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Contents
Consolidated Financial Highlights 1
To Our Shareholders and Investors 2
Management’s Discussion and Analysis 6
Consolidated Seven-Year Summary 8
Consolidated Balance Sheets 10
Consolidated Statements of Income 12
Consolidated Statements of Comprehensive Income 13
Consolidated Statements of Changes in Net Assets 14
Consolidated Statements of Cash Flows 16
Notes to Consolidated Financial Statements 17
Independent Auditor’s Report 39
Investor Information 40
Consolidated Financial Highlights
Consolidated Financial
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Highlights
Years ended March 31, 2012, 2011 and 2010
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2012, 2011 and 2010
Millions of yen
(except per share amounts)
Net sales
Net (loss) income
Total assets
Total net assets
2012
¥557,864
(4,868)
627,428
193,485
2011
¥545,353
12,049
663,867
205,095
2010
¥441,486
(61,717)
670,350
205,301
¥(5.39)
1.50
¥13.33
2.00
¥(68.28)
1.00
Net (loss) income per share2
Cash dividends per share2
Thousands of U.S. dollars 1
(except per share amounts)
Percent
change
(2012/2011)
2.3
(5.5)
(5.7)
2012
$6,787,492
(59,229)
7,633,873
2,354,119
(25.0)
$(0.07)
0.02
Notes: 1. Unless indicated otherwise, all dollar figures herein refer to U.S. currency. Yen amounts have been translated into
U.S. dollars, for convenience only, at \82.19=US$1, the effective rate of exchange at March 31, 2012.
2. Per share figures are in yen and U.S. dollars.
Net Sales
Net Income (Loss)
(Billions of yen)
(Years ended March 31)
(Billions of yen)
(Years ended March 31)
40 37.2
720
641.2
649.5
600
32.2
617.4
30
545.4
480
557.9
20
441.5
12.0
10
360
0
’09
’07
’10
’08
’12
’11
240
120
0
-4.9
-25.5
’07
’08
’09
’10
’11
’12
-61.7
Total Net Assets
Net Income (Loss) per Share
(Billions of yen)
(March 31)
400 385.7
361.5
(Yen)
(Years ended March 31)
39.86
40
35.37
30
320
20
260.6
240
205.3
205.1
13.33
10
193.5
160
0
’09
’07
’10
’08
80
0
’07
’08
’09
’10
’11
’12
-28.15
-68.28
1
’12
’11
-5.39
To Our Shareholders and Investors
In the stainless steel field, the Company began
investigating a business merger with Nippon Metal
Industry Co., Ltd. in order to growing ourselves into
a top global stainless steel producer by strengthening
our business base. The companies have agreed on
establishing a holding company via a joint share transfer.
Regarding developments in overseas markets, the
Company is making steady progress on building and
strengthening stainless steel production bases in Asia, as
Bahru Stainless SDN. BHD., which was established in
Malaysia in cooperation with the Spanish firm Acerinox,
S.A., has begun commercial production, and the
Chinese firm Ningbo Baoxin Stainless Steel Co., Ltd.,
which has completed expansion and reinforcement of its
facilities in order to improve productivity and quality
competitiveness.
In the surface treatment field, as part of the Company’
s plan to secure monthly production of 100,000 tons
of highly corrosion-resistant hot-dipped steel sheet
(ZAM®), the Ichikawa Works has begun commercial
production of ZAM®after the modification of one of its
existing coating lines. This means that the Company
now has three production centers for ZAM ®-- Toyo,
Sakai, and Ichikawa. In addition to improving its
productive capacity, the Company has created a product
supply system that can meet customer needs in a more
timely fashion, and will work to further sales of ZAM®.
Also, in an effort to create an optimum company-wide
production system for building materials, coated steel
sheet production of the group company Nisshin A&C
Co., Ltd. has been consolidated at the Ishikawa Works. In
the steel roof and wall market, the Company is working
to create new demand by, for example, introducing new
functional products and jointly developing new products
with customers on a group-wide basis.
In the special steel field, a ladle furnace will be built
at the Kure Works to enable the production of highly
clean steel for stronger competitiveness both in domestic
and foreign markets with upgraded product quality.
Consolidated results for this period show that despite
our continuing efforts to secure income, the effects of
Overview of the Fiscal Year Ended March 31, 2012
Early in this period Japan suffered from sluggish
economic activity due to the effects of the Great East
Japan Earthquake and shortages of electricity. However,
domestic demand, especially in the automotive sector,
gradually recovered. Other negative factors, such
as record high yen rates and economic downturn in
developing countries caused by flooding in Thailand and
the European financial crisis, have had an adverse effect
on the economy. In addition, though the appreciation of
the yen began to calm down toward end of current fiscal
year, new concerns arose, such as rising oil prices due to
tensions in the Middle East.
For the iron and steel industry, as the prices of raw
materials such as iron ore and coal remained high,
domestic demand fell into a slump resulting from the
Great East Japan Earthquake at the beginning of the
period. Difficulties in the export sector persisted, as
profit deteriorated due to the rising yen and economic
sluggishness in Asia. Subsequently automotive
production and domestic demand recovered, but the
overall economic difficulties mounted with an oversupply
of steel in Asia caused higher steel imports from China
and South Korea and a general weakening of the steel
market.
Against this operating environment, the Nisshin
Group put more efforts into promoting detailed
efficiency and general cost-cutting measures currently
in place, such as augmenting the use of low-cost raw
materials, improving production efficiency, and reducing
logistics costs. Cost increases that could not be absorbed
with our own efforts had to be reflected in sales prices
after the situation was diligently explained to customers
for their understanding. In addition to improving the
on-time delivery rate and working to reduce lead time,
the Company is aggressively going forward with projects
that will lead to the realization of the management
themes listed in the No. 22 Mid-term Consolidated
Business Plan. These include developing a company-wide
integrated production system that will lead to inventory
reduction.
2
will as a whole make further efforts to streamline and
cut overall costs and in addition will work to improve
performance and to increase every division’s income.
In particular, we intend to improve quality, cost,
and competitiveness with stable operation of the hotrolling line that was revamped last year at the Kure
Works. Also, in order to deal with the electricity supply
problem, which is likely to become a long-term agenda,
the Company is making its operations more efficient to
save electricity while at the same time working to keep
the effect of these factors on production to a minimum
by increasing energy efficiency and introducing onsite power generators. The Company, via its business
activities, will continue to fulfill its social responsibility
and maintain a stable and swift supply of the products
needed by the customers.
In terms of sales, cost increases that could not be
absorbed by our own efforts will have to be reflected in
sales prices following diligent explanation of the situation
to customers for their understanding. In order to be an
absolutely essential presence to customers, in addition
to its popular F-Tech. Plaza, the Nisshin Group will use
tools such as the new community development proposal
site to further strengthen its distinctive proposal-based
sales activities, one of the Company’s specialties. In
particular, regarding growth fields such as alternative
energy (solar power, etc.), which are expected to become
increasingly popular in the future, the Nisshin Group is
utilizing its total abilities with, for example, aggressive
market developments through a fusion of its materials
development prowess and processing technology so that
it will be able to steadily respond to new demand in this
field.
The Company is also speeding up its continuing
efforts to realize the management themes of the No. 22
Mid-term Consolidated Business Plan. Regarding the
business merger with Nippon Metal Industry Co., Ltd.,
for which a share transfer agreement was signed in April
of this year, assuming that approval is granted from
the concerned authorities (including those abroad) as
well as the approval of both companies’ shareholders at
the Thai flood and the Asian economic downturn on
the foreign market as well as the negative effect of the
strong yen on export profitability and the sluggishness
of the domestic market due to high steel imports have
been enormous. Consolidated sales were 557,864 million
yen (up 12,511 million yen from previous fiscal year),
consolidated income before special items was 4,689
million yen (down 13,847 million yen from the previous
fiscal year), and consolidated net loss was 4,868 million
yen (down in income 16,917 million yen from the
previous fiscal year). The Company’s non-consolidated
results showed sales of 447,730 million yen, loss before
special items of 3,163 million yen, and net loss of 10,312
million yen.
Outlook for the Fiscal Year Ending March 31, 2013
The future of the Japanese economy looks promising,
led by improving automotive production due to
increased sales related to recovery from the Great
East Japan Earthquake and supportive government
policies including the subsidy system. This should
lead to recovery of domestic activities as demand for
reconstruction starts taking full effect. On the other
hand, uncertainty will likely persist due to continued
financial anxiety caused by the European economic
crisis, the consistently high value of the yen, worries
about economic stagnation in developing countries, and
uneasiness about whether the nationwide demand for
electricity in Japan can be met.
In the iron and steel industry, there is raised hope
for recovery of domestic demand, but there are also
worries that shortages of electricity and higher electric
and petroleum prices will have a negative effect on
production and lead to higher costs. Besides, the Asian
situation will remain unpredictable as oversupply is
expected to continue for the time being and fear of a
negative effect on the steel market will persist with the
combination of stagnation in the emerging economies
and the high yen keeping the export environment from
turning for the better.
Under these economic conditions, the Nisshin Group
3
Ningbo Baoxin Stainless Steel Co., Ltd. in China. In
India the Company has begun producing both carbon
and stainless steel tubes at the joint venture ANS Steel
Tubes Limited with its local partner. The Company
will launch a full-scale approach for developing demand
from Japanese automobile manufacturers. The Nisshin
Group will continue to work with customers to develop
new markets in overseas growth fields by strengthening
overseas business development.
As a company engaged in the steel business that
supports the social foundation, the Nisshin Group
believes that continuously working to provide a steady
supply of products, technologies, and services beneficial
to both customers and society is the origin of its
corporate value and it believes that this will lead to
contributions to society, including earthquake disaster
reconstruction.
Therefore, the Nisshin Group intends to carry out
proactive business undertakings as a company that
creates new markets with customers in order to realize
the concepts of its management philosophy: “A company
chosen by all present and future customers, shareholders,
and employees” and “A company in harmony with
stakeholders and society.”
