RT 2018

ANNUAL REPORT 2018

ANNUALR E P O R T

2018for the year ended March 31, 2018

Fi n a n c i a l H i g h l i g ht s (Con s ol i date d)ProfileFinancial Highlights (Consolidated)
The Japan Steel Works, Ltd. and Consolidated Subsidiaries
Years ended March 31, 2016, 2017, and 2018

Thousands of
U.S. dollars

FY2015FY2016FY2017FY2017¥223,301¥212,469¥212,957$2,004,490

Operating income

14,423

12,34021,318200,659

Profit (loss) attributable to owners of parent(16,600)(4,968)

10,712

100,828

Total assets

293,138

275,315

297,433

2,799,633

Total net assets

111,340

107,587

118,600

1,116,340

ROE−13.5%

−4.6%

9.6%

Equity ratio

37.5%

38.6%

39.3%

¥(226.62)¥(67.61)¥145.77

$1.37

5.00

15.00

37.50

0.35

For the year
Net sales

At year-end

RatiosContents
01
02
04
05
06
08
10
12
14
16
20
22

Financial Highlights (Consolidated)

23
26
31
52
53

Financial Section

Amounts per share (yen and U.S. dollars)

Message from the President

Profit (loss)

JSW’s Model of Value Creation
New Medium-term Management Plan ”JGP2020”

Cash dividends applicable to the year

JGP2020: 3 Basic Policies (priority issues)

Notes 1: Amounts in U.S. dollars are presented solely for convenience and based on the rate of ¥106.24 = US$1.00, the rate of exchange on March 31, 2018.
2: The figures for 2015 have been revised due to changes in the financial results.
3: The Company conducted a 1-for-5 reverse common stock split effective on October 1, 2016. For the sake of simplicity, the profit (loss) per share in the table
above is calculated using the number of shares after the reverse stock split.

Our Business Domains
Review of Operations
Special Feature
Research and Development

Profit (loss) attributableto owners of parent

Profit (loss)

Millions of yen

Millions of yen

Yen−10,000

145.7774.58(67.61)60,0000(226.62)0

80.0(71.94)

120,000

10,712

Network

10,000(4,968)180,000

Corporate Directory

160.0(16,600)

Notes to Consolidated Financial Statements

194,674

Consolidated Financial Statements

212,957

20,000212,469

240,000

223,301

Board of Directors, Audit & Supervisory
Board Members, and Executive Officers

Net Sales(5,327)

Environmental Management

5,527

Corporate Governance

188,719

In 1907, the Japanese government launched a joint venture
for the purpose of domestic weapons production in Muroran, Hokkaido—later to become a major steel manufacturing center—consisting of two British firms (W.G. Armstrong
and Vickers) and one Japanese company. That was the birthof The Japan Steel Works, Ltd. (JSW).
After World War II, the company turned its sophisticatedtechnologies and considerable experience to meeting
peacetime needs. Continuing to produce high-quality steel,
it developed machinery making use of this steel and endeavored to open up new business fields. In addition to heavy
and chemical industries such as electric power, steel, shipbuilding, and petrochemicals, the company broadened into
areas from automobiles to electrical machinery and information equipment, earning a worldwide reputation as an integrated producer of steel materials and machinery.
Today, having grown into a comprehensive materials provider and manufacturer of mechatronics products, JSW is
meeting society’s needs at the forefront. In the steel andenergy products business, we are serving the needs of theenergy industry in areas such as electrical power generation,
oil refining, natural gas, and wind power generation. In theindustrial machinery products business, we supply equipment for manufacturing and processing plastic materials,
along with a diverse range of products in areas from information technology to defense.

Millions of yen

Forward-looking statements
The performance forecasts included in thisreport are judgments based on the information−60.0

that was available to the JSW Group at the time
this report was prepared and the actual results
may differ significantly from these forecasts due
to a variety of factors.

0−20,0002013 2014 2015 2016 2017 (FY)−240.02013 2014 2015 2016 2017 (FY)2013 2014 2015 2016 2017 (FY)01

M e s s a g e from t h e Pre s i de nt

Message from the President

Naotaka Miyauchi
Representative Director & President

02

slump in demand for products used in thermal power

European, and other industrialized economies. In Japan,

and nuclear power plants.

we expect the economy to remain on a moderate recov-

Under these conditions, the JSW Group promoted

ery path as well. On the other hand, uncertainties

its business activities in accordance with the medi-

regarding intensifying trade frictions, the impact of

um-term management plan entitled JGP2017 duringexport-oriented companies due to respective countries’

fiscal 2017, the final year of the plan. Despite a harshtrade policies, and rising geopolitical risks in the Middle

business environment, the Steel and Energy Products

East and other regions require close monitoring.

Business segment cut back on invested capital andUnder these circumstances, the JSW Group’s Steelreviewed its business domain in order to make a strate-and Energy Products Business segment is expected to

gic move for a rebound. Meanwhile, the Industrial

continue facing a difficult business environment amid a

Machinery Products Business segment accelerated its

prolonged delay in demand recovery for nuclear powerbusiness growth by expanding its business domain andproducts as well as stagnant demand in products fortaking other measures.

thermal power plants after the passage of the Paris

For fiscal 2017, total orders amounted to ¥236,050

Agreement. To achieve a return to profitability, we will

million (US$2,221 million), up 32.9% over the previous

continue rebuilding our business foundation and fos-

year, due to increases in orders generated by both thetering new businesses. In the Industrial Machinery Prod-

Steel and Energy Products Business and Industrial

ucts Business segment, we will further expedite

Machinery Products Business segments. Net sales

business expansion not only by augmenting produc-edged up 0.2% to ¥212,957 million (US$2,004 million),tion capacity aimed at responding to robust demandwith higher sales in the Industrial Machinery Products

but also strengthening alliances and after-sales
services.

Overview of Fiscal 2017higher resource prices and an expansion in exports. The

Business segment offsetting lower sales in the SteelJapanese economy also recovered moderately thanks

and Energy Products Business segment. With regard to

Our consolidated forecasts for fiscal 2018 are: total

Business performance

to an improvement in the employment situation andprofits, the JSW Group posted operating income oforders of ¥230.0 billion (US$2,164 million), net sales ofgrowth in capital investment and exports.

¥21,318 million (US$200 million), up 72.8%; ordinary¥220.0 billion (US$2,070 million), operating income of

In fiscal 2017, ended March 31, 2018, overseas econo-

With respect to the JSW Group’s operating environ-income of ¥22,117 million (US$208 million), up 82.6%;¥22.0 billion (US$207 million), ordinary income of ¥22.0

mies remained on a mild recovery path overall. This wasment, the Industrial Machinery Products Business seg-and profit attributable to owners of parent of ¥10,712

billion (US$207 million), and profit attributable to owners

in part because economies in the United States, Europe,

ment performed well for the most part due to growing

million (US$100 million) (as opposed to a loss attribut-of parent of ¥15.0 billion (US$141 million).

and other industrialized countries as well as China con-demand for such plastic products for automobiles as

able to owners of parent of ¥4,968 million in the previ-

tinued to recover underpinned by strong consumer

materials for automotive lithium-ion batteries. However,ous fiscal year).

spending and an expansion in exports while economies

conditions remained difficult for the Steel and Energy

Looking ahead, the world economy is expected toin emerging nations also turned around on the back ofProducts Business segment, reflecting a prolonged

continue recovering moderately, driven by the U.S.,

We look forward to the further guidance and supportof all shareholders.
June 201803

J SW ’s M od el of Value Cre at io n

New Medium-term Management Plan ”JGP2020”

JSW’s Model of Value Creation
VisionThe ideal image of a corporation to which to aspire:
A company that creates changes with creative technology,
and contributes to the development of societyManagement philosophy

N e w M e di u m - te r m M a n a g e m e nt Pl a n “J G P 2 0 2 0 ”(1) Continue to provide clients with surprise and excitement(2) Coexist with society and sustain profits(3) Believe in constant change

Corporate Vision for FY2030 and Basic Concept behind JGP2020
Building foundations for new growth

JGP2020

Building foundations to ensure the unfailing growth of the JSW Group for the next ten years

FY2030I n d ustr ial M ach in e r y Prod uc ts Busin e ss
Ste e l an d E n e rg y Prod uc ts Busin e ss

Toward a stable businessportfolio

MissionNew business, M&A〜JGP2017
Manufacturing that creates markets

Source that generates customer satisfaction

Aiming for customer satisfaction throughmanufacturing and value creation

Maximization of capabilities by cherishing employees

JGP2020“Aggressive management”

Expand existing business

Customersatisfaction

Expand business scale

Sowing and nurturing seeds for expanding
business domains

Foster new business
Promotion of restructuring

Attaining stable profitability with the current
business scale
Discovering and developing
opportunities for growthof production system

Shareholders
satisfaction

Monozukuri＋
Value creation

Employeesatisfaction

Firmly maintaining
existing businesses

Numerical target for JGP2020(Unit: Billions of yen)

JSW
Fulfilling our
responsibilities tosociety

Consolidated sales

Pursuit of shareholder value

Co-existence with society

Promotion of shareholder return and dialogue
Effective corporate governance and appropriate
information disclosure

Responsibility to strive for co-existence with andcontribution to society as a member of society≧ 260.0

billions of yen

Consolidated
operating income≧ 30.0Consolidated operating income

billions of yen(ROS ≧ 11.5%)

Yonpo yoshi

04

Consolidated sales
Operating income
Ratio of operating profit on sales

Ratio of operating profit on sales
ROA
ROE

Industrial Machinery Products Business
While aiming to achieve stable growth as a company through monozukuri (good manufacturing practices) andvalue creation, we will contribute to society by performing our obligations on four different fronts, ensuringsatisfaction for customers, employees and shareholders as well as fulfilling our responsibilities to society.

Consolidated sales

FY2017

JGP2020

170.2
23.8
13.9%

≧205.0≧28.0≧13.6%FY2017

JGP2020

212.9
21.3
10.0%
3.7%
9.6%

≧260.0≧30.0≧11.5%≧7%≧14%

Steel and Energy Products Business
FY2017

JGP2020

Consolidated sales

40.8

≧45.0

Operating income

△1.5

≧3.0

−3.7%

≧6.6%

Ratio of operating profit on sales

05

JGP 2 0 2 0 : 3 Ba s i c Pol i c i e s ( p r i or i t y i s s u e s )JGP2020: 3 Basic Policies (priority issues)
JGP2020: Lay foundations look ing ahead to 2030

Based on the basic policies listed on page 6, we intend to steadily promote the following business strategies.

“Growth” in Industrial Machinery Products Business,“Rebirth” in Steel and Energy Products BusinessIndustrial Machinery Products Business
Basic strategy in the JGP2020 plan for the Industrial Machinery Products Business is to sow the seeds
and nurture them to expand business domains through “offensive management.”(1) Optimize management resources and strengthen alliances

Primary business strategies are listed below.

		 Rationalization through reallocation of management resources
		 Actively invest in Industrial Machinery Products Business and restructure Steel and Energy 					 Products		 		 Business according to sales
		 Move away from principle of self-sufficiency

Injection molding machines(2) Strengthen after-sales services (stock-based business)

Establish a solid JSW molding machine brand power through mass customization strategy*.

		 Strengthen foundations of service structure focusing on Industrial Machinery Products Business				 Generate stable profits and increase customer satisfaction* Mass customization strategy
Provide differentiated, customized machines based on a common base to meet the needs of areas and customers.

Improve the degree of customer satisfaction through proposal-based services utilizing the Internet of Things (IoT) andother technologies as well as aim for higher profitability through preventive maintenance and repair.

				 Build strong customer base through service business

Laser plasma related equipment

		 Lay foundations for next businesses

Strive for further improvement of profitability by strengthening product competitiveness through differentiation ofexisting products and by expanding service businesses.

(3) Increase exploration and fostering of new businesses
		 Explore new businesses with an eye on megatrends

Create new products related to flat panel displays by securing competitive core technologies.

Foster and develop business mainly in four areas: aircraft components, hydrogen, crystal devices, and 		deposition systems
HydrogenReinforce production facility as soon as possible in response to robust demand mainly for use in manufacturing
separator films.
Strive to expand business in the areas of packaging materials, industrial materials and optical applications as
a comprehensive film equipment manufacturer.

		 Scale up business by promoting alliances and M&A

Aircraft

Film and sheet equipment

Crystal

Deposition system

Steel and Energy Products Business
Basic strategy in the JGP2020 plan for the Steel and Energy Products Business is to aim for stableprofitability for existing products at the current business scale as well as to explore and promote early
development of new growth opportunities.
Primary business strategies are listed below.
Collaboration with Tsukishima Kikai Co., Ltd.

Under the guidance of a partnercompany, JSW will build a factory
for aircraft components, makecapital investments and acquirecertification to produce cladding
metal products and multi-material
products at Muroran. JSW will
construct a mass production
system for multi-material products
for commercial aircraft for which
demand is expected to grow in the
future.

06

JSW will expand and step up thehydrogen station business centered on pressure accumulatorsand compressors, incorporating its
own hydrogen-resistant material
technologies. JSW will spread MH
tanks based on hydrogen storing
alloy technologies into thedomains of energy storage andsupply systems and fuel cellapplications.

The development of infrastructure
and terminals ready for thefifth-generation communication
standard (5G) is gathering pace.
The applications of crystal materials have expanded in the areas of
optical communication, wirelesscommunication and sensing. JSW
is working to develop composite
substrates for SAW devices, composite substrates for optical communication and gallium nitride(GaN) crystal substrates matchedwith the aforementioned
applications.

The electron cyclotron resonance(ECR) deposition system deposits
high quality films such as semiconductor laser coatings with expanding applications and protection
layers for electronic devices. JSW
will work to further expand sales of
ECR systems and broaden thelineup of different deposition
systems for wafers, including
atomic layer deposition (ALD)
systems and electron beam evaporation systems.

Establish structure for collaboration with Tsukishima Kikai to commence factory operation at the Muroran Plant from
April 2019.

Improvement of fixed costs
Continue to implement measures to achieve cost structure reforms aligned with the scale of sales, including further
restructuring at the Muroran Plant group.

Rapid launch of new businesses
Aim for establishing a future-oriented growth foundation by developing new businesses that will replace existingproducts while leveraging the Muroran Plant’s long-accumulated expertise on steel and other materials.

07

O u r Bu s i n e s s D om a i n s

Our Business Domains
The JSW Group comprises 49 subsidiaries (of which 31 are consolidated) and three affi liates (of which one is anequity-method affi liate). Our operating domains are the Steel and Energy Products Business, the Industrial
Machinery Products Business, and the Real Estate and Other Businesses.
With three plants in Muroran, Hiroshima, and Yokohama, JSW manufactures a wide range of plastic production
and processing machinery as well as molding machines as a general plastic machinery manufacturer. At the sametime, we engage in the production of high-quality cast and forged steel products as well as steel plates and pipes
as a time-honored steel manufacturer. In response to changes in the industrial structure, we have not only made aforay into the fields of flat panel display (FPD) devices and wind turbines but also explored opportunities in new
business domains, promoting the fostering and development of business in four areas, namely, aircraft components, hydrogen, crystal devices, and deposition systems.

Sales
Composition

Industrial Machinery Products Business

80%

Plastic Production and Processing MachineryWe manufacture and sell a variety of plastic production and processing
machinery, which are highly regarded by users around the world, for a wide
range of applications and purposes. Our product lineup in this field includes
pelletizers that manufacture plastic pellets; twin-screw extruders for compounding, reactive processing, dewatering, and devolatilizing; film and sheet
equipment; and spinning extruders for synthetic fibers.

Business Lines
Production, sale, and maintenance ofplastic production and processing
machinery (including pelletizers,
compound extruders, film and sheet
equipment, etc.)

