ANNUAL
R E P O R T
ANNUAL REPORT 20172017
for the year ended March 31, 20170818̲JSW̲AR2017̲FH.indd a-b

2017/09/14 16:07

Financial H ighlights (Consolidated)

ProfileFinancial Highlights (Consolidated)

In 1907, the Japanese government launched a joint venture for the purpose of domestic weapons pro-Years ended March 31, 2017, 2016 and 2015

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

duction in Muroran, Hokkaido—later to become a major steel manufacturing center—consisting of two
Thousands ofBritish firms (W.G. Armstrong and Vickers) and one Japanese company. That was the birth of The Japan
Steel Works, Ltd. (JSW).

Millions of Yen

U.S. dollars

FY2014FY2015FY2016FY2016¥194,674¥223,301¥212,469$1,893,832

After World War II, the company turned its sophisticated technologies and considerable experience
to meeting peacetime needs. Continuing to produce high-quality steel, it developed machinery making

For the year

use of this steel and endeavored to open up new business fields. In addition to heavy and chemical

Net salesindustries such as electric power, steel, shipbuilding, and petrochemicals, the company broadened into

Operating income

7,517

14,423

12,340109,992

areas from automobiles to electrical machinery and information equipment, earning a worldwide repu-

Profit (loss) attributable to owners of parent(5,327)(16,600)(4,968)(44,282)

tation as an integrated producer of steel materials and machinery.
At year-end

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 and energy products business, we

Total assets

319,667

293,138

275,315

2,454,007

are serving the needs of the energy industry in areas such as electrical power generation, oil refining,

Total net assets

138,234

111,340

107,587

958,971

ROE

−3.9%

−13.5%–4.6%

Equity ratio

42.7%

37.5%

38.6%

¥(71.94)¥(226.62)¥(67.61)$(0.60)

4.00

5.00

15.00

0.13

natural gas, and wind power generation. In the industrial machinery products business, we supply

Ratiosequipment for manufacturing and processing plastic materials, along with a diverse range of products
in areas from information technology to defense.

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

Contents
01
02
04
08
10
12
14
16
20
22

Financial Highlights (Consolidated)

23
26
32
52
53

Financial Section

Cash dividends applicable to the year

Notes 1: Amounts in U.S. dollars are presented solely for convenience and based on the rate of ¥112.19 = US$1.00, the rate of exchange on March 31, 2017.
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 are calculated using the number of shares after the reverse stock split.

Message from the President
Progress of JGP2017

Net Sales

Profit (loss) attributableto owners of parent

Profit (loss)

Millions of yen

Millions of yen

Yen(67.61)−10,000(226.62)

60,0000(71.94)0(4,968)120,000

60.0(16,600)

10,000111.66120.0(5,327)

212,469

Board of Directors, Audit & Supervisory Board Members andExecutive Officers

223,301

180,000

194,674

Environmental Management

188,719

Corporate Governance

20,000220,653

240,000

Research and Development

8,281

Special Feature

74.58

Review of Operations

5,527

Our Business Domains

Consolidated Financial Statements
Notes to Consolidated Financial Statements

Forward-looking statements

Corporate Directory

The performance forecasts included in this report are judgments

Networktime this report was prepared and the actual results may differ sig-

−60.0

based on the information that was available to the JSW Group at thenificantly from these forecasts due to a variety of factors.

0−20,000

2012 2013 2014 2015 2016 (FY)−240.02012 2013 2014 2015 2016 (FY)2012 2013 2014 2015 2016 (FY)010818̲JSW̲AR2017̲FH.indd c-01

2017/09/14 16:07

M essage from the President

Message from the President

Naotaka Miyauchi
Representative Director & President

Overview of Fiscal 2016
Business performance
In fiscal 2016, ended March 31, 2017, overseas economies were affected by economic slowdown in
China, stagnation in emerging nations stemming from falling commodity prices, and financial turmoil
following the United Kingdom’s decision to exit the European Union. Owing partly to buoyant economic sentiment following the U.S. presidential election, however, the world economy maintained an
overall recovery tone. The Japanese economy also recovered moderately on the back of healthy corporate earnings and improved worker recruitment and income conditions.
With respect to the JSW Group’s operating environment, the Industrial Machinery Products Businesssegment performed well for the most part, thanks to increased demand for plastics machinery on theback of growing worldwide demand for plastic raw materials and plastic products, especially in theautomotive sector. However, conditions remained difficult for the Steel and Energy Products Businesssegment, reflecting a prolonged slump in demand for products used in nuclear power plants and therise of manufacturers from emerging nations.

Fiscal 2016 was the second year of the Group’s medium-term management plan, titled JGP2017,
which was formulated in May 2015 and covers the three-year period to fiscal 2017. The slogan of theplan is “Advancing toward Top Global & Niche Corporate Group,” and its aim is to achieve the top shareat key points in customer value chains. During the year, we advanced our business activities according
to three basic policies: (1) increase the profitability of existing businesses, (2) foster new products andbusinesses and make them competitive as soon as possible, and (3) reinforce Group management andpromote alliances.
For the year, total orders amounted to ¥177,585 million (US$1,582 million), down 16.1% from theprevious year. This was due to declines in orders generated by both the Steel and Energy Products Business and Industrial Machinery Products Business segments. Net sales fell 4.9%, to ¥212,469 million(US$1,893 million), due to lower sales in the Steel and Energy Products Business segment, which contrasted with higher sales in the Industrial Machinery Products Business segment. Operating income fell
14.4%, to ¥12,340 million (US$109 million), and ordinary income was down 14.3%, to ¥12,111 million(US$107 million). For the year, we reported a loss attributable to owners of parent of ¥4,968 million(US$44 million), from ¥16,600 million (US$147 million) in the previous year. This was due to an impairment loss of ¥17,800 million (US$158 million) on fixed assets owned by the Muroran Plant, arising froma prolonged delay in the recovery of the Steel and Energy Products Business segment’s operating performance, following an impairment loss of ¥35,400 million (US$315 million) in the previous fiscal year.
Looking ahead, the world economy is expected to continue recovering moderately, driven by the
U.S., European, and other industrialized economies. By contrast, various uncertain factors remain, suchas declines in crude oil and other resource prices and fluctuations in financial markets impacted bypolitical trends in Europe. In Japan, we expect the economy to remain on a moderate recovery path, but
the outlook is unpredictable due to China’s slowdown, the effect of U.S. trade policies on exporting
companies, and geopolitical risks in East Asia.
Under these circumstances, the JSW Group’s Steel and Energy Products Business segment will continue facing a difficult business environment amid a prolonged delay in demand recovery for electric
power and nuclear power products. To achieve a return to profitability, we will continue rebuilding ourbusiness foundation and fostering new businesses. In the Industrial Machinery Products Business segment, we will expedite business expansion by pursuing growth opportunities, especially in China andother overseas markets.
Our consolidated forecasts for fiscal 2017 are: total orders of ¥200.0 billion (US$1,782 million), net
sales of ¥205.0 billion (US$1,827 million), operating income of ¥12.5 billion (US$111 million), ordinary
income of ¥12.5 billion (US$111 million), and profits attributable to owners of parent of ¥8.0 billion(US$71 million).
We look forward to the renewed guidance and support of all shareholders.

June 2017

020818̲JSW̲AR2017̲FH.indd 02-03

03

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PROGRESS OF JGP2017

Progress of JGP2017 (JSW GROUP GROWTH PLAN FY2015-2017)
Corporate Vision

Business Strategies
Steel and Energy Products Segment“Advancing toward Top Global & Niche Corporate Group”

Defensive management

Aiming to achieve top share at key points in customer value chains

Achieve steady growth and prepare for renewed growth after JGP2017

Reduce invested capital• Rationalize facilities• Reallocate personnel

B a s i c Po l i c i e s

Review business domains• Promote cost-reduction measures• Expand new products• Strengthen “profitable products”• Secure volume of “operable products” • Review unprofitable businesses

N u m e r i c a l Targ e t s(Billions of yen)

Policy 1
Increase profitability of existing
businesses• Pursue product & service differentiation• Strengthen total-cost competitiveness• Develop service & solution businesses• Reinforce initiatives in growth markets

Renewed challenge:
Net sales of ¥250 billion in FY 2020

More thanNet Sales

Policy 2
Foster new products & businesses
and make them competitive assoon as possible• Promote businesses based oncore management resources• Optimize timeframe and systems forpromoting new products & businesses

More than(Billions of yen)¥250.0FY2016(Actual)

FY2017(Plan)FY2017(Forecast)

Net Sales

Net Sales

Net Sales

Net Sales

¥74.8

¥51.2

≧ ¥60.0≧ ¥45.2

Operating Income

Operating Income

Operating Income

Operating Income

¥0.6

−¥2.7

≧ ¥0

−¥1.1

FY2020Businessi
restructuring¥220.0Industrial Machinery Products Segment

Offensive management
Identify growth opportunities and accelerate business expansion
Operating income

Operating income

Operating income¥7.5≧ ¥13.0≧ ¥20.0

ROA

ROA

≧ 3%

≧ 4%

ROE

ROE

≧ 8%

≧ 10%

Pursue strategic investments• Reinforce production capacity at
Hiroshima and Yokohama Plants

Expand business domains• Reinforce personnel• Promote strategic alliances• Expand sales of J-ADS series• Strengthen service businesses• Expand thin-film coating business• Acquired South Korea’s SM PLATEK• Acquired “simultaneous biaxial stretchingmachine business” for film and sheet
manufacturing equipment(Billions of yen)Reinforce Group management
and promote alliances
FY2014FY2017

FY2020* The ROE target has been revised upwards.

