ANNUAL REPORT2015

Year Ended March 31, 2015

Licensed by TOKYO TOWER

Chairman and CEOAkiji Makino

Gas &Energy

Our corporate philosophy encourages every member in our group to “Become a person

needed by society, as those needed by society can prosper.” In this spirit, Iwatani

Corporation has long been deeply involved with people’s lives and industry through

the supply of gases and energy. We have pursued sustained growth and enhancement

of corporate value by focusing on our core businesses: the Energy Business, which

continuously supports the lifestyles of 3.1 million households nationwide through the

supply of LPG, and the Industrial Gases & Machinery Business, which has developed and

grown together with Japanese industry over the course of many years.

For our hydrogen operations, in 2015 the door to a hydrogen society is slated to

open, marking the dawning of the hydrogen era. The Iwatani Group will contribute to

popularizing and expanding the use of hydrogen by drawing fully on knowledge and

experience pertaining to hydrogen accumulated over 70 years as a hydrogen pioneer.

We will continue to build on the strengths in our core businesses and work to but-

tress the business foundation. Our management vision is clear. Corporate transformation

that positions us to supply the future material needs of society is rewarded by growth.

We ask your continued support in the years to come.

To Our Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 1Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Special Feature: Moving Toward Realization of a Hydrogen Society . . . 3An Interview with the President . . . . . . . . . . . . . . . 5Performance by Segment . . . . . . . . . . . . . . . . . . . . . 8Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . 9Company Information . . . . . . . . . . . . . . . . . . . . . . . . 10

Contents

Disclaimer Regarding Forward-looking Statements:This report contains forward-looking statements regarding the Company’s plans, outlook, strategies and results for the future that are based on management’s estimates, assumptions and projections at the time of publication . Certain risks and uncertainties could cause the Company’s actual results to differ materially from any projections presented in this report . These risks and uncertainties include, but are not limited to, the domestic and international economic circumstances surrounding the Com-pany’s businesses, competitive activity, related laws and regulations and exchange rate fluctuations .

To Our Shareholders

Supplying “Gas & Energy” to meet the needs of society

1

Supply for living

As a unique trading company with technological capabilities

Energy

Materials

Industrial Gases & MachineryWe support industry by supplying a wide range of high-pressure gases, including oxygen, nitro-gen, argon, and other air-separation gases as well as hydrogen and helium, which offer prospects for future growth. We maintain a constant quest for solutions together with our customers through initiatives including the development of new gases.

We have achieved a stable supply of mineral sand and rare earth metals and support wide-ranging industries through the supply of materials. We engage in the materials business worldwide, focusing mainly on functional materials such as films for smartphones, metal coating products for air conditioning equipment, and resin raw materials such as PET resins.

Agri-bio & FoodsWe provide safe and reliable food by applying advanced gas technologies to our operations in the health food, agriculture, and livestock sectors, including the import and sale of vegetables, marine products, and other frozen food products. We also contribute to people’s lives in a number of food-related fields through activities including the construction and installation of plant factories.

Since Iwatani became Japan’s first nationwide supplier of LPG for household use in 1953, we have been building an independent and stable supply structure that extends end to end from oil-producing countries to our customers’ kitch-ens. We support Japan’s energy infrastructure by building a disaster-resilient supply system and diversifying our supply sources.

2

Business Overview

21

18

13 14

1516 12

20

19

Kokura

The First Hydrogen Refueling Station in Kyushu

The northern Kyushu area is the site of a number of hydrogen- related initiatives, such as the Kitakyushu Hydrogen Town

demonstration experiment. Iwatani opened a hydrogen refueling station in Kokura, the first one in the

Kyushu area and we also plan to open a mobile hydrogen refueling station

in the same area.

Iwatani became involved with hydrogen in 1941. Ever since, we have worked to develop demand for hydrogen and increase sales, mainly for industrial applications. The MIRAI fuel cell vehicle became commercially available at the end of last year, and 2015 has been called year one of the hydrogen era. As a leading supplier of hydrogen, the Iwatani Group will construct 20 hydrogen refueling stations in fiscal 2015 to support the popularization of fuel cell vehicles.