We would appreciate our shareholders’ continued
support.
shareholders meetings, the companies will aim to secure
overwhelming competitiveness in the stainless steel field
in terms of cost, quality, delivery time, and all other
aspects by maximizing the effects of the merger through
the concentration of the superior tangible and intangible
management resources that the companies have
developed and by creating efficient production and sales
systems. Furthermore, the companies will provide new
added value to customers through the integrated sales
of both companies’ stainless steel and the Company’s
ordinary and special steel. By aggressively expanding
sales abroad through both companies’ foreign offices, we
will work to receive high praise from customers both at
home and abroad. In order to consolidate the stainless
steel production processes to be achieved through this
merger, the Company has also decided to overhaul
the steelmaking facilities at the Shunan Works for
increased productive capacity and improved cost and
quality competitiveness and work to create a powerful
production base with state-of-the-art equipment.
As a new strategy to expand ZAM®sales, investments
will be made in order to start manufacturing at the
Company’s U.S. subsidiary Wheeling-Nisshin, Inc. and
improve the North American supply system. This will
improve the development of ZAM ®not only in the
Japanese domestic market but also in foreign markets.
The idea behind the decision to implement these
new initiatives is they are essential for the continued
future growth of Nisshin Group, and in order to reap
the benefits of and derive profits from these initiatives as
soon as possible we intend to realize them without delay
while maintaining the business operation levels.
In terms of growing overseas markets, the Company
is continuing to utilize to the fullest extent the business
networks it has created and is establishing our unique
corporate presence in local markets via reinforcing linkups with overseas branch and representative offices that
it has been incorporating there. Thus the Company is
aggressively developing a new business model through
cooperation with Bahru Stainless in Malaysia, which
is working to further raise its capacity by 2013, and
Outlook for the next fiscal year
The Company has decided against announcing its
performance forecast for the next period since reasonable
estimations are difficult to make at this point of time.
Ongoing negotiations of selling prices with customers
are complicated with highly volatile prices of raw
materials and fuels, which can also necessitate changes
in inventory valuations.
Even in the current circumstances, the Company
is committed to securing profits through achieving
appropriate sales prices and thoroughly implementing
rationalization and cost reduction programs.
The performance forecast will be released as soon as it
is made available. Further information will be provided
4
ensure sustainable growth and for strengthening
competitiveness to improve corporate value, as well as to
enhance the Group’s financial position.
We decided that dividends from retained earnings
for this year would be ¥1.50 per share for the yearend, based on the business results and forecasts, and in
overall consideration of the economic outlook and plans
for the Group’s business development. As we forwent the
payment of mid-term dividends, the full-year dividends
are set at ¥1.50 per share.
at the time of announcement of the first-quarter financial
results.
In addition, the Company and Nippon Metal Industry
Co., Ltd. are set to execute business integration effective
as of October 1, 2012 through establishing a holding
company via a joint share transfer.
The announcement of performance forecast of the
holding company to be established will be scheduled at
a later date.
Basic Policy on Returns to Shareholders
I wou ld like to of fer my appreciation to all
shareholders and investors for their continued support.
Regarding the distribution of earnings, we plan
to ensure stable returns to our shareholders, with
the payment of appropriate dividends from retained
earnings depending on the consolidated business results,
while securing internal reserves necessary for future
business development to enhance corporate value, and in
consideration of the future business outlook.
Internal reserves will be used for investments to
June 2012
Toshinori Miki
President and Chief Executive Officer
5
Management’s Discussion and Analysis
Financial Position
Cash Flows
Consolidated total assets at the close of the year
ended March 31, 2012 stood at ¥627,428 million,
down ¥36,439 million from the end of the previous
year. This was due mainly to decreases in property, plant
and equipment (down ¥16,106 million) and notes and
accounts receivable (down ¥10,274 million).
Total liabilities declined by ¥24,829 million to
¥433,943 million. This was due mainly to decreases in
interest-bearing debt (down ¥14,856 million) and notes
and accounts payable (down ¥4,990 million).
Total net assets declined ¥11,610 million to
¥193,485 million. This was mostly the result of net loss
(¥4,868 million).
Net cash provided by operating activities totaled
¥42,076 million. This was due mainly to ¥1,104
million in income before provision for income taxes,
¥36,688 million from depreciation and amortization,
and decrease of ¥10,190 million in notes and accounts
receivable.
Net cash used in investing activities totaled ¥25,102
million, with ¥20,258 million spent on acquisition of
property, plant and equipment. Free cash flow amounted
to ¥16,974 million.
Net cash used in financing activities totaled ¥16,894
million. This mainly reflected a ¥14,844 million
decrease in interest-bearing debt.
As a result of these developments, and with the
addition of foreign currency translation adjustment of
cash and cash equivalents, the consolidated balance of
cash and cash equivalents at the end of the fiscal year
amounted to ¥18,236 million, down ¥147 million from
the end of the previous year.
6
Operating Income (Loss)
Total Current Assets
Total Assets
(Billions of yen)
(Billions of yen)
(Billions of yen)
80
900
350
63.3
60
300 293.7
315.4
296.0
58.5
246.8
250
265.3
826.5 818.3
722.3
750
670.4 663.9
627.4
248.6
600
200
40
450
150
23.9
7.1
0
’09
’07
’10
’08
’11
300
100
20
’12
150
50
0
’07
’08
’09
’10
’11
’12
-7.3
-43.2
Interest-Bearing Debt
Net Cash Provided
by Operating Activities
(Billions of yen)
(Billions of yen)
286.3 297.9
300
282.9
268.0
250
60
52.3
50
218.6
200
42.1
40
173.8
150
30
100
20
50
10
0
’07
’08
’09
’10
’11
’12
0
26.5 25.8 25.8
24.4
’07
’08
’09
7
’10
’11
’12
0
’07
’08
’09
’10
’11
’12
Consolidated Seven-Year Summary
Consolidated Seven-Year Summary
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Millions of yen
(except per share amounts and weighted average number of shares issued and outstanding)
Years ended March 31
Results for the year:
Net sales
Gross profit (loss)
Operating income (loss)
Income (loss) before special items
Income (loss) before provision for income taxes
Net (loss) income
¥557,864
51,535
7,068
4,689
1,104
(4,868)
¥545,353
67,931
23,944
18,536
14,864
12,049
¥441,486
(319)
(43,228)
(53,775)
(62,339)
(61,717)
¥617,400
39,781
(7,317)
(12,383)
(17,946)
(25,484)
¥649,495
108,510
58,457
54,546
53,304
32,192
¥641,246
112,677
63,270
62,131
61,074
37,214
¥556,057
117,506
70,199
63,153
47,498
24,464
Year-end financial position:
Total current assets
Total property, plant and equipment
Total assets
Total current liabilities
Long-term debt
Total net assets1
¥248,580
224,562
627,428
213,740
172,185
193,485
¥265,328
240,668
663,867
202,672
206,697
205,095
¥246,771
256,590
670,350
162,770
253,813
205,301
¥295,992
264,983
722,271
237,214
175,778
260,641
¥315,374
265,790
818,310
284,583
90,266
361,463
¥293,727
267,923
826,540
250,659
92,983
385,695
¥259,466
268,438
718,237
239,008
72,615
315,595
Cash flows:
Net cash provided by operating activities
Net cash used in investing activities
Net cash (used in) provided by financing activities
¥ 42,076
(25,102)
(16,894)
¥ 24,426
(30,118)
(16,076)
¥ 25,757
(29,987)
7,397
¥ 25,810
(62,252)
58,534
¥ 26,545
(49,182)
26,969
¥ 52,250
(48,041)
(7,338)
¥ 42,411
(22,877)
(27,651)
¥13.33
2.00
¥(68.28)
1.00
¥(28.15)
7.00
¥35.37
10.00
¥39.86
7.00
¥25.98
6.00
903,806
903,854
905,269
910,210
933,499
941,658
2012
2011
2010
2009
2008
2007
2006
2
Per share amounts :
Net (loss) income per share
Cash dividends per share
¥(5.39)
1.50
Weighted average number of shares issued and outstanding (thousands)
903,762
1. The amount of total net assets at March 31, 2006 represents the value of conventional
total shareholders' equity.
2. Per share figures are in yen.
8
9
Consolidated Balance Sheets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
March 31, 2012 and 2011
Consolidated Balance Sheets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
March 31, 2012 and 2011
Millions of yen
2012
ASSETS
Current assets:
Cash on hand and in banks (Notes 18, 21)
Notes and accounts receivable (Notes 11, 21)
Marketable securities (Notes 18, 21 and 22)
Inventories (Note 5)
Deferred income taxes (Note 8)
Other current assets
Allowance for doubtful accounts
Total current assets
¥
Investments and long-term receivables:
Investments in securities (Notes 6, 14, 21 and 22)
Deferred income taxes (Note 8)
Other (Note 6)
Allowance for doubtful accounts
Total investments and long-term receivables
2011
18,241 ¥ 18,388
80,323
90,597
12
127
132,383
133,628
1,772
4,191
16,546
19,047
(697)
(650)
248,580
265,328
Thousands of
U.S. dollars (Note 4)
2012
$ 221,937
977,284
146
1,610,695
21,560
201,314
(8,480)
3,024,456
103,768
6,949
35,204
(545)
145,376
104,706
6,599
37,465
(570)
148,200
1,262,537
84,548
428,325
(6,631)
1,768,779
246,504
861,688
1,108,192
(943,796)
164,396
57,199
2,967
224,562
244,864
856,564
1,101,428
(920,338)
181,090
56,938
2,640
240,668
2,999,197
10,484,098
13,483,295
(11,483,100)
2,000,195
695,936
36,099
2,732,230
8,248
8,745
100,353
Deferｒed assets
662
926
8,055
Total assets
¥ 627,428
¥ 663,867
$ 7,633,873
Property, plant and equipment, at cost:
Buildings and structures
Machinery, equipment and vessels
Accumulated depreciation
Land
Construction in progress
Total property, plant and equipment
Other assets
The accompanying notes are an integral part of these financial statements.