Strict management control based on Action Plan (implement PDCA)

0818̲JSW̲AR2017̲FH.indd 04-05(Actual)¥194.6

Policy 304

FY2015FY2015(Actual)

FY2016(Actual)

FY2017(Plan)FY2017(Forecast)

Net Sales

Net Sales

Net Sales

Net Sales¥144.3¥159.3≧ ¥158.0¥158.0Operating Income

Operating Income

Operating Income

Operating Income

¥12.3

¥15.1

≧ ¥14.0¥15.0

FY2020Continuous
growth05

2017/09/14 16:07

PROGRESS OF JGP2017

JGP2017: Basic Strategies

Foster new produc ts and businesses andmake them competitive as soon as possible

R e i n fo rce G ro u p
management and promote alliances

New fields and product groups of JSW GroupNEW ENERGYTELECOMMUNICATION,
FPD, SENSOR

Low-pressure hydrogenstorage tank

Laser annealing
equipment

High-pressure hydrogenstorage

Equipment applied laser
technology

Hydrogen station

Fine foam injection molding
machines

Seek maximum synergistic benefits

Manufacturing equipment for
gallium nitride crystals

Thin-film deposition equipment for flat panel display

Film processing
equipment

Crystal device

AUTOMOBILE

Rubber manufacturing
equipment

CFRP processing
equipment

Increase profitabilityof existing businesses

Continue andd strength
strengthen further

Expand and evolv
evolve further

Initiatives and Results from FY2015 to FY2016

Initiatives and Results from FY2015 to FY2016

Reinforce Group management

Promote alliances

Reallocation at Hiroshima Plant factory(commenced in FY2015 → completed in first half of FY2016)

Film and sheet equipment

Continued to press ahead with Muroran
Restructuring Project(improved production efficiency, etc.)

Compounding twin-screw extruders

Increased profitability at affiliates(strengthened and expanded subsidiaries for external sales)

Joint development of small machinery with Toyo Machinery &Metal Co., Ltd.
(started to be sold in October 2016)

Made Meiki Co., Ltd. a wholly-owned subsidiary

New defense systems

DEFENSE SYSTEMS

Aircraft components

AIRCRAFT FIELD

Developing operations in growth fields, primarily automotive,
making the most of unique techniques
060818̲JSW̲AR2017̲FH.indd 06-07

Foster new products
and businesses
and make themcompetitive as soon
as possible

Strengthened corporate governance(formulated and executed policy; strengthened the management of affiliates)

Acquired simultaneous biaxial stretching technologies

Acquired South Korea’s SM PLATEK Co., Ltd.

Molding machines

Large cast and forged steel products
Alliance with India’s LTSSHF
Joint venture with Brazil’s Gerdau(established in January 2017)

Reallocation at Hiroshima Plant factory and acquisition of the simultaneous biaxial stretching machine business have contributed greatly to the
expansion of our Industrial Machinery Products Business. At the same time, we are working to improve the profitability of affiliated companies tobolster consolidated revenue growth. Going forward, we will continue strengthening, expanding, and evolving these efforts to maximize synergies.

07

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Our Business Domains

Our Business Domains
The JSW Group comprises 49 subsidiaries (of which 32 are consolidated) and three affiliates (of which one is an

Production encompasses steel casting and forging products (Muroran), steel plate and steel structures (Muroran),equity-method affiliate). Our operating domains are the Steel and Energy Products Business, the Industrial

wind turbines (Muroran), plastics machinery (Hiroshima and Yokohama), and other machinery (Muroran, Hiro-

Machinery Products Business, and the Real Estate and Other Businesses.

shima, and Yokohama). We have responded to changes in the industrial structure by diversifying our businesses

We maintain the Muroran, Hiroshima, and Yokohama plants. Our integrated lineup ranges from steel manufac-

and launching environmental businesses.

turing to machinery.
Sales
Composition

Steel and Energy Products Business24%

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
refinery, 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.

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. In addition,
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.

At the Hiroshima Plant, we produce injection molding machines, pelletizers,
twin-screw extruders, and film and sheet manufacturing equipment. At the
Yokohama Plant, we produce blow molding machines and spinning extruders.
In injection molding machines, we offer a lineup of electrically driven machines,
all of which feature both improved productivity and energy-saving standards
along with enhanced basic performance and molding precision. In addition toconventional power regeneration technology, the new ADS Series delivers
even better energy savings thanks to a revamp of its servo control. To respondto diversifying needs in these product markets, we have established a Technology Development Center within the Hiroshima Plant and engage in wide-ranging consultation with product users, enabling us to put in place an integrated
development system to cope with changing demand, from plastic manufacturing to processing machinery.

Business Lines
Production and sale of products for
power generation industries, steelmaking, nuclear power-related equipment, die materials, and other areas

75%
Business Lines
Production and sale of plastic injection molding machines, plastic production and processing machinery(including pelletizers, compound
extruders, film and sheet manufacturing equipment, etc.), and blow
molding machines

Other Machinery

Steel Plates and Structures
Business Lines
Production and sale of products foroil refining, petrochemical, generalchemical, and chemical machinery,
as well as a wide range of pressure
vessels, clad steel plates, clad steel
pipes, extra-thick steel plates, andother areas

Wind Turbines

Supported by proprietary technologies and facilities at the Hiroshima, Yokohama, and Muroran plants, JSW produces industrial machinery for a wide range
of demand, including defense equipment, power plant equipment, magnesium
alloy injection molding machines, laser annealing systems, rolling stock parts,and environmental facilities.

Business Lines
Production, sale and maintenance ofcompressors, hydraulic machines,
machinery for the production ofelectronic components and displays(laser annealing systems, thin-film
coating machines, etc.), magnesium
alloy injection molding machines,
tightlock couplers and dampers, anddefense equipment

Services“Improving customer satisfaction: Our services business”
The JSW Group entered the wind turbine system business in 2000. Leveraging
state-of-the-art technologies, including permanent magnet synchronous generators, we make low-noise wind turbine system equipment that excels interms of function, performance, and reliability and is also environment-friendly.
Going forward, we will provide high-quality services in an effort to increasecustomers’ capacity utilization rates.

0818̲JSW̲AR2017̲FH.indd 08-09

Industrial Machinery Products Business
Plastics Machinery

Steel Products

08

Sales
Composition

Business Lines
Production, sale and maintenanceof wind turbine system equipment

Drawing on its global network, the Company is advancing its wide-ranging service-related businesses,
which include the maintenance and supply of components. In fiscal 2016, our service-related businesses accounted for around 10% of consolidated net sales. To meet ever-increasing demand, we willcontinue upgrading our domestic and overseas service bases and expanding our operations.
We also value communication with customers. By reflecting their valuable feedback in the form of
improved services, we enable customers to use our products with peace of mind, thus providing themwith confidence and satisfaction.

10%
FY2016
Net sales:
212.4
billions of Yen

09

2017/09/14 16:08

Review of Operations

Review of Operations

Steel and Energy Products BusinessIndustrial Machinery Products Business

Steel Products Sector

Plastics Machinery Sector

Steel Plates and Structures Sector

Other Machinery Sector

Wind Turbines Sector

Performance in Fiscal 2016

Performance in Fiscal 2016

Total orders in the Steel and Energy Products Business amounted to ¥19,500

Total orders in the Industrial Machinery Products Business declined 7.0%, tomillion (US$173 million), down 51.0% from the previous year. This was due¥156,204 million (US$1,392 million), due to a pullback in sales of laser

mainly to the cancellation of orders for wind power generation equipment,

annealing equipment following a surge in sales to large-scale projects in theas well as declining orders for electric and nuclear power plant products,

previous year. This was despite an increase in sales of plastic production andand for clad steel plates and pipes.

processing machinery.

Sales in this segment fell 31.6%, to ¥51,207 million (US$456 million), due

Shell flange used for pressure chamber
for nuclear power plant

Sales in this segment climbed 10.4%, to ¥159,378 million (US$1,420 mil-to a recoil in sales of clad steel pipes following a surge in sales to large-scalelion), thanks to a solid performance by plastic production and processing

projects in the previous year.

machinery, as well as increased sales of molding machines and laser anneal-

Despite a decline in depreciation expenses, the segment posted an oper-

Polyolefin extruder/pelletizer

ing equipment.

ating loss of ¥2,794 million (US$24 million), compared with operating

Operating income jumped 22.5%, to ¥15,183 million (US$135 million),income of ¥699 million (US$6 million) in the previous year. This was due tobenefiting from higher segment sales and cost improvements.

the fall in sales of clad steel pipes.

0

2013

10

0818̲JSW̲AR2017̲FH.indd 10-11

2014

2015

156,204

167,875

60,000

0

2014

2015

2016 (FY)J82-2.0D wind turbines system

120,000

60,00002013

Large-size all-electric injection molding
machine180,000

135,389

51,2072016 (FY)Millions of yen

126,699

74,854

66,215120,000

30,00019,50030,000

Sales

Millions of yen

180,000

67,60260,00039,785

57,12860,000Orders Received

159,378

90,00068,41890,000Clad steel plate

144,358

Millions of yen

126,363

Sales

Millions of yen

118,385

Orders Received

0

2013

2014

2015

2016 (FY)

2013

2014

2015

2016 (FY)

Magnesium alloy injection molding machine11

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S P E C I A L F E AT U R E

S

P

E

C

I

A

L

F

E

A

T

U

R

Flexible compact hydrogen package (FCHP) forsmall-scale hydrogen stations
During the year, we began selling a flexible compact hydrogen
package (FCHP) for small-scale hydrogen stations, which willencourage the expansion of infrastructure to improve the supply
of hydrogen required for the proliferation of fuel cell vehicles(FCVs).
This FCHP is compact, consisting mainly of a pressure vessel
and compressor, enabling it to be operated at hydrogen stations
according to local needs and to be transported by truck.
By promoting hydrogen infrastructure development, we willcontribute to the developement of the hydrogen society.
Flexible compact hydrogen package (FCHP) forsmall-scale hydrogen stations

Private showing of compact all-electric injection
molding machines (J-ADS Series)
JSW held a private showing of its J-ADS Series of compact all-electric injection molding machines (launched in October 2016),
developed based on the concept of “maximum peace of mind for
all customers.” Held at the Hiroshima Plant, it was the first showing in Japan and introduced the latest Group technologies.
Costs have been reduced thanks to a parts-sharing arrangement with Toyo Machinery & Metal Co., Ltd., a capital and business partner. In addition, J-ADS features the SYSCOM 5000i touch
panel controller, which is popular in medium-sized machines,
facilitating functional expansion through application development and compatibility with IoT technologies.
Many customers were curious about the Group technologies
and other facets of J-ADS. It was a significant showcasing of ourtechnological know-how, which generated a lot of positive
interest and for which we have high expectations.
120818̲JSW̲AR2017̲FH.indd 12-13

E

Record-high orders for film and sheet equipment

Demand for film and sheet equipment is strong, especially foruse in manufacturing separator films required for lithium-ion
batteries installed in hybrid and electric vehicles.
In fiscal 2016, we achieved record-high orders for our film andsheet equipment, as we did in fiscal 2015. Moreover, we expect
significant demand to persist until around 2019, with steady growth
to continue thereafter. In anticipation of this situation, we acted
swiftly to increase production capacity at the Hiroshima Plant.
A key feature of our equipment is that it can be tailored to
specific manufacturing methods according to intended applications, such as automobiles and smartphones. As a leading manufacturer in the industry, we will continue striving to further
improve productivity.