Kansai International Airport is implementing initiatives to realize an envi-ronmentally advanced airport, including the deployment of fuel cell

buses and replacement of 400 airport forklifts with fuel cell forklifts . Iwatani is participating in this project and planning to con-

struct a large hydrogen refueling station for FCV and FC buses . In addition, we are working to supply

hydrogen to the new forklifts .

Hydrogen Refueling Station at Kansai International Airport

17

Kansai International

Airport

The Iwatani Group plans to construct 20 hydrogen refueling stations by the end of fiscal 2015.

Hydrogen era

birth

Special Feature: Moving Toward Realization of a Hydrogen Society

A leading supplier into the future

Hydrogen Refueling Stations of

3

9

11 10

8

7 6

3

4

5

Hydrogen Refueling Station Combined with a Convenience Store

Stations

Opened (As of August, 31, 2015) Planned

1 Shiba Koen

2 Ikegami, Tokyo

3 Ariake, Tokyo

4 Kudan (mobile station)

5 Shin Yokohama

6 Toda, Saitama

7 Kofu

8 Toyota Ecoful Town

9 Kariya, Aichi

10 Nagoya (mobile station)

11 Inazawa (mobile station)

12 Otsu

13 Amagasaki

14 Osaka Hommachi (mobile station)

15 Morinomiya, Osaka

16 Osaka Suminoe

17 Kansai International Airport

18 Shunan, Yamaguchi

19 Kokura

20 Fukuoka City (mobile station)

21 Fukuoka City

Prepare for tomorrow

First Commercial Hydrogen Refueling Station in Central Tokyo

1

2

Ikegami Tokyo

This hydrogen refueling station, symbol of a new era, is combined with a showroom that displays fuel cell vehicles and a pure

hydrogen fuel cell. It will serve as a flagship site for dis-seminating information and promoting the

advantages of a hydrogen society.

Iwatani will partner with Seven-Eleven Japan to operate hydro-gen refueling stations alongside convenience stores for the

purpose of fostering a sense of familiarity with hydrogen energy. We will support eco-friendly store planning

and design by demonstrating environmental load reduction through using a pure

hydrogen fuel cell.

ShibaKoen Licensed by TOKYO TOWER

4

President Masao Nomura

Quantitive Management Targets

What is the outlook for fiscal 2015, the final year of the PLAN15 medium-term management plan?Question 1

We set quantitative management targets of net sales of ¥724.0 billion, ordinary income of ¥22.0 billion, and net income of ¥11.0 billion in the PLAN15 medium-term management plan. However, as a result of a review of all of our businesses in light of a sharp decline in LPG import prices and the current business environment, we have revised our forecasts and reduced the fiscal 2015 targets for net sales and ordinary income. The revised forecast is for net sales of ¥700.0 billion, ordinary income of ¥21.0 billion, and net income of ¥11.0 billion. In addition, in PLAN15 we set fiscal 2015 targets of interest-bearing debt of ¥145.0 billion and a ratio of interest-bearing debt to total assets of 35.0%, which we have achieved. As of March 31, 2015, interest bearing debt was ¥141.7 billion, and the ratio of interest-bearing debt to total assets was 34.7%. To secure a good foundation for the next medium-term management plan, we will steadily and determinedly bring PLAN15 to a successful completion in fiscal 2015.

Answer 1

* Iwatani has changed the full-year forecast to ¥21 .0 billion, as announced at the beginning of the fiscal year .

Fiscal 2014result

Fiscal 2015 plan(PLAN15)

Ordinary income ¥127 .6 billion ¥220.0 billion*

Net income ¥ 61 .9 billion ¥110.0 billion

Interest-bearing debt ¥141 .7 billion ¥145.0 billion or less

Ratio of interest-bearing debt to total assets 34 .7% 35.0% or less

ROA 3 .1% 5.3%

During the year ended March 31, 2015 (fiscal 2014), Iwatani undertook continuous enhance-ment of earning power and strengthened its financial standing in accordance with the PLAN15 medium-term management plan . We will continue to enhance corporate value by moving steadily to strengthen infrastructure with 20 hydrogen refueling stations being constructed across Japan in preparation for a hydrogen society and other initiatives .