10
Millions of yen
LIABILITIES
Current liabilities:
Notes and accounts payable (Notes 11, 21)
Short-term loans (Notes 7, 21)
Current portion of long-term debt (Notes 7, 21)
Commercial paper (Note 21)
Provision for environmental remediation
Provision for loss on disaster
Provision for business structure improvement
Other current liabilities
Total current liabilities
Long-term debt (Notes 7, 21)
Deferred income taxes (Note 8)
Employees' retirement benefits (Note 9)
Allowance for retirement benefits for directors and corporate auditors
Reserve for rebuilding furnaces
Provision for environmental remediation
Other liabilities
Total liabilities
NET ASSETS
Shareholders' equity:
Common stock, no par value at March 31, 2012 and 2011
Authorized: 3,977,964 thousand shares at March 31, 2012 and 2011
Issued: 994,500 thousand shares at March 31, 2012 and 2011 (Note 16)
Additional paid-in capital
Retained earnings
Treasury stock, at cost (Note 16)
Total shareholders' equity
Accumulated other comprehensive income:
Unrealized gain or loss on available-for-sale securities
Deferred gain or loss on hedges
Adjustment on revaluation of land (Note 15)
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets
11
2012
2011
Thousands of
U.S. dollars (Note 4)
2012
¥ 80,523
51,054
34,809
10,000
317
312
36,725
213,740
172,185
949
30,378
446
12,701
517
3,027
433,943
¥ 85,513
26,606
49,601
13
1,170
319
39,450
202,672
206,697
1,064
31,549
407
12,152
828
3,403
458,772
$979,718
621,170
423,519
121,669
3,857
3,796
446,831
2,600,560
2,094,963
11,547
369,607
5,426
154,532
6,290
36,829
5,279,754
79,913
49,893
88,577
(26,445)
191,938
79,913
49,893
95,711
(26,440)
199,077
972,296
607,045
1,077,710
(321,754)
2,335,297
6,718
320
360
(12,485)
(5,087)
6,634
193,485
8,115
51
315
(8,785)
(304)
6,322
205,095
81,737
3,893
4,380
(151,904)
(61,894)
80,716
2,354,119
¥627,428
¥663,867
$7,633,873
Consolidated Statements of Income
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Consolidated Statements of Income
Years ended March 31, 2012 and 2011
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2012 and 2011
Millions of yen
Net sales
Cost of sales (Note 5)
Gross profit
Selling, general and administrative expenses (Notes 12 and 13)
Operating income
Other (income) expenses:
Interest and dividend income
Interest expense
Equity in earnings of unconsolidated subsidiaries and affiliates
Retirement benefit expense
Service cost of temporarily transferred employees
Foreign exchange loss
Other, net
Income before special items
Special items:
Gain on sale of properties
Gain on sale of investments in securities
Special items, income and gain
Loss on sale and disposition of properties
Loss on sale of other investments
Loss on devaluation of other investments
Loss on disaster
Loss on devaluation of investment in securities
Business structure improvement expense
Special items, expense and loss
Income before provision for income taxes
Provision for income taxes (Note 8):
Current
Deferred
Total provision for income taxes
(Loss) income before minority interests
Minority interests in earnings of consolidated subsidiaries
Net (loss) income
2012
¥557,864
506,329
51,535
44,467
7,068
2011
¥ 545,353
477,422
67,931
43,987
23,944
(1,657)
5,632
(6,349)
1,814
1,763
241
935
4,689
(1,335)
6,437
(5,928)
1,553
1,704
1,459
1,518
18,536
(20,161)
68,524
(77,248)
22,071
21,450
2,932
11,376
57,051
86
789
875
879
649
2,397
535
4,460
1,104
910
1,230
1,054
478
3,672
14,864
1,046
9,600
10,646
10,695
7,896
29,164
6,510
54,265
13,432
1,806
3,830
5,636
(4,532)
336
¥ (4,868)
2,134
232
2,366
12,498
449
¥ 12,049
21,973
46,600
68,573
(55,141)
4,088
$ (59,229)
Yen
Net (loss) income per share
Cash dividends per share
Weighted average number of shares issued and outstanding (thousands)
The accompanying notes are an integral part of these financial statements.
12
Thousands of
U.S. dollars (Note 4)
¥ (5.39)
1.50
¥ 13.33
2.00
903,762
903,806
2012
$6,787,492
6,160,470
627,022
541,027
85,995
U.S. dollars (Note ４)
$(0.07)
0.02
Consolidated Statements of Comprehensive Income
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2012 and 2011
Consolidated Statements of Comprehensive Income
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2012 and 2011
Millions of yen
(Loss) income before minority interests
Other comprehensive income (Note 20) :
Unrealized gain or loss on available-for-sale securities
Deferred gain or loss on hedges
Foreign currency translation adjustment
Share of other comprehensive income of companies accounted
for by the equity method
Other, net
Total other comprehensive income
Comprehensive (loss) income
Total comprehensive income attributable to :
Shareholders of Nisshin steel Co., Ltd.
Minority interests
The accompanying notes are an integral part of this financial statement.
13
Thousands of
U.S. dollars (Note 4)
2012
¥(4,532)
2011
¥ 12,498
2012
$ (55,141)
(1,478)
547
(390)
(5,121)
(55)
(1,372)
(17,983)
6,655
(4,745)
(3,446)
33
(4,734)
¥(9,266)
(5,155)
(11,703)
¥ 795
(41,927)
402
(57,598)
$(112,739)
¥(9,617)
351
¥387
408
$(117,009)
4,270
Consolidated Statements of Changes in Net Assets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Consolidated
Statements
Years
ended March 31,
2012 and 2011of Changes in
Net Assets
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2012 and 2011
Millions of yen
Shareholders' equity
Common
stock
Additional
paid-in
capital
¥79,913
¥49,893
¥95,711
¥(26,440)
¥199,077
Accumulated other comprehensive income
Foreign
Total
Minority
Deferred
Adjustment on currency
accumulated interests in
gain or loss
revaluation
translation
other
consolidated
on hedges
of land
adjustment comprehensive subsidiaries
income
¥ 8,115
¥ 51
¥315
¥ (8,785)
¥ (304)
¥6,322
¥79,913
¥49,893
(1,811)
(4,868)
(351)
1
(105)
(7,134)
¥88,577
(5)
(5)
¥(26,445)
(1,811)
(4,868)
(5)
(351)
1
(105)
(7,139)
¥191,938
(1,397)
(1,397)
¥ 6,718
269
269
¥320
45
45
¥360
(3,700)
(3,700)
¥(12,485)
(4,783)
(4,783)
¥ (5,087)
312
312
¥6,634
(1,811)
(4,868)
(5)
(351)
1
(105)
(4,471)
(11,610)
¥193,485
¥79,913
¥49,893
¥84,638
¥(26,432)
¥188,012
¥13,202
¥182
¥291
¥(2,341)
¥11,334
¥5,955
¥205,301
¥79,913
¥49,893
(905)
12,049
(24)
(47)
11,073
¥95,711
(8)
(8)
¥(26,440)
(905)
12,049
(8)
(24)
(47)
11,065
¥199,077
(5,087)
(5,087)
¥ 8,115
(131)
(131)
¥ 51
24
24
¥315
(6,444)
(6,444)
¥(8,785)
(11,638)
(11,638)
¥ (304)
367
367
¥6,322
(905)
12,049
(8)
(24)
(47)
(11,271)
(206)
¥205,095
Balance at April 1, 2011
Changes of items during the year
Cash dividends (Note 17)
Net loss
Acquisition of treasury stock
Change in scope of equity method
Increase due to adjustment on revaluation of land
Other, net
Items other than changes in shareholders' equity
Total changes of items during the year
Balance at March 31, 2012
Balance at April 1, 2010
Changes of items during the year
Cash dividends (Note 17)
Net income
Acquisition of treasury stock
Decrease due to adjustment on revaluation of land
Other, net
Items other than changes in shareholders' equity
Total changes of items during the year
Balance at March 31, 2011
Retained
earnings
Treasury
stock,
at cost
Total
shareholders'
equity
Shareholders' equity
Balance at April 1, 2011
Changes of items during the year
Cash dividends (Note 17)
Net loss
Acquisition of treasury stock
Change in scope of equity method
Increase due to adjustment on revaluation of land
Other, net
Items other than changes in shareholders' equity
Total changes of items during the year
Balance at March 31, 2012
Common
stock
Additional
paid-in
capital
Retained
earnings
$972,296
$607,045
$1,164,509
$972,296 $607,045
Treasury
stock,
at cost
Total
shareholders'
equity
$(321,694) $2,422,156
(22,034)
(22,034)
(59,229)
(59,229)
(60)
(60)
(4,271)
(4,271)
12
12
(1,277)
(1,277)
(86,799)
(60)
(86,859)
$1,077,710 $(321,754) $2,335,297
Unrealized
gain or loss on
available-for-sale
securities
¥205,095
Thousands of U.S. dollars (Note 4)
Accumulated other comprehensive income
Foreign
Total
Minority
Deferred
Adjustment on currency
accumulated interests in
gain or loss
revaluation
translation
other
consolidated Total net
on hedges
of land
adjustment comprehensive subsidiaries
assets
income
$98,735
$ 621
$3,833
$(106,886)
$ (3,697)
$76,919 $2,495,378
Unrealized
gain or loss on
available-for-sale
securities
(16,998)
(16,998)
$81,737
3,272
3,272
$3,893
547
547
$4,380
(45,018)
(45,018)
$(151,904)
The accompanying notes are an integral part of these financial statements.