Film and sheet equipment

JSW’s couplers and draft gears used by “Train Suite Shiki-shima”(following adoption by “Seven Stars in Kyushu”)
The Japanese railway system is highly regarded around theworld for its safety and precision, and JSW’s couplers and draft
gears are widely used in trains operated by Japan Railway andprivate railway companies.
In luxury trains, which have been popular in recent years, ourcouplers and draft gears were adopted in “Train Suite Shikishima” operated by East Japan Railway Company (JR East) ineastern Japan and Hokkaido. This follows their addition to the“Seven Stars in Kyushu” cruise train running in Kyushu.

Private showing

Train Suite Shiki-shima(Photo courtesy of East Japan Railway Company)

13

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R e s e a rc h a n d D e ve l o p m e n t

Research and Development

Muroran Research Laboratory

Research and development activities were almost

Hiroshima Research Laboratory

Yokohama Research Laboratory

Basic Research and Development Policy

Activities by Business Segment

entirely funded by the Company during fiscal 2016. Combined spending on research and development for the

We develop new products and businesses by focusing on

Steel and Energy Products BusinessIndustrial Machinery Products Business

Steel and Energy Products Business and the Industrial

new energy and energy savings, information and tele-

Product development centers on materials, notably for

In machine-related product development, we are work-

Machinery Products Business amounted to ¥4,237 mil-communications, nanotechnology and materials, andclad steel pipes for natural gas transportation, large

ing to develop advanced processing technology forlion (US$37 million).

new production technologies, which relate directly tosteel castings, and forgings and high alloys for high-effi-

plastic molding machines; enhance the performance of

Seeking to become a “Top Global & Niche Corporate

existing businesses. We have increased collaboration

ciency thermal power generation, forged steel products

plastic extruders and film molding equipment; enhanceGroup”, we strive to develop new products and produc-

between the Research and Development Headquarters

for advanced nuclear power plants, and high-perfor-

the performance and lower the cost of magnesiumtion techniques using our proprietary technologies. To

and business divisions, and aim to cultivate existing busi-

mance nonferrous alloys, as well as manufacturing pro-injection molding equipment and compressors; andbring these products and techniques to market as soonness by expanding and upgrading core technologies.

cess technology development. We improve materials

develop manufacturing equipment for fiber-reinforced

We engage in basic research for future technologies

and component technologies for existing products. In

plastic composite components. We are also incorporat-and contemporary social needs and in researching

the renewable arena, we develop material and compo-

ing advanced technologies and systems to develop

Our Research and Development Headquarters collab-

component technologies for existing products. We will

nent technologies to create lighter and more reliable

laser annealing equipment for thin-film transistor liquid

orates with business divisions and Group companies tobuild on these efforts to undertake R&D projects thatpressure accumulators for hydrogen fueling stations.

crystal display (TFT LCD) production, as well as other1) improve the capabilities, performance, and reliability

create new products and businesses and pursue inno-

We create analytical technologies and enhance compo-

laser application equipment and chemical vapor depo-of core products; 2) develop offerings in new businessvations for existing products.

nent technologies to improve the reliability of windsition (CVD) and plasma application equipment.

as possible, we actively promote multidisciplinary andtechnological tie-ups and joint development.

fields based on core and differentiated technologies; andIn Steel Products, we emphasize advances in energy3) promote the development and commercialization ofand creating even more industry-leading offerings

new products through synergies with Group companies.

while commercializing new areas. The focuses in

The Research and Development Headquarters con-

Machinery Products are to enhance plastics machinery,sist of the head office, and our research laboratories in

IT equipment, and other industrial machinery. We will

Muroran, Hiroshima, and Yokohama.

allocate significant resources to such machinery by clar-

power plants.
Segment R&D spending totaled ¥1,274 million

R&D spending in this segment was ¥2,963 million(US$26 million) in fiscal 2016.

(US$11 million) in fiscal 2016.

ifying that our commercialization framework is open tomergers, acquisitions and alliances.

140818̲JSW̲AR2017̲FH.indd 14-15

15

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Co r p o r a te 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 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 statutory auditor system comprising eight
directors, two of whom are independent, and four statutory auditors (hereafter, “audit & supervisory board members”), two of whom are external.
The term of office of directors is one year. We maintain an executive officer system and separate decisionmaking 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 important management
issues, including basic operational policies and legally
stipulated matters. 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 a audit & supervisory board member (chosen by rotation)—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, plant general managers, headquarters managers, and others withexecutive responsibilities. This body’s tasks include

160818̲JSW̲AR2017̲FH.indd 16-17

assessing the business environment and monitoring the
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.
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 execution of duties bydirectors 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 Audit Division
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.
• In addition to its Corporate Code of Conduct, which
opposes anti-social forces, the Company maintains an
office to share relevant information and spearhead
tough measures to eliminate anti-social forces.
2. Safeguarding and managing information relating
to 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

2017/09/14 16:08

Co r p o r a te G ove r n a n ce

4. Ensuring 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 Conduct. 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. At the same time, the Company
ensures that listed subsidiaries retain a degree ofmanagement autonomy.

180818̲JSW̲AR2017̲FH.indd 18-19• In addition to dispatching directors and audit &supervisory board members to Group subsidiaries,
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 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.
8. Policies on advance payment and compensation
pertaining to costs and obligations incurred in execution 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.

Policy Regarding Large-Scale Purchaseof Company Shares
At the meeting of the Board of Directors held on September 10, 2007, the Company introduced “Measures against
Large-Scale Share Acquisitions (takeover defense measures),” which stipulate the procedures and rules to befollowed and obeyed by any party seeking to purchaseshares issued by the Company. Since then, the Company
has amended part of the Takeover Defense Measures,
which were updated following approval by shareholders
at the 91st Annual General Meeting of Shareholders heldon June 27, 2017.

9. Ensuring effectiveness of audits conducted by audit& 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

2017/09/14 16:08

Environmental M anagement

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.

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.

Action Plan
1. We aim to carry out environmental tasks in an organized way,
and to implement environmental preservation activities
continuously.

(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 environ-

2. We will set appropriate objectives and targets for reducing theburden our activities impose on the environment with con-mental loads by obtaining a clear grasp of environmental
needs and developing technologies.

INPUT
Materials

Steel and energy products• Metals(including steel,
non-ferrous metal)• Forged steel components for nuclear power reactors• Plastics

serving biodiversity.

• Rubber, timber, etc.

3. We aim to provide society with products and services that

MANUFACTURING• Monobloc rotor shafts

OUTPUT
Total waste volume
86,039 t
Waste emission volume• Turbine casings for thermal power generation• Reactors for petroleum refineries

Recycling volume• Clad steel plates/clad steel pipes

73,602 t• Wind Turbines

contribute to the preservation of the environment.

EnergyEnvironmental Management Structure

ISO 14001 Certification Progress

The Environmental Management Committee, headed by the

The Company’s Muroran, Hiroshima, and Yokohama plants anddirector in charge of environmental management, determines

its Group companies, Meiki Co., Ltd., Fine Crystal Precision (S.Z.)

matters such as annual environmental management policies andCo., Ltd., and NIKKO-YPK SHOJI CO., LTD., have obtained certifica-

programs of environmental activities for the whole company.

tion under ISO 14001, an international standard for environmen-

Each plant has its own Environmental Supervisory Committee,

tal management systems.

which promotes environmental management activities andWe leverage third-party certification bodies and internal

works hand in hand with other Group companies including affili-inspections to conduct checks at least once annually to ensure

ates to reduce the environmental impact of the Company’sthat ISO 14001-certified business sites are endeavoring to main-

activities.

tain and improve their environmental management systems.
The Company and Group companies have adhered strictly to

Presidentlaws and ordinances, and there were again no violations infiscal 2016.

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

ISO 14001 Certifications of Business Sites

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

JSW plants Environmental
Management Plant Supervisors(Plant general managers)

Environmental
Supervisory
Committees

Environmental
Supervisory
Committees

JSW Group companies Environmental
Management Supervisors

Affiliatedcompanies

200818̲JSW̲AR2017̲FH.indd 20-21

Departments

JSW plants Environmental
Management Supervisors

Departments

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.