5

An Interview with the President

What challenges must be addressed to realize a hydrogen society?Question 2

We consider the reduction of the manufacturing cost of hydrogen to be one challenge. The Iwatani Group will proceed with cost reduction by importing inexpensive hydrogen manufactured overseas and working to increase demand for hydrogen. To develop hydrogen demand, in addition to development targeting fuel cell vehicles (with a view to future use of hydrogen in homes) we are developing a pure-hydrogen fuel cell to generate electricity, for which we will directly supply hydrogen. At Kitakyushu Hydrogen Town, we have conducted a demonstration test involving the supply of hydrogen directly to commercial facilities and homes through a network of pipes in an urban setting. We will utilize the knowledge gained through such initiatives to further develop demand for hydrogen.

Answer 2

Liquid hydrogen is the key to popularization

A Supply Chain Connecting Hydrogen Sources with Hydrogen Demand

A liquid hydrogen supply chain

Pure hydrogen fuel cells

99.9999%Liquid

hydrogen

High purityTransport

efficiency Approx .

10times

Corporation’s Business Area

Hydrogen source

Manufacturing Transport Supply Hydrogen demandStorage

6

The Iwatani Group began handling helium produced in Qatar in July 2013 and has become a “helium major” that handles approximately 8% of the helium produced worldwide. In addition to expanding sales in Japan, We will increase sales in growth markets such as China and Southeast Asia. As a distribution system initiative to help manage logistics, we have added a GPS function to the containers used to import helium. In this way, we will pursue greater business efficiency and profit growth. As a long-term initiative, we will also work to secure new supply sources for helium and bolster long-term supply capabilities.

Answer 3

Question 4

The Iwatani Group has a basic policy of continuously paying stable dividends and provides shareholder returns observing careful consideration to business results and the business environment. We maintained the annual dividend of ¥7 per share in fiscal 2014, despite a substantial year-on-year decrease in earnings resulting from a special factor: an unprecedented decline in LPG import prices. We plan to pay a dividend of ¥7 per share for fiscal 2015 as well. We consider increasing the level of the Company’s earnings by achieving the targets in the current medium-term management plan to be our responsibility to our shareholders.

Answer 4

Question 3What future developments can we expect in the helium business?

What is Iwatani’s dividend policy?

l Bases for helium distribution

The U.S.Qatar

Volumehandled:

Approximately 8% of

world supply capabilities

7

An Interview with the President

52 .8%

23 .5%

18 .5%

3 .9% 1 .3%

Segment Performance Review

Percentage of Net Sales

n Energy n Industrial Gases & Machinery

n Materials n Agri-bio & Foods n Others

Operating IncomeNet Sales A downtrend in LPG import prices throughout the year led to an extremely difficult business environment, with prices continuing to decline even during the winter peak demand season. In this environment, in the mainstay residential and commercial LPG business, sales volume to residential customers increased due to expansion of the number of LPG consumer households, and sales volume to commercial cus-tomers increased as a result of conversion of fuel from heavy oil to LPG. The impact of falling LPG import prices was that we held LPG inventory that was purchased at contract prices comparatively higher than market prices, which contributed to a substantial income decrease. As a result, operating income fell by approximately ¥9,700 million.

Energy

l LPG for household, commercial and industrial use

l LPG-supply equipment and facilitiesl LNGl Petroleum productsl Household kitchen appliancesl Home energy componentsl Daily necessitiesl Portable cooking stovesl Gas canistersl Mineral water, etc .

0

100,000

200,000

300,000

400,000

0

3,000

6,000

9,000

15,000

12,000

365,592

2,347

’13 ’14 ’13 ’14

(¥ million) (¥ million)

(FY) (FY)

Operating IncomeNet Sales Sales of air-separation gases increased as a result of high-er sales volume to the domestic and overseas electronic component and automotive industries and progress in the response to increases in electricity charges in Japan. Sales of helium increased, especially in overseas markets, thanks to strengthening of the supply structure from Qatar. Sales of liquid hydrogen increased as a result of new customer acquisition and other factors. In the machinery and facilities business, sales of hydrogen-related facilities, welding-related facilities, and welding materials were strong. As a result, operating income rose by approximately ¥1,400 million.