14
Total net
assets
15
(58,197)
(58,197)
$(61,894)
3,797
3,797
$80,716
(22,034)
(59,229)
(60)
(4,271)
12
(1,277)
(54,400)
(141,259)
$2,354,119
Consolidated Statements of Cash Flows
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Consolidated Statements of Cash Flows
Years ended March 31, 2012 and 2011
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2012 and 2011
Millions of yen
Cash flows from operating activities:
Income before provision for income taxes
Depreciation and amortization
Decrease in employees' retirement benefits account
Increase in prepaid pension cost
Increase in reserve for rebuilding furnaces
Equity in earnings of unconsolidated subsidiaries and affiliates
Interest and dividend income
Interest expense
Loss on sale and disposition of properties
Decrease (increase) in notes and accounts receivable
Decrease (increase) in inventories
(Decrease) increase in notes and accounts payable
Other, net
2012
2011
Thousands of
U.S. dollars (Note 4)
2012
¥ 1,104
36,688
(1,171)
(743)
549
(6,349)
(1,657)
5,632
790
10,190
1,156
(5,259)
6,368
47,298
3,702
(5,944)
(2,980)
42,076
¥ 14,864
38,480
(81)
(1,132)
503
(5,928)
(1,335)
6,437
910
(19,155)
(14,325)
9,687
(1,670)
27,255
4,460
(6,403)
(886)
24,426
$ 13,432
446,380
(14,247)
(9,040)
6,680
(77,248)
(20,161)
68,524
9,612
123,981
14,065
(63,986)
77,479
575,471
45,042
(72,320)
(36,257)
511,936
Cash flows from investing activities:
Acquisition of investments in securities
Proceeds from sale of investments in securities
Acquisition of shares of subsidiaries and affiliates
Proceeds from sale of shares of subsidiaries and affiliates
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Other, net
Net cash used in investing activities
(73)
755
(3,560)
(20,258)
357
(2,323)
(25,102)
(1,092)
198
(1,335)
1
(25,145)
146
(2,891)
(30,118)
(888)
9,186
(43,314)
(246,478)
4,344
(28,264)
(305,414)
Cash flows from financing activities:
Increase (decrease) in short-term loans, net
Increase in commercial paper, net
Proceeds from long-term debt
Repayment and redemption of long-term debt
Acquisition of treasury stock
Cash dividends
Other, net
Net cash used in financing activities
24,456
10,000
300
(49,600)
(4)
(1,836)
(210)
(16,894)
(711)
2,500
(16,738)
(9)
(935)
(183)
(16,076)
297,554
121,669
3,650
(603,480)
(49)
(22,338)
(2,554)
(205,548)
(227)
(147)
18,383
¥ 18,236
(1,608)
(23,376)
41,759
¥ 18,383
(2,763)
(1,789)
223,665
$ 221,876
Receipt of interest and dividends
Payment of interest
Payment of income taxes
Net cash provided by operating activities
Foreign currency translation adjustment of cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 18)
The accompanying notes are an integral part of these financial statements.
16
Notes to ConsolidatedNotes
Financial
StatementsFinancial Statements
to Consolidated
Nisshin Steel Co., Ltd. and its consolidated subsidiaries
Nisshin Steel
Years ended March 31, 2012 and 2011
Co., Ltd. and its consolidated subsidiaries
Years ended March 31, 2012 and 2011
1. Basis of Presenting the Financial Statements
The accompanying consolidated financial statements have been prepared from the accounts maintained by Nisshin Steel Co.,
Ltd. (the “Company”) and its subsidiaries in conformity with accounting principles generally accepted in Japan, which are
different in certain respects in so far as the application and disclosure requirements of International Financial Reporting
Standards.
Certain items presented in the consolidated financial statements submitted to the Director of the Kanto Finance Bureau in
Japan have been reclassified for the convenience of readers outside Japan.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its 10 consolidated subsidiaries, listed below
(together, the “Companies”):
Nisshin A&C Co., Ltd.
Nisshin Kokan Co., Ltd.
Nisshin Koki Co., Ltd.
Shinwa Kigyo Co., Ltd.
Tsukiboshi Logistics Co., Ltd.
Tsukiboshi Shoji Co., Ltd.
Nisshin Holding, Inc.
Nisshin Steel USA, LLC
Wheeling-Nisshin, Inc.
Nisshin Automotive Tubing LLC
The fiscal year periods and the closing dates thereof for the financial statements of consolidated subsidiaries are in
agreement with those of the Company, except for the four foreign consolidated subsidiaries: Nisshin Holding, Nisshin Steel
USA, Wheeling-Nisshin and Nisshin Automotive Tubing (with fiscal years ending on December 31). In consolidating the four
foreign subsidiaries, the Company makes adjustments for any material transactions subsequent to December 31.
Regarding the elimination of investments in the stock of consolidated subsidiaries, together with the underlying equity in
the net assets of such subsidiaries, the Company follows the step-by-step acquisition approach to include equity in the net
income (loss) of subsidiaries, subsequent to the date of acquisition, in the Consolidated Statements of Income and the
Consolidated Statements of Changes in Net Assets.
Valuation of the assets and liabilities of consolidated subsidiaries is made at their fair values in proportion to the parent
company’s equity in the subsidiaries upon each acquisition.
The difference between the cost of an investment in a subsidiary and the amount of underlying equity in the net assets of the
subsidiary is deferred as an asset or a liability as the case may be and amortized over a period of five years on a straight-line
basis.
Investments in unconsolidated subsidiaries and affiliates are accounted for using the equity method, except for those valued
at cost due to the lack of materiality.
The number of unconsolidated subsidiaries accounted for using the equity method was 10 at March 31, 2012 and included:
Tsukiboshi Art Co., Ltd.
Osaka Stainless Center Co., Ltd.
17
Nisshin Steel Asia PTE. LTD. became an unconsolidated subsidiary accounted for using the equity method in the year
ended March 31, 2012 due to the establishment by the Company.
The number of affiliates accounted for using the equity method was 20 at March 31, 2012 and included:
Nihon Teppan Co., Ltd.
Sun Wave Corporation
Canox Corporation
Sanko Metal Industrial Co., Ltd.
Ningbo Baoxin Stainless Steel Co., Ltd.
Acerinox, S. A.
Bahru Stainless Sdn. Bhd. became an affiliate accounted for using the equity method in the year ended March 31, 2012 due
to the increase of the materiality with the beginning of commercial production.
Foreign Currency Translation
Foreign currency transactions are generally translated using foreign exchange rates prevailing at the respective transaction
dates. Receivables and payables in foreign currencies are translated at the foreign exchange rates prevailing at the respective
balance sheet dates.
The assets and liabilities of overseas subsidiaries are translated into yen at the foreign exchange rates prevailing at the
respective balance sheet dates, whereas net assets are translated at historical rates.
Cash and Cash Equivalents
Cash and cash equivalents include in the Consolidated Statements of Cash Flows comprise cash on hand and in banks, deposits
that can be withdrawn upon demand and easily cashable short-term investments with a three-month or shorter redemption term
that carry a negligible risk of fluctuation in value.
Inventory Valuation
Inventories are valued at cost using the weighted average method (the amounts on the Consolidated Balance Sheet reflect the
decrease in their value due to their decrease in profitability, if any), except for supplies which are valued at the
moving-average cost (the amounts on the Consolidated Balance Sheets reflect the decrease in their value due to their decrease
in profitability, if any).
Allowance for Doubtful Accounts
The allowance for doubtful accounts is evaluated based on the actual bad debt rate in the past. For doubtful receivables etc.,
the likelihood of collection is evaluated in accounting for the allowance.
Investments in Securities
Investments in securities are classified into four categories:
(1)Trading securities are valued at their fair values on the balance sheet date, and any unrealized gain or loss is
charged to income. The Companies had no trading securities at March 31, 2012 and 2011.
(2)Held-to-maturity securities are stated at cost after the amortization of premiums or discounts on acquisition, which
are amortized over the period to maturity. The Companies had no held-to-maturity securities at March 31, 2012.
(3)Investments in unconsolidated subsidiaries and major affiliates are accounted for using the equity method, except for
those valued at cost due to their lack of materiality.
(4)Available-for-sale securities are valued at their fair values except for those valued at cost due to a lack of fair value
information. Applicable unrealized net-of-tax gains and losses are included in accumulated other comprehensive
income.
Property, Plant and Equipment
Depreciation is computed using the declining-balance method except buildings which are accounted for using the straight-line
method.
18
The cost of maintenance, repairs and minor renewals is charged to operating income as incurred. Major renewals and
improvements are capitalized. The cost of property, plant and equipment retired or otherwise disposed of and the
corresponding accumulated depreciation are eliminated from the related accounts, and the resulting profit or loss is reflected in
income.
Leased Assets
Finance leases which do not involve the transfer of ownership rights are accounted for with the method for regular purchase
and sale transactions, whereas such finance lease transactions with initial lease dates beginning before March 31, 2008 are
accounted for with the methods for rental transactions and periodic capital lease payments are charged to expenses when paid.
Lease assets are depreciated with the straight-line method, adopting the lease period as the useful life and assuming a
residual value of zero.
Deferred Assets
Significant bond issue costs, except for those that are not material are deferred and amortized over a reasonable period of time
through bond redemption.
Other Assets
Amortization of intangible assets including software is computed using the straight-line method. Software is amortized over
the internally estimated useful life, i.e., five years.
Provision for Environmental Remediation
The provision for environmental remediation is estimated and recorded to provide for future potential costs, such as waste
management costs for stored PCB (polychlorinated biphenyl).
Provision for Loss on Disaster
The provision for loss on disaster is estimated and recorded to provide for future potential costs, such as restoration costs to
repair the machinery and equipment damaged in the Great East Japan Earthquake in march, 2011.
Employees’ Retirement Benefits
The lump-sum severance benefit payments and the defined benefit pension plans are accounted for using the actuarial
calculation of projected benefit obligation for each employee.
Allowance for Retirement Benefits for Directors and Corporate Auditors
The allowance for retirement benefits for directors and corporate auditors is calculated based on internal rules.
The Company decided to abolish the lump-sum severance benefit payments for directors and corporate auditors at the
Annual Shareholders’ Meeting held on June 26, 2003. The Company posted the amount for payments of the lump-sum
severance benefit payments for their duties performed until June 26, 2003.
Reserve for Rebuilding Furnaces
Blast furnaces, including related machines, periodically require substantial component replacements and repairs. Such work
occurs normally every 10 years after blast furnaces are put into operation. The estimated future costs of such work are
provided for and charged to income on a straight-line basis over the periods to the date of the anticipated replacements and
repairs. The difference between such estimated costs and the actual costs is charged or credited to income at the time the work
takes place. In estimating such future costs for a specific furnace, the general price level increase and other economic factors
are taken into consideration.
Sales Recognition
Sales of finished goods are generally recognized when goods are shipped to the customers.