08

19%

At the Muroran Plant, which manufactures steel in electric furnaces, we produce a broad range of cast products and steel ingots for forged products. In
ingots for forgings, we have one of the world’s largest production capacities of
670 tons. Our range of presses and hammers of various types and sizes, including two 14,000-ton hydraulic presses, ensures that we can deliver forgings in
any needed shape. After undergoing heat treatment, machining, and finishing,
the cast and forged steel products are used in the electric power generationindustry (fossil fuel, hydroelectric, and nuclear) as well as for steel-making, oil
refineries, and industrial machinery and facilities. In addition to being a leading
global supplier of numerous extra-large cast and forged steel products, ourplants produce a wide range of high-quality small and medium-sized steel castand forged products.

Business Lines
Production and sale of power
generation equipment nuclear
power-related equipment, etc.

Business Lines
Production, sale, and maintenance ofplastic injection molding machines,
blow molders, magnesium
thixomolding machines

Flat Panel Display Devices
We have been designing and manufacturing excimer laser annealing (ELA) systems, which are used for mass production of high-quality liquid crystal displays(LCD), at the Yokohama Plant since 1995.
We also offer and market laser lift-off (LLO) systems for the production offlexible displays, which are anticipated as promising next-generation displays.
Leveraging laser application technology as our core competence, we aim to
expand into the fields of FPDs and semiconductors.

Steel and Energy Products BusinessElectric and Nuclear Power Products

Molding Machines
All of our standard plastic injection molding machines are provided as an electric type to improve the basic performance of the machines themselves, offer
higher precision, provide high productivity and energy saving. The new ADS
Series realizes further energy savings via the revised servo control system.
We have also supplied a diverse range of blow molders, which produce various tanks and bottles for automotive gas tanks, thereby meeting various customer needs and receiving high praise.
As for magnesium thixomolding machines, we currently provide a lineup of
third-generation injection molding machines that realize more stable molding,a smaller footprint, and energy savings. Demand for these machines is
expected to expand in the foreseeable future as more and more magnesiumparts are adopted in the automotive field.

Sales
Composition

Clad Steel Plates and Pipes
At the Muroran Plant, which has one of Japan’s largest 4-thick-plate reversing
rolling mills, we can roll high-quality, extremely thick, wide, and long steel
plates (maximum thickness: 350 millimeters, maximum width: 4.8 meters, maximum length: 20 meters). Using advanced manufacturing technology, we now
mainly produce high-quality clad steel plates and clad steel pipes using clad
steel plates. All of our products are used in a wide range of industrial applications in Japan and overseas, giving this business a unique profile.

Business Lines
Production and sale of clad steel
plates, clad steel pipes, extra-thicksteel plates, etc.

Other Steel Products
Business Lines
Electronic components and displays(laser annealing systems, thin-film
deposition systems, etc.)

The Muroran Plant integrates the various forged steel products it manufacturesand leverages the Company’s state-of-the-art welding technologies and facilities to produce very large welded structures, such as pressure vessels for oil
refineries and petrochemical plants, in an integrated process extending fromraw materials to finished products. As a result, we are meeting demand both inJapan and overseas.

Business Lines
Production and sale of steelmaking,die materials, oil-refining,
petrochemical, and general chemical
products, chemical machinery, etc.

09R e v i e w of Op e rat i on s

Review of Operations
Industrial Machinery Products Business

Steel and Energy Products Business

Plastics Machinery Sector

Steel Products Sector

Other Machinery Sector

Steel Plates and Structures Sector

Performance in Fiscal 2017

Performance in Fiscal 2017

Orders totaled ¥186,969 million (US$1,759 million), up 19.7% from the previ-

Orders totaled ¥47,510 million (US$447 million), up 143.6% year on year,

ous fiscal year, due mainly to increases in plastic production and processing

due mainly to an increase in clad steel pipes.

machinery as well as molding machines.

Sales were down 20.1%, to ¥40,891 million (US$384 million), attributable

Sales rose 6.8%, to ¥170,267 million (US$1,602 million). This was attribut-

primarily to decreases in sales of products for electronic devices and nuclear

able primarily to increases in sales of plastic production and processing
machinery as well as molding machines despite a rebound decrease in laser

power plants as well as clad steel pipes.
Polyolefin extruder/pelletizer

Despite decreases in depreciation and amortization and other fixed costs,

annealing systems, for which large sales were posted in the previous fiscal

the Steel and Energy Products Business recorded an operating loss of ¥1,544

year.

million (US$14 million) due mainly to a decline in sales, compared withOperating income increased 57.0%, to ¥23,834 million (US$224 million),

Shell flange used for pressure chamber
for nuclear power plant

operating income of ¥2,794 million in the previous fiscal year.

due mainly to an increase in sales and cost improvement activities.

Sales

Millions of yen

Millions of yen

30,00040,891

30,00051,20747,51060,00019,50060,00068,418170,267

60,000Clad steel plate

90,00039,78560,000159,378

120,000

Orders Received

90,000144,358

180,000

126,363

167,875

156,204

120,000

135,389

180,000

Large-size all-electric injection molding
machine74,854

Millions of yen

66,215

Sales

Millions of yen

186,969

Orders Received

0

0

2014

10

2015

2016

2017 (FY)

0

2014

2015

2016

2017 (FY)

Magnesium alloy injection molding machine

0

2014

2015

2016

2017 (FY)

2014

2015

2016

2017 (FY)11

S p e c i a l Fe at u reSpecial Feature

Record-High Orders Received for Film andSheet Manufacturing Equipment

Film and sheet manufacturing equipment

Demand for film and sheet manufacturing equipment,
which is indispensable for lithium-ion batteries, wasrobust, breaking record-high orders received for threeconsecutive years since fiscal 2015.
Anticipating the current situation, JSW quadrupled
its production capacity compared with the level in fiscal
2015. In response to strong demand, we plan to further
double our production capacity toward fiscal 2019.
Going forward, we intend to create high-addedvalue products that anticipate market needs by releasing new models that achieve 40% improved throughput
compared with previous models.

Record-High Net Sales and Orders
Received for Injection Molding Machines
Taking advantage of active demand primarily in the automobile andhousehold goods fields, JSW achieved record-high orders received andnet sales for injection molding machines, one of its mainstay products.
Orders expanded throughout the product lineup, spanning from verticalinjection molding machines to small and ultra-large ones.
In response to a wide range of customer needs, in fiscal 2017 wecommenced sales of a high-speed, high-responsive system and a highload, high-responsive system as options for the J-ADS series of mid-size
electric injection molding machines. Highly responsive and highly powerful injection devices equipped with a proprietary built-in direct drive
motor, these options make it possible to respond to a broad spectrum ofmolding requirements that were previously difficult to meet with conventional models.
We are committed to providing products that contribute to productivity, economic efficiency, and the higher quality of our customers.

Overseas Expansion of Train Couplers
JSW received orders for train couplers for Bangladesh’s first Dhaka Mass Rapid Transit (MRT) system.
There are great expectations for this MRT system as a mass transportation system that not only provides
safety but also gives consideration to passengers in terms of comfort and a smooth ride under the hot andhumid climate of the country.
With more than 15 million people living in the greater Dhaka area, chronic traffic jams and air pollution
have become serious social issues. The opening of the MRT system is expected to alleviate traffic jams andreduce exhaust fumes.
There are a number of infrastructure projects planned mainly in Southeast Asia. We will continue to playa role in the railway development business and contribute to the prosperity of society.

12

Train coupler

Vertical injection molding machine

Traffic jam in Dhaka(photo courtesy of JICA)

13

R e s e a rc h a n d D e ve l op m e nt

Research and Development

Research and development activities were almost entirely funded by the Com-We engage in basic research for future technologies and contemporarypany during fiscal 2017. Combined spending on research and development forsocial needs and in researching component technologies for existing prod-

the Steel and Energy Products Business and the Industrial Machinery Products

ucts. We will build on these efforts to undertake R&D projects that create newBusiness amounted to ¥4,369 million (US$41 million).

products and businesses and pursue innovations for existing products.

Aiming to become a company that contributes to the prosperity of society

The focuses in Machinery Products are to enhance plastics machinery, IT

by generating changes through its innovative technologies, we strive toequipment, and other industrial machinery. We will allocate significant

develop new products and production techniques using our proprietary tech-

Muroran Research Laboratory

resources to such machinery by clarifying that our commercialization frame-

nologies. To bring these products and techniques to market as soon as possible,

work is open to mergers, acquisitions, and alliances. In Steel Products, we

we actively promote multidisciplinary and technological tie-ups and jointemphasize advances in energy and creating even more industry-leading

development.

offerings while commercializing new areas.

Our Research and Development Headquarters collaborates with businessdivisions and Group companies to 1) improve the capabilities, performance,

Activities by Business Segment

and reliability of core products; 2) develop and nurture offerings in new business fields based on core and differentiated technologies; and 3) promote theIndustrial Machinery Products Businessdevelopment and commercialization of new products through synergies with

In machine-related product development, we are working to develop advanced

Group companies.

processing technology for plastic molding machines; enhance the performance

In order to facilitate R&D across the Group as well as further accelerate theof plastic extruders; improve the functionality and performance of film molding

R&D of existing products and the commercialization of products in new busi-

equipment; enhance the performance and lower the cost of magnesium injec-

ness fields, JSW implemented a partial reorganization of the Research and Devel-tion molding equipment and compressors; and develop manufacturing equip-

opment Headquarters. Details are as follows:

ment for fiber-reinforced plastic composite components. We are also
incorporating advanced technologies and systems to develop laser annealing(1) The Technological Strategy Office, which was tasked with the planning of
R&D-related themes and the commercialization of new business as well as

Hiroshima Plant
Technical Development Department

equipment and other laser application equipment as well as chemical vapor

the survey of market and technological trends, has been integrated into thedeposition (CVD) and plasma application equipment. R&D spending in this seg-

New Business Promotion Headquarters with its functions transferred.

ment was ¥3,041 million (US$28 million) in fiscal 2017.

(2) Each research laboratory has been placed under the authority of the individual plants, and the research laboratories in Hiroshima and Yokohama

Steel and Energy Products Businesshave been reorganized into the Technological Development Department.

Product development centers on materials, notably for clad steel pipes fornatural gas transportation pipelines, large steel castings and high alloys forhigh-efficiency thermal power generation, and forged steel products for

Basic Research and Development Policy
In terms of the promotion and commercialization of new businesses, the New

development. Our technological development focuses on improving materi-Business Promotion Headquarters collaborates with each business division andals and element technologies for existing products. In the area of renewableprioritizes R&D on new energy and energy savings, information and telecom-

energy, we develop material and element technologies to create lighter andmunications, nanotechnology and materials, and new production technologies,

more reliable pressure accumulators for hydrogen fueling stations. Segment

all of which are related directly to JSW’s businesses. Through these efforts, we

R&D spending totaled ¥1,328 million (US$12 million) in fiscal 2017.

aim to focus on expanding and upgrading core technologies while cultivating
and growing existing businesses.

14

advanced nuclear power plants, as well as manufacturing process technology

Yokohama Plant
Technical Development Department

15

Cor p orate G ove r n a n ce

Corporate Governance
JSW recognizes that it must earn the trust of shareholders, customers, employees, and other stakeholders
to aim to enhance enterprise value and thereby contribute to the economy and society as a whole.
We therefore created a corporate governance setup that encompasses a management organization andframework to implement essential measures and pursues fair disclosure to ensure business transparency.
On November 18, 2015, we formulated “Corporate Governance Policy of The Japan Steel Works, Ltd.”
based on a resolution of the Board of Directors. The aim of the Policy is to clarify our basic stance, initiatives, and approach with respect to corporate governance. The Policy can be found at the following
website: http://www.jsw.co.jp/en/guide/governance.html

Overview of Corporate Governance
Structure
We employ a audit & supervisor board member systemcomprising nine directors, two of whom are independent, and four audit & supervisory board members, twoof whom are external.
The term of office of directors is one year. We maintain an executive officer system: separate decision-making and oversight from the executive functions ofexecutive officers. The goal is to accelerate decision-making and enhance oversight and execution.
In principle, the Board of Directors convenes once
monthly to decide and report on basic operational policies, legally stipulated matters, and other important management issues. Managing executive officers and above
attend these meetings, positioning the Board as a vehicle
for mutual oversight of directors and executive officers.
The Executive Board—consisting of two representative directors and other directors with executive responsibilities nominated by the president, two outside directors,
and an audit & supervisory board member (chosen byrotation)—meets once a week to deliberate and decide on
important management matters and important businessexecution decisions made by directors and executive officers. The Strategy Council also discusses, reports on, andmonitors overall operational matters.
Our Management Council also convenes once
monthly, in principle. Members include directors, audit &supervisory board members, divisional heads, generalplant managers, headquarters managers, and otherswith executive responsibilities. This body’s tasks include
assessing the business environment and monitoring the

16

progress of the Company’s business plan. Its goals are toshare such knowledge throughout management andreflect it in their decisions as well as to ensure risk management and compliance.
The Audit & Supervisory Board comprises four audit &supervisory board members, two of whom are external as
part-time. These members attend meetings of the Boardof Directors, the Executive Board, the Management Council, and other important gatherings. In principle, they visit
the Company’s plants and offices and major subsidiaries
once every six months. The members receive divisional
reports as necessary and exchange opinions with directors and key employees. Based on these efforts, the members express their views to management from an objective
and neutral perspective, and exercise strict oversight withregard to the execution of directors’ duties.
Seeking to ensure fairness and transparency of decision-making processes related to executive nomination
and remuneration, the Company established the Nomination Advisory Committee and the Remuneration Advisory Committee. Consisting of five members, including
several outside executives, the committees serve as advisory bodies to the Board of Directors.

Status of Internal Control System
The Company recognizes the importance of its management responsibilities with respect to establishing andproperly managing the necessary systems to ensure
appropriate business operations. Based on this recognition, it has set up a specialist unit to supervise internal
controls, and its Internal Control Committee also meetsas necessary. The Company is working to improve its
internal control system in line with its Basic Policy on
Internal Control Systems, adopted by the Board of Directors, as described below.
1.	Adhering to laws and regulations and the Articles
of Incorporation relating to the execution of duties
by directors and employees•	At the Company, compliance extends beyond preventing fraud and adhering to laws and regulations
and in-house rules. It also encompasses the fulfillment of broad social responsibilities and establishment of various compliance-related rules. The
essence of its compliance activities centers on directors and executive officers taking the lead and practicing integrity and raising employee awareness ofcompliance issues through education and training.
•	The Company established the Internal Auditors Offices
to ensure that all of its corporate operations comply
with all laws and regulations and in-house rules. The
Division conducts regular and spot audits and submits
the results of its audits to the president and to otherrelevant parties as appropriate, including the Board of
Directors, the Executive Board, the Management Council, and audit & supervisory board members.
•	The Company has created multiple ways, includinginternal and external channels, for reporting and discussing compliance-related problems uncovered by
employees, based on a guarantee of protection for
whistleblowers.
• The Company clearly stipulates in its Corporate codeof behavior the thorough enforcement of organizational crisis management against anti-social forces,
and firmly rejects unwarranted demands from themin accordance with the law and in collaboration with
relevant authorities.
2.	Safeguarding and managing information relating
to the execution of duties by directors•	The Company appoints a director or an executive officer as the person responsible for safeguarding andmanaging information. Adhering to document andinformation management rules and regulations, theCompany stores and manages important information
relating to the execution of duties by directors andexecutive officers as printed or digital records. This
information includes the minutes of important meetings and written requests for approvals. Further,
directors and audit & supervisory board members
may review or copy this information as needed.
•	The Company discloses financial and important management information in an appropriate and timely
manner.
3. Rules on managing risk of losses•	Directors, executive officers, and employees concurrently serving as general managers identify and evaluate risks arising in the course of business. They addressthese risks in keeping with regulations and the management approval system. The Board of Directors andthe Executive Board deliberate on key risks.
•	The Company maintains risk management rules anda Companywide risk management system. Divisions
overseeing risks in such areas as safety and hygiene,
environmental management, information security,and export safety controls set up committees andcreate and administer rules for properly managing
such risks throughout the Company. The Company
also appoints a director or an executive officer as the
person responsible for risk management. In collaboration with the Internal Audit Division, that person
monitors the progress of risk management andreports to the Board of Directors or the Executive
Board as appropriate.
•	At all divisional headquarters, business units, andplants, the Company has risk managers who evaluate
measures and identify daily risks. It also has a crisis
management headquarters to handle critical situations. Accordingly, the Company is prepared for bothordinary and emergency situations.