Industrial Gases & Machinery

l Air-separation gases l Hydrogenl Helium l Other specialty gasesl Gas-supply facilities l Welding materialsl Welding and cutting equipmentl Industrial machinery and facilitiesl Industrial robots l Pumps and compressorsl Disaster prevention equipmentl High-pressure gas containersl Semiconductor manufacturing equipmentl Electronic-component manufacturing equipmentl Factory automation systemsl Medicine and food packing machineryl Environmental equipment, etc .l Hydrogen refueling station facilities

0

50,000

100,000

150,000

200,000

0

2,500

5,000

10,000

7,500

162,275

6,324

’13 ’14 ’13 ’14

(¥ million) (¥ million)

(FY) (FY)

Operating IncomeNet Sales Sales of products for smartphones were strong, mainly in overseas markets. In addition, sales of metal coating products for air conditioning equipment and interior construction contracting for the construction industry increased. On the other hand, a slump in sales of PET resin raw material caused by a decline in demand, lower sales of titanium raw material and other factors led to a substantial decrease in income in the mineral resource raw materi-als business in Western Australia. As a result, operating income was nearly unchanged from fiscal 2014.

Materials

l Stainless steell Non-ferrous metalsl Functional plastic productsl Electronic display materialsl Mineral sandl Rare earth metals, etc .

0

50,000

100,000

150,000

0

1,000

3,000

2,000

128,034 2,647

’13 ’14 ’13 ’14

(¥ million) (¥ million)

(FY) (FY)

Operating IncomeNet Sales In the foods business, sales of frozen vegetables increased, mainly for use in processed side dishes. Profit-ability improved in the agriculture and livestock business as a result of solid sales of large-scale projects for agricul-tural facilities and livestock facilities and high hog prices. As a result, operating income rose by approximately ¥100 million.

Agri-bio & Foods

l Frozen vegetables and fruitsl Health foodsl Livestock-related productsl Agri-bio related goodsl Food plant sanitation management, etc .

0

10,000

20,000

30,000

0

200

400

800

600

27,286 727

’13 ’14 ’13 ’14

(¥ million) (¥ million)

(FY) (FY)

(Years ended March 31)

8

Performance by Segment

2011 2012 2013 2014 2015 2015

For the year ¥ million US$ thousand

Net sales ¥ 618,844 ¥ 661,185 ¥ 657,006 ¥ 703,923 ¥ 691,902 $ 5,757,693

Gross profit 138,608 144,432 139,763 146,792 141,034 1,173,620

Operating income 14,868 19,171 16,709 18,518 11,174 92,984

Ordinary income 15,590 19,528 17,406 19,258 12,761 106,191

Income before income taxes and minority interests 12,850 19,535 15,465 18,302 12,468 103,753

Net income 6,193 10,543 8,026 10,466 6,199 51,585

Comprehensive income 4,888 10,508 13,691 16,384 16,100 133,976

R&D expenses 611 572 683 1,368 1,250 10,401

Ratios % %

Net income to net sales 1 .0 1 .6 1 .2 1 .5 0.9 0.9

ROE (net income to net assets) 10 .0 15 .7 10 .4 11 .6 6.1 6.1

ROA (ordinary income to total assets) 4 .2 5 .1 4 .5 4 .8 3.1 3.1

Equity ratio 16 .9 18 .4 21 .5 23 .2 26.7 26.7

Per share data Yen U.S. dollars

Net income 25 .21 43 .24 32 .88 42 .53 25.19 0.20

Shareholders’ equity 257 .80 292 .28 337 .74 393 .15 442.96 3.68

Cash dividend applicable to the period 6 .00 7 .00 7 .00 7 .00 7.00 0.05

At year-end ¥ million US$ thousand

Total assets 373,940 386,127 386,302 416,219 408,824 3,402,047

Fixed assets 197,811 200,354 207,523 214,724 227,015 1,889,115

Interest-bearing debt 166,108 159,398 151,378 161,099 141,793 1,179,936

Net assets 71,249 79,551 90,903 105,058 117,942 981,459

0

200,000

’11 ’12 ’13 ’14 ’15

800,000

600,000

400,000

0

5,000

’11 ’12 ’13 ’14 ’15

20,000

15,000

10,000

0’11 ’12 ’13 ’14 ’15

100,000

500,000

300,000

400,000

200,000

0’11 ’12 ’13 ’14 ’15

30,000

120,000

90,000

60,000

0

4,000

’11 ’12 ’13 ’14 ’15

2,000

12,000

8,000

10,000

6,000

* The U .S . dollar amounts have been translated at the prevailing exchange rate as of March 31, 2015, which was ¥120 .17 to US$1 .00 .