Net Income and Cash Dividends per Share
The computation of net income per share is based on the weighted average number of common shares issued and outstanding
19
during each year. Cash dividends per share shown for each year in the accompanying Consolidated Statements of Income are
based on cash dividends applicable to the net income of each year.
Income Taxes
The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences
of temporary differences between the carrying amounts and the tax basis of assets and liabilities.
Consumption Tax
In Japan, consumption tax is imposed on domestic consumption of goods and services at the rate of 5%. The consumption tax
imposed on the Companies’ sales to customers is withheld by the Companies at the time of sale and paid to the national
government. The consumption tax withheld upon sale is not included in the amount of “Net sales” in the accompanying
Consolidated Statements of Income but is recorded as a liability. The balances of consumption tax withheld and consumption
tax paid (an asset item), which are paid by the Companies on the purchases of products, merchandise and services from
vendors, are offset, and the net balance is included in “Other current liabilities” in the Consolidated Balance Sheets.
3. Accounting Changes
(Additional Information)
Accounting Changes and Error Corrections
“Accounting Standard for Accounting Changes and Error Corrections” (ASBJ statement No. 24 issued on December 4, 2009)
and the “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ guidance No. 24 issued on
December 4, 2009) have been applied effective from the year ended March 31, 2012.
4. U.S. Dollar Amounts
U.S. dollar amounts included in the consolidated financial statements and notes thereto represent the arithmetical results of
translating yen into dollars on the basis of ¥82.19 = US$1, the effective rate of exchange at March 31, 2012. The inclusion of
such dollar amounts is solely for convenience and is not intended to imply that the yen amounts have been or could be readily
converted, realized or settled in dollars at ¥82.19 = US$1 or at any other rate.
5. Inventories
Details of “Inventories” in the Consolidated Balance Sheet at March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
2012
Finished goods
\ 61,904
U.S. dollars
2011
\ 61,562
2012
$
753,182
Work in process
27,106
29,787
329,797
Raw materials and other supplies
43,373
42,279
527,716
\132,383
\133,628
$1,610,695
Total
The amounts of inventories on the Consolidated Balance Sheet at March 31, 2012 reflect the decrease in their value due to
their decrease in profitability (after setting off the reversal amount of reducing the book value at the end of the previous
consolidated fiscal year). “Cost of sales” in the Consolidated Statement of Income for the year ended March 31, 2012
includes ¥3,013 million (US$36,659 thousand) of such unrealized net loss of inventories.
The amounts of inventories on the Consolidated Balance Sheet at March 31, 2011 reflect the decrease in their value due to
their decrease in profitability. “Cost of sales” in the Consolidated Statement of Income for the year ended March 31, 2011
includes ¥7,250 million of such unrealized net gain of inventories.
20
6. Investments in Unconsolidated Subsidiaries and Affiliates
“Investments in securities” in the Consolidated Balance Sheets at March 31, 2012 and 2011 include investments in
unconsolidated subsidiaries and affiliates as follows:
Thousands of
Millions of yen
Stocks of unconsolidated subsidiaries and affiliates
U.S. dollars
2012
2011
2012
\48,977
\45,596
$595,900
“Other” in “Investments and long-term receivables” in the Consolidated Balance Sheets at March 31, 2012 and 2011 include
investments in unconsolidated subsidiaries and affiliates as follows:
Thousands of
Millions of yen
Equity in unconsolidated subsidiaries and affiliates
U.S. dollars
2012
2011
2012
\8,192
\7,612
$99,671
7. Short-term Loans and Long-term Debt
Short-term loans at March 31, 2012 and 2011 consisted of the following:
Thousands of
Millions of yen
Bank loans
2012
2011
\ 51,054
\ 26,606
U.S. dollars
2012
$
621,170
It is a normal business custom in Japan for short-term borrowings to be rolled over.
Long-term debt at March 31, 2012 and 2011 consisted of the following:
Thousands of
Millions of yen
2012
Loans from banks and other financial institutions
2011
U.S. dollars
2012
\106,994
\146,298
$1,301,789
16th 1.68% unsecured bond of the Company due Jul. 2011
-
10,000
-
17th 1.37% unsecured bond of the Company due Nov. 2012
10,000
10,000
121,669
18th 1.66% unsecured bond of the Company due May. 2013
10,000
10,000
121,669
19th 2.20% unsecured bond of the Company due Jun. 2018
10,000
10,000
121,669
20th 1.64% unsecured bond of the Company due May. 2014
20,000
20,000
243,339
1st series unsecured, interest deferrable and early redeemable
50,000
50,000
608,347
subordinated bonds solely for qualified institutional investors*1
Total long-term debt
206,994
256,298
2,518,482
“Current portion of long-term debt” in the Consolidated Balance Sheets
(34,809) (49,601)
“Long-term debt” in the Consolidated Balance Sheets
\172,185 \206,697
(423,519)
$2,094,963
*1. (1) From the day after October 9, 2009 – October 31, 2014: Annual rate 4.612 % (fixed rate)
(2) From the day after October 31, 2014: 6-Month Yen London Interbank Offered Rate + 4.75% (floating rate)
8. Income Taxes
The Company and its domestic subsidiaries are subject to a number of different taxes based on income. Income taxes
consist of corporate income tax, inhabitants’ taxes and enterprise taxes.
The “Act for Partial Revision of the Income Tax Act etc. for the Purpose of Creating Taxation System Responding to
Changes in Economic and Social Structures” (Act No. 114 of 2011) and the “Act for Special Measures for Securing Financial
Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake” (Act No.117 of
2011) were promulgated on December 2, 2011 and the staged reduction of the national corporate tax rate and a special
reconstruction corporate tax will apply to corporate taxes effective for fiscal years beginning on or after April 1, 2012.
21
As a result, the effective statutory tax rate used to measure the Company’s deferred tax assets and liabilities was changed
from 40.4% to 37.8% for the temporary differences expected to be realized or settled in the period from April 1, 2012 to
March 31, 2015 and from 40.4% to 35.5% for temporary differences expected to be realized or settled from fiscal years
beginning April 1, 2015.
The effect of the announced reduction of the effective statutory tax rate was to decrease deferred tax assets, net by
¥518million (US$6,302 thousand) and income taxes-deferred, unrealized gain or loss on available-for-sale securities and
deferred gain or loss on hedges increased by ¥1,097 million(US$13,347 thousand), ¥551 million(U.S.$6,704 thousand) and
¥28 million(US$341 thousand) respectively, as of and for the year ended March 31, 2012.
Components of the Companies’ deferred income tax assets and liabilities at March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
U.S. dollars
2012
2011
2012
Deferred income tax assets:
Tax loss carry forwards
\32,445
\32,652
$394,756
Non-deductible portion of employees’ retirement benefits
Non-deductible portion of reserve for rebuilding furnaces
6,674
3,512
8,137
3,910
81,202
42,730
Loss on impairment of fixed assets
2,070
1,683
25,186
Non-deductible portion of accrued bonus expense
1,599
1,720
19,455
Other
Preliminary deferred income tax assets
Valuation allowance
7,056
8,152
85,850
53,356
56,254
649,179
(38,516） (37,091)
Total deferred income tax assets
(468,621)
14,840
19,163
180,558
Unrealized gain or loss on available-for-sale securities
4,011
6,313
48,802
Reserve for postponement of taxation on capital gains from property
2,088
2,500
25,405
969
625
11,790
Deferred income tax liabilities:
Other
Total deferred income tax liabilities
Net deferred income tax assets
7,068
9,438
85,997
\ 7,772
\ 9,725
$ 94,561
The reconciliation of the statutory tax rate to the income tax rate reflected in the consolidated statements of income for the
years ended March 31, 2012 and 2011 are as follows:
Statutory tax rate
2012
2011
40.4%
40.4%
Reconciliation:
Valuation allowance
633.8
(21.0)
Effect of tax rate reduction
99.4
-
Dividends
41.5
5.7
Equity in earnings of unconsolidated subsidiaries and affiliates
Other
Effective rate of income tax expense
22
(232.3)
(16.1)
(72.4)
6.9
510.4%
15.9%
9. Employees’ Retirement Benefits
Analysis of the reserve account for “Employees’ retirement benefits” at March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
Projected benefit obligations
Plan assets
2012
2011
2012
\102,620
\106,576
$1,248,571
(70,797)
(71,521)
(861,382)
31,823
35,055
387,189
(25,661)
(28,201)
(312,216)
5,645
6,867
68,682
11,807
13,721
143,655
Funded status
Unrecognized actuarial differences
Unrecognized prior-service costs
Total employees' retirement benefits
Prepaid pension cost
“Employees' retirement benefits” in the Consolidated Balance Sheets
U.S. dollars
18,571
17,828
\ 30,378
\ 31,549
225,952
$
369,607
Components of retirement benefit expense for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
U.S. dollars
2012
2011
2012
Service costs
\2,231
\2,299
$27,144
Interest cost
2,116
2,196
25,745
(1,430)
(1,567)
(17,399)
2,802
2,492
34,092
Expected return on plan assets
Amortization of unrecognized actuarial differences
Amortization of unrecognized prior-service costs
(1,249)
Retirement benefit expense
\4,470
(890)
\4,530
(15,196)
$54,386
Assumptions made in the calculation of the above information are as follows:
2012
2011
Discount rate:
2.0%
2.0%
Expected rate of return on plan assets:
2.0%
2.0%
Method of attributing the projected benefits
Straight-line basis
Straight-line basis
Amortization of unrecognized actuarial differences:
to periods of services:
Primarily 17 years
Primarily 17 years
Amortization of unrecognized prior-service costs:
Primarily 14 years
Primarily 14 years
10. Contingent Liabilities
Contingent liabilities at March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
2012
2011
U.S. dollars
2012
Contingent liabilities arising from:
Guarantee of bank loans for employees
\
Guarantee of loans for others in the ordinary course of business
775
7,201
\
971
$ 9,429
7,274
87,614
In addition, the Companies issued letters of guarantee for the future for others in the ordinary course of business. The
aggregate amount was ¥16 million (US$195 thousand) and ¥16 million at March 31, 2012 and 2011, respectively.