17

Cor p orate G ove r n a n ce

4. Ensuring the efficient execution of duties by directors•	The Company ensures rapid decision-making andflexible and efficient business execution by having
the president act as chief executive officer, with directors overseeing key headquarters divisions and business units. Under this command and management
structure, executive officers appointed by the Boardof Directors perform the duties assigned to them.
Directors and executive officers deliberate, decide,and report on important matters in meetings of theBoard of Directors and the Executive Board.
•	The Board of Directors formulates the medium-term
management plan and annual business plans as Companywide objectives for directors, executive officers,
and employees. Directors and executive officers planand implement specific policies for reaching goals,
segregating tasks in line with in-house rules. They also
evaluate the results, review progress, and submit periodic and spot reports to the Board of Directors, theExecutive Board, and the Management Council.
5. Ensuring appropriate conduct at Group companies•	The Company encourages Group subsidiaries to workto establish and build Companywide internal controls
according to JSW’s Vision, Management Philosophy,
and Corporate code of behavior. The Company also
supports Group subsidiaries to strive for efficientbusiness execution and autonomous management
by ensuring proper division of duties and clarificationof decision-making authority based on their own
in-house rules.
•	The Company has formulated operational and management rules for subsidiaries and defined therelated management responsibilities and leadership
structures. The Company maintains a system forreporting, notifying, and gathering information
about subsidiary decisions on important matters andimportant facts.
•	In addition to dispatching directors and audit &supervisory board members to Group subsidiaries,

18

the Company ensures that subsidiaries comply withall laws and regulations and in-house rules by mandating periodic and spot internal audits through relevant departments or the Internal Audit Division. It
also audits operations directly and instructs subsidiaries on internal control improvements.
•	The Company supports the efforts of Group subsidiaries to establish systems to identify and evaluate risks
according to division of duties determined inde­pendently
based on rules concerning risk management.
6.	
Appointing audit & supervisory board member
assistants, securing their independence from directors, and ensuring the effectiveness of instructions
given to them•	On request from audit & supervisory board members,
the Company offers employees as assistants. The
Company seeks the opinions and consent of thesemembers for appointments, dismissals, evaluations,and other personnel treatment regarding these assistants to secure their independence from directors
and executive officers.
•	The Company ensures that employees assigned as
assistants can perform their duties according to thedirections and instructions of audit & supervisoryboard members.
7.	Reporting to audit & supervisory board membersby directors and employees and preventing unfavorable treatment based on its content•	Audit & supervisory board members are guaranteed
the opportunity to attend meetings of the Board of
Directors, the Executive Board, the Management
Council, and other managerial meetings that deliberate, decide, and report on important matters.
•	Based on its management approval system, the Company presents approval records to audit & supervisoryboard members. Audit & supervisory board members
can at any time request reports from directors, executive
officers, and employees of the Company and Groupsubsidiaries. Also, persons who have received reports

from directors, executive officers, and employees of theCompany and Group subsidiaries can convey suchreports to audit & supervisory board members.
•	The Company guarantees that persons making
reports to audit & supervisory board members are
not subject to unfavorable treatment based on thecontent of such reports.

Policy Regarding Large-Scale Purchaseof Company Shares
At the meeting of the Board of Directors held on May 15,
2017, the Company decided to update the “Measuresagainst Large-Scale Share Acquisitions (takeover defense
measures), which was then approved at the 91st Annual
General Meeting of Shareholders on June 27, 2017.

8.	Policies on advance payment and compensation
pertaining to costs and obligations incurred in theexecution of duties by audit & supervisory board
members•	The Company assumes responsibility for any necessary costs incurred in the execution of duties by audit& supervisory board members.
9.	Ensuring the effectiveness of audits conducted byaudit & supervisory board members•	The Company encourages directors, executive officers, and employees to recognize the importance andvalue of audits conducted by audit & supervisoryboard members and to accord them their fullest
cooperation. These members can request assistancefrom the Internal Audit Division, other headquarters
divisions, and all other divisions for auditing tasks.
•	The Company enables audit & supervisory board
members to collaborate closely with the accounting
auditor and the Internal Audit Division.
•	Audit & supervisory board members have the discretion to employ the services of legal advisors andother outside experts.
10. Ensuring reliable financial reporting•	The Company evaluates the effectiveness of internal
controls for financial reports in keeping with basic
policies for such controls. The Board of Directors andthe Executive Board deliberate and report on thefindings of such evaluations.

19

E nv i ron m e nt a l M a n a g e m e nt

Environmental Management
As a responsible member of society, JSW regards operating in harmony with the environment as animportant corporate responsibility. In our pursuit of production activities and environmental technologies that respect environmental integrity, we engage in business activities that contribute to the ecologically sustainable development of society.
Ever since we formulated a medium-term environmental plan in fiscal 2001 for the first time, we havebeen proactively promoting environmental management activities throughout the company. With the
Fourth Medium-Term Environmental Plan (fiscal 2013 to fiscal 2017) completed, in fiscal 2018 weformulated the Fifth Medium-Term Environmental Plan and widened the scope of environmental
activities to include the entire JSW Group. Accordingly, we are engaged in activities to achieve thegoals set out in the plan.
Action Plan
1.	We aim to carry out environmental tasks in an organized way,
and to implement environmental preservation activities
continuously.
2.	We will set appropriate objectives and targets for reducing theburden our activities impose on the environment with conserving biodiversity.

Environmental Management Structure
The Environmental Management Committee, headed by the
director in charge of environmental management, determines
matters such as annual environmental management policies andprograms of environmental activities for the whole company.
Each plant has its own Environmental Supervisory Committee,
which promotes environmental management activities andworks hand in hand with other Group companies including affiliates to reduce the environmental impact of the Company’s
activities.

President
Chief Environmental Management Supervisor/
Environmental Management Committee Chairman(Director in charge of Environmental Management)

JSW plants Environmental
Management Plant Supervisors(General plant managers)

Environmental
Supervisory
Committees

Environmental
Supervisory
Committees

JSW Group companies Environmental
Management Supervisors

Affiliatedcompanies

20

Departments

JSW plants Environmental
Management Supervisors

Departments

ISO 14001 Certification Progress
The Company’s Muroran, Hiroshima, and Yokohama plants and
its Group companies, Meiki Co., Ltd., Fine Crystal Precision (S.Z.)
Co., Ltd., and NIKKO-YPK SHOJI CO., LTD. (Head Office, Saitama
Office, Kansai Branch, Kansai Sales District Office, Chubu Branch,
Sendai Sales District Office, Nagano Sales District Office, Toyama
Sales District Office, Kyushu Sales District Office), have obtained
certification under ISO 14001, an international standard for environmental management systems.
We leverage third-party certification bodies and internal
inspections to conduct checks at least once annually to ensurethat ISO 14001-certified business sites are endeavoring to maintain and improve their environmental management systems.
The Company and Group companies have adhered strictly tolaws and ordinances, and there were again no violations infiscal 2017.

ISO 14001 Certifications of Business Sites

Environmental
Management Committee
JSW Group companies Environmental
Management Supervisors(Company presidents)

3.	We aim to provide society with products and services that
contribute to the preservation of the environment.
(1)	We endeavor to increase the social value of our products interms of environmental protection, safety and hygiene.
(2)	We will provide products and services that reduce environmental loads by obtaining a clear grasp of environmental
needs and developing technologies.

Affiliatedcompanies

Business Site

Certification Date

Current Certification Body

Muroran Plant

December 18, 1998

Lloyd’s Register Quality
Assurance

Hiroshima Plant

December 18, 1998

Japan Quality Assurance
Organization

Yokohama Plant

September 4, 2006

Lloyd’s Register Quality
Assurance

Meiki Co., Ltd.

March 4, 2005

ASR International Corporation

Fine Crystal Precision(S.Z.) Co., Ltd.

March 7, 2007

Intertek

NIKKO-YPK SHOJI
CO., LTD.

February 7, 2005

Japan Value-Added
Certification Co., Ltd.

Business activities and environmental impact
In the process of manufacturing activities related to our core business sectors, steel and energy products business and industrial machinery products business, the environmental impact status is shown below.
We measure both inputs (consumption of energy, water, and the like) and outputs (such as waste, carbon dioxide, and water resulting
from manufacturing processes), and use the data in our environmental improvement activities.

INPUT

MANUFACTURING

OUTPUT

Materials

Industrial machinery products• Metals(including steel,
non-ferrous metal)• Twin-screw extruders

Total waste volume
86,887 t• Plastics• Rubber, timber, etc.

Energy3,087 TJ
Chemical
substances
7,475 tWater

22.90 million m3• Single-screw extruders

Waste emission volume• Film and sheet equipment• Electric servo drive molding machines• Blow molding machines• Magnesium alloy injection molding machines• Excimer laser annealing systems

6,003 tRecycling volume

80,883 t

93%
of total

waste volume
is recycled

CO2 (from electric power and fuel)194,343 t-CO2

Steel and energy products• Forged steel components for nuclear power reactors• Monobloc rotor shafts• Turbine casings for thermal power generation• Reactors for petroleum refineries

CO2 (from domestic transportation)
2,732 t-CO2
Chemical substances(amounts emitted and transferred)

223 t• Clad steel plates/clad steel pipes• Wind Turbines

Waste water
16.78 million m3

ECO Steel pressure vessel for hydrogen stations (eco-car-related)
Fuel cells that generate electricity by causing hydrogen andoxygen to react chemically are attracting attention as an environmentally friendly energy source. Vehicles equipped with fuel cells
allow significant reductions in carbon dioxide and harmful gas
emissions, making the ultimate “eco car,” the vehicle leveraging
environmentally friendly energy. Since sales of fuel cell vehicles to
the general public began in 2014, we have seen the establishment of hydrogen stations, which supply hydrogen for fuel cellvehicles, in various locations. With a history of hydrogen-related
research and development covering more than 40 years, we havedeveloped a steel pressure vessel for hydrogen storage, whichplays a central role in the operation of hydrogen stations.

What is a steel pressure vessel?
Hydrogen to be stored in fuel cell vehicles must be supplied at highpressure to enable long-distance trips with one filling. Therefore, inorder to completely fill the tank with hydrogen in a short time period,
the hydrogen station must use a steel pressure vessel to store hydrogenat high pressure beforehand. Deploying our technological expertise
related to steel, we developed a highly durable and reliable steel pressure vessel for hydrogen storage. It can be used safely for long time
periods, and even permits highly accurate safety inspections during
operation.

21

S i x-Ye a r S u m m a r y

Board of Directors,
Audit & Supervisory Board Members, and Executive Officers

Financial Section

Board of Directors and Audit & Supervisory
Board Members

The Japan Steel Works, Ltd.

Executive Officers

Years ended March 31

As of September 1, 2018

Representative Director &President

Naotaka Miyauchi

Representative Director &Executive Vice President

Yutaka Higashiizumi

Directors, Managing
Executive Officers

Takashi Shibata
Masao Oshita
Toshio Matsuo

Six-Year Summary
As of September 1, 2018

Managing Executive
Officer

Toyohiko Kagawa

Executive Officers

Kenji Kikukawa
Yoshitaka Sato
Toru Nishiyama
Shingo Mito
Hiroki Kikuchi
Shigeki Inoue

Directors, Executive Officers Junichiro Deguchi
Takashi Iwamoto
Directors

Nobuo Mochida (Outside)
Sadao Degawa (Outside)

Audit & Supervisory Board
Members

Yoshitomo Tanaka
Kenji Watanabe
Kazuya Jono (Outside)
Itaru Masuda (Outside)

Millions of yen

2015

2016

2017

2018

Net sales¥220,653¥188,719¥194,674¥223,301¥212,469¥212,957

Profit (loss) attributable toowners of parent

8,281

5,527

(5,327)(16,600)(4,968)

10,712

Total assets

303,970

293,139

319,667

293,138

275,315

297,433

Total net assets

134,368

139,268

138,234

111,340

107,587

118,600¥111.66¥74.58¥(71.94)¥(226.62)¥(67.61)¥145.77

Amounts per share (yen):
Profit (loss)
Non-Consolidated¥184,312¥155,211¥153,455¥176,116¥166,722¥162,043

Profit (loss)

7,519

6,645

(5,658)(18,719)(8,260)8,559

Total assets

277,086

267,241

291,793

263,112242,353259,342

Total net assets

120,866

127,416

124,381

97,107

88,83796,596

Profit (loss)¥101.39¥89.67¥(76.41)¥(255.55)¥(112.40)¥116.48

Cash dividends applicable to the year

¥10.00

¥5.00

¥4.00

¥5.00

¥15.00¥37.50

Amounts per share (yen):

Organization

Board of Directors

2014

Consolidated

Net sales

General Meeting of Shareholders

2013

Corporate Planning Office

Domestic Office

Personnel Dept.

Overseas Office

Note: The Company conducted a 1-for-5 reverse common stock split effective on October 1, 2016. For the sake of simplicity, the profit (loss) per share in thetable above are calculated using the number of shares after the reverse stock split.

Secretary Office
Executive Board

General Affairs Dept.
Finance & Accounting Dept.

President
New Business Promotion Headquarters
Internal Auditors Office
Audit＆Supervisory Board Members

Contents

Wind Power Business Office

Muroran Plant

Steel Business Division

Hiroshima Plant

23 Six-Year Summary

29 Consolidated Statement of Changes in Net Assets

Yokohama Plant

24 Financial Performance (Consolidated)

30 Consolidated Statement of Cash Flows

26 Consolidated Balance Sheet

31 Notes to Consolidated Financial Statements

28 Consolidated Statement of Income

51 Independent Auditor’s Report

Machinery Business Division
Injection Molding Machinery Business Division
FPD System Business Division

Consolidated Statement of Comprehensive Income

Ordnance Business Headquarters

22

23

Fi n a n c i a l Pe r for m a n ce (Con s ol i date d)Financial Performance (Consolidated)
Operating Results

Financial Position

Net Sales

Cash Flow

Cash Flow from Financing Activities

As of March 31, 2018, total assets amounted to ¥297,433 million

Net sales totaled ¥212,957 million (US$2,004 million), up ¥487 mil-At year-end, cash and cash equivalents stood at ¥77,879 million

Net cash used in financing activities was ¥2,457 million (US$23 mil-

(US$2,799 million), up ¥22,118 million from a year earlier. This waslion, or 0.2%, year on year. This was due to higher sales in the(US$733 million), an increase of ¥19,208 million from a year earlier.

lion), attributable primarily to cash dividends paid, compared with

due primarily to an increase in cash on hand and in banks, notes

net cash used in financing activities of ¥1,203 million in the previ-and accounts receivable, and other current assets.

Industrial Machinery Products Business, offsetting lower sales in

Cash Flow from Operating Activities

the Steel and Energy Products Business.

Total liabilities stood at ¥178,833 million (US$1,683 million), up

ous fiscal year.