3,054 TJ

12,437 t

Industrial machinery products

86%

of total
waste volume
is recycled

CO2 (from electric power and fuel)192,635 t-CO2• Twin-screw extruders

Chemical
substances
4,901 tWater

22.15 million m3• Film and sheet equipment

CO2 (from domestic transportation)
2,343 t-CO2• Electric servo drive molding machines

Chemical substances• Blow molding machines(amounts emitted and transferred)• Magnesium alloy injection molding machines

198 t• Single-screw extruders• Excimer laser annealing systems

Waste water
16.03 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

2017/09/14 16:08

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

Six-Year SummaryYears ended March 31

As of September 1, 2017

Representative Director &President

Naotaka Miyauchi

Representative Director &Executive Vice President

Yutaka Higashiizumi

As of September 1, 2017

Senior Managing
Executive Officer

Yoshinao Ishibashi

Managing Executive
Officers

Hiroshi Fujimura
Toyohiko Kagawa

Millions of yen

Directors, Managing
Executive Officers

Kenji Watanabe

Takashi Shibata
Masao Oshita
Toshio Matsuo

Directors

Senior Executive Officer

Executive Officers

Motonobu Sato (Outside)
Nobuo Mochida (Outside)

Audit & Supervisory Board
Members

Katsutoshi Orita

Junichiro Deguchi
Kenji Kikukawa
Takashi Iwamoto
Yoshitaka Sato
Toru Nishiyama
Shingo Mito

Yoshitomo Tanaka
Akira Kadota
Kazuya Jono (Outside)
Itaru Masuda (Outside)

2013

2014

2015

2016

2017

¥221,368¥220,653¥188,719¥194,674¥223,301¥212,469

Consolidated
Net sales

Director, Senior Managing
Executive Officer

2012

Profit (loss) attributable toowners of parent

12,591

8,281

5,527

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

Total assets

325,653

303,970

293,139

319,667

293,138

275,315

Total net assets

128,613

134,368

139,268

138,234

111,340

107,587¥151.65¥111.66¥74.58¥(71.94)¥(226.62)¥(67.61)

Net sales¥189,329¥184,312¥155,211¥153,455¥176,116¥166,722

Profit (loss)

11,257

7,519

6,645

(5,658)(18,719)(8,260)Total assets

302,550

277,086

267,241

291,793

263,112242,353

Total net assets

116,255

120,866

127,416

124,381

97,107

88,837

Profit (loss)¥169.63¥101.39¥89.67¥(76.41)¥(255.55)¥(112.40)

Cash dividends applicable to the year

¥10.00¥10.00

¥5.00

¥4.00

¥5.00

¥15.00

Amounts per share (yen):
Profit (loss)
Non-Consolidated

Amounts per share (yen):

Organization
General Meeting of Shareholders

Corporate Planning Office

Domestic Office

Personnel Dept.

Overseas Office

Note1: Amounts in U.S. dollars are presented solely for convenience and based on the rate of ¥112.19 = US$1.00, the rate of exchange on March 31, 2017.
2: 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

Board of Directors

table above are calculated using the number of shares after the reverse stock split.

Secretary Office
General Affairs Dept.

Nomination
Advisory Committee

Remuneration
Advisory Committee

Finance & Accounting Dept.
Research & Development Headquarters
Muroran Research Laboratory
Hiroshima Research Laboratory

Contents

Yokohama Research Laboratory

23 Six-Year Summary

30 Consolidated Statement of Changes in Net Assets

24 Financial Performance (Consolidated)

31 Consolidated Statement of Cash Flows

26 Consolidated Balance Sheet

32 Notes to Consolidated Financial Statements

28 Consolidated Statement of Income

51 Independent Auditor’s Report

Executive Board

President

Laser & Plasma System OfficeWind Power Business OfficeInternal Auditors Office

Audit ＆ Supervisory Board

Steel Business Division

Muroran Plant

Machinery Business Division

Hiroshima Plant

Injection Molding Machinery Business Division

Yokohama Plant

29 Consolidated Statement of Comprehensive Income

Ordnance Business Headquarters

220825̲JSW̲AR2017̲BH.indd 22-23

23

2017/09/14 16:09

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

Financial Position

Net Sales

Cash Flow

Cash Flow from Financing Activities

As of March 31, 2017, total assets amounted to ¥275,315 million

Net sales totaled ¥212,469 million (US$1,893 million), down

At year-end, cash and cash equivalents stood at ¥58,671 million

Net cash used in financing activities was ¥1,203 million, compared(US$2,454 million), down ¥17,823 million from a year earlier. This

¥10,831 million, or 4.9% year on year. This was due to lower sales in(US$522 million), down ¥2,787 million from a year earlier.

with net cash provided by financing activities of ¥4,788 million in

was due primarily to a decline in property, plant and equipment

the Steel and Energy Products Business, which contrasted withhigher sales in the Industrial Machinery Products Business.

the previous year. The main factors were cash dividends paid andstemming from impairment treatment of fixed assets owned by

Cash Flow from Operating Activities

repayments of finance lease obligations, which contrasted with an

the Muroran Plant, as well as decreases in cash and deposits, notes

Net cash provided by operating activities amounted to ¥12,023

increase in proceeds from long-term loans payable.

and accounts receivable, and other current assets.

Operating Income

million, compared with ¥19,721 million in the previous year. This

Total liabilities stood at ¥167,727 million (US$1,495 million),

Operating income fell ¥2,082 million, or 14.4%, to ¥12,340 million

was mainly because depreciation and impairment loss exceeded

down ¥14,070 million from a year earlier. This was due mainly to a

(US$109 million, and the operating income margin edged down

the loss before income taxes.

decrease in current liabilities, including advances received andInterest-Bearing Debt

0.7 point, to 5.8%.

Cash Flow from Investing Activities

provision for loss on the wind power generator business. Interestbearing debt was ¥52,453 million (US$467 million), up ¥1,112 mil-Millions of yen

Loss Attributable to Owners of Parent

Net cash used in investing activities totaled ¥13,580 million, com-

Loss attributable to owners of parent was ¥4,968 million (US$44

pared with ¥12,135 million in the previous year. This was due

million), compared with ¥16,600 million (US$147 million) in themainly to the purchase of property, plant and equipment andprevious fiscal year. This equates to loss of ¥67.61 for the year on aintangible assets.

lion from a year earlier.
80,000Net assets amounted to ¥107,587 million (US$958 million),
down ¥3,753 million. This was due mainly to a decline in retained
earnings stemming from a loss attributable to owners of parent.

The Japanese market accounted for sales of ¥103,575 million

52,45351,341

41,34640,000

Sales by Region

42,092per-share basis.

53,24260,00020,000(US$923 million), the Chinese market for ¥40,852 million (US$364
million), with all other markets accounting for ¥68,041 million(US$606 million).

02013 2014 2015 2016 20170240825̲JSW̲AR2017̲BH.indd 24-25

Millions of yen

Millions of yen

%

%

0

0

15

−10

4.1

(4.6)

30

6.3

38.6

42.7

47.1

43.8

10

0

2013 2014 2015 2016 2017(13.5)

40,00002013 2014 2015 2016 201737.5

107,587

111,340

138,234

45

20

(3.9)

12,02380,000139,268

120,00060

134,368

160,000

19,72151.3

02013 2014 2015 2016 2017

ROE

30

15

0

2013 2014 2015 2016 2017

20,00010,00040,000Equity Ratio

30,00045

108,89355.1
94,25692,752

115,472

80,00060

Net Assets

11,580

5,000

7,517

8,864

10,00012,34014,423120,000

122,996

16,68015,000160,000

48.4

20,000%Net Cash Provided byOperating Activities

11,549Millions of yen% of total sales

23,735

Millions of yen

49.1

Overseas Sales

52.3

Operating Income−202013 2014 2015 2016 20172013 2014 2015 2016 201725

2017/09/14 16:09

Consolidated Balance SheetThe Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheet
March 31, 2017 and 2016

AssetsCurrent assets:
Cash on hand and in banks (Notes 6, 16 and 18)
Notes and accounts receivable:
Unconsolidated subsidiaries and affiliates
Trade (Note 18)
Other
Less allowance for doubtful accounts
Inventories (Note 5)
Deferred tax assets (Note 22)
Other current assets
Total current assets

Property, plant and equipment, at cost (Notes 8 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

2016

Millions of yen

Thousands of
U.S. dollars(Note 4)

2017

2017

¥ 62,018¥ 59,801257
52,493286(248)
67,195
7,120
6,451
195,574

237
49,194292(140)
66,152
6,473
4,555
186,565

10,33477,287
134,348
3,206
3,530
228,707(179,991)
48,715

1,676

1,002
29,93963
1,872
12,1572,707(573)
47,171¥ 293,138

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

1,655

1,002
33,94153
2,472
15,041
2,805(455)
54,860¥ 275,315$

533,033
2,112
438,488
2,603(1,248)589,643
57,69740,601
1,662,938

86,648634,032
1,191,042
25,5192,095
1,939,362(1,652,046)
287,307

14,752

8,931
302,531472
22,034
134,067
25,002(4,056)
488,992$ 2,454,007

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
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 11 and 18)
Accrued retirement benefits
For directors and audit & supervisory board members
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
(801,480 shares in 2017 and 3,995,515 shares in 2016)
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

2016

Millions of yen

Thousands of
U.S. dollars(Note 4)

2017

2017

¥ 12,569
940¥ 11,908
4,789$ 106,141
42,687

107
53,727
1,461
18,984
1,456
8,687
20,540118,475

153
47,5901,348
17,004866
4,655
20,072
108,3901,364
424,191
12,015
151,564
7,719
41,492
178,911966,129

37,83135,755

318,700

108
11,315230
13,83663,322

115
10,620175
12,671
59,337

1,025
94,661
1,560
112,942
528,897

19,694
5,467
84,554

19,694
5,467
77,748

175,541
48,730693,003(2,302)
107,413(2,308)100,601(20,572)
896,702

3,830
337
51
(1,609)2,609
1,318
111,340¥293,138

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

56,877(2,683)(1,515)(1,881)50,78911,472
958,971$2,454,007

See notes to consolidated financial statements.