23
11. Notes Receivable and Payable with Due Dates at the Balance Sheet Dates
Financial institutions were closed on March 31, 2012 in Japan. Notes receivable and payable with due dates of March 31, 2012
were accounted for as if they had been settled on March 31, 2012. These balances at March 31, 2012 are as follows:
Thousands of
Millions of yen
U.S. dollars
2012
Notes receivable with due date at March 31
Notes payable with due date at March 31
2012
\1,514
$18,421
2,727
33,179
12. Research and Development Expenses
Research and development expenses for the years ended March 31, 2012 and 2011 totaled ¥4,405 million (US$53,595
thousand) and ¥4,501 million, respectively. They were included in selling, general and administrative expenses.
13. Selling, General and Administrative Expenses
Principal selling, general and administrative expenses for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
Freight out
U.S. dollars
2012
2011
2012
\15,617
\15,415
$190,011
Salaries, bonuses and allowances
9,084
8,648
110,524
Research and development expenses
4,405
4,501
53,595
14. Mortgaged Properties
Breakdown of properties pledged as collateral at March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
U.S. dollars
2012
2011
2012
Investments in securities
\16
\16
$195
Total
\16
\16
$195
Properties pledged as collateral:
15. Adjustment on Revaluation of Land
At March 31, 2002, some of the affiliates accounted for using the equity method revalued land in accordance with the Law
concerning Revaluation of Land. The Company’s share of a net-of-tax unrealized gain at March 31, 2012 and 2011 has been
recorded as a separate component of accumulated other comprehensive income.
16. Net Assets
Number and types of stock at March 31, 2012 and 2011 are as follows:
Thousands of shares
Number of common stocks, issued
March 31, 2011
994,500
Increase during the year
March 31, 2012
24
Number of treasury stocks
90,722
-
27
994,500
90,749
17. Cash Dividends
Cash dividends declared are as follows:
Cash dividends payment in the year ending March 31, 2013
Amount of
dividends paid
May 11, 2012
Board of Directors’ Meeting
\1,358 million
US$16,523 thousand
Cash dividends
Books closing
per share
Effective
date
\1.5
date
Mar. 31, 2012
Jun.
5, 2012
US$0.02
Cash dividends payment in the year ended March 31, 2012
Amount of
dividends paid
May 13, 2011
Board of Directors’ Meeting
\1,811 million
Cash dividends
per share
\2.0
Books closing
Effective
date
date
Mar. 31, 2011
Jun.
3, 2011
Cash dividends payment in the year ended March 31, 2011
Amount of
dividends paid
May 14, 2010
Board of Directors’ Meeting
\
905 million
Cash dividends
Books closing
per share
\1.0
Effective
date
date
Mar. 31, 2010
Jun.
4, 2010
18. Reconciliation of Cash on Hand and in Banks to Cash and Cash Equivalents at End of Year
The reconciliation of “Cash on hand and in banks” in the Consolidated Balance Sheets at March 31, 2012 and 2011 to “Cash
and cash equivalents at end of year” in the Consolidated Statements of Cash Flows for the years then ended are as follows:
Thousands of
Millions of yen
U.S. dollars
2012
2011
\18,241
\18,388
$221,937
12
127
146
18,253
18,515
222,083
maturity periods exceeding three months
(17)
(132)
Cash and cash equivalents at end of year
\18,236
\18,383
Cash on hand and in banks
Marketable securities
Total
2012
Time deposits and short-term investments with deposit terms or
(207)
$221,876
19. Leases
Finance leases which do not involve the transfer of ownership rights with initial lease dates beginning on and after April 1,
2008 are accounted for with the method for regular purchase and sale transactions. Such lease assets are mainly equipment.
Finance lease transactions with initial lease dates beginning on and before March 31, 2008 are accounted for with the
methods for rental transactions. Details of such finance leases are as follows:
(1) Pro forma information regarding leased property at March 31, 2012 and 2011 are as follows:
Thousands of
Millions of yen
2012
2011
Amount equivalent to leased article acquisition costs
\941
\1,491
Amount equivalent to the accumulated depreciation
(685)
（1,028)
Amount equivalent to the year-end balance
\256
25
\
463
U.S. dollars
2012
$11,449
(8,334)
$ 3,115
(2) The amount of outstanding future lease payments at March 31, 2012 and 2011, which includes the portion of interest
thereon, is as follows:
Thousands of
Millions of yen
2012
U.S. dollars
2011
2012
\113
\204
$1,375
143
259
1,740
\256
\463
$3,115
Future lease payments:
Due within one year
Due over one year
Total
(3) Lease payments and amounts equivalent to depreciation expenses for the years ended March 31, 2012 and 2011 are as
follows:
Thousands of
Millions of yen
2012
Lease payments
Amount equivalent to depreciation expenses
2011
U.S. dollars
2012
\203
\287
$2,470
203
287
2,470
Note: The amount equivalent to depreciation expenses is calculated using the straight-line method, which designates the residual value
as zero, over the years equivalent to the contracted lease periods.
26
20. Other Comprehensive Income
The following table presents reclassifications adjustments and tax effects allocated to each component of other comprehensive
income for the year ended March 31, 2012:
Thousands of
Millions of yen
U.S. dollars
2012
2012
\(3,549)
$(43,180)
(168)
(2,044)
(3,717)
(45,224)
2,239
27,241
(1,478)
(17,983)
(510)
(6,205)
(15)
(183)
Unrealized gain or loss on available-for-sale securities：
Amount arising during the year
Reclassification adjustments for
gains and losses included in net income
Amount before tax effect
Tax effect
Unrealized gain or loss on available-for-sale securities
Deferred gain or loss on hedges：
Amount arising during the year
Reclassification adjustments for
gains and losses included in net income
Acquisition adjustment
Amount before tax effect
Tax effect
Deferred gain or loss on hedges
1,395
16,973
870
10,585
(323)
(3,930)
547
6,655
(390)
(4,745)
Foreign currency translation adjustment：
Amount arising during the year
Reclassification adjustments for
gains and losses included in net income
-
Amount before tax effect
(390)
Tax effect
-
Foreign currency translation adjustment
(390)
(4,745)
(4,745)
Other, net：
Amount arising during the year
53
645
Reclassification adjustments for
gains and losses included in net income
Amount before tax effect
Tax effect
Other, net
-
-
53
645
(20)
(243)
33
402
Share of other comprehensive income of companies
accounted for by the equity method:
Amount arising during the year
(3,443)
(41,891)
(3)
(36)
(3,446)
(41,927)
\(4,734)
$(57,598)
Reclassification adjustments for
gains and losses included in net income
Share of other comprehensive income of companies
accounted for by the equity method
Total other comprehensive income
27
21. Financial Instruments
1. Status of financial instruments
(1) Policy regarding financial instruments
The Companies’ cash is put mainly into short-term deposits, and temporary surplus is invested in highly secure financial
assets.
The Company obtains funds, which are deemed necessary according to its loan and investment plan, mainly from bank
loans and bond issue. It also obtains short-term operating funds from bank loans and commercial paper. A group cash
management system has been implemented among the Company and major subsidiaries, which enables lending and
borrowing of funds in both directions in a recurrent and continuous manner.
Derivatives are used to avoid interest rate risk for loans and foreign exchange risk for transactions in foreign currency.
The policy on derivatives of the Company and its consolidated subsidiaries restricts the use of derivative transactions to
those related to actual demands and forbids their use for the purpose of speculation.
(2) Types of financial instruments, their risk and risk management system
The Company is exposed to credit risk of customers arising from notes and accounts receivable. In order to manage such
risk, due dates and account balances of customers are controlled in accordance with the corporate management rules. The
credit status of major customers is also monitored in necessity.
Marketable securities and investment in securities are exposed to market value risk. Such securities are mainly those of
the corporations with which the Company has business relationship. The Company monitors their market value as well as
financial situations of the issuing companies on a regular basis.
As loans and bonds have interest rate risk, the Company uses interest rate swap transactions for some loans, which meet
the exceptional requirements defined in Japanese generally accepted accounting principles for financial instruments.
Derivative transactions are made in accordance with the corporate management rules. The Company makes transactions
only with financial institutions with high ratings in order to reduce credit risk.
Liquidity risk of operating credits and loans is managed according to a method in which each group company prepares its
own cash-flow projections on a timely basis, etc.
2. Estimated fair value of financial instruments
Book value, estimated fair value and unrealized gains (losses) of financial instruments on the Consolidated Balance Sheets
at March 31, 2012 and 2011 are as follows. The table below does not include financial instruments for which it is extremely
difficult to determine the fair value.
(Year ended March 31, 2012)
Millions of yen
(1) Cash on hand and in banks
(2) Notes and accounts receivable
Book
Estimated
Unrealized
value
fair value
gain (loss)
\ 18,241
\ 18,241
80,323
80,323
-
\
-
(3) Marketable securities and investments in securities
Stocks of subsidiaries and affiliates
21,343
42,958
21,615
Available-for-sale securities
48,655
48,655
-
(4) Notes and accounts payable
(80,523)
(80,523)
-
(5) Short-term loans
(51,054)
(51,054)
-
(6) Commercial paper
(7) Bonds
(10,000)
(10,000)
(100,000)
(106,472)
(6,472)
-
(106,994)
(109,749)
(2,755)
(8) Long-term loans
Loans from banks and other financial institutions
1,092
(9) Derivative transactions
28
1,092
-
(Year ended March 31, 2012)
Thousands of U.S. dollars
Book
Estimated Unrealized
value
(1) Cash on hand and in banks
$
(2) Notes and accounts receivable
221,937
fair Value
$
221,937
gain (loss)
$
-
977,284
977,284
-
Stocks of subsidiaries and affiliates
259,679
522,667
262,988
Available-for-sale securities
591,982
591,982
-
(4) Notes and accounts payable
(979,718)
(979,718)
-
(5) Short-term loans
(621,170)
(621,170)
-
(3) Marketable securities and investments in securities
(6) Commercial paper
(7) Bonds
(121,669)
(121,669)
-
(1,216,693)
(1,295,437)
(78,744)
(1,301,789)
(1,335,308)
(33,519)
(8) Long-term loans
Loans from banks and other financial institutions
(9) Derivative transactions
13,286
13,286
-
Notes:
1. Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivative
transactions
(1) Cash on hand and in banks and (2) notes and accounts receivable
Since these are settled in a short period of time and their fair value is almost equal to the book value, they are based on the
book value.