Net cash provided by operating activities amounted to ¥26,712¥11,105 million from a year earlier. This was due mainly to an

Operating Income

million (US$251 million), compared with ¥12,023 million in theincrease in current liabilities, including advances received for prod-

Operating income increased ¥8,977 million, or 72.8%, to ¥21,318

previous fiscal year, due mainly to profit before income taxes anducts and provision for business restructuring. Interest-bearing

million (US$200 million), and the operating income margin

provision for business restructuring.

debt was ¥52,647 million (US$495 million), up ¥193 million from aInterest-Bearing Debt

increased 4.2 percentage points to 10.0%.

Cash Flow from Investing Activities

year earlier.
Net assets amounted to ¥118,600 million (US$1,116 million),

Millions of yen

intangible assets.
40,000profit per share of ¥145.77 for the year.

52,647fiscal year. This was due mainly to an increase in tangible andparent of ¥4,968 million in the previous fiscal year. This equates to52,453(US$100 million), compared with a loss attributable to owners ofup ¥11,013 million, due mainly to an increase in retained earnings.

60,00051,341(US$47 million), compared with ¥13,580 million in the previous

41,346

Net cash used in investing activities totaled ¥5,077 million

Profit attributable to owners of parent was ¥10,712 million

42,092

Profit Attributable to Owners of Parent

Sales by Region
The Japanese market accounted for sales of ¥104,757 million

20,000(US$986 million), the Chinese market for ¥48,043 million (US$452
million), with all other markets accounting for ¥60,156 million(US$566 million).

02014 2015 2016 2017 2018

0Millions of yen

Millions of yen

%

%

0

2014 2015 2016 2017 201800

2014 2015 2016 2017 2018

30

0

15

−10

0

2014 2015 2016 2017 2018

9.6
4.1

39.3

38.6

42.7

37.5

118,600

40,000

10

(4.6)

15

20

(13.5)

10,00040,00080,00045

107,58730

120,000

111,340

19,721

20,00060

47.1

160,000

138,234

30,000139,268

51.3

50.8
108,199

94,256

108,893

55.1
48.4

49.1
80,000ROE

45

02014 2015 2016 2017 201824

120,000

60

Equity Ratio

(3.9)

7,517

6,000

8,864

12,00012,34014,42318,00092,752

21,318160,000

122,996

24,000%Net Assets

26,712Millions of yen

Net Cash Provided byOperating Activities

12,023

Millions of yen% of total sales

11,580Overseas Sales

11,549Operating Income−202014 2015 2016 2017 20182014 2015 2016 2017 201825

Con s ol i date d Ba l a n ce S h e e t

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheet
March 31, 2017 and 2018

AssetsCurrent assets:
Cash on hand and in banks (Notes 5, 15 and 18)
Notes and accounts receivable:   Unconsolidated subsidiaries and affiliates   Trade (Note 18)  Other   Less allowance for doubtful accounts
Inventories (Note 4)
Deferred tax assets (Note 22)
Other current assets    Total current assets

Property, plant and equipment, at cost (Notes 7 and 9):Land
Buildings and structures
Machinery and equipment
Leased assets
Construction in progress
Less accumulated depreciation    Property, plant and equipment, net

Intangible assets

Investments and other assets:
Investments in unconsolidated subsidiaries and affiliates
Investment securities (Notes 18 and 19)
Long-term loans receivable
Retirement benefit asset (Note 21)
Deferred tax assets (Note 22)
Other assets
Less allowance for doubtful accounts    Total investments and other assets   Total assets

2017

Millions of yen

Thousands of
U.S. dollars(Note 3)

2018

2018

¥   59,801¥   79,032$   743,901

237
49,194292(140)
66,152
6,473
4,555
186,565485
54,061757(142)
62,1607,376
4,947
208,679

4,565
508,857
7,125(1,337)585,090
69,42846,564
1,964,223

9,721
71,132
133,6232,863
235
217,577(185,343)
32,233

10,05971,536
134,3192,701
288
218,905(185,865)
33,04094,682
673,343
1,264,298
25,4242,711
2,060,476(1,749,482)
310,994

1,655

1,774

16,6981,002
33,94153
2,472
15,041
2,805(455)
54,860¥ 275,315

1,144
34,129293
2,736
12,9073,131(402)
53,939¥ 297,433

10,768321,244
2,758
25,753
121,489
29,471(3,784)
507,709$ 2,799,633

Liabilities and net assets
Current liabilities:
Short-term borrowings (Notes 11 and 18)
Current portion of long-term debt (Notes 11 and 18)
Notes and accounts payable:   Unconsolidated subsidiaries and affiliates   Trade (Note 18)  Other
Advances received for products
Accrued income taxes (Note 22)
Provision for loss on wind power generator business
Provision for business restructuring
Other current liabilities    Total current liabilities
Long-term liabilities:
Long-term debt (Notes 11 and 18)
Accrued retirement benefits   For directors and corporate auditors
Retirement benefit liability (Note 21)
Deferred tax liabilities (Note 22)
Other long-term liabilities    Total long-term liabilities
Net assets:
Shareholders’ equity (Note 15)
Common stock:  Authorized — 200,000,000 shares  Issued— 74,292,607 shares
Capital surplus
Retained earnings
Treasury stock, at cost
(802,503 shares in 2018 and 801,480 shares in 2017)    Total shareholders’ equity
Accumulated other comprehensive income:Unrealized holding gain (loss) on securities
Unrealized gain (loss) from hedging instruments
Translation adjustments
Remeasurement of retirement benefit plans    Total accumulated other comprehensive income
Non-controlling interests    Total net assets    Total liabilities and net assets

2017

Millions of yen

Thousands of
U.S. dollars(Note 3)

2018

2018

¥ 11,908
4,789¥ 12,004
625$  112,989
5,883

153
47,5901,348
17,004866
4,655—
20,072
108,390

137
54,8191,184
18,863
2,296
9,754
6,389
9,342
115,418

1,290
515,992
11,145
177,551
21,611
91,81160,13787,933
1,086,389

35,75540,016376,657

115
10,620175
12,671
59,33775
10,046
168
13,10763,414706
94,5591,581
123,372
596,894

19,694
5,467
77,748

19,694
5,467
86,256

185,373
51,459811,898(2,308)100,601(2,310)109,107(21,743)
1,026,986

6,381
(301)
(170)
(211)
5,698
1,287
107,587¥275,315

7,269
305
(21)
370
7,923
1,569
118,600¥297,433

68,421
2,871
(197)
3,483
74,576
14,7681,116,340$2,799,633

See notes to consolidated financial statements.

26

27

Co n s o l id ated Statement of I ncome

Consoli d ated Statement of Comprehens ive I n co m e

Co n so lid ate d St ate m e nt of C h a n g e s i n N e t As s e t s

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

For the years ended March 31, 2017 and 2018

For the years ended March 31, 2017 and 2018

Consolidated Statement of Income

Consolidated Statement of Changes in Net Assets
Millions of yen

2017

Net sales
Cost of sales (Note 12)
Gross profit
Selling, general and administrative expenses (Note 12)
Operating income
Other income (expenses):
Interest and dividend income
Interest expense
Impairment loss (Note 9)
Other, net (Note 13)¥212,469
170,695
41,77329,432
12,340

Income before income taxes
Income taxes (Note 22):
Current
DeferredIncome (Note 28)
Profit attributable to non-controlling interests
Income attributable to shareholders of The Japan Steel Works, Ltd.

2018

¥212,957
163,455
49,501
28,182
21,318Millions of yen

Thousands of
U.S. dollars(Note 3)

Shareholders’ equity

2018$2,004,490
1,538,545
465,936
265,267
200,659653(273)(17,874)(687)(18,181)(5,841)827(258)(1,352)(5,642)(6,426)
14,892

7,784(2,428)(12,726)(53,106)(60,486)
140,173

2,819(3,706)(4,954)14¥  (4,968)

3,633
307
10,951238¥ 10,712

34,1962,890
103,0782,240$  100,828

See notes to consolidated financial statements.

Commonstock

CapitalsurplusRetainedearnings

Balance at April 1, 2016
Changes during the year
Cash dividends paid
Loss attributable to shareholdersof The Japan Steel Works, Ltd.
Purchases of treasury stock
Disposal of treasury stock
Transfer of loss on disposalof treasury shares
Net changes in items other thanthose in shareholders’ equity
Total changes during the year
Balance at March 31, 2017¥19,694¥5,467¥84,554

Balance at April 1, 2017
Changes during the year
Cash dividends paid
Income attributable to shareholdersof The Japan Steel Works, Ltd.
Purchases of treasury stock
Disposal of treasury stock
Transfer of loss on disposalof treasury shares
Net changes in items other thanthose in shareholders’ equity
Total changes during the year
Balance at March 31, 2018

Accumulated other comprehensive income

Treasury stock(Note 15)

Total
shareholders’equityUnrealized
holding gain
(loss) on
securities

Unrealized gain
(loss) fromhedging
instruments

Translation
adjustments¥(2,302)¥107,413¥3,830¥ 337¥   51(1,837)(4,968)
(5)
0

(0)

Total
Remeasurement accumulated
benefit plansotheradjustments comprehensive Non-­controlling(Note 21)
incomeinterest¥(1,609)¥2,609¥1,318Total
net assets¥111,340(1,837)(1,837)(4,968)(5)
0(4,968)
(5)
0

—

—

0

(0)

—
¥19,694—¥5,467(6,806)¥77,748(5)¥(2,308)(6,811)¥100,601

2,551
2,551
¥6,381(638)(638)¥(301)(222)(222)¥(170)

1,398
1,398¥  (211)

3,089
3,089
¥5,698(31)(31)¥1,287

3,058(3,753)¥107,587¥19,694¥5,467¥77,748¥(2,308)¥100,601¥6,381¥(301)¥(170)¥ (211)¥5,698¥1,287¥107,587(2,204)
10,712
(2)
0

(0)

—
¥19,6940(0)—¥5,467

8,508¥86,256(2)¥(2,310)(2,204)(2,204)

10,712(2)
0

10,712
(2)
0

—

—

8,505
¥109,107887
887¥7,269

606
606
¥ 305

149
149
¥ (21)

581
581
¥ 370

2,225
2,225
¥7,923282
282¥1,5692,507
11,013¥118,600

Thousands of U.S. dollars (Note 3)

Shareholders’ equity

Accumulated other comprehensive income

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Comprehensive Income
For the years ended March 31, 2017 and 20182017

IncomeOther comprehensive income:Unrealized holding gain (loss) on securities
Unrealized gain (loss) from hedging instruments
Translation adjustments
Remeasurement of retirement benefit plans
Total other comprehensive income (Note 14)
Comprehensive income
Total comprehensive income attributable to:Shareholders of The Japan Steel Works, Ltd.
Non-controlling interests

Millions of yen

Thousands of
U.S. dollars(Note 3)

2018

2018

¥(4,954)¥10,951$103,078

2,551
(638)
(251)
1,398
3,059
¥(1,894)

887
606
203
597
2,295
¥13,246

8,349
5,704
1,911
5,619
21,602$124,680¥(1,879)¥   (14)¥12,937¥   308$121,771$  2,899

Balance at April 1, 2017
Changes during the year
Cash dividends paid
Income attributable to shareholdersof The Japan Steel Works, Ltd.
Purchases of treasury stock
Disposal of treasury stock
Transfer of loss on disposalof treasury shares
Net changes in items other thanthose in shareholders’ equity
Total changes during the year
Balance at March 31, 2018

Treasury stock(Note 15)

Total
shareholders’equityUnrealized
holding gain
(loss) on
securities

Unrealized gain
(loss) fromhedging
instruments

Translation
adjustments$60,062$(2,833)$(1,600)

Total
Remeasurement accumulated
benefit plansotheradjustments comprehensive Non-­controlling(Note 21)
incomeinterest

Commonstock

CapitalsurplusRetainedearnings$185,373$51,459$731,815$(21,724) $  946,922(20,745)(20,745)(20,745)

100,828(19)
0100,828(19)
0—100,828
(19)
0

(0)

—
$185,373

0

(0)

—

—
$51,459

80,083$811,898(19)
80,055$(21,743) $1,026,986

8,349
8,349
$68,421

5,704
5,704
$ 2,871

1,402
1,402
$  (198)$(1,986)

5,469
5,469
$ 3,483$53,633

20,943
20,943$74,576$12,114

2,654
2,654
$14,768

Total
net assets$1,012,679

23,598103,662$1,116,340

See notes to consolidated financial statements.

See notes to consolidated financial statements.

28

29

Consoli d ated Statement of Cash Flows

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

For the years ended March 31, 2017 and 2018

Operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Interest and dividend income
Interest expense
Equity in losses of affiliates
Gain on sales of property, plant and equipment and intangible assets(Gain) loss on sales of investment securities
Loss on disposal of tangible and intangible assets
Gain on sales of investment securities
Increase (decrease) in provision for warranties for completed construction
Increase (decrease) in provision for loss on construction contracts
Decrease in provision for loss on wind power generator business
Increase in provision for business restructuring
Changes in operating assets and liabilities:   Trade assets (Note 18)   Trade liabilities   Inventories (Note 4)  Other   Subtotal
Interest and dividends received
Interest paid
Income taxes paid    Net cash provided by operating activities
Investing activities
Investments into time deposits
Proceeds from withdrawal of time deposits
Increase in tangible and intangible assets
Decrease in tangible and intangible assets
Proceeds from sale of investment securities
Purchases of investment securities
Reimbursement of long-term deposits on contracts
Decrease in short-term loans receivable
Payments of long-term loans receivableCollection of long-term loans receivable
Purchase of investments in subsidiaries
Other    Net cash used in investing activities
Financing activities (Notes 11 and 18)
Net increase (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 16 and 18)
The accompanying notes are an integral part of these statements.

30

Millions of yen

Thousands of
U.S. dollars(Note 3)

2017

2018

2018

¥ (5,841)
8,058
17,874
(653)
273
0
(78)
—
150
—
717
1,699
(4,032)—¥14,892
4,308
1,352
(827)
258
0
(1)
(789)
273
—
(1,027)(2,184)(1,289)6,389$140,173
40,55012,726(7,784)2,428
0(9)(7,427)2,570—(9,667)(20,557)(12,133)
60,137(122)(2,987)
1,022(1,023)
15,056660(273)(3,420)12,023(2,848)
6,101
3,994
(250)
28,351827(257)(2,207)
26,712(26,807)57,42737,594(2,353)
266,858
7,784(2,419)(20,774)
251,431(1,001)
545(13,348)
131
0
(345)
(67)
0
—
10
—
494
(13,580)(607)
657(6,549)
76
1,869
(12)
(89)
(1)
(300)
50
(147)
(22)
(5,077)(5,713)
6,184(61,643)715
17,592
(113)
(838)
(9)
(2,824)471(1,384)(207)(47,788)

(660)
2,308
(320)
(1,837)
(5)
(673)
(16)
(1,203)(26)(2,787)61,458¥ 58,671

96
4,500(4,215)(2,204)
(2)
(621)
(9)
(2,457)30
19,20858,671¥77,879904
42,357(39,674)(20,745)(19)(5,845)(85)(23,127)282
180,798552,250$733,048

1. Basis of Presentation
The Japan Steel Works, Ltd. (the “Company”) and its domestic subsidiaries maintain their books of account in conformity with thefinancial accounting standards of Japan, and its foreign subsidiaries maintain their books of account in conformity with those of
their respective countries of domicile.
The accompanying consolidated financial statements havebeen prepared in accordance with accounting principles generally
accepted in Japan, which are different in certain respects as to theapplication and disclosure requirements of IFRS, and have been
compiled from the consolidated financial statements prepared by
the Company as required by the Financial Instruments andExchange Law of Japan.
As permitted by the Financial Instruments and Exchange Law
of Japan, 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 not­necessarily agree with 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
in unconsolidated subsidiaries and affiliates
The accompanying consolidated financial statements include theaccounts of the Company and any significant companies­controlled directly or indirectly by the Company.
Companies over which the Company exercises significant
influence in terms of their operating and financial policies havebeen accounted for by the equity method. All significant intercompany balances and transactions have been eliminated inconsolidation.
As of March 31, 2018, the numbers of consolidated subsidiaries, and subsidiaries and affiliates accounted for by the equity
method were 31 and 1 (32 and 1 in 2017), respectively.
JSW Plastics Machinery, Inc. was consolidated subsidiary in theprevious fiscal year was absorbed by Japan Steel Works ­America,
Inc. in accordance with the merger.
Certain foreign subsidiaries are consolidated on the basis of
fiscal periods ended December 31, which differ from that of theCompany. However, the necessary adjustments have been made if
the effect of the difference is material.
Investments in subsidiaries and affiliates which are neither
consolidated nor accounted for by the equity method are carriedat cost or less. Where there has been a permanent decline in thevalue of such investments, the Company has written them down.
Differences between the cost and the underlying net equity atfair value of investments in consolidated subsidiaries and in companies accounted for by the equity method have been amortizedby the straight-line method over five years after acquisition andare included in selling, 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 thebalance sheet date, except for the components of net assets
excluding Non-controlling interests which are translated at their
historical exchange rates. Revenue and expense accounts aretranslated at the average rates of exchange in effect during theyear. Differences arising from the translation are presented astranslation adjustments and Non-controlling interests in the­consolidated financial statements.
Revenue and expense items arising from transactions denominated in foreign currencies are generally translated into yen at therates 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 atthe 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 lesswhen purchased which can easily be converted to cash and are
subject to little 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 at the lower of cost or net realizable value determined principally by the specific identification method. Raw materials arestated at the lower of cost or replacement cost determined principally by the moving average method.
(e) Investment securities
Marketable securities classified as other securities are carried atfair value with changes in unrealized holding gain or loss, net ofthe applicable income taxes, included directly in net assets. Non-­marketable securities classified as other securities are carried atcost. Cost of securities sold is determined by the moving averagemethod.
(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 specific uncollectible 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 the amount of total losses anticipated in the following
fiscal year and thereafter to be incurred, when the amounts can bereasonably estimated.