Net Sales (¥ million) Operating Income (¥ million) Net Income (¥ million)

Total Assets (¥ million) Net Assets (¥ million)

9

Financial Highlights

Share listing Tokyo, Nagoya Shares of common stock issued and outstanding

251,365,028 (5,015,621 shares of treasury stock included)

Agent to manage shareholders’ registry Mitsubishi UFJ Trust and Banking Corporation

Distribution of shares by type*4

Major shareholders*5

Change in share price

Name Number of shares held (Thousands of shares)

Shareholding ratio(%)

The Iwatani Naoji Foundation 20,663 8 .39Tetsu Iwatani Co . Ltd . 6,870 2 .79The Bank of Tokyo-Mitsubishi UFJ, Ltd . 6,680 2 .71Resona Bank, Ltd . 5,888 2 .39Japan Trustee Services Bank, Ltd . (Trust Account) 5,015 2 .04Iwatani Enyukai 4,527 1 .84Nippon Life Insurance Company 4,491 1 .82The Master Trust Bank of Japan, Ltd . (Trust Account) 4,362 1 .77Iwatanisangyou Senyukai 4,059 1 .65Sompo Japan Nipponkoa Insurance Inc . 3,907 1 .59

Name Formal establishment February 2, 1945

Headquarters

Osaka Head Office6-4, Hommachi 3-chome, Chuo-ku, Osaka 541-0053, Japan Tel: 81-6-7637-3310Tokyo Head Office21-8, Nishi-Shimbashi 3-chome, Minato-ku, Tokyo 105-8458, Japan Tel: 81-3-5405-5711

Company directors and auditors

Paid-in capital 20,096 million yen Number of employees 8,688 (consolidated)

Website http://www .iwatani .co .jp/eng/

［2012］ ［2013］ ［2014］ ［2015］

500

0

1,000

0

150,000

100,000

50,000

200,000

250,000

300,000

Jan.Feb.M

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Shares of common stock issued and outstanding(Treasury stock included)

251,365,028

* 5 In addition to the above, the Company holds 5,015,621 shares of treasury stock .

* 4 Treasury stock is included in Individuals and others

Individuals and others 40 .08% Financial institutions 25 .76% Other institutions 25 .28% Foreign institutions and others 6 .17% Securities companies 2 .72%

Share Price (Yen) Trading Volume (Thousand shares)

Company Information

(As of March 31, 2015)

* 1 Director and executive officer 2 Outside director 3 Outside auditor

(As of June 26, 2015)

Chairman and CEO*1 Akiji MakinoVice Chairman*1 Toshio WatanabePresident*1 Masao NomuraExecutive Vice President*1 Kazuhiko MinamimotoExecutive Vice President*1 Hisato UehaSenior Executive Director*1 Mitsuhiro Tanimoto

Senior Executive Director*1 Hirozumi HirotaExecutive Director*1 Masanori WatanabeExecutive Director*1 Takashi FunakiExecutive Director*1 Hiroshi MajimaExecutive Director*1 Naoki IwataniDirector*1 Akira Ohta

Director*1 Katsuya TakemotoDirector*1 Satoshi WatanabeDirector*2 Mitsuaki NaitouCorporate Auditor Toyofumi OhamaCorporate Auditor Yoshiaki FukuzawaCorporate Auditor*3 Masahiro Horii

Corporate Auditor*3 Yoshinori Shinohara

Share Information

10

Company Information

Osaka Head Office6-4, Hommachi 3-chome, Chuo-ku, Osaka 541-0053, JapanTel: 81-6-7637-3310 Fax: 81-6-7637-3535

Tokyo Head Office21-8, Nishi-Shimbashi 3-chome, Minato-ku, Tokyo 105-8458, JapanTel: 81-3-5405-5711 Fax: 81-3-5405-5640

Corporate Website http://www.iwatani.co.jp/eng/ Printed in Japan

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