260825̲JSW̲AR2017̲BH.indd 26-27

27

2017/09/14 16:09

Consolidated Statement of I n comeConsolidated Statement of Comprehensive I n come

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Income

Consolidated Statement of Comprehensive Income

For the years ended March 31, 2017 and 2016

For the years ended March 31, 2017 and 2016

2016

Millions of yen

Thousands of
U.S. dollars(Note 4)

2017

2017

Net sales¥223,301¥212,469$1,893,832

Loss

Cost of sales (Note 12)

179,197

170,695

1,521,481

Other comprehensive income:

44,103

41,773372,342

Unrealized holding gain (loss) on securities

29,68029,432

262,341

Unrealized gain (loss) from hedging instruments

14,423

12,340109,992

Translation adjustments

Gross profit
Selling, general and administrative expenses (Note 12)
Operating income
Other income (expenses):

772

653

5,820

Total other comprehensive income (Note 14)

Interest expense

(345)

(273)

(2,433)Comprehensive income(35,447)(17,874)(159,319)

Total comprehensive income attributable to:

Other, net (Note 13)
Loss before income taxes

Thousands of
U.S. dollars(Note 4)

2016

2017

2017

¥(16,409)¥(4,954)$(44,157)(5,364)

2,551

22,738531(638)(5,687)

Remeasurement of retirement benefit plans

Interest and dividend income
Impairment loss (Note 9)

Millions of yen(1,451)(687)(6,124)(36,472)(18,181)(162,055)(22,049)(5,841)(52,063)

(229)

(251)

(2,237)(1,231)

1,398

12,461(6,294)

3,059

27,266¥(22,703)¥(1,894)$(16,882)

Shareholders of The Japan Steel Works, Ltd.

¥(22,831)¥(1,879)$(16,748)

Non-controlling interests

¥

¥

$

127

(14)

(125)

See notes to consolidated financial statements.

Income taxes (Note 22):
Current

3,357

2,819

25,127

Deferred(8,996)(3,706)(33,033)

Loss (Note 28)(16,409)(4,954)(44,157)

191

14

125

¥ (16,600)¥ (4,968)

Profit attributable to non-controlling interests
Loss attributable to shareholders of The Japan Steel Works, Ltd.

$(44,282)

See notes to consolidated financial statements.

280825̲JSW̲AR2017̲BH.indd 28-29

29

2017/09/14 16:09

Consolidated Statement of Changes in Net Assets

Consolidated Statement of Cash Flows

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

The Japan Steel Works, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Changes in Net Assets

Consolidated Statement of Cash Flows
For the years ended March 31, 2017 and 2016

For the years ended March 31, 2017 and 2016
Millions of yen

Shareholders’ equity

Commonstock

CapitalsurplusRetainedearnings

Balance at April 1, 2015
Changes during the year
Cash dividends paid
Loss attributable to shareholdersof The Japan Steel Works, Ltd.
Purchase of shares of
consolidated subsidiaries
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, 2016

¥19,694¥5,425¥103,330

Balance at April 1, 2016
Changes during the year
Cash dividends paid
Loss attributable to shareholdersof The Japan Steel Works, Ltd.
Purchase of shares of
consolidated subsidiaries
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

Treasury stock(Note 15)

Total
shareholders’equityUnrealized
holding gain
(loss) on
securities

Unrealized gain
(loss) fromhedging
instruments

Translation
adjustments¥ (731)¥127,718¥ 9,195¥(194)

¥ 239

Total
Remeasurement accumulated
otherbenefit plansadjustments comprehensive Non-controllingincomeinterest(Note 21)

¥ (399)¥ 8,839¥1,676Total
net assets¥138,234(1,653)(1,653)(1,653)(16,600)(16,600)(16,600)45(2,940)842

45(2,940)
842

—

—

45
(2,940)
1,368

(525)
521

(521)

—
¥19,694

41¥5,467(18,775)¥ 84,554(1,571)¥(2,302)(20,305)¥107,413(5,364)(5,364)¥ 3,830

531
531
¥ 337

(187)
(187)
¥ 51

(1,210)(1,210)¥(1,609)(6,230)(6,230)¥ 2,609

(358)
(358)
¥1,318(6,588)(26,894)¥111,340¥19,694¥5,467¥ 84,554¥(2,302)¥107,413¥ 3,830

¥ 337

¥ 51

¥(1,609)¥ 2,609¥1,318¥111,340(1,837)(1,837)(1,837)(4,968)(4,968)(4,968)

—
(5)
0

—
(5)
0

—

—

(5)
0

(0)

—
¥19,6940(0)—¥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

Thousands of U.S. dollars (Note 4)

Shareholders’ equity

Balance at April 1, 2016
Changes during the year
Cash dividends paid
Loss attributable to shareholdersof The Japan Steel Works, Ltd.
Purchase of shares of
consolidated subsidiaries
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

Accumulated other comprehensive income

Commonstock

CapitalsurplusRetainedearnings

Treasury stock(Note 15)

Total
shareholders’equity$175,541$48,730$753,668$(20,519)$957,420—$175,541

Unrealized gain
(loss) fromhedging
instruments

Translation
adjustments$34,139$ 3,004

$ 455

Total
Remeasurement accumulated
otherbenefit plansadjustments comprehensive Non-controllingincomeinterest(Note 21)$(14,342)$23,255$11,748

Total
net assets$992,424(16,374)(16,374)(44,282)(44,282)(44,282)

—
(45)
0

—
(45)
0

—

—

(45)
0

0

(0)

—
$48,730(60,665)$693,003

See notes to consolidated financial statements.

Unrealized
holding gain
(loss) on
securities(16,374)(0)Millions of yen

Thousands of
U.S. dollars(Note 3)

2016

2017

2017

¥(22,049)
10,84335,447
(772)
345
0
(112)
892
(54)
(4,515)¥ (5,841)
8,058
17,874
(653)
273
0
(78)
150
—
(4,032)$ (52,063)
71,825
159,319(5,820)
2,433
0
(695)
1,337
—
(35,939)(11,637)
11,5572,363
122
22,431771(336)(3,144)
19,721(122)(2,987)1,022
1,393
15,056660(273)(3,420)12,023(1,087)(26,624)
9,110
12,416134,201
5,883(2,433)(30,484)
107,166(964)
757(9,976)
322
839
(11)
(378)
0
14
(531)
(2,293)
87(12,135)(1,001)
545(13,348)
131
0
(345)
(67)
0
10
—
—
494
(13,580)(8,922)
4,858(118,977)
1,168
0(3,075)
(597)
0
89
—
—
4,403
(121,045)

313
30,900(11,105)(10,000)(1,653)(2,940)
(724)
(1)
4,788
(68)
12,30649,152¥ 61,458

(660)
2,308
(320)
—
(1,837)
(5)
(673)
(16)
(1,203)(26)(2,787)61,458¥ 58,671(5,883)
20,572(2,852)—(16,374)(45)(5,999)(143)(10,723)(232)(24,842)
547,803$ 522,961

Accumulated other comprehensive income(45)$(20,572)(60,710)$896,702

22,73822,738$56,877(5,687)(5,687)$(2,683)(1,979)(1,979)$(1,515)

12,461
12,461$ (1,881)

27,53427,534$50,789

(276)
(276)
$11,472

27,257(33,452)$958,971

Operating activities
Loss 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
Loss on disposal of tangible and intangible assets
Gain on sales of investment securities
Decrease in provision for loss on wind power generator businessChanges in operating assets and liabilities:
Trade assets (Note 18)
Trade liabilities
Inventories (Note 5)
Other
SubtotalInterest 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 receivableCollection of long-term loans receivable
Payments for transfer of business
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
Redemption of bonds
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.

300825̲JSW̲AR2017̲BH.indd 30-31

31

2017/09/14 16:09

Notes to Consolidated Financial Statements

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 companies
controlled 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, 2017, the numbers of consolidated subsidiaries, and subsidiaries and affiliates accounted for by the equity
method were 32 and 1 (32 and 1 in 2016), respectively.
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

320825̲JSW̲AR2017̲BH.indd 32-33

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 the
consolidated 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 determinedprincipally 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. Nonmarketable 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.

(j) 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(k) 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.
(l) 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 the
average 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.
(m) 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.
(n) Research and development expenses
Research and development expenses are charged to income whenincurred.
(o) 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 percentage-ofcompletion method. The percentage of completion is calculated at
the cost incurred as a percentage of the estimated total cost. The
completed-contract method is applied to contracts for which thepercentage of completion cannot be reliably estimated.

(p) 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.
(q) Consumption tax
Accounting treatment of consumption tax is the tax exclusion
method.
(r) 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.
(s) Provision for directors’ retirement benefits
Provision for directors’ retirement benefits is provided based on
estimated amounts determined by internal rules.
(t) Accounting changes
The Company’s domestic consolidated subsidiaries adopted“Practical Solution on a change in depreciation method due to Tax
Reform 2016” (ASBJ PITF No.32, June 17, 2016) as a result of revisions to the Corporate Tax Act of Japan. Accordingly, the depreciation method for both facilities attached to buildings and othernon-building structures acquired on or after April 1, 2016 waschanged from the declining-balance method to the straight-line
method. The effect of this adoption on the accompanying consolidated financial statements for the year ended March 31, 2017 isimmaterial.

3. Additional Information
The Company and its domestic consolidated subsidiaries adopted“Revised Implementation Guidance on Recoverability of Deferred
Tax Assets” (ASBJ Guidance No. 26 of Mar 28, 2016) effective from
April 1, 2016.

4. 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¥112.19 = U.S.$1.00, the approximate rate of exchange prevailingon March 31, 2017. This translation should not be construed as arepresentation that all amounts shown could be converted into
U.S. dollars at such rate.

(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.

33

2017/09/14 16:09

Notes to Consolidated Financial Statements

5. Inventories
Inventories at March 31, 2017 and 2016 consisted of the following:
Millions of yen

Thousands of
U.S. dollars

2017

2017

2016

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

¥

283
1,703
58,878

6,328¥67,195

¥

278
2,080
58,037

5,755¥66,152$

2,478
18,540517,310

51,297$589,643

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 ¥191 million ($1,702 thousand) at
March 31, 2017 and ¥172 million at March 31, 2016.

6. Assets pledged as collateral
The assets pledged as collateral for issuance of Performance Bondat March 31, 2017 and 2016 were as follows:

Time deposit

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

—

¥96

$856

Note: The assets pledged as collateral were no corresponding obligations at
March 31, 2017.

7. Depreciation
Depreciation expense on property, plant and equipment for theyears ended March 31, 2017 and 2016 were as follows:

Depreciation expense

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥10,669¥7,858$70,0428. 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, 2017 and2016 are summarized as follows:

Accumulated advanced
depreciation expense

340825̲JSW̲AR2017̲BH.indd 34-35

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥1,283¥1,298

9. Impairment Loss
Current 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

Location

Buildings, structures,
machinery andequipment, land,
construction inprogress, etc.
Buildings, structures,
machinery andequipment, land,etc.

