Financial Performance (Consolidated)
Operating Results
Net Sales

Cash Flow

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

lion, 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.

Industrial Machinery Products Business, offsetting lower sales in

Cash Flow from Operating Activities

the Steel and Energy Products Business.

Net cash provided by operating activities amounted to ¥26,712

Operating Income

million (US$251 million), compared with ¥12,023 million in the

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

previous fiscal year, due mainly to profit before income taxes andmillion (US$200 million), and the operating income margin

provision for business restructuring.

increased 4.2 percentage points to 10.0%.

Cash Flow from Investing Activities
Profit Attributable to Owners of Parent

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

Profit attributable to owners of parent was ¥10,712 million(US$47 million), compared with ¥13,580 million in the previous(US$100 million), compared with a loss attributable to owners offiscal year. This was due mainly to an increase in tangible andparent of ¥4,968 million in the previous fiscal year. This equates tointangible assets.

profit per share of ¥145.77 for the year.

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

7,517

6,000

8,864

0

50.8

51.3

60

30,00020,00019,721

108,199

108,893

55.1
48.4

49.1
80,000Millions of yen

4530

10,00040,00015

02014 2015 2016 2017 201824

120,000

94,256

12,00012,34014,42318,00092,752

21,318160,000

122,996

24,000%26,712Millions of yen

02014 2015 2016 2017 201812,023

Millions of yen

Net Cash Provided byOperating Activities% of total sales

11,580Overseas Sales

11,549Operating Income02014 2015 2016 2017 2018

Fi nanci al Per for mance (Co n so lid ate d )Financial Position
Cash Flow from Financing Activities

As of March 31, 2018, total assets amounted to ¥297,433 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), 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.
Total liabilities stood at ¥178,833 million (US$1,683 million), up

ous fiscal year.

¥11,105 million from a year earlier. This was due mainly to anincrease in current liabilities, including advances received for products and provision for business restructuring. Interest-bearing
debt was ¥52,647 million (US$495 million), up ¥193 million from aInterest-Bearing Debt

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

Millions of yen

up ¥11,013 million, due mainly to an increase in retained earnings.

52,64752,45351,341
41,34640,00042,09260,00020,00002014 2015 2016 2017 2018

Net Assets

Equity Ratio

ROE

Millions of yen

%

%

0

15

−10

9.6
(4.6)

0

(13.5)

4.1

39.3

38.6

37.5

30

0

2014 2015 2016 2017 2018

10

(3.9)

40,000

42.7

20

47.1
118,600

107,58745

111,340

80,000138,234

120,000

60

139,268

160,000−20

2014 2015 2016 2017 20182014 2015 2016 2017 201825

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

26

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

Consoli d ated B alan ce Sh e e t

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.

27

Co n s o l id ated Statement of I ncome

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

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

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

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)

Millions of yen

Thousands of
U.S. dollars(Note 3)

2018

2018

¥212,469
170,695
41,77329,432
12,340¥212,957
163,455
49,501
28,182
21,318$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

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.
See notes to consolidated financial statements.

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
See notes to consolidated financial statements.

28

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

Consoli d ated Statement of Changes i n N e t Asse t s

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Changes in Net Assets
For the years ended March 31, 2017 and 2018
Millions of yen

Shareholders’ equity

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

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$60,062$(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.

29

Consoli d ated Statement of Cash Flows

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Cash Flows
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

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

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Presentation
The Japan Steel Works, Ltd. (the “Company”) and its domestic subsidiaries maintain their books of account in conformity with 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

(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

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

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.

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¥17,874(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

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

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

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)35

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:
Number of sharesYear ended
March 31,2017

¥ 3,655—¥2,050(793)$19,296

Increaseduringthe year

Decreaseduringthe yearYear ended
March 31,2018

(7,464)

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

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.

3,655(1,104)

1,257
(369)

11,832(3,473)

2,551

887

8,349

(921)
282

874
(267)

8,227
(2,513)

(638)

606

5,704

(251)
(251)

203
203

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

Year ended March 31, 2017(a)	Information regarding the number and type of sharesissued and treasury stock:
Number of sharesYear ended
March 31,2016

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

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.

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

(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, 2018
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

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

Year ended March 31, 2017
Millions of yen

Due after
one yearthroughfive years

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

232
¥232

—
—

Due inone yearor less

Cash on hand andin banks
Trade notes andaccounts receivable
Total

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

19. Securities
Other securities:(iv) The redemption schedule for long-term debt
Year ended March 31, 2018
Millions of yen

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

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
Millions of yen

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20. Derivative Transactions(a) Derivatives not subject to hedge accounting
Year ended March 31, 2018
None applicableYear ended March 31, 2017
None applicable(b) Derivatives subject to hedge accounting
The contract amounts or the amount corresponding to principal as specified by the contract as of the date of the closing of the consolidated
accounts is shown below by type of hedge accounting method.
(i) Currency-related transactions
Year ended March 31, 2018
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¥10,853
1,688
75
33
31

¥1,258
185
—
—
—

¥473
11
5
(1)
2

¥   617852255¥¥ (22)(5)(27)

Contract
amountOver oneyear

Fair value$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——
125

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

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

42

Accounts payable
—
—
1,177

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

Year ended March 31, 2017
Millions of yen

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

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

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

(ii) Interest-related transactions
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

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.

43Year ended March 31, 2017
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

Contract
amountOver
one year

Fair value¥29,000¥25,000

(*)

708

708

(*)

(*) 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.

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

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

44

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

Millions of yen

Thousands of
U.S. dollars

2017

2018

2018

¥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

Millions of yen

Thousands of
U.S. dollars

2017

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

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

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:

2017

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

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

2018

30.7%

Since loss
beforeincometaxes isrecorded,
it is notstated.

0.9
(0.5)
(2.1)
(5.3)
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.

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

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

Balance at beginningof yearLiabilities incurred dueto the acquisition ofp­ roperty, plant andequipment
Accretion expense
Liabilities settled
Other
Balance at endof yearMillions 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

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

Thousands of U.S. dollars

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

AdjustmentsandEliminations

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$—(80,685)(80,685)$  (16,849)$2,004,490—
2,004,490$  200,659$380,092
2,579
28,163$1,206,259
32,87831,231$110,646
1,948
518$1,697,007
37,42559,921$1,102,626
1,130
649

$2,799,633
38,56460,580Consolidated

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.

Millions of yen

Reportable segments

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¥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¥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

Total

AdjustmentsandEliminations

Consolidated

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

Notes to Consoli d ated Fi nanci al St ate m e nt s(a) Product and service information
Millions of yen

Year 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$16,915 $2,004,490

Sales tothird parties

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses¥51,207¥159,378¥1,883Japan
China
OthersConsolidated¥103,575
40,852
68,041¥212,469

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¥212,469(b) Geographical information(i) Sales

2017

Year ended
March 31,2018

Thousands of U.S. dollars

Total

Millions of yen

Year ended
March 31,2017(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:

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.

(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

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

(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.

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29. Subsequent Events(Significant subsequent events)
None applicableI nd epend ent Aud i to r ’s R e p o r t

Independent Auditor’s Report51