31

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s(i) Provision for loss on wind power generator business
The Company provides a provision for loss on wind power generator business by estimating the amount of total losses caused by
the defects of certain parts used in wind power generators.
(j) Provision for business restructuring
The Company provides a provision for the anticipated losses onwind power generators sold in previous years in order to­restructure the wind power generator business.
(k) Property, plant and equipment and depreciation
Depreciation of property, plant and equipment is calculated by the
declining-balance method based on the estimated useful lives andthe residual value determined by the Company, except for certain
buildings which are depreciated by the straight-line method.
Significant renewals and additions are capitalized at cost.
Maintenance and repairs are charged to profit. The estimate useful
lives of the assets are as follows:
Buildings and structures:
6 to 65 years
Machinery, equipment and vehicles: 3 to 20 years(l) Intangible fixed assets
Amortization of intangible fixed assets is calculated using thestraight-line method.
Software products for internal use are amortized mainly overthe estimated useful lives of five years.
(m) Leases and depreciation
Finance lease transactions which do not stipulate the transfer ofownership of the leased assets to the lessee are accounted for aspurchase and sales transactions.
With regard to the depreciation method of leased assets, thestraight-line method is applied using the lease period as the­estimated useful life and a residual value of zero.
(n) Retirement benefit
The retirement benefit obligation for employees is attributed toeach period by the benefit formula method.
Prior service cost is being amortized as incurred by thestraight-line method over ten years, which is shorter than the­average remaining years of service of the eligible employees.
Actuarial gain or loss is amortized in the year following the year
in which the gain or loss is recognized by the straight-line method
over ten years, which is shorter than the average remaining yearsof service of the employees participating in the plans.
Certain subsidiaries use a simplified method in the calculationof their retirement benefit obligation.
(o) 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 are measured using the enacted tax rates and laws which will
be in effect when the differences are expected to reverse.
(p) Research and development expenses
Research and development expenses are charged to income whenincurred.
32(q) Revenue and cost recognition
Revenues on sales of products are generally recognized at thetime of shipment.
Revenues and costs, of which the percentage of completioncan be reliably estimated, are recognized by the percentageof-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 forwhich the percentage of completion cannot be reliably estimated.
(r) Derivative financial instruments
Derivative financial instruments are carried at fair value. Gain orloss on derivatives designated as hedging instruments is deferred
as a component of net assets until the loss or gain on the underlying hedged items is recognized. Foreign currency receivables andpayables are translated 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 theswap agreements as an adjustment to the interest expense of theunderlying hedged items when certain conditions are met.
(s) Consumption tax
Accounting treatment of consumption tax is the tax exclusion
method.
(t) Provision for directors’ bonuses
Provision for directors’ bonuses is provided based on estimatedamounts to be paid in the subsequent period that are applicableto the current period.
(u) Provision for directors’ retirement benefits
Provision for directors’ retirement benefits is provided based on
estimated amounts determined by internal rules.
(v) Standards issued but not yet effective
Accounting Standard and Implementation Guidance on Revenue
Recognition
On March 30, 2018, the ASBJ issued “Accounting Standard for
Revenue Recognition” (ASBJ Statement No. 29) and “Implementation Guidance on Accounting Standard for Revenue Recognition”(ASBJ Guidance No. 30).
(1) Overview
This is a comprehensive accounting standard for revenue­recognition. Specifically, the accounting standard establishes
the following five-step model that will apply to revenue from
customers:
1. Identify the contract(s) with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4.	Allocate the transaction price to the performance­obligations in the contract
5.	Recognize revenue when (or as) the entity satisfies a­performance obligation(2) Scheduled date of adoption
The Company expects to adopt the accounting standard andimplementation guidance from the beginning of the fiscal
year ending March 31, 2022.
(3)	Impact of adoption of accounting standard and­implementation guidance
The Company is currently evaluating the effect of the a­ doptionof this accounting standard and implementation guidance on
its consolidated financial statements.
3. U.S. Dollar Amounts
The translation of yen amounts into U.S. dollars is included solely
for convenience, as a matter of arithmetic computation only, at¥106.24 = U.S.$1.00, the approximate rate of exchange prevailingon March 31, 2018. This translation should not be construed as arepresentation that all amounts shown could be converted into
U.S. dollars at such rate.
4. Inventories
Inventories at March 31, 2018 and 2017 consisted of the following:

Real estate held for sale
Finished products
Work in process
Raw materials andsupplies
Total

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥   278
2,080
58,037¥   277
2,027
54,663$  2,607
19,079514,524

5,755¥66,152

5,191¥62,160

48,861$585,090

Work in process related to construction contracts of which aloss is anticipated to be incurred was offset with a provision forloss on construction contracts of ¥750 million ($7,059 thousand) at
March 31, 2018 and ¥191 million at March 31, 2017.
5. Assets pledged as collateral
The assets pledged as collateral for issuance of Performance Bondat March 31, 2018 and 2017 were as follows:

Time deposit

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥96

¥106

6. Depreciation
Depreciation expense on property, plant and equipment for theyears ended March 31, 2018 and 2017 were as follows:

Depreciation expense

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥7,858¥4,097$38,564

7. Advanced Depreciation
Accumulated advanced depreciation related to government
grants received has been deducted directly from the acquisition
costs of certain tangible fixed assets (plant, machinery and equipment). Such accumulated depreciation at March 31, 2018 and2017 are summarized as follows:

Accumulated advanced
depreciation expense

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥1,298¥1,306$12,293

8.	Notes Receivable and Notes Payable Maturing at Fiscal
Year-End
Although March 31, 2018 was a bank holiday, notes maturing onthat date were accounted for as if they were settled on their maturity date. The corresponding amounts of notes receivable andnotes payable maturing on March 31, 2018 were as follows:

Trade notes and accounts
receivable
Trade notes and accounts
payableOther current
liabilities
Endorsed trade notes
receivable

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥—

¥  293$ 2,758¥—¥1,592$14,985¥—¥  242$ 2,278¥—¥    3$    28$998

Note: The assets pledged as collateral have no corresponding obligations at
March 31, 2018.

33

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

9. Impairment Loss
Current fiscal year (From April 1, 2017 to March 31, 2018)
The Group recorded an impairment loss on the following groupsof assets in the current fiscal year:
Use

Steel and Energy
Products:
Business assets
Steel and Energy
Products:
Business assets atinvestee subsidiary

Asset type

Location

Structures, machinery andequipment, tools, furnitureand fixtures, constructionin progress, etc.
Vehicles, construction inprogress, etc.

Muroran,
Hokkaido
Muroran,
Hokkaido andGuangdong,China(1) Grouping of assets
The Company and its consolidated subsidiaries (hereinaftercollectively known as the “Group”) determine whether to recognize an impairment loss and measures the loss by grouping
assets based on the smallest units used in management
accounting that generate cash flows which are largely independent and whose revenue and expenditures are identified
on an ongoing basis.
However, the Group determines whether to recognize
impairment and measures the impairment on an individual
asset basis if the asset is idle and not expected to be used in
the future.
(2)	Circumstances that led to the recognition of theimpairment loss
Carrying amounts of non-current assets were reduced torecoverable amounts and the reduced amounts were recognized in extraordinary losses as impairment loss because
investment amounts were no longer expected to be recovered
due to a decrease in profitability.
Breakdown of the impairment loss is as follows:
Buildings and structures
Machinery, equipment andvehiclesTools, furniture and fixtures
Construction in progress
Other (intangible assets)
Total¥  145 million$ 1,365 thousand

718
129
174
184
¥1,352

6,758
1,214
1,638
1,732
$12,726(3) Calculation method for recoverable amounts
Recoverable amounts of the groups of assets are calculated atvalue in use. It is evaluated by memorandum value.

Prior fiscal year (From April 1, 2016 to March 31, 2017)
The Group recorded an impairment loss on the following groupsof assets in the current fiscal year:
Use

Steel and Energy
Products:
Business assets
Steel and Energy
Products:
Business assets atinvestee subsidiary

Asset type

Buildings, structures,
machinery and equipment,
land, construction inprogress, etc.
Buildings, structures,
machinery and equipment,
land, etc.

10. Contingent Liabilities
Contingent liabilities at March 31, 2018 and 2017 consisted of thefollowing:

Location

Muroran,
Hokkaido
Muroran,
Hokkaido andGuangdong,China(1) Grouping of assets
The Company and its consolidated subsidiaries (hereinaftercollectively known as the “Group”) determine whether to recognize an impairment loss and measures the loss by grouping
assets based on the smallest units used in management
accounting that generate cash flows which are largely independent and whose revenue and expenditures are identified
on an ongoing basis.
However, the Group determines whether to recognize
impairment and measures the impairment on an individual
asset basis if the asset is idle and not expected to be used in
the future.
(2)	Circumstances that led to the recognition of theimpairment loss
Carrying amounts of non-current assets were reduced torecoverable amounts and the reduced amounts were recognized in extraordinary losses as impairment loss because
investment amounts were no longer expected to be recovered
due to a decrease in profitability.
Breakdown of the impairment loss is as follows:
Buildings and structures¥ 8,882 million
Machinery, equipment andvehicles
6,761
Tools, furniture and fixtures
352
Land
576
Leased assets (property,
plant and equipment)
336
Construction in progress
898
Leased assets (intangible
assets)8
Other (intangible assets)
57
Total¥17,8742017

As endorsers of trade notes
receivable:
Endorsed to otherAs guarantors of loans:
Muroran Environmental
Plant Service Co., Ltd.
Obligation to guarantee
uncollected receivablesof leasing companies
Gotsu Wind Power
Co., Ltd
Employees and other

Millions of yen

Thousands of
U.S. dollars

2018

2018

¥ 87

¥ 92

$  866

358

305

2,871

42

8

75

978
25

849
13

7,991
122

11. Short-Term Borrowings and Long-Term Debt
All short-term borrowings, with interest at annual rates ranging
from 0.2454% to 1.4750% at March 31, 2018 and 0.3073% to1.4750% at March 31, 2017, were unsecured.
Long-term debt at March 31, 2018 and 2017 were as follows:

2017

Loans from banks andinsurance companies withinterest at annual rates
ranging from 0.1934% to0.9600%Less those maturing within
one yearLease obligations
Less those maturing within
one yearLong-term indebtedness
reflected in the
consolidated balance
sheetsMillions of yen

Thousands of
U.S. dollars

2018

2018

¥39,116¥39,401$370,868(4,215)
1,428

(132)
1,241

(1,242)
11,681

(574)

(493)

(4,640)¥35,755¥40,016$376,657

The aggregate annual maturities of long-term debt and leaseobligations subsequent to March 31, 2018 are summarized asfollows:
Millions of yen

Thousands of
U.S. dollars Millions of yen

Year ending March 31,

Long-term loans

2019
2020
2021
2022
2023
2024 and thereafter¥   132
60
5,000
1,800
15,70016,708

Thousands of
U.S. dollars

Lease obligations$  1,242
565
47,063
16,943
147,779
157,267

¥493
366
218
114
43
4

$4,640
3,445
2,052
1,073
405
38

12. Research and Development Expenses
Research and development expenses included in manufacturingcosts, and selling, general and administrative expenses for theyears ended March 31, 2018 and 2017 were as follows:

Research and ­development
expensesMillions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥4,237¥4,369$41,124

13. Other Income (Expenses)—Other, Net
The details of “Other, net” in “Other income (expenses)” for theyears ended March 31, 2018 and 2017 were as follows:

Foreign exchange loss
Equity in losses of affiliates
Gain on sales of property,
plant and equipment
Gain on sales ofinvestment securities
Compensation expenses
Loss on sales or disposal ofproperty, plant andequipment
Provision for businessrestructuring
Other, net
Total

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥ (91)(0)¥  (115)(0)$ (1,082)
(0)

93

30

282

—
(272)

791
(150)

7,445
(1,412)

(165)

(302)

(2,843)—(251)¥(687)(6,389)490¥(5,642)(60,137)
4,612$(53,106)(3) Calculation method for recoverable amounts
Recoverable amounts of the groups of assets are calculated atvalue in use. It is evaluated by memorandum value.

34

35

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

14. Other Comprehensive Income
The following table presents reclassification adjustments and tax
effects allocated to each component of other comprehensive
income for the years ended March 31, 2018 and 2017:2017

Unrealized holding gain
(loss) on securities:
Amount arising during
the year
Reclassification
adjustments for gains
and losses realized in
net income
The amount of
unrealized holding gain
(loss) on securities
before tax effectTax effectUnrealized holding gain
(loss) on securities
Unrealized gain (loss) fromhedging instruments:
Amount arising during
the yearTax effectUnrealized gain (loss) fromhedging instruments
Translation adjustments:
Amount arising during
the yearTranslation adjustments
Remeasurement benefits
plans adjustments:
Amount arising during
the year
Reclassification
adjustments for gains
and losses realized in
net income
The amount of
unrealized holding gain
(loss) on securities
before tax effectTax effectRemeasurement benefits
plans adjustments
Total other comprehensive
incomeMillions of yen

Thousands of
U.S. dollars

2018

2018

15.	Supplementary Information for Consolidated Statementof Changes in Net Assets
Year ended March 31, 2018(a)	
Information regarding the number and type of sharesissued and treasury stock:—¥2,050(793)$19,296

Year ended
March 31,2018

Notes: 1.	The increase in treasury stock – common stock of 1,055 was due to theacquisition of fractional shares of less than one unit.
2.	The decrease in treasury stock – common stock of 32 was due to salesof fractional shares of less than one unit.