Muroran, Hokkaido

Muroran, Hokkaido
and Guangdong,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 $ 79,169 thousand
Machinery, equipment andvehicles
6,761
60,264Tools, furniture and fixtures
352
3,138
Land
576
5,134
Leased assets (property,
plant and equipment)
336
2,995
Construction in progress
898
8,004
Leased assets (intangible
assets)
8
71
Other (intangible assets)
57
508
Total
¥17,874$159,319(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, 2015 to March 31, 2016)
The Group recorded an impairment loss on the following groupsof assets in the prior fiscal year:
Use

Steel and Energy
Products:
Business assets

Steel and Energy
Products:
Business assets atinvestee subsidiary

Asset type

10. Contingent Liabilities
Contingent liabilities at March 31, 2017 and 2016 consisted of thefollowing:
Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

75

¥ 87

$ 775

421

358

3,191

62

42

374

1,107
50

978
25

8,717
223

Location

Buildings, structures, Muroran, Hokkaido
machinery andequipment, land,
construction inprogress, etc.
Machinery and
Muroran, Hokkaido
equipment, etc.
and Guangdong,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¥19,744 million
Machinery, equipment andvehicles
10,764Tools, furniture and fixtures
401
Land
770
Leased assets (property,
plant and equipment)
232
Construction in progress
3,439
Leased assets (intangible
assets)16
Other (intangible assets)
79
Total¥35,447

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¥

11. Short-Term Borrowings and Long-Term Debt
All short-term borrowings, with interest at annual rates ranging
from 0.3073% to 1.4750% at March 31, 2017 and 0.3490% to
1.4750% at March 31, 2016, were unsecured.
Long-term debt at March 31, 2017 and 2016 were as follows:

Loans from banks andinsurance companies withinterest at annual rates
ranging from 0.0030% to
1.0960%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

2016

2017

2017

¥37,127¥39,116$348,659

(320)
1,644

(4,215)
1,428(37,570)
12,728

(620)

(574)

(5,116)¥37,831¥35,755$318,700(3) Calculation method for recoverable amounts
Recoverable amounts of the groups of assets are calculated atvalue in use. Future cash flows are discounted at 7.52%.

$11,57035

2017/09/14 16:09

Notes to Consolidated Financial Statements

The aggregate annual maturities of long-term debt and leaseobligations subsequent to March 31, 2017 are summarized asfollows:
Millions of yen

Thousands of
U.S. dollars Millions of yen

Year ending March 31,

Long-term loans

2018
2019
2020
2021
2022
2023 and thereafter¥ 4,215
132
60
5,000
1,800
27,908

Thousands of
U.S. dollars

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, 2017 and 2016:

Lease obligations
2016$ 37,570
1,177
535
44,567
16,044
248,757

¥574
400
274
131
40
7

$5,116
3,565
2,442
1,168
357
62

12. Research and Development Expenses
Research and development expenses included in manufacturingcosts, and selling, general and administrative expenses for theyears ended March 31, 2017 and 2016 were as follows:

2016

Research and development
expenses¥4,292Millions of yen

Thousands of
U.S. dollars

2017

2017

¥4,237$37,766

13. Other Income (Expenses)—Other, Net
The details of “Other, net” in “Other income (expenses)” for theyears ended March 31, 2017 and 2016 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
Other, net
Total

36

0825̲JSW̲AR2017̲BH.indd 36-37

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥ (205)(0)¥ (91)(0)$ (811)
(0)

117

93

829

126
(23)

—
(272)

—
(2,424)

(892)
(573)
¥(1,451)

(150)
(266)
¥(687)(1,337)(2,371)$(6,124)

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

2017

2017

15. Supplementary Information for Consolidated Statementof Changes in Net Assets
Year ended March 31, 2017(a) Information regarding the number and type of sharesissued and treasury stock:
Number of sharesYear ended
March 31,2016¥(8,031)6¥ 3,655—$32,579—(8,024)
2,660

3,655
(1,104)32,579(9,840)(5,364)

2,551

22,738

774
(242)

(921)
282

(8,209)
2,514

531

(638)

(5,687)

(229)
(229)

(251)
(251)

(2,237)(2,237)(2,122)

1,023

9,118

381

1,004

8,949

(1,741)
509

2,028
(629)

18,076(5,607)(1,231)

1,398

12,461¥(6,294)¥ 3,059$27,266

Shares issued:
Common stock 371,463,036
Treasury stock:
Common stock(Note 1 and 2)
3,995,515

Increaseduringthe year

Decreaseduringthe year— 297,170,429

5,589

3,199,624

Year ended
March 31,2017

74,292,607

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
Common stock

Type of shares:
Total amount ofdividends:¥918 million ($8,183 thousand)
Dividends per share: ¥2.5 ($0.022)
Cut-off date:
March 31, 2016
Effective date:June 27, 2016
Resolution:

Meeting of Board of Directors held on
November 7, 2016
Common stock

Type of shares:
Total amount ofdividends:¥918 million ($8,183 thousand)
Dividends per share: ¥2.5 ($0.022)
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
Common stock

Type of shares:
Total amount ofdividends:¥918 million ($8,183 thousand)
Dividends per share: ¥12.5 ($0.111)
Cut-off date:
March 31, 2017
Effective date:June 28, 2017
Source of dividends: Retained earnings

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.

Year ended March 31, 2016(a) Information regarding the number and type of sharesissued and treasury stock:
Number of sharesYear ended
March 31,2015

Shares issued:
Common stock 371,463,036
Treasury stock:
Common stock(Note 1 and 2)
1,192,297

Increaseduringthe year—

5,177,789

Decreaseduringthe yearYear ended
March 31,2016

— 371,463,036

2,374,571

3,995,515

Notes: 1. Increase of 5,177,789 ordinary shares held in treasury was attributableto purchase of 5,173,000 shares under a resolution approved at theBoard of Directors meeting on May 26, 2015, purchase of 4,782 sharesthat was less than one share unit, and acquisition of 7 shares resulting
from fractional shares arising from an exchange of shares in making
Meiki Co.,Ltd. a wholly owned subsidiary of the Company.
2. Decrease of 2,374,571 ordinary shares held in treasury attributable tothe distribution of 2,373,831 treasury shares resulting from theexchange of shares for making Meiki Co.,Ltd. a wholly owned subsidiaryof the Company, and sale of 740 shares resulting from the sale of sharesto shareholders at their request.

37

2017/09/14 16:09

Notes to Consolidated Financial Statements(b) Dividends(i) Dividends paid to shareholders
Resolution:

Annual general meeting ofshareholders held on June 24, 2015
Common stock

Type of shares:
Total amount ofdividends:¥740 million
Dividends per share: ¥2
Cut-off date:
March 31, 2015
Effective date:June 25, 2015
Resolution:

Lease assets
Lease obligations

Meeting of Board of Directors held on
November 2, 2015
Common stock

Type of shares:
Total amount ofdividends:¥912 million
Dividends per share: ¥2.5
Cut-off date:
September 30, 2015
Effective date:
December 3, 2015(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 24, 2016
Common stock

Type of shares:
Total amount ofdividends:¥918 million
Dividends per share: ¥2.5
Cut-off date:
March 31, 2016
Effective date:June 27, 2016
Source of dividends: Retained earnings

380825̲JSW̲AR2017̲BH.indd 38-39

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥62,018322¥59,801189$533,033
1,685

(881)

(1,320)(11,766)¥61,458¥58,671$522,961

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥581
631

¥438
465

$3,9044,145

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

Millions of yen

Thousands of
U.S. dollars

20182019 and thereafter
Total

¥132
195
¥327

$1,177
1,738$2,915

Year ended March 31, 2016
Future minimum lease payments subsequent to March 31, 2016
under non-cancelable operating leases are summarized asfollows:
Year ending March 31,

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, 2017 and 2016 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 consolidated
statement of cash flows(b) Significant transactions without cash flows
Assets and liabilities corresponding to finance lease transactions
that have been recorded by the Company and its domestic
consolidated subsidiaries at March 31, 2017 and 2016 were as
follows:

20172018 and thereafter
Total

Millions of yen

¥186
284
¥470

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. These
securities 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 exchange
contracts 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.
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).
(c) Risk management for financial instruments(i) Monitoring of credit risk (the risk that customers or
counterparties may default)
In accordance with the internal policies of the Company for
managing credit risk arising from receivables, each related
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 Company’s
internal policies and methods.
The Company also believes that the credit risk of derivatives is insignificant as it enters into derivative transactions
only with financial institutions which have a high credit-rating.

(ii) Monitoring of market risk (the risk arising from fluctuations inforeign exchange rates, interest rates and others)
For trade receivables and payables denominated in foreign
currencies, the Company identifies the foreign currency
exchange risk for each currency on a monthly basis and enters
into forward foreign exchange contracts to hedge such risk. In
order 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 18 Derivative
Transactions are not necessarily indicative of the actual market risk
involved in derivative transactions.

39

2017/09/14 16:09

Notes to Consolidated Financial Statements

Estimated Fair Value of Financial Instruments
Carrying value of financial instruments on the consolidatedbalance sheet as of March 31, 2017 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, 2017
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¥ 59,801¥ 59,801¥ —49,42049,420(0)32,787¥142,009

32,787¥142,009—¥ (0)¥ 47,744
11,908¥ 47,744
11,908

¥ —
—

4,215
34,901¥ 98,768
¥
(472)

4,235
35,385¥ 99,274
¥
(472)

20
484
¥505
—

Thousands of U.S. dollars

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$ 533,033$ 533,033

440,503

440,503292,245$1,265,790$ 425,564
106,141

292,245$1,265,790$ 425,564
106,141

37,57037,748311,088
315,402$ 880,364 $ 884,874$(4,207) $(4,207)

Difference

$

—
(0)

$

$

—
(0)

—
—

178
4,314
$4,501—

Year ended March 31, 2016
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¥ 62,018¥ 62,018¥—

52,73852,738(0)29,121¥143,878

29,121¥143,877—¥ (0)¥ 53,835
12,569¥ 53,835
12,569¥——320
36,807¥103,531¥
486

322
36,881¥103,608
¥
486

2
73
¥76
—

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 18, Derivative Transactions, of the notes tothe consolidated financial statements.
(ii) Financial instruments for which it is extremely difficult todetermine the fair value

2016(*) The value of assets and liabilities arising from derivatives is shown at net value,with the amount in parentheses representing net liability position.