(3) Marketable securities and investments in securities
Fair value of stocks is based on the price presented by stock exchanges, while bonds are based on the price presented by
stock exchanges or financial institutions.
(4) Notes and accounts payables, (5) short-term loans and (6) commercial paper
Since these are settled in a short period of time and their fair value is almost equal to the book value, they are based on the
book value.
(7) Bonds
Fair value of bonds is based on the market price. The fair value of the 1st Series Unsecured, Interest Deferrable and Early
Redeemable Subordinated Bonds Solely for Qualified Institutional Investors is calculated by discounting the principal and
interest payments by the assumed discount rate for bonds of the same rating.
(8) Long-term loans
Fair value of long-term loans is calculated by discounting the principal and interest payments by the assumed discount rates
for similar new loans.
(9) Derivative transactions
Please refer to Note “23. Derivative transactions”.
29
(Year ended March 31, 2011)
Millions of yen
Estimated Unrealized
Book
(1) Cash on hand and in banks
(2) Notes and accounts receivable
value
fair value
\ 18,389
\ 18,389
90,597
90,597
gain (loss)
\
-
(3) Marketable securities and investments in securities
Held-to-maturity securities
Stocks of subsidiaries and affiliates
Available-for-sale securities
(4) Notes and accounts payable
(5) Short-term loans
(6) Bonds
127
127
-
20,131
64,894
44,763
52,968
52,968
-
(85,513)
(85,513)
-
(26,606)
(26,606)
(110,000)
(118,874)
(8,874)
-
(146,297)
(149,536)
(3,239)
(7) Long-term loans
Loans from banks and other financial institutions
(8) Derivative transactions
222
222
-
2. Financial instruments for which it is extremely difficult to determine the fair value
In “(3) Marketable securities and investments in securities: Stocks of subsidiaries and affiliates”, the fair value for unlisted
stocks (¥27,635 million (US$336,233 thousand) and ¥25,465 million in the Consolidated Balance Sheets at March 31, 2012
and 2011, respectively.) does not have to be disclosed because there is no market price for them, their future cash flow
cannot be estimated, and because it is deemed very difficult to determine their fair value.
In “(3) Marketable securities and investments in securities: Available-for-sale securities”, the fair value for unlisted
stocks (¥6,147 million (US$74,790 thousand) and ¥6,142 million in the Consolidated Balance Sheets at March 31, 2012 and
2011 respectively.) and others (¥0 million (US$0 thousand) and ¥1 million in the Consolidated Balance Sheets at March 31,
2012 and 2011, respectively.) does not have to be disclosed because there is no market price for them, their future cash flow
cannot be estimated, and because it is deemed very difficult to determine the fair value.
Redemption schedule for receivables and marketable securities with maturities at March 31, 2012 and 2011 are as follows:
(Year ended March 31, 2012)
Millions of yen
Over
Over
Cash on hand and in banks
Notes and accounts receivable
one year
five year
Within
and within
and within
one year
five years
ten years
\ 18,104
\ -
\-
\-
80,323
-
-
-
Over
ten years
Marketable securities and investments in securities
National and local governmental bonds, etc
Total
30
12
-
4
-
\ 98,439
\ -
\4
\-
(Year ended March 31, 2012)
Thousands of U.S. dollars
Cash on hand and in banks
$
Over
Over
one year
five year
Within
and within
and within
one year
five years
ten years
Notes and accounts receivable
220,270
$
977,284
Over
ten years
-
$ -
$-
-
-
-
Marketable securities and investments in securities
National and local governmental bonds, etc
146
Total
$1,197,700
$
(Year ended March 31, 2011)
-
49
-
-
$49
$-
Millions of yen
Cash on hand and in banks
Over
Over
one year
five year
Within
and within
and within
one year
five years
ten years
\ 18,269
\ -
\-
\-
90,597
-
-
-
Notes and accounts receivable
Over
ten years
Marketable securities and investments in securities
Held-to-maturity securities
127
-
-
-
-
12
4
-
\108,993
\ 12
\4
\-
National and local governmental bonds, etc
Total
22. Securities
Available-for-sale securities
(Year ended March 31, 2012)
Thousands of
Millions of yen
Book
Acquisition
value
cost
U.S. dollars
Unrealized
gain(loss)
Book
Acquisition
value
cost
Unrealized
gain(loss)
Securities whose book value
exceeds their acquisition cost:
Stocks
\35,468
\19,913
\15,555
$431,537
$242,280
$189,257
Bonds
National and local governmental
bonds, etc
16
16
-
195
195
-
Subtotal
\35,484
\19,929
\15,555
$431,732
$242,475
$189,257
\12,233
\17,094
\(4,861)
$148,837
$207,981
$(59,144)
Securities whose book value
does not exceed their
acquisition cost:
Stocks
Bonds
Other
Subtotal
Total
938
1,156
(218)
11,413
14,065
(2,652)
\13,171
\18,250
\(5,079)
$160,250
$222,046
$(61,796)
\48,655
\38,179
\10,476
$591,982
$464,521
$127,461
Regarding available-for-sale securities for which fair value information was not available, their aggregate book value on the
Consolidated Balance Sheets was ¥6,147 million (US$74,790thousand) at March 31, 2012, up from ¥6,142 million at March
31, 2011.
31
(Year ended March 31, 2011)
Millions of yen
Book
Acquisition
value
cost
Unrealized
gain(loss)
Securities whose book value
exceeds their acquisition cost:
Stocks
\37,010
\18,270
\18,740
Bonds
National and local governmental
bonds, etc
16
16
-
Subtotal
\37,026
\18,286
\18,740
\14,620
\18,834
\(4,214)
1,321
1,675
(354)
\15,941
\20,509
\(4,568)
\52,967
\38,795
\14,172
Securities whose book value
does not exceeds their
acquisition cost:
Stocks
Bonds
Other
Subtotal
Total
Sale of securities classified as available-for-sale securities and the aggregate gain and loss for the year ended March 31, 2012
and 2011 are as follows:
(Year ended March 31, 2012)
Thousands of
Millions of yen
Sale proceeds
U.S. dollars
\1,389
$16,900
Aggregate gain
789
9,600
Aggregate loss
-
-
(Year ended March 31, 2011)
Millions of yen
Sale proceeds
\198
Aggregate gain
-
Aggregate loss
12
23. Derivative Transactions
The policy on derivatives of the Company and its consolidated subsidiaries restricts the use of derivative transactions to those
related to actual demands and forbids their use for the purpose of speculation. The Company and its consolidated subsidiaries
use derivative transactions for the purpose of reducing the impact on earnings caused by future market fluctuations, hedging
losses, reducing procurement costs and fixing costs. In the years ended March 31, 2012 and 2011, the Company and its
consolidated subsidiaries used interest rate swaps, forward exchange contracts and currency options to hedge the risk against
rate fluctuations or reduce the interest rates of bank loans, bonds and other means of financing.
Under the hedge accounting method, hedging instruments and hedged items for the years ended March 31, 2012 and 2011
are as follows:
・The deferral hedge accounting method is adopted for hedging transactions. As for interest swaps, when the amounts, index
and period meet the conditions for hedged items, the exceptional method defined in Japanese generally accepted accounting
principles for financial instruments is applied.
32
・Hedging instruments are interest rate swaps, forward exchange contracts, currency options and currency swaps.
・Hedged items are the interest of bank loans, bonds and other means of financing and foreign currency transactions.
24. Segment Information
The Companies operate solely in the steel business segment, the disclosure of business segment information has been omitted.
Products and services information
(Year ended March 31, 2012)
Millions of yen
Steel Products
Sales to third parties
\526,562
Other
Total
\31,302
\557,864
(Year ended March 31, 2012)
Thousands of U.S. dollars
Steel Products
Other
Sales to third parties
$6,406,643
$380,849
Total
$6,787,492
(Year ended March 31, 2011)
Millions of yen
Steel products
Sales to third parties
\515,677
Other
Total
\29,676
\545,353
Geographical information
(Year ended March 31, 2012)
Millions of yen
Japan
Sales to third parties
\455,168
North America
\40,979
East Asia
\38,794
Other
\22,923
Total
\557,864
(Year ended March 31, 2012)
Japan
Sales to third parties
$5,537,996
Thousands of U.S. dollars
North America
East Asia
Other
$498,589
$472,004
North America
East Asia
$278,903
Total
$6,787,492
Notes: Net sales information above is based on customer location.
(Year ended March 31, 2011)
Millions of yen
Japan
Sales to third parties
\439,035
33
\40,469
\41,523
Other
\24,326
Total
\545,353
The following tables present the amortization and balance of goodwill as of and for the year ended March 31, 2012 and 2011
by reportable segment.
(Year ended March 31, 2012)
Millions of yen
Steel
Amortization
\604
Balance as of March 31
604
(Year ended March 31, 2012)
Thousands of U.S. dollars
Steel
Amortization
$7,349
Balance as of March 31
7,349
(Year ended March 31, 2011)
Millions of yen
Steel
Amortization
\
Balance as of March 31
604
1,208
25. Related Party Transactions
Material transactions of the Company with related companies and individuals, excluding transactions with consolidated
subsidiaries which are eliminated in the consolidated financial statements and other than those disclosed elsewhere in these
financial statements, for the years ended March 31, 2012 and 2011 are as follows:
(Year ended March 31, 2012)
Millions of yen/Thousands of U.S. dollars
Transaction
Equity
ownership
percentage by
the Company as
of Mar.31,2012
50.0%
Description
of the
Company’s
transactions
Sale of the
Name of
related
company
Nihon
Paid-in
capital
\1,300
Principal
business
Sale of
Teppan
million
coated
Company’s coated
Co., Ltd.