11,832(3,473)

2,551

887

8,349

(921)
282

874
(267)

8,227
(2,513)

(638)

606

5,704

203
203

Decreaseduringthe year(7,464)

1,257
(369)

(251)
(251)

Increaseduringthe year

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

3,655(1,104)

1,911
1,911

1,023

767

7,220

1,004

95

894

2,028
(629)

863
(265)

8,123
(2,494)

1,398

597

5,619

¥ 3,059¥2,295$21,60274,292,607——

74,292,607

801,4801,055

32

802,503(b) Dividends(i) Dividends paid to shareholders
Resolution:	Annual general meeting ofshareholders held on June 27, 2017
Type of shares:
Common stock
Total amount ofdividends:¥918 million ($8,641 thousand)
Dividends per share: ¥12.5 ($0.118)
Cut-off date:
March 31, 2017
Effective date:June 28, 2017
Resolution:
Meeting of Board of Directors held on		November 6, 2017
Type of shares:
Common stock
Total amount ofdividends:¥1,286 million ($12,105 thousand)
Dividends per share: ¥17.5 ($0.165)
Cut-off date:
September 30, 2017
Effective date:
December 6, 2017(ii)	Dividends of which the cut-off date was in the year ended
March 31, 2017, but the effective date is in the following­fiscal year
Resolution:
Annual general meeting of		shareholders held on June 26, 2018
Type of shares:
Common stock
Total amount ofdividends:¥1,469 million ($13,827 thousand)
Dividends per share: ¥20.0 ($0.188)
Cut-off date:
March 31, 2018
Effective date:June 27, 2018
Source of dividends: Retained earnings
Note: Dividends per share include ¥2.5 ($0.024) dividend commemorative 110th
anniversary dividend.

36

Number of sharesYear ended
March 31,
2016

Number of sharesYear ended
March 31,2017

¥ 3,655

Year ended March 31, 2017(a)	Information regarding the number and type of sharesissued and treasury stock:

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

Increaseduringthe year

Decreaseduringthe yearYear ended
March 31,2017

371,463,036—

297,170,429

74,292,607

3,995,515

5,589

3,199,624

801,480

Notes: 1.	Decrease of 297,170,429 ordinary shares held in shares was attributableto carry out the share consolidation at the ratio of 5 shares to 1 shareeffective, October 1, 2016.
2.	Increase of 5,589 ordinary shares held in treasury was attributable topurchase of less than one share unit.
3.	Decrease of 3,199,508 ordinary shares held in treasury was attributableto carry out the share consolidation at the ratio of 5 shares to 1 shareeffective, October 1, 2016, and sale of 116 shares resulting from the saleof shares to shareholders at their request.

(b) Dividends(i) Dividends paid to shareholders
Resolution:	Annual general meeting ofshareholders held on June 24, 2016
Type of shares:
Common stock
Total amount ofdividends:¥918 million
Dividends per share: ¥2.5
Cut-off date:
March 31, 2016
Effective date:June 27, 2016
Resolution:
Meeting of Board of Directors held on		November 7, 2016
Type of shares:
Common stock
Total amount ofdividends:¥918 million
Dividends per share: ¥2.5
Cut-off date:
September 30, 2016
Effective date:
December 7, 2016(ii)	Dividends of which the cut-off date was in the year ended
March 31, 2016, but the effective date is in the following
fiscal year
Resolution:	Annual general meeting ofshareholders held on June 27, 2017
Type of shares:
Common stock
Total amount ofdividends:¥918 million
Dividends per share: ¥12.5
Cut-off date:
March 31, 2017
Effective date:June 28, 2017
Source of dividends: Retained earnings

16. Cash Flow Information(a) Cash and cash equivalents
The reconciliation between cash and cash equivalents in theaccompanying consolidated statements of cash flows and cash on
hand and in banks in the accompanying consolidated balance
sheets at March 31, 2018 and 2017 are summarized as follows:

Cash on hand and in banks
in the consolidated­balance sheet
Other current assets
Time deposits with­maturities of more than
three months
Cash and cash equivalentsin the consolidated­statement of cash flows

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥59,801
189¥79,032
156$743,901
1,468(1,320)(1,309)(12,321)¥58,671¥77,879$733,048(b) Significant transactions without cash flows
Assets and liabilities corresponding to finance lease transactions
that have been recorded by the Company and its domestic­consolidated subsidiaries at March 31, 2018 and 2017 were as
follows:

Lease assets
Lease obligations

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥438
465

¥402
433

$3,784
4,076

17. Leases
Year ended March 31, 2018
Future minimum lease payments subsequent to March 31, 2018
under non-cancelable operating leases are summarized asfollows:
Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

20192020 and thereafter
Total

¥ 72
145
¥217

$  6781,365$2,043

Note: The Company carried out the share consolidation at the ratio of 5 shares to
1 share effective October 1, 2016. In accordance with this, cash dividends
per share of which record date is March 31, 2017 is based on the shareconsolidation.

37

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

Year ended March 31, 2017
Future minimum lease payments subsequent to March 31, 2017
under non-cancelable operating leases are summarized asfollows:

Information regarding the method of hedge accounting,hedging instruments and hedged items, hedging policy, and theassessment of the effectiveness of hedging activities is found in
Note 2 (p).

Year ending March 31,(c) Risk management for financial instruments(i)	Monitoring of credit risk (the risk that customers or­counterparties may default)
In accordance with the internal policies of the Company for
managing credit risk arising from receivables, each related
division monitors credit worthiness of their main customers
periodically, and monitors due dates and outstanding balances by individual customer. In addition, the Company ismaking 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 C­ ompany’s
internal policies and methods.
The Company also believes that the credit risk of derivatives is insignificant as it enters into derivative transactions
only with financial institutions which have a high credit-rating.

20182019 and thereafter
Total

Millions of yen

¥132
195
¥327

18. Financial Instruments
Overview(a) Policy for financial instruments
In consideration of plans for operations and capital investment,
the Company 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 through low-risk financial assets. The Company
uses derivatives for the purpose of reducing risks and does notenter into derivative 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, theCompany is exposed to foreign currency exchange risk arisingfrom receivables denominated in foreign currencies. The foreign
currency exchange risks deriving from the trade receivables
denominated in foreign currencies are hedged by forward foreignexchange contracts, if needed.
Investment securities are exposed to market risk. These­securities are mainly composed of the shares of common stock ofcompanies with which the Company has business relationships.
Trade payables – trade notes and accounts payable – havepayment due dates within one year. Since the Company is exposed
to foreign currency exchange risk arising from those payables
denominated in foreign currencies, forward foreign exchange­contracts are arranged to reduce the risk, if needed.
Loans payable are used to raise funds mainly in connection
with capital investments. The repayment dates of the long-term
debts extend up to nine years from the balance sheet date. Longterm debt with variable interest rates is exposed to interest rate
fluctuation risk and foreign currency exchange risk. However, toreduce such risk and fix the interest payments for long-term debt
with variable rates, the Company utilizes interest rate swap
transactions and interest-rate currency swaps as hedging­
instruments.
Regarding derivatives, the Company enters into forward
foreign exchange contracts to reduce the foreign currency­
exchange risk arising from the receivables and payables denominated in foreign currencies. The Company also enters into interest
rate swap transactions and interest-rate currency swaps to reduce
the fluctuation risk of interest payments for long-term debt withvariable rates.

38(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 to mitigate the interest rate risk for loans payable bearing interest at variable rates, the Company may also enter into
interest rate swap transactions and interest-rate currency
swaps.
For investment securities, the Company periodicallyreviews the fair values of such financial instruments and thefinancial position of the issuers. In addition, the Company continuously evaluates whether securities should be maintained
taking into account their fair values and relationships with theissuers.
In conducting derivative transactions, the division in
charge of 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 their review. The consolidated subsidiaries also
conduct derivative transactions using the Company’s internal
policies.
(iii)	Monitoring of liquidity risk (the risk that the Company may
not be able 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 offinancial instruments
The fair value of financial instruments is based on their quoted
market price, if available. When there is no available quoted market price, fair value 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 amounts of derivatives in Note 20 Derivative
Transactions are not necessarily indicative of the actual market risk
involved in derivative transactions.
Estimated Fair Value of Financial Instruments
Carrying value of financial instruments on the consolidated balance sheet as of March 31, 2018 and estimated fair value areshown in the following table. The following table does not include
financial instruments for which it is extremely difficult to determine the fair value (Please refer to Note (ii) below).
Year ended March 31, 2018
Millions of yen

Carrying
amountAssetsCash on hand and inbanks
Trade notes andaccounts receivable
Securities:  Other securities
Total assets
Liabilities
Trade notes andaccounts payable
Short-term borrowings
Current portion of
long-term debt
Long-term debt
Total liabilities
Derivatives (*)

Estimated
fair value

Difference

Thousands of U.S. dollars

AssetsCash on hand and inbanks
Trade notes andaccounts receivable
Securities:  Other securities
Total assets
Liabilities
Trade notes andaccounts payable
Short-term borrowings
Current portion of
long-term debt
Long-term debt
Total liabilities
Derivatives (*)

Carrying
amountEstimated
fair value$  743,901$  743,901

513,385

513,375

306,749$1,564,044

306,749$1,564,034$  517,291
112,989$  517,291
112,989$

1,242
369,616$1,001,148$    4,104

1,365
375,188$1,006,843$    4,104

112
5,563
$5,685—Difference

$

—
(0)

$

—
(0)

—
—

(*) The value of assets and liabilities arising from derivatives is shown at net value,with the amount in parentheses representing net liability position.

¥ 79,032¥ 79,032¥ —54,54254,541(0)

32,589¥166,164

32,589¥166,163—¥  (0)¥ 54,957
12,004¥ 54,957
12,004¥ ——132
39,268¥106,362¥    436

145
39,860¥106,967¥    436

12
591
¥604
—

Year ended March 31, 2017
Millions of yen

AssetsCash on hand and inbanks
Trade notes andaccounts receivable
Securities:  Other securities
Total assets
Liabilities
Trade notes andaccounts payable
Short-term borrowings
Current portion of
long-term debt
Long-term debt
Total liabilities
Derivatives (*)

Carrying
amountEstimated
fair value

Difference¥ 59,801¥ 59,801¥ —49,42049,420(0)32,389¥141,611

32,389¥141,611—¥  (0)¥ 47,744
11,908¥ 47,744
11,908

¥ —
—

4,215
34,901¥ 98,768¥    (472)4,23535,385¥ 99,274¥    (472)

20
484
¥505
—

(*) The value of assets and liabilities arising from derivatives is shown at net value,with the amount in parentheses representing net liability position.

39

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s(i)	Method to determine the estimated fair value of financial
instruments and other matters related to securities and­derivative transactions
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 value of time deposits in banks with maturities is calculated based on the present value of the total principal andinterest discounted at a rate supposing a newly made deposit.
Trade notes and accounts receivables
The fair value is calculated by categories of the remaining­periods of 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-termborrowings
The carrying amount is used for these items because the fairvalue approximates the carrying amount.
Current portion of long-term debt 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 isissued, to the total of the principal and interest. The current
portion of long-term debt and long-term debt with variableinterest rates are subject to the special treatment of interest
rate swaps or the integral treatment of interest rate currency
swaps and is calculated by applying a discount rate, based on
the assumed interest rate if a similar new debt is issued, to thetotal of the principal and interest including that of the interest
rate swap.
Derivative Transactions
Please refer to Note 20, Derivative Transactions, of the notes tothe consolidated financial statements.
(ii)	
Financial instruments for which it is extremely difficult todetermine the fair value

2017

Unlisted stocks¥1,950Millions of yen

Thousands of
U.S. dollars

2018

2018

¥2,081$19,588

Because the fair values of these financial instruments are
extremely difficult to determine, given that they do not havequoted market prices and future cash flows cannot be estimated, they are not included in “Securities” in the precedingtable.

40(iii)	Redemption schedule for receivables and securities withmaturities at March 31, 2018 and 2017.
Year ended March 31, 2018Year ended March 31, 2018
Millions of yen

Millions of yen

Due after
one yearthroughfive years

Due after
five years¥ 79,032¥ ——53,980¥133,012

561
¥561

—
—

Due inone yearor less

Cash on hand andin banks
Trade notes andaccounts receivable
Total

19. Securities
Other securities:(iv) The redemption schedule for long-term debt

Due in 1 year or lessDue after 1 year through 2 years
Due after 2 years through 3 years
Due after 3 years through 4 years
Due after 4 years through 5 years
Due after 5 years

Long-term
loans

Lease
obligations¥   132
60
5,000
1,800
15,70016,708

¥493
366
218
114
43
4

Thousands of U.S. dollars
Thousands of U.S. dollars

Cash on hand andin banks
Trade notes andaccounts receivable
Total

Due inone yearor less

Due after
one yearthroughfive years$  743,901

$

—

—

508,095$1,251,995

5,280$5,280——Due after
five years

Due in 1 year or lessDue after 1 year through 2 years
Due after 2 years through 3 years
Due after 3 years through 4 years
Due after 4 years through 5 years
Due after 5 years

Long-term
loans

Lease
obligations$  1,242
565
47,063
16,943
147,779
157,267$4,640
3,445
2,052
1,073
405
38

Year ended March 31, 2017
Year ended March 31, 2017

Millions of yen
Millions of yen

Due inone yearor less

Cash on hand andin banks
Trade notes andaccounts receivable
Total

Due after
one yearthroughfive years

Due after
five years¥ 59,801¥ ——49,188¥108,989

232
¥232

—
—

Due in 1 year or lessDue after 1 year through 2 years
Due after 2 years through 3 years
Due after 3 years through 4 years
Due after 4 years through 5 years
Due after 5 years

Long-term
loans

Lease
obligations¥ 4,215
132
60
5,000
1,800
27,908

¥574
400
274
131
40
7

March 31, 2018
Millions of yen

Carrying amountexceeding theacquisition cost:
		 Stocks
Carrying amount notexceeding theacquisition cost:
		 Stocks
Total

Acquisition
cost

Carrying
amountUnrealized
gain (loss)¥13,441¥25,824¥12,382

8,721¥22,163

6,765¥32,589(1,956)¥10,425

Acquisition
cost

Carrying
amountUnrealized
gain (loss)$126,515$243,072$116,547

82,088$208,613

63,677$306,749(18,411)$ 98,127

Acquisition
cost

Carrying
amountUnrealized
gain (loss)¥13,379¥24,189¥10,809

9,840¥23,220

8,199¥32,389(1,640)¥ 9,168

Thousands of U.S. dollars

Carrying amountexceeding theacquisition cost:
		 Stocks
Carrying amount notexceeding theacquisition cost:
		 Stocks
Total
March 31, 2017

Millions of yen

Carrying amountexceeding theacquisition cost:
		 Stocks
Carrying amount notexceeding theacquisition cost:
		 Stocks
Total

When their fair values have declined by 50% or more, impairment
losses are recorded on those securities. When their fair values havedeclined by 30% up to 50%, impairment losses are recorded on
those securities on an individual basis to the values considered tobe recoverable.