(i) Method to determine the estimated fair value of financial
instruments and other matters related to securities 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 remaining
periods of the receivables based on the present value using
discount rates determined by the period to maturity andcredit 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.

Unlisted stocks¥1,217

Millions of yen

Thousands of
U.S. dollars

2017

2017

¥1,552$13,834

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.

Thousands of U.S. dollars

Cash on hand andin banks
Trade notes andaccounts receivable
Total

Due inone yearor less

Due after
one yearthroughfive years$533,033$——

438,435$971,468

2,068$2,068——Due inone yearor less

Due after
one yearthroughfive years

Due after
five years¥ 62,018¥ ——52,576¥114,594

162
¥162

—
—

Year ended March 31, 2016
Millions of yen

Cash on hand andin banks
Trade notes andaccounts receivable
Total(iv) The redemption schedule for long-term debt
Year ended March 31, 2017
Millions of yen(iii) Redemption schedule for receivables and securities withmaturities at March 31, 2017 and 2016.
Year ended March 31, 2017
Millions of yen

Cash on hand andin banks
Trade notes andaccounts receivable
Total

Due inone yearor less

Due after
one yearthroughfive years

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

232
¥232

—
—

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

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

Long-term
loans

Lease
obligations$ 37,570
1,177
535
44,567
16,044
248,757$5,116
3,565
2,442
1,168
357
62

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

400825̲JSW̲AR2017̲BH.indd 40-41

41

2017/09/14 16:09

Notes to Consolidated Financial Statements

Year ended March 31, 2016

March 31, 2016(i) Currency-related transactions
Year ended March 31, 2017

Millions of yen

Long-termloans

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

¥

320
3,175
1,092
40
5,000
27,500

¥620
482
306
181
49
3

19. Securities
Other securities:
March 31, 2017
Millions of yen

Acquisition
cost

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

Carrying
amountMillions of yen

Leaseobligations

Unrealized
gain (loss)

Acquisition
cost

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

Carrying
amountMillions of yen

Unrealized
gain (loss)¥12,987¥21,432¥ 8,445

10,217¥23,204

7,283¥28,716(2,934)¥ 5,511When 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.

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

9,835¥23,215¥24,189

8,194¥32,384¥10,809(1,640)¥ 9,168

Thousands of U.S. dollars

Acquisition
cost

Carrying
amountUnrealized
gain (loss)

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

¥

¥

¥

Accounts payable

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 receivableYear ended March 31, 2017
None applicableYear ended March 31, 2016
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.

Over
one year

82
272
359

23
—
236

0
0
(68)

Thousands of U.S. dollars

20. Derivative Transactions(a) Derivatives not subject to hedge accounting¥13,379

Contract
amountContract
amountOver oneyear

Fair value$122,257
6,141
27
89

$15,064
1,551——$(3,663)
53
(0)
(0)

$

$

$

Accounts payable
731
2,424
3,200

205
—
2,104

0
0
(606)

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

Year ended March 31, 2016
Millions of yen

Carrying amountexceeding theacquisition cost:
StocksCarrying amount notexceeding theacquisition cost:
StocksTotal$119,253

87,664$206,926$215,607

73,037$288,653$ 96,345(14,618)$ 81,719

Hedge accounting method

Type of derivative

Principal items hedged

Allocation method

Foreign exchange forward contracts
Sell:
U.S. dollars
Euros
Sterling pound
Foreign exchange forward contracts
Buy:
U.S. dollars
Euros
Sterling pound
Swiss franc

Accounts receivable

Contract
amountOver oneyear

Fair value¥13,805
715
—

¥210
158
—

¥587
17
—

—
—
—
—

¥ (52)(21)(44)—

Accounts payable
¥

922
388
758
—

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

420825̲JSW̲AR2017̲BH.indd 42-43

43

2017/09/14 16:09

Notes to Consolidated Financial Statements

The changes in the retirement benefit obligation for the years
ended March 31, 2017 and 2016 are as follows:(ii) Interest-related transactions
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 rate

Contract
amountOver
one year

Fair value¥29,000¥25,000

(*)

708

708

(*)

Long-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

Contract
amount$258,490

6,311

Over
one year$222,836

6,311

Fair value

2016

Balance at the beginningof the year
Service cost
Interest cost
Actuarial gain and loss
Retirement benefit paid
Balance at the endof the year(*) 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.

Year ended March 31, 2016

Thousands of
U.S. dollars

2017

2017

¥20,489
1,030
197
1,097
(1,804)¥21,011
1,153
109
(627)
(1,518)$187,281
10,277972(5,589)(13,531)¥21,011¥20,128$179,410

The changes in plan assets for the years ended March 31, 2017 and2016 are as follows:

(*)

(*)

Millions of yen

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

2016

2017

2017

¥16,101¥14,729$131,286

322(1,025)

294
396

2,621
3,530

422
(1,091)

467
(918)

4,163
(8,183)¥14,729¥14,969$133,425

Millions of yen

Hedge accounting method

Type of derivative

Principal items hedged

Special treatment forinterest rate swaps

Receive/floating and pay/fixedLong-term borrowings

Contract
amount¥29,000Over
one year¥29,000

Fair value

The changes in retirement benefit liability accounted for using thesimplified method for the years ended March 31, 2017 and 2016
are as follows:(*)(*) Since interest rate swap contracts accounted for by the special treatment for interest rate swaps are treated together with the long-term borrowings subject to hedging,
the estimated fair value of such interest rate swap contracts is included in the estimated fair value of the corresponding long-term borrowings.
Note: 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

440825̲JSW̲AR2017̲BH.indd 44-45

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.

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

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥3,436¥3,161$28,175

686
(757)
(203)

646
(629)
(187)

5,758
(5,607)(1,667)¥3,161¥2,989$26,642

The following table sets forth the funded status of the plans andthe amounts recognized in the consolidated balance sheets as ofMarch 31, 2017 and 2016 for the Company’s and the consolidated
subsidiaries’ defined benefit plans:

2016

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¥ 20,145(15,769)
4,375

Millions of yen

Thousands of
U.S. dollars

2017

2017

¥ 19,201 $ 171,147(16,079) (143,319)
3,121
27,819

5,067

5,026

44,799

9,442
11,315(1,872)

8,148
10,620(2,472)

72,627
94,661(22,034)¥ 9,442¥ 8,148$ 72,627

The components of retirement benefit expense for the years
ended March 31, 2017 and 2016 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

2016

2017

2017

¥1,030197¥1,153
109$10,277
972

(322)

(294)

(2,621)

397

1,019

9,083

702
49

646
39

5,758
348

¥2,054¥2,673$23,82645

2017/09/14 16:09

Notes to Consolidated Financial Statements

The components of retirement benefits plans adjustments
included in other comprehensive income (before tax effect) for theyears ended March 31, 2017 and 2016 are as follows:

Actuarial gain and loss
Total

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥(1,741)¥(1,741)¥2,028¥2,028$18,076$18,076

The components of retirement benefits plans adjustments
included in accumulated other comprehensive income (before tax
effect) as of March 31, 2017 and 2016 are as follows:

Unrecognized actuarial
gain and loss
Total

Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥(2,359)¥(2,359)¥(331)¥(331)$(2,950)$(2,950)

The fair value of plan assets, by major category, as a percentage of
total plan as of March 31, 2017 and 2016 as follows:
March 31,

Bonds
StocksCash on hand and in banks
General account
Other
Total

2016

2017

31%
38
0
20
11
100%

30%
42
0
18
10
100%

Retirement benefit trust set for the lump-sum and corporate pension plans accounts for 19% and 17% of the total plan assets, forthe years ended March 31, 2017 and 2016, respectively.
The expected return on assets has been estimated based on the
anticipated allocation to each asset class and the expected longterm 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

2016

2017

0.59%
2.00

0.68%
2.00

Contributions made to defined contribution plans for the years
ended March 31, 2017 and 2016 were ¥59 million ($526 thousand)and ¥61 million, respectively.

460825̲JSW̲AR2017̲BH.indd 46-47

22. Income Taxes
The significant components of the Company’s deferred tax assets
and liabilities at March 31, 2017 and 2016 were as follows:
Millions of yen

Thousands of
U.S. dollars

2017

2017

138 $
912
685

1,230
8,129
6,106

2016

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
Less allowance for doubtful
accounts
Asset retirement obligations
Percentage-ofcompletion method
Tax 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

¥

176
951
1,081

¥

105

105

936

1,018

1,036

9,234

193
11,0264,921

194
15,3504,363

1,729
136,82138,889

670

884

7,879

390

911

8,120

2,667

1,429

12,737

216
393

155
400

1,382
3,565

544
2,217

483
2,327

4,305
20,742

886
100

500
172

4,457
1,533

720
704
28,986(4,194)
24,792677
793
31,525(4,288)27,236

6,034
7,068
280,997(38,221)242,767

The reconciliation between the effective tax rates reflected in the
consolidated statement of income and the statutory tax rates forthe years ended March 31, 2017 and 2016 were as follows:
2016

No reconciliation items areapplicable for the year as theCompany recorded net loss
before income taxes

24. Asset Retirement Obligations
The following table presents the changes in asset retirement obligations for the years ended March 31, 2017 and 2016:
Millions of yen

Thousands of
U.S. dollars

2016

2017

2017

¥1,295¥1,307$11,650

—
21
(2)
(6)

16
21
(23)
(1)

143
187
(205)
(9)

¥1,307¥1,320$11,766

2017

No reconciliation items areapplicable for the year as theCompany recorded net loss
before income taxes

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

23. Business Combinations
None applicable

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, 2017 and2016.

