash use

C/F from operating activities

Dividends¥1.6 billion¥19.7 billion
Profit before depreciation andimpairment¥24.0 billion
Reduction of working capital, etc.
¥2.3 billion
Other (taxes, extraordinary loss
related to wind power, etc.)¥(6.6) billion

C/F from financing activities(Excluding dividend payment andacquisition of treasury stock)¥9.3 billion

Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

Acquisition of treasury stock¥2.9 billion
Capital investment¥9.3 billion
M&A investment¥2.8 billion
Cash and deposits at the end of the fiscal year ended
March 31, 2016 increased by ¥12.8 billion comparedto the end of the previous fiscal year.
Review allocation of generated cash, based on abalance between continued investment in growth andreturn to shareholders while considering financial
soundness.

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6. Change in Assets of Steel and Energy Products Business Segment
Segment assets were streamlined by impairment of non-current assets, etc.

Impairment of plant assets at Muroran Plant
In the process of preparing the business budget for the fiscal year ending
March 31, 2017, there was an indication of impairment due to the declined
profitability of assets in the Steel and Energy Products Business,reflecting the delayed recovery in the business environment, among otherfactors.

Based on the Accounting Standards for Impairment of Fixed Assets, adifference between the book value of the assets and the amountrecoverable in future cash flow was impaired, and an impairment loss of¥35.4 billion was recognized.

As a result, segment assets were streamlined, including a decreasein current assets (accounts receivable and inventories).

As of March 31, 2015

As of March 31, 2016¥111.4 billion¥60.2 billion

Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

Change in consolidated B/S for
the Company as a whole
Consolidated B/S as of March 31, 2015
(Unit: Billions of yen)
Current assets
190.9
Non-current assets
128.6
Total assets
319.6
Current liabilities
145.5
Non-current liabilities
35.9
Net assets
138.2
Total liabilities and net assets
319.6

Consolidated B/S as of March 31, 2016
(Unit: Billions of yen)
Current assets
195.5
Non-current assets
97.5
Total assets
293.1
Current liabilities
118.4
Non-current liabilities
63.3
Net assets
111.3
Total liabilities and net assets
293.1

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Corporate Vision and Management Philosophy
Corporate Vision
A company that creates change with creativetechnology, and contributes to the development ofsociety
Management Philosophy
1) Continue to provide clients with surprise andexcitement
2) Coexist with society and sustain profits
3) Believe in constant change
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Copyright (C) 2015 The Japan Steel Works, LTD. All Rights Reserved.

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