41

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

20. Derivative Transactions(a) Derivatives not subject to hedge accounting

Year ended March 31, 2017
Millions of yen

Year ended March 31, 2018
None applicableYear ended March 31, 2017
None applicable

Hedge accounting method

Type of derivative

Principal items hedged

Allocation method

Foreign exchange forward contracts
Sell:
U.S. dollars
Euros
Thai baht
JPY
Foreign exchange forward contracts
Buy:
U.S. dollars
Euros
Sterling pound

Accounts receivable(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, 2018

Contract
amountOver
one year

Fair value¥13,716689
3
10¥1,690174——¥(411)
6(0)(0)¥    82272
359¥   23
—
236

¥   0
0
(68)

Contract
amountOver
one year

Fair value¥25,000¥25,000

(*)

708

708

(*)

Contract
amountOver
one year

Fair value$235,316$235,316

(*)

6,664

6,664

(*)

Accounts payable

Millions of yen

Hedge accounting method

Type of derivative

Principal items hedged

Allocation method

Foreign exchange forward contracts
Sell:
U.S. dollars
Euros
Canadian dollars
Thai baht
JPY
Foreign exchange forward contracts
Buy:
U.S. dollars
Euros
Sterling pound

Accounts receivable

Contract
amountOver
one year

Fair value

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

(ii) Interest-related transactions¥10,853
1,688
75
33
31

¥1,258
185
—
—
—

¥473
11
5
(1)
2

¥   617852255¥¥ (22)(5)(27)

Accounts payable——
125

Year ended March 31, 2018
Millions of yen

Hedge accounting method

Type of derivative

Principal items hedged

Special treatment forinterest rate swaps
Integral treatment forinterest rate currency swaps:(Special treatment andallocation method)

Receive/floating and pay/fixedLong-term borrowings

Receivable USD and floating rate/
payable JPY and fixed rateLong-term borrowings

Thousands of U.S. dollars

Hedge accounting method

Type of derivative

Principal items hedged

Allocation method

Foreign exchange forward contracts
Sell:
U.S. dollars
Euros
Canadian dollars
Thai baht
JPY
Foreign exchange forward contracts
Buy:
U.S. dollars
Euros
Sterling pound

Accounts receivable

Contract
amountOver oneyear$102,155
15,889706
311
292$11,841
1,741
—
—
—

$4,452
104
47
(9)
19

$  5,808
8,020
2,400

$

$ (207)(47)(254)

Accounts payable
—
—
1,177

Thousands of U.S. dollars

Fair value
Hedge accounting method

Type of derivative

Principal items hedged

Special treatment forinterest rate swaps
Integral treatment forinterest rate currency swaps:(Special treatment andallocation method)

Receive/floating and pay/fixedLong-term borrowings

Receivable USD and floating rate/
payable JPY and fixed rateLong-term borrowings(*) Interest rate swaps subject to the special treatment for interest rate swaps and interest rate currency swaps subject to integral treatment for interest rate currency swaps
are accounted for together with the long-term debt, accordingly the fair value of the interest rate swaps is included in the fair value of the corresponding long-term debt.
Note: Calculation of fair value is based on the stated price by financial institutions.

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

4243

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

Year ended March 31, 2017
Millions of yen

Hedge accounting method

Special treatment forinterest rate swaps
Integral treatment forinterest rate currency swaps:(Special treatment andallocation method)Type of derivative

Principal items hedged

Receive/floating and pay/fixedLong-term borrowings

Receivable USD and floating rate/
payable JPY and fixed rateLong-term borrowings

Contract
amount¥29,000

708

Over
one year¥25,000

708

Fair value(*)

Note: Calculation of fair value is based on the stated price by financial institutions.

The changes in the retirement benefit obligation for the years
ended March 31, 2018 and 2017 are as follows:

2017

Balance at the beginningof the year
Service cost
Interest cost
Actuarial gain and loss
Retirement benefits paid
Balance at the endof the year

44

Millions of yen

Thousands of
U.S. dollars

2018

2018

The changes in plan assets for the years ended March 31, 2018 and2017 are as follows:

Balance at the beginningof the year
Expected return on plan
assetsActuarial gain and loss
Contributions by theCompany
Retirement benefits paid
Balance at the end
the year

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥14,729¥14,969$140,898

294
396

299
529

2,814
4,979

467
(918)

479
(760)

4,509
(7,154)¥14,969¥15,517$146,056¥21,011
1,153
109
(627)
(1,518)¥20,128
1,119
120
(237)
(1,338)$189,458
10,5331,130(2,231)(12,594)

The changes in retirement benefit liability accounted for using thesimplified method for the years ended March 31, 2018 and 2017
are as follows:¥20,128¥19,792$186,295

Balance at the beginningof the year
Retirement benefit
expenses
Retirement benefits paid
Contributions
Balance at the end
the year

2017

2017

(*)

(*) Interest rate swaps subject to the special treatment for interest rate swaps and interest rate currency swaps subject to integral treatment for interest rate currency swaps
are accounted for together with the long-term debt, accordingly the fair value of the interest rate swaps is included in the fair value of the corresponding long-term debt.

21. Retirement Benefit Plans
The Company and its consolidated subsidiaries have either fundedor unfunded defined benefit plans and/or defined contributionplans.
The Company and its domestic consolidated subsidiaries havedefined benefit plans, i.e. lump-sum payment plans, defined
benefit plans, welfare pension fund and tax-qualified pension­
plans, covering substantially all employees who are entitled to
lump-sum or annuity payments, the amounts of which are determined by reference to their basic rates of pay, length of service,and the conditions under which termination occurs.

The following table sets forth the funded status of the plans andthe amounts recognized in the consolidated balance sheets as ofMarch 31, 2018 and 2017 for the Company’s and the consolidated
subsidiaries’ defined benefit plans:Millions of yen

Thousands of
U.S. dollars

2018

2018

¥3,161¥2,989$28,134

646
(629)
(187)

592
(361)
(185)

5,572
(3,398)(1,741)¥2,989¥3,034$28,558

Funded retirement benefit
obligation
Plan assets at the value
Unfunded retirement
benefit obligation
Net liability for retirement
benefits in the balance
sheet
Retirement benefit liability
Retirement benefit assets
Net liability for retirement
benefits in the balance
sheet¥ 19,201(16,079)
3,121
5,026

Millions of yen

Thousands of
U.S. dollars

2018

2018

¥ 19,587 $ 184,366(16,717) (157,351)
27,0052,869
4,439

41,783

8,148
10,620(2,472)

7,309
10,046(2,736)

68,797
94,559(25,753)¥   8,148¥   7,309$   68,797

The components of retirement benefit expense for the years
ended March 31, 2018 and 2017 are as follows:

Service cost
Interest cost
Expected return on plan
assetsAmortization of actuarial
gain and loss
Simplified method for
retirement benefit
expenses
Other
Retirement benefit
expenseMillions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥1,153109¥1,119120$10,533
1,130

(294)

(299)

(2,814)

1,004

95

894

646
39

592
45

5,572
424

¥2,658¥1,674$15,757

The components of retirement benefits plans adjustments
included in other comprehensive income (before tax effect) for theyears ended March 31, 2018 and 2017 are as follows:

Actuarial gain and loss
Total

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥2,028¥2,028¥863¥863$8,123$8,123The components of retirement benefits plans adjustments
included in accumulated other comprehensive income (before tax
effect) as of March 31, 2018 and 2017 are as follows:

Unrecognized actuarial
gain and loss
Total

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥(331)¥(331)¥531¥531$4,998$4,998The fair value of plan assets, by major category, as a percentage of
total plan as of March 31, 2018 and 2017 as follows:
March 31,

Bonds
StocksCash on hand and in banks
General account
Other
Total

2017

2018

30%
42
0
18
10
100%

29%
44
0
16
11
100%

Retirement benefit trust set for the lump-sum and corporate pension plans accounts for 20% and 19% of the total plan assets, forthe years ended March 31, 2018 and 2017, respectively.
The expected return on assets has been estimated based on
the anticipated allocation to each asset class and the expectedlong-term returns on assets held in each category.
The assumptions used in accounting for the above plans are as
follows:
March 31,

Discount rates
Expected rates of return on plan assets

2017

2018

0.68%
2.00

0.62%
2.00

Contributions made to defined contribution plans for the years
ended March 31, 2018 and 2017 were ¥68 million ($640 thousand)and ¥59 million, respectively.

45

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

22. Income Taxes
The significant components of the Company’s deferred tax assets
and liabilities at March 31, 2018 and 2017 were as follows:

2017

Deferred tax assets:
Accrued enterprise taxes
Accrued bonuses
Depreciation
Amortization of long-term
prepaid expenses
Loss on revaluation of
inventory items
Loss on revaluation offinancial instruments
Impairment loss
Retirement benefit liability
Provision for warranties forcompleted construction
Provision for loss on
construction contracts
Provision for loss on wind
power generator business
Provision for businessrestructuring
Less allowance for doubtful
accounts
Asset retirement obligations
Percentage-of-completion
methodTax loss carry forwards
Unrealized loss on
investment securities
Deferred loss on hedges
Unrealized gain on
intercompany transactions
Other   Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Reserve for advanced
depreciation
Reserve for special
depreciation
Net defined benefit asset
Disposal cost with asset
retirement obligations
Unrealized gain on
investment securities
Deferred gain on hedges
Other
Total deferred tax liabilities
Net deferred tax assets

46¥   138
912
685

Millions of yen

Thousands of
U.S. dollars

2018

2018

¥   184 $  1,732
955
8,989
938
8,829

105

105

988

1,036

1,656

15,587

194
15,3504,363

189
13,5894,381

1,779
127,909
41,237

884

528

4,970

911

239

2,250

1,429

1,026

9,657

—

1,948

18,336

155
400

133
416

1,252
3,916

483
2,327

16
2,189

151
20,604

500
172

596
26

5,610
245

677
1,423
32,155(4,918)27,236499
1,158
30,782(4,132)
26,650

4,697
10,900289,740(38,893)
250,847

1,279

1,220

11,483

51
765

—
839

—
7,897

230

233

2,193

3,298
39
232
5,897
¥21,338

3,764
35,429
160
1,506
316
2,974
6,534
61,502¥20,116 $189,345

Change in deferred tax assets and deferred tax liabilities due toreduction in corporate income tax rate
On December 22, 2017, the Tax Cuts and Jobs Act was enacted
in the United States, effectively lowering the federal corporate
income tax rate effective for the periods beginning on or after­January 1, 2018. Consequently, the federal corporate income tax
rate applicable to the Company’s consolidated subsidiaries in the
U.S. was reduced from 35% to 21%.
The effect of this change in tax rate is minor.
2017

Statutory tax rates
Effect of:Permanent differences (Expense)
Permanent differences (Benefits)
Tax credit
Evaluation reserve amount
Retained earnings of overseas
subsidiaries
Tax effect not recognized on
unrealized income
Other
Effective tax rates(b) Outline of the accounting treatment
The Company treated the transaction as transaction under common control based on Accounting Standard for Business
Combinations (Accounting Standards Board of Japan (ASBJ),
Statement No, 21 issued) and the Guidance on AccountingStandard for Business Combinations and Accounting Standard forBusiness Divestitures (ASBJ Guidance No, 10, issued).

Balance at beginningof yearLiabilities incurred dueto the acquisition of­property, plant andequipment
Accretion expense
Liabilities settled
Other
Balance at endof year

2018

30.7%

Since loss
beforeincometaxes isrecorded,
it is notstated.

24. Asset Retirement Obligations
The following table presents the changes in asset retirement­obligations for the years ended March 31, 2018 and 2017:

0.9
(0.5)
(2.1)
(5.3)

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥1,307¥1,320$12,425

16
21
(23)
(1)

35
22
(15)
2

329
207
(141)
19

¥1,320¥1,364$12,839

1.0
0.5
1.3
26.5%

23. Business Combinations
Transaction under common control(a) Outline of the transaction
Combination between Japan Steel Works America, Inc. and JSW
Plastics Machinery, Inc.
1. Name and business of companies
		 Name of		 surviving company: Japan Steel Works America, Inc.
		 Business:	Sales of products, Procurement,
Technical service, Market research,
Information gathering, etc.
		 Name of		 absorbed company: JSW Plastics Machinery, Inc.
		 Business:	Sales of injection molding machines,
Parts sales, Technical service
2. Date of business combination
		 December 31, 2017
3. Legal form of business combination
		Absorption-type merger with Japan Steel Works America,
Inc. as the surviving company
4. Name of company after business combination
		 Japan Steel Works America, Inc.
5. Purpose of transaction		The purpose is to merge two US sales subsidiaries,
strengthen the sales force of the industrial machinery
division, integrate common functions and strengthen the
profitability of the group.

25. Investment and Rental Properties
The Company has omitted the disclosure of investment and rental properties due to immateriality for the years ended March 31, 2018 and2017.
26. 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, 2018

Sales and operating income:Sales to third parties
Intra-segment sales and transfers
Total sales
Operating income
Assets, depreciation,and capital expenditures
Total assets
Depreciation and amortization
Capital expenditures

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses¥40,891
3,868
44,759¥ (1,544)¥170,267
1,002
171,270¥ 23,834¥ 1,797
3,702
5,500¥   820¥212,957
8,572
221,530¥ 23,109¥—(8,572)(8,572)¥  (1,790)¥212,957—
212,957¥ 21,318¥40,381274
2,992¥128,153
3,493
3,318

¥11,755207
55¥180,290
3,976
6,366

¥117,143120
69¥297,433
4,097
6,436

Total

AdjustmentsandEliminations

Consolidated47

N o te s to Con s ol i date d Fi n a n c i a l St ate m e nt s

Thousands of U.S. dollars(a) Product and service information

Reportable segments

Year ended March 31, 2018

Sales and operating income:Sales to third parties
Intra-segment sales and transfers
Total sales
Operating income
Assets, depreciation,and capital expenditures
Total assets
Depreciation and amortization
Capital expenditures

Millions of yen

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total$384,893
36,408421,301$ (14,533)$1,602,664
9,431
1,612,105$  224,341$ 16,915
34,846
51,770$  7,718$2,004,490
80,6852,085,184$  217,517$380,092
2,579
28,163$1,206,259
32,87831,231$110,646
1,948
518$1,697,007
37,42559,921

AdjustmentsandEliminations$—(80,685)(80,685)$  (16,849)$1,102,626
1,130
649

Consolidated$2,004,490—
2,004,490$  200,659$2,799,633
38,56460,580Year ended
March 31,
2018

Sales tothird parties

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses¥40,891¥170,267¥1,797

Millions of yen

Total¥212,957

Thousands of U.S. dollars

Year ended
March 31,2018

Steel andEnergyProducts

Industrial
Machinery
Products

Sales tothird parties$384,893 $1,602,664

Real Estate
and OtherBusinesses

Year ended
March 31,2017

$16,915 $2,004,490

Sales tothird parties

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses¥51,207¥159,378¥1,883

Year ended March 31, 2017

Sales and operating income:Sales to third parties
Intra-segment sales and transfers
Total sales
Operating income
Assets, depreciation,and capital expenditures
Total assets
Depreciation and amortization
Capital expenditures

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Total

AdjustmentsandEliminations¥212,469(b) Geographical information(i) Sales
Consolidated
2017¥51,207
5,551
56,759¥ (2,794)¥159,378
858
160,236¥ 15,183¥ 1,8833,751
5,635¥   959¥212,469
10,161
222,630¥ 13,349¥—(10,161)(10,161)¥  (1,008)¥212,469—
212,469¥ 12,340¥103,575
40,852
68,041¥212,469

Millions of yen

Thousands of
U.S. dollars

2018

2018

¥104,757 $ 986,041
48,043452,21260,156566,227¥212,957 $2,004,490

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

¥37,561
4,142
4,574

¥123,743
3,418
4,742

¥11,878206
44¥173,183
7,767
9,361

¥102,13191
140¥275,315
7,858
9,502

Notes: 1.	Adjustments and eliminations for segment profit of ¥1,008 million ($8,985 thousand) include elimination of inter-segment profit on inventories and corporate
general administration expense which are not allocable to a reportable segment.
2.	Adjustments and eliminations for segment assets of ¥102,131 million ($910,340 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 ¥91 million ($811 thousand) include depreciation and amortization for corporate assets.
		Adjustments and eliminations for capital expenditures of ¥140 million ($1,248 thousand) include capital expenditures for corporate assets.