$15,817
steel
steel products
thousand
Resulting accounting balance
2012
\60,946
$741,526
Account
Accounts
receivable
2012
\11,556
$140,601
to the related party
by the Company
Canox
\2,310
Sale of
Corporation
million
coated
Company’s coated
$28,106
steel
steel products
thousand
15.9%
Sale of the
to the related party
by the Company
34
\43,382
$527,826
Accounts
receivable
\7,789
$94,768
(Year ended March 31, 2011)
Millions of yen
Transaction
Equity
ownership
percentage by
the Company as
of Mar.31,2011
50.0%
Description
of the
Company’s
transactions
Sale of the
Name of
related
company
Nihon
Paid-in
capital
\1,300
Principal
business
Sale of
Teppan
million
coated
Company’s coated
steel
steel products
Co., Ltd.
Resulting accounting balance
2011
\60,211
Account
Accounts
2011
\11,207
receivable
to the related party
by the Company
Canox
\2,310
Sale of
Corporation
million
coated
15.9%
Company’s coated
Sale of the
steel
steel products
\40,206
Accounts
\ 6,770
receivable
to the related party
by the Company
Material transactions of the consolidated subsidiaries with the Company’s related companies and individuals, excluding
transactions between consolidated subsidiaries which are eliminated in the consolidated financial statements and other than
those disclosed elsewhere in these financial statements, for the years ended March 31, 2012 and 2011 are as follows:
(Year ended March 31, 2012)
Millions of yen/Thousands of U.S. dollars
Transaction
Name of
related
company
Nihon
Paid-in
capital
\1,300
Principal
business
Sale of
Teppan
million
Co., Ltd.
$15,817
Equity
ownership
percentage by
the Company as
of Mar.31,2012
50.0%
Resulting accounting balance
Description
of the
transactions
Purchase of the
2012
\20,549
Account
Accounts
2012
\7,517
coated
steel products by
$250,018
payable
$91,459
steel
Tsukiboshi Shoji
thousand
Co., Ltd.
(Year ended March 31, 2011)
Millions of yen
Transaction
Equity
ownership
percentage by
the Company as
of Mar.31,2011
50.0%
Name of
related
company
Nihon
Paid-in
capital
\1,300
Principal
business
Sale of
Teppan
million
coated
steel products by
steel
Tsukiboshi Shoji
Co., Ltd.
Description
of the
transactions
Purchase of the
Co., Ltd.
35
Resulting accounting balance
2011
\19,525
Account
Accounts
payable
2011
\7,463
Material related company in the years ended March 31, 2012 and 2011 are Acerinox, S. A. Summary of consolidated
financial conditions and results of Acerinox, S. A. for the years ended December 31, 2011 and 2010 are as follows:
Millions of
Euros
2011
2010
€1,819
€2,005
Total non-current assets
2,251
2,235
Total current liabilities
1,201
1,324
Total current assets
Total non-current liabilities
988
992
Total net assets
1,881
1,924
Net Sales
4,672
4,500
132
193
73
123
Profit on ordinary activities
Profit attributable to the group
26. Other
(1) Information on the consolidated cumulative and quarterly results for the year ended March 31, 2012 is as follows:
Millions of yen
(except per share)
1Q
2Q
3Q
4Q
Cumulative results
Net sales
\136,973
\280,376
\421,529
\557,864
2,820
5,206
5,885
1,104
Income before provision for income taxes
2,143
Net income (loss)
3,925
2,291
(4,868)
Net income (loss) per share*1
Quarterly results
\
2.37
\
4.34
\
2.53
\
(5.39)
Net income (loss) per share*1
\
2.37
\
1.97
\
(1.81)
\
(7.92)
Thousands of U.S. dollars
(except per share)
1Q
2Q
3Q
4Q
Cumulative results
Net sales
$1,666,541
$3,411,315
34,311
63,341
Income before provision for income taxes
26,074
Net income (loss)
Net income (loss) per share*1
Quarterly results
Net income (loss) per share*1
*1. Per share figures are in yen and U.S. dollars.
36
$5,128,714 $6,787,492
47,755
71,602
13,432
27,874
(59,229)
$
0.03
$
0.05
$
0.03 $
(0.07)
$
0.03
$
0.02
$
(0.02) $
(0.10)
(2) Significant lawsuits and claims, etc.
The Company received ceases and desist orders and surcharge payment orders from the Japan Fair Trade Commission on
August 27, 2009 for violation of the antimonopoly law in connection to hot dip zinc coated steel sheets and steel bands
(including prepainted and non-prepainted products). Among the said orders, we are dissatisfied with a cease and desist order
and surcharge payment order issued in connection to the sale of prepainted hot dip zinc coated steel sheets and steel bands for
building material manufacturers and requested for hearings to the Commission on October 1, 2009. After responding to the
hearing procedures, on June 13, 2012, we were served with the transcript of the written decision by the Japan Fair Trade
Commission that dismissing our hearing request.
The Company will respond to the notice appropriately after careful examination of the decision.
27. Major Subsequent Events
１．《Execution of Agreement on the Establishment of Holding Company between Nisshin Steel Co., Ltd. and Nippon Metal
Industry Co., Ltd. and Preparation of the Share Transfer Plan》
On March 19, 2012, the Company and Nippon Metal Industry Co., Ltd. (“Nikkinko”) have agreed to establish a holding
company (the “Holding Company”) by means of joint transfer of their respective shares (the “Share Transfer”) and have
entered into a master business integration agreement (the “Master Business Integration Agreement”) on the same date.
Pursuant to the Master Business Integration Agreement, the both companies have entered into a share transfer agreement (the
“Share Transfer Agreement”) and have jointly prepared a share transfer plan (the “Share Transfer Plan”) as provided below
after respectively obtaining the resolution of the board of directors in the meeting held on April 27, 2012.
(1) Objectives of Business Integration through the Share Transfer, etc.
Through the business integration, the both companies will not only establish itself as the No. 1 manufacturer in stainless
steel business in Japan overall (i.e., technology, development, marketing and earnings), but also develop a firmer business
platform in order to make a leap to become one of the top stainless steel manufacturers in the world by consolidating and
taking full advantage of their business resources.
(2) Outline of the Share Transfer
①Schedule for the Share Transfer
・Execution of Share Transfer Agreement and
preparation of Share Transfer Plan (both companies)
・Annual shareholders’ meetings at which approval for the
Share Transfer Plan was obtained (both companies)
・Date of delisting from the Tokyo Stock Exchange (both companies)
・Effective date of the Share Transfer
・Date of registration of the incorporation of the Holding Company
・Listing date of shares in the Holding Company
April 27, 2012
June 26, 2012
September 26, 2012(scheduled)
October 1, 2012(scheduled)
October 1, 2012(scheduled)
October 1, 2012(scheduled)
The Share Transfer is subject to the both companies obtaining the approval such of the relevant authorities (including
approvals required under the applicable competition laws overseas) and approval from their shareholders at their
respective shareholders’ meetings. The above schedule is subject to change upon discussion between the two companies
if such change is necessary in the course of the business integration process or for any other reason.
②Allocation of Shares upon the Share Transfer
Name of Company
Nisshin Steel
Nikkinko
Share Transfer Ratio
1.00
0.56
37
(3) Overview of the Holding Company to be Established as a result of the Share Transfer
Trade Name
Nisshin Seiko Holdings Kabushiki Kaisha
(“Nisshin Steel Holdings Co., Ltd.” in English)
(2)
Business Description
Management and administration of subsidiaries, etc. which engage
in the business of, among others, manufacturing, processing and
sales of steel products and non-steel products and other business
incidental thereto
(3)
Location
4-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo
(4)
Representative
President & Chief
Toshinori
Executive Officer and
Miki
Representative Director
(5)
Paid-in Capital
30 billion yen
(6)
Net Assets
To be determined
(7)
Total Assets
To be determined
(8)
Date of Fiscal Year End March 31
Name of Shareholder
Mitsubishi UFJ Trust and Banking Corporation
Registry Administrator
(1)
(9)
(Current President & Chief
Executive Officer and
Representative Director of
the Company)
２．The Company decided to issue a domestic unsecured bond at the Board of Directors Meeting held on May 11, 2012. The
bond was issued on June 4, 2012. Details of the bond are as follows:
Total amount: ¥20,000 million
(US$243,339 thousand)
Interest rate: 0.618%
Due date:
June 2, 2017
38
39
Investor Information
(As of March 31, 2012)
Nisshin Steel Co., Ltd.
Registered Head Office
Shin Kokusai Building, 4-1, Marunouchi 3-chome,
Chiyoda-ku, Tokyo l00-8366, Japan
Telephone: (81)-3 3216-5566 Facsimile: (81)-3 3216−5546
Year of Establishment
1928
Year of Incorporation
1959
Common Stock
Authorized: 3,977,964 thousand shares
Issued: 994,500 thousand shares
Capital: ¥79,913,126 thousand
Common Stock Price Range
(Tokyo Stock Exchange)
First Quarter
2012
2011
2010
High Low
High Low
High Low
¥181
¥141
¥207
¥140
¥267
¥163
Second Quarter
164
133
167
135
223
153
Third Quarter
138
100
189
140
169
122
Fourth Quarter
149
112
188
117
197
147
Note: Years ended March 31.
Number of Shareholders
44,400
Independent Certified Public Accountants
Ernst & Young ShinNihon LLC
For further information or additional copies of our corporate brochure or annual report, please contact the Public & Investor
Relations Term.
Public & Investor Relations Term
General Administration & Risk Management Department
Nisshin Steel Co., Ltd.
Shin Kokusai Building, 4-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo l00-8366, Japan
Telephone: (81)-3 3216-5566
Facsimile: (81)-3 3216-5546
40
(As of June 26, 2012)
Managing Executive Officers
Kenji Minami
Kazuhisa Obama
Yoshikazu Tsuda
Yukio Uchida
Koji Mizumoto
Hiroshi Takahashi
Hideyuki Moriya
Katsuhisa Miyakusu
Junya Hayakawa
Junichi Higurashi
Kiyoshi Yasui
Takashi Nakao
Nobuhiro Miyoshi
Tetsuo Kaharu
Executive Officers
Makoto Haya
Takayuki Nakanori
Hiroyuki Aihara
Takayuki Kondo
Shigeru Matsunaga
Naoto Hiramatsu
Toshiaki Naganuma
Atsushi Tsuchiya
Akira Ichii
Hideo Tanaka
Printed in Japan