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

1,342

1,279

11,400

181
937

51
765

455
6,819

232

230

2,050

2,579
250
221
5,744
¥19,048

3,298
29,397
39
348
232
2,068
5,897
52,563¥21,338 $190,195

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¥ 1,883
3,751
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

47

2017/09/14 16:09

Notes to Consolidated Financial Statements

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

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

Millions of yen

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

AdjustmentsandEliminations

Total$456,431
49,479505,919$ (24,904)$1,420,608
7,648
1,428,256$ 135,333$ 16,784
33,43450,227$ 8,548$1,893,832
90,5701,984,401$ 118,986$—(90,570)(90,570)$ (8,985)$1,893,832—
1,893,832$ 109,992$334,798
36,92040,770$1,102,977
30,46642,268$105,874
1,836
392$1,543,658
69,231
83,439$910,340
811
1,248$2,454,007
70,042
84,696

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.

Year ended
March 31,2017

Steel andEnergyProducts

Industrial
Machinery
Products

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

Year ended
March 31,2017

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate
and OtherBusinesses

Sales tothird parties$456,431 $1,420,608

Year ended
March 31,2016

Steel andEnergyProducts

Sales tothird parties

Total¥212,469(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.
(d) Information on loss on impairment of fixed assets
Impairment losses on fixed assets by reportable segment for theyears ended March 31, 2017 and 2016 are summarized as follows:
Millions of yen

Thousands of U.S. dollars

Year ended
March 31,2017

Steel andEnergyProducts

Impairment
loss¥17,874

Total

Year ended
March 31,2017

Steel andEnergyProducts¥223,301

Impairment
loss$159,319

Year ended
March 31,2016

Steel andEnergyProducts

Impairment
loss¥35,447

Total$16,784 $1,893,832

Industrial Real Estate
Machinery and Other
Products Businesses—

Sales tothird parties¥74,854

Real Estate
and OtherBusinesses¥144,358¥4,087

Industrial Real Estate
Machinery and Other
Products Businesses——

Millions of yen

Reportable segments

Year ended March 31, 2016

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

Consolidated
2016¥144,358
1,883
146,242¥ 12,391¥ 4,087
3,362
7,449¥ 2,018¥223,301
9,930
233,232¥ 15,109¥—(9,930)(9,930)¥ (685)¥223,301—
223,301¥ 14,423¥60,256
7,294
9,053

¥124,383
3,009
4,940

¥12,055271
67¥196,694
10,576
14,062¥96,44392(51)¥293,138
10,66914,0100825̲JSW̲AR2017̲BH.indd 48-49$159,319

Japan
China
OthersConsolidated¥100,304
30,29992,697¥223,301

Millions of yen

Thousands of
U.S. dollars

2017

2017

Industrial Real Estate
Machinery and Other
Products Businesses

—

—

Total

¥35,447¥103,575 $ 923,211
40,852
364,132
68,041
606,480¥212,469 $1,893,832

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

Notes: 1. Adjustments and eliminations for segment profit of ¥685 million 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 ¥96,443 million include offset of inter-segment debt and credit, and corporate assets which are not allocable
to a reportable segment.
3. Adjustments and eliminations for depreciation and amortization of ¥92 million include depreciation and amortization for corporate assets.
Adjustments and eliminations for capital expenditures of ¥51 million include capital expenditures for corporate assets.

48

Total

Millions of yen(b) Geographical information(i) Sales¥74,854
4,684
79,539¥ 699¥17,874

Thousands of U.S. dollars

Millions of yen

Industrial
Machinery
Products—

Total(ii) Tangible assets
The Company has omitted the disclosure of tangible assets bycountry or region as of March 31, 2017 and 2016 because theamount of tangible assets in Japan accounted for more than
90% of the carrying amount in the consolidated balance sheet.

49

2017/09/14 16:09

Notes to Consolidated Financial Statements

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

Independent Auditor’s Report(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, 2017 and2016 by reportable segment:
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

Thousands of U.S. dollars

Year ended
March 31,2017

Amortization
Balance as ofMarch 31

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate Adjustments
and OtherandBusinesses Eliminations—$1,774——$1,774

—

5,856

—

—

5,856

Total

Millions of yen

Year ended
March 31,2016

Amortization
Balance as ofMarch 31

Steel andEnergyProducts

Industrial
Machinery
Products

Real Estate Adjustments
and OtherandBusinesses Eliminations

—

¥174

—

—

¥174

—

912

—

—

912

Total

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, 2017 and 2016 and for the years
then ended were as follows:
Yen

U.S. dollars

2017

2017

¥ (226.62) ¥ (67.61)
1,497.04
1,446.44$ (0.60)
12.89

2016

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 been
carried out at the beginning of fiscal 2016.

29. Subsequent Events(Significant subsequent events)
None applicable(f) Information on gain on negative goodwill
Year ended March 31, 2017
None applicableYear ended March 31, 2016
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 if
certain conditions are met.

50

0825̲JSW̲AR2017̲BH.indd 50-51

51

2017/09/14 16:09

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

24,719Stock Listings

Tokyo

Transfer Agent and Registrar

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

Corona(near Los Angeles)
Shanghai
ShenzhenTaipeiHong Kong

New York
HoustonManilaKuala Lumpur
Singapore
JakartaFoundation

November 1, 1907

Paid-in Capital¥19,694 million

Employees

2,266 (Consolidated 5,239)

AuditorErnst & Young ShinNihon LLC
Hibiya Kokusai Bldg.,
2-3, Uchisaiwai-cho 2-chome,
Chiyoda-ku, Tokyo, Japan(as of March 31, 2017)

Major Shareholders (holding %)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.
BBH for the Advisor’s Inner Circle Fund II/Kopernik Glo All–cap Fund
Mitsui Sumitomo Insurance Co., Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Nippon Steel & Sumitomo Metal Corp.
Japan Trustee Services Bank, Ltd. (Trust Account 5)
State Street Bank and Trust Company

7.58%
6.24%
3.85%
2.99%
2.53%
2.40%
2.22%
1.78%
1.73%
1.69%

(as of March 31, 2017)
Note: The shareholding ratios are calculated after deducting 801,480 treasury shares from thetotal number of shares issued.

Classification of Shareholders by Percentage ofShares Held (As of March 31, 2017)

Domestic
Head Office

Hiroshima Office

Muroran 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

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

4, Chatsumachi, Muroran-shi,
Hokkaido 051-8505, Japan
Phone: +81-143-22-0143 Facsimile: +81-143-24-3440

Nagoya Office

Fukuoka Office

Hiroshima Plant

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

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

6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-8602, Japan
Phone: +81-82-822-3181 Facsimile: +81-82-285-2038

Osaka Office

Yokohama Plant

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

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

Overseas
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
Detroit Office24387 Halstead Road Unit B, Farmington Hills,
MI 48335, U.S.A.
Phone: +1-248-536-0288 Facsimile: +1-212-490-2575
Houston Office9801 Westheimer Road, Suite 220 Houston, TX 77042, U.S.A.
Phone: +1-713-588-1303 Facsimile: +1-713-588-1322

Japan Steel Works Europe GmbHFriedrichstr. 19, 40217 Düsseldorf, Germany
Phone: +49-211-3116660 Facsimile:+49-211-31166640

THE JAPAN STEEL WORKS (SINGAPORE) PTE. LTD.
17, Gul Lane, Singapore 629413, Republic of Singapore
Phone: +65-6861-4511 Facsimile: +65-6862-3166

JAPAN STEEL WORKS INDIA PRIVATE LIMITED

Securities
Companies

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

2.73%
Foreign Corporations
and Foreign
Individuals

25.80%
General Companies
and Other
Corporations

15.31%SM PLATEK CO., LTD.

Individuals andOthers

17.75%
Number of
Shares Issued

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, Inc.

74,292,607
shares29, Cheomdan-ro, 181beon-gil, Danwon-gu, Ansan-si, Kyeonggi-do,
Korea
Phone: +82-31-488-3401 Facsimile: +82-31-488-9982

Financial
Institutions

38.41%

Head Office
555 South Promenade Ave., Unit 104 Corona,
CA 92879, U.S.A.
Phone: +1-951-898-0934 Facsimile: +1-951-898-1747
Chicago Office
540 Capital Drive, Suite 130, Lake Zurich, IL 60047, U.S.A.
Phone: +1-847-550-0704 Facsimile: +1-847-550-0725
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, Bldg. 200, Suite 201,
Marietta, GA 30067, U.S.A.
Phone: +1-770-575-0383 Facsimile: +1-678-403-1846

JSW Plastics Machinery (Philippines) Inc.
Unit 802 Alabang Business Tower 1216 Acacia Avenue, Madrigal
Business Park, Alabang Muntinlupa City Metro
Manila 1771, Philippines
Phone: +63-2-478-2533/2534 Facsimile: +63-2-809-6221

520825̲JSW̲AR2017̲BH.indd 52-53

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

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.

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

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.

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

Flat C, 20/F, Young Ya Industrial Bldg., 381-389,
Sha Tsui Road Tsuen Wan, N.T., Hong Kong
Phone: +852-3521-0437 Facsimile:+852-3905-7216

JSW Plastics Machinery (TAIWAN) Corp.

YPK Machine Trading (Shenzhen) Co., Ltd.

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 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
Beijin Branch
Room 622, B Section, Xingfu Plaza, No.3,
DongSanHuan North Road, Chaoyang District,
Beijing, 100027, China
Phone: +86-010-6590-8967 Facsimile: +86-010-6590-8968

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, Tong Fu Yu Industrial Zone, Long Tian She Qu, Keng Zi Ban Shi
Chu, Ping Shan New District, Shenzhen, China
Phone: +86-755-8411-6005 Facsimile: +86-755-8411-5009

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ANNUALR E P O R T
ANNUAL REPORT 20172017
for the year ended March 31, 20170818̲JSW̲AR2017̲FH.indd a-b

2017/09/14 16:07