48

Japan
China
OthersConsolidated

Steel andEnergyProducts

Industrial Real Estate
Machinery and Other
Products Businesses

Impairment
loss¥1,352

Year ended
March 31,2018

Steel andEnergyProducts

Impairment
loss$12,726

Year ended
March 31,2017

Steel andEnergyProducts

Impairment
loss¥17,874

—

Total

—

¥1,352

Industrial Real Estate
Machinery and Other
Products Businesses

—

Total

—

$12,726
Millions of yen

Total

Millions of yen

Reportable segments

Year ended
March 31,2018

Thousands of U.S. dollars

Total

Millions of yen

Notes: 1.	Adjustments and eliminations for segment profit of ¥1,790 million ($16,849 thousand) include elimination of inter-segment profit on inventories and corporate
general administration expense which are not allocable to a reportable segment.
2.	Adjustments and eliminations for segment assets of ¥117,143 million ($1,102,626 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 ¥120 million ($1,130 thousand) include depreciation and amortization for corporate assets.
		 Adjustments and eliminations for capital expenditures of ¥69 million ($649 thousand) include capital expenditures for corporate assets.

(d) Information on loss on impairment of fixed assets
Impairment losses on fixed assets by reportable segment for theyears ended March 31, 2018 and 2017 are summarized as follows:(ii) Tangible assets
The Company has omitted the disclosure of tangible assets bycountry or region as of March 31, 2018 and 2017 because theamount of tangible assets in Japan accounted for more than
90% of the carrying amount in the consolidated balance sheet.
(c) Significant customer information
The Company has omitted the disclosure of significant customer
information for the years ended March 31, 2017 and 2016 because
no individual customer accounted for more than 10% of net sales
in the consolidated statement of income.

Industrial Real Estate
Machinery and Other
Products Businesses

—

Total

—

¥17,874(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, 2018 and2017 by reportable segment:
Millions of yen

Year ended
March 31,2018

Amortization
Balance as ofMarch 31

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate Adjustments
and OtherandBusinesses Eliminations

—

¥211

—

—

¥211

—

509

—

—

509

Total

Thousands of U.S. dollars

Year ended
March 31,2018

Amortization
Balance as ofMarch 31

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate Adjustments
and OtherandBusinesses Eliminations—$1,986——$1,986

—

4,791

—

—

4,791

Total

49

Notes to Consoli d ated Fi nanci al St ate m e nt s

I n de p e n de nt Au di tor ’s R e p or t

Independent Auditor’s Report
Millions of yen

Year ended
March 31,2017

Amortization
Balance as ofMarch 31

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate Adjustments
and OtherandBusinesses Eliminations

—

¥199

—

—

¥199

—

657

—

—

657

Total

29. Subsequent Events(Significant subsequent events)
None applicable(f) Information on gain on negative goodwill
Year ended March 31, 2018
None applicableYear ended March 31, 2017
None applicable
27. Shareholders’ Equity
The Corporation Law of Japan provides that an amount equal to
10% of the amount to be disbursed as distributions of capital­surplus (other than the capital reserve) and retained earnings(other than the legal reserve) be transferred to the capital reserveand the legal reserve, respectively, until the sum of the capitalreserve and the legal reserve equals 25% of the capital stock
account. Such distributions can be made at any time by resolutionof the meeting of shareholders, or by the Board of Directors if­certain conditions are met.
28. Amounts per ShareProfit (loss) attributable to owners of parent per share is calculated
based on the Profit (loss) attributable to owners of parent available
for distribution to shareholders of common stock and the weighted-average number of shares of common stock outstanding during the year. Net assets per share are calculated based on thenumber of shares of common stock outstanding at year end.
Amounts per share at March 31, 2018 and 2017 and for the years
then ended were as follows:
Yen

U.S. dollars

2018

2018

¥  (67.61) ¥  145.77
1,446.44
1,592.47$ 1.3714.99

2017

Profit (loss) attributableto owners of parent
Net assets

Note: The Company carried out the share consolidation at the ratio of 5 shares to
1 share effective October 1, 2016. In accordance with this, net assets per
share and profit (loss) attributable to owners of parent per share are calculated based on the assumption that the share consolidation had been­carried out at the beginning of fiscal 2016.

50

51

Corporate Directory

Network
Düsseldorf
Detroit

Ansan (near Seoul)
Gurgaon(near Delhi)
Hanoi
Bangkok

Corporate Data

Stock Information

Trade Name

The Japan Steel Works, Ltd.

Authorized Shares

200,000,000 shares

Head Office

Gate City Ohsaki-West Tower,
11-1, Osaki 1-chome,
Shinagawa-ku, Tokyo, Japan

Issued and Outstanding Shares

74,292,607 shares

Shareholders

20,636

Stock Listings

Tokyo

Transfer Agent and Registrar

Sumitomo Mitsui Trust Bank, Ltd.
4-1, Marunouchi 1-chome, Chiyoda-ku,
Tokyo, JapanFoundation

November 1, 1907

Paid-in Capital¥19,694 million

Employees

2,248 (Consolidated 5,156)

AuditorErnst & Young ShinNihon LLC
Hibiya Kokusai Bldg.,
2-3, Uchisaiwai-cho 2-chome,
Chiyoda-ku, Tokyo, Japan(as of March 31, 2018)



9.93%
9.57%
3.85%
2.99%
2.22%
2.13%
1.78%
1.68%
1.59%
1.55%
(as of March 31, 2018)

1.52%

Foreign Corporations
and Foreign
Individuals

13.60%

Number of
Shares Issued

General Companies
and Other
Corporations

14.46%

74,292,607
sharesHead Office

Hiroshima Office

Muroran Plant

Nagoya Office

Fukuoka Office

Hiroshima Plant

Gate City Ohsaki-West Tower, 11-1, Osaki 1-chome,
Shinagawa-ku, Tokyo 141-0032, Japan
Phone: +81-3-5745-2001 Facsimile: +81-3-5745-2025
Mitsui Sumitomo Kaijo Nagoya Shirakawa Bldg. 7F, 9-15,
Sakae 2-chome, Naka-ku, Nagoya-shi, Aichi 460-0008, Japan
Phone: +81-52-222-1271 Facsimile: +81-52-222-1275

Japan Steel Works America, Inc.
Head Office
379 Thornall Street, 5th Floor, Edison, NJ 08837, U.S.A.
Phone: +1-212-490-2630 Facsimile: +1-212-490-2575
Chicago Office
540 Capital Drive, Suite 130, Lake Zurich, IL 60047, U.S.A.
Phone: +1-847-550-0704 Facsimile: +1-847-550-0725
Los Angeles Office
555 South Promenade Ave., Unit 104, Corona, California 92879,
U.S.A.
Phone: +1-951-898-0934 Facsimile: +1-951-898-0944
Detroit Office24387 Halsted Road Unit B, Farmington Hills, MI 48335, U.S.A.
Phone: +1-248-536-0288 Facsimile: +1-212-490-2575
Atlanta Office1395 S. Marietta Parkway, Building 200 Suite 201
Marietta, GA 30067
Phone: +1-770-575-0383 Facsimile: +1-678-403-1846

Japan Steel Works Europe GmbH17, Gul Lane, Singapore 629413, Republic of Singapore
Phone: +65-6861-4511 Facsimile: +65-6862-3166

JAPAN STEEL WORKS INDIA PRIVATE LIMITED

611, Time Tower, MG Road, Sector 28, Gurgaon,
Haryana, 122001, India
Phone: +91-124-469-4444 Facsimile: +91-124-469-4433

JSW IT KOREA CO., LTD.

1805, 6, Samseong-ro 96-gil, Gangnam-gu, Seoul, Korea
Phone: +82-2-2191-5294/5295 Facsimile: +82-2-2191-5296

JSW Plastics Machinery (Philippines) Inc.

Unit 2205, 22nd floor, Asian Star Building, Asean Drive, Filinvest
Corporate City, Alabang, Muntinlupa City, 1781, Philippines
Phone: +63-2-478-2533/2534 Facsimile: +63-2-809-6221

PT. JSW Plastics Machinery Indonesia

Gajah Building, Unit K Jl. Dr. Saharjo Raya No.111Tebet, Jakarta
Selatan 12810, Indonesia
Phone: +62-21-8370-2536/2537 Facsimile: +62-21-829-8264

52

4, Chatsumachi, Muroran-shi,
Hokkaido 051-8505, Japan
Phone: +81-143-22-0143 Facsimile: +81-143-24-3440
6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-8602, Japan
Phone: +81-82-822-3181 Facsimile: +81-82-285-2038

Yokohama Plant

2-1, Fukuura 2-chome, Kanazawa-ku,
Yokohama-shi, Kanagawa 236-0004, Japan
Phone: +81-45-781-1111 Facsimile: +81-45-787-7200

Overseas

29, Cheomdan-ro, 181beon-gil, Danwon-gu, Ansan-si, Kyeonggi-do,
Korea
Phone: +82-31-488-3401 Facsimile: +82-31-488-9982

43.88%

23-2, Sakuragaoka 1-chome, Kasuga-shi, Fukuoka 816-0872, Japan
Phone: +81-92-582-8111 Facsimile: +81-92-582-8124

Shinanobashi Mitsui Bldg., 11-7, Utsubohonmachi 1-chome,
Nishi-ku, Osaka-shi, Osaka 550-0004, Japan
Phone: +81-6-6446-2480 Facsimile: +81-6-6446-2488

SM PLATEK CO., LTD.

Financial
Institutions

6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-8602, Japan
Phone: +81-82-822-0991 Facsimile: +81-82-822-0997

Osaka Office

THE JAPAN STEEL WORKS (SINGAPORE) PTE. LTD.

Individuals andOthers

26.54%

Domestic

Head OfficeFriedrichstr. 19, 40217 Düsseldorf, Germany
Phone: +49-211-3116660 Facsimile:+49-211-31166640
Technical Center
Bonnerstr. 243 40589 Düsseldorf, Germany
Phone: +49-211-788600

Securities
Companies

MexicoManilaJakartaNote: The shareholding ratios are calculated after deducting 802,503 treasury shares from thetotal number of shares issued.

Classification of Shareholders by Percentage ofShares Held (As of March 31, 2018)

New York
Houston

Kuala Lumpur
Singapore

Major Shareholders (shareholding ratio)
The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
Mitsui Life Insurance Co., Ltd.
Sumitomo Mitsui Banking Corp.
Sumitomo Mitsui Trust Bank, Ltd.
Mitsui Sumitomo Insurance Co., Ltd.
Nippon Steel & Sumitomo Metal Corp.
Japan Trustee Services Bank, Ltd. (Trust Account 5)
RBC IST-OMNIBUS 10 LENDING AC - CLIENT ACCOUNT
Chase Manhattan Bank GTS Clients Account Escrow

Corona(near Los Angeles)
Shanghai
ShenzhenTaipeiHong Kong

JSW Plastics Machinery (M) SDN. BHD.
Head Office
D6-5-G Block D6, Pusat Perdagangan Dana, 1 Jalan
PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan,
Malaysia
Phone: +60-3-7842-6076 Facsimile: +60-3-7842-6078
Johor Office
No.207, Ground Floor Industry Center, Technovation Park UTM
KM20, Jalan Pontian Lama, 81300 Skudai, Johor Bahru, Malaysia
Phone: +60-7-554-3637 Facsimile: +60-7-554-3711

The Japan Steel Works (Thailand) Co.,Ltd.

78/6 JST Building 4th Floor, Moo7, Kingkaew Road, Rachatewa,
Bangplee, Samutprakarn 10540, Thailand
Phone: +66-2-738-5272~6 Facsimile: +66-2-738-5277

JSW Plastics Machinery Vietnam Ltd.
Head Office
Room 103, Techno-Center Thang Long Industrial Park,
Kim Chung Commune, Dong Anh District, Hanoi, Vietnam
Phone: +84-24-3951-6383 Facsimile: +84-24-3951-6384
Ho Chi Minh Office
G-Floor, DC Tower, 111D Ly Chinh thang Ward 7, Dist3,
Ho Chi Minh, Vietnam
Phone: +84-28-3526-1295 Facsimile: +84-28-3526-1296

JSW Plastics Machinery (H.K.) Co., Ltd.

Room 907, Corporation Park, 11 On Lai Street, Shatin,
New Territories, Hong Kong
Phone: +852-2648-0720 Facsimile:+852-2686-8204

JSW Plastics Machinery (TAIWAN) Corp.
Head Office
1F., No. 21, Dahu 1st Rd., Gueishan Shiang, Taoyuan,County 33373, Taiwan, R.O.C.
Phone: +886-3-396-2102 Facsimile: +886-3-396-2104
Tainan Branch
15F-7, No.689-78, Xiaodong Rd., Yongkang City,
Tainan County 71052, Taiwan, R.O.C.
Phone: +886-6-311-4192 Facsimile: +886-6-311-4193

JSW Plastics Machinery Mexico S. de R.L. de C.V.

Avenida Mineral de Valenciana 202 A-1, Parque Industrial Santa Fe,
Silao De La Victria, Guanajuato C. P: 36275
Phone: +52-472-748-9412

JSW Machinery Trading (Shanghai) Co., Ltd.
Head Office
28A, Strength Plaza, No.600-4 Tianshan Road,
Shanghai, 200051, China
Phone: +86-21-5206-7031/7032 Facsimile: +86-21-5206-7033
Dalian Branch
Room1055, Development Building, Rong Hui Road,
Area No.9, Dalian Development District,
Dalian Liaoning 116600, China
Phone: +86-411-8761-0339 Facsimile: +86-411-8750-9182

Tianjin Branch
Room 609, HaiHe Creative Center No. 5, JuXing Road No. 9,
XianShuiGu Town, JinNan District, Tianjin, 300350 China
Phone: +86-22-8538-5431 Facsimile: +86-22-8535-5431
Suzhou Branch
C-219, Dong Chuang Technical Park, No. 216 Jinfeng Rd,
Mudu, Wuzhong District, Suzhou, Jiansu 215101, China
Phone: +86-512-6831-6246 Facsimile: +86-512-6831-6249
Chengdu Branch
Room 11003, 10# building, area C, No.8 GuangFu Road,
Qing Yang industrial headquarters base, QingYang District,Cheng Du 610031, China

JSW Injection Machine Maintenance (Shenzhen) Co., Ltd.
1F, YiBen Electronic & Business Industrial Park,
NO.1063 Chaguang Road, Xili Town, Nanshan District, Shenzhen
City, Guangdong Province, 518055, China
Phone: +86-755-8602-0930 Facsimile: +86-755-8602-0934

NINGBO TONGYONG PLASTIC MACHINERYMANUFACTURING CO., LTD.

No.1 Zhuhan Industrial Zone Hengzhang Village Shiqi
Street Yinzhou District Ningbo 315155, China
Phone: +86-574-8821-7608 Facsimile: +86-574-8821-4801

JSW Machinery (Ningbo) Co., Ltd.

No.1 Zhuhan Industrial Zone Hengzhang Village Shiqi
Street Yinzhou District Ningbo 315155, China
Phone: +86-574-8823-6758 Facsimile: +86-574-8308-1589

YPK TRADING (HONG KONG) CO., Ltd.

Unit A2, 4/F, Blk. A, Po Yip Bldg., 62-70 Texaco Rd., Tsuen Wan,
Hong Kong
Phone: +852-3521-0437 Facsimile: +852-3905-7216

YPK Machine Trading (Shenzhen) Co., Ltd.

Flat C, 10/F, Laifu Bldg., Fuyong Road, Baoan Shenzhen, Guangdong,
518103, China
Phone: +86-755-2733-2114 Facsimile: +86-755-2733-2106

Fine Crystal (H.K.) Co., Ltd.

Room 903, 9/F Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong,
Kowloon, Hong Kong
Phone: +852-2345-7485 Facsimile: +852-2357-9104

Fine Crystal Precision (S.Z.) Co., Ltd.

No.14, Tongfuyu Lndustrial Estate, Longtian Community,
Longtian Sub-District, Pingshan District, Shenzhen City, Guangdong
Province, P. R. China
Phone: +86-755-8411-6005 Facsimile: +86-755-8411-5009

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