Consolidated Financial Statements
Toho Zinc Co., Ltd.
and Consolidated Subsidiaries
For the year ended March 31, 2023
with Independent Auditor’s ReportToho Zinc Co., Ltd. and Consolidated Subsidiaries
Contents to Consolidated Financial Statements

Independent Auditor’s Report ------------------------------------------------------------- 1
Consolidated Balance Sheet --------------------------------------------------------------- 6
Consolidated Statement of Operations --------------------------------------------------- 8
Consolidated Statement of Comprehensive Income ------------------------------------- 9
Consolidated Statement of Changes in Net Assets ------------------------------------- 10
Consolidated Statement of Cash Flows -------------------------------------------------- 12
Notes to Consolidated Financial Statements -------------------------------------------- 14

(This is an English translation of the Independent Auditor's Report for the financial statementin the Japanese Annual report)

Independent Auditor’s Report

The Board of Directors
Toho Zinc Co., Ltd.
OpinionWe have audited the accompanying consolidated financial statements of Toho Zinc Co., Ltd.
and its consolidated subsidiaries (the Group), which comprise the consolidated balance sheet
as at March 31, 2023, and the consolidated statements of income, comprehensive income,changes in net assets, and cash flows for the year then ended, and notes to the consolidated
financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Group as at March 31, 2023, andits consolidated financial performance and its consolidated cash flows for the year then endedin accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan.
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements section of our report.
We are independent of the Group in accordance with the ethical requirements that are relevant
to our audit of the consolidated financial statements in Japan, and we have fulfilled our otherethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of mostsignificance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of the audit of the consolidated financial statements as awhole, and in forming the auditor’s opinion thereon, and we do not provide a separate opinion
on these matters.

1

Recoverability of deferred tax assets
Description of Key Audit Matter

Auditor’s Response

As described in (1) “Recoverability of Deferred
Tax Assets” under (s) “Significant accounting
estimates” in 1. “Summary of Significant
Accounting Policies” in Notes to Consolidated
Financial Statements, the Group recorded
deferred tax assets (before being offset against
deferred tax liabilities) of ¥2,816 million as ofMarch 31, 2023. Of this amount, deferred tax
assets (before being offset against deferred tax
liabilities) recorded by Toho Zinc Co., Ltd.
(“Toho Zinc”) amounted to ¥1,071 million. The
recoverability of deferred tax assets on
deductible temporary differences and tax loss
carryforwards is determined by estimating futuretaxable income. Estimates of future taxable
income are based on future business plans, andthe significant assumptions underlying futurebusiness plans are market conditions, such as
metal prices and foreign exchange rates, andsales volume.

In considering the recoverability of Toho
Zinc’s deferred tax assets, we mainly performed
the following audit procedures:

In determining the recoverability of Toho Zinc’s
deferred tax assets, the significant assumptions
underlying future business plans are affected byfluctuations in quoted market prices and market
demand and thus involve uncertainty and require
management’s judgment. Accordingly, we havedetermined that this is a key audit matter for theyear ended March 31, 2023.

・We considered the scheduled timing of thereversal of the balance of deductible
temporary differences and tax loss
carryforwards.
・In order to assess estimates of future taxable
income, we considered the underlying futurebusiness plan. In considering the futurebusiness plan, we considered its consistency
with the latest budget approved by the Boardof Directors.
・To assess the effectiveness of the estimation
process used by management in developing
business plans, we compared previous year
business plans and actual results.
・We made inquiries of management about
metal prices, foreign exchange rates, and sales
volume, which are significant assumptions
included in future business plans, andcompared these assumptions with the resultsof trend analysis based on historical data.
・We considered management’s evaluation of
uncertainty which reflects a certain level ofrisk in the business plan.

Other Information
The other information comprises the information included in the Annual report that contains
audited consolidated financial statements but does not include the consolidated financial
statements and our auditor’s report thereon. Management is responsible for preparation anddisclosure of the other information. The Audit and Supervisory Committee responsible foroverseeing the Group’s reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is toread the other information and, in doing so, consider whether the other information ismaterially inconsistent with the consolidated financial statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated.
2

If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management, the Audit and Supervisory Committee for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in Japan,
and for such internal control as management determines is necessary to enable the preparationof consolidated financial statements that are free from material misstatement, whether due tofraud or error.
In preparing the consolidated financial statements, management is responsible for assessing
the Group’s ability to continue as a going concern and disclosing, as required by accounting
principles generally accepted in Japan, matters related to going concern.
The Audit and Supervisory Committee is responsible for overseeing the Group’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, andto issue an auditor’s report that includes our opinion. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
・ Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the consolidated financial statements is not expressing an opinion on the effectiveness of
the Group’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

3

・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Group to cease tocontinue as a going concern.
・ Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fairpresentation in accordance with accounting principles generally accepted in Japan.
・ Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit and Supervisory Committee regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the Audit and Supervisory Committee with a statement that we havecomplied with the ethical requirements regarding independence that are relevant to our auditof the consolidated financial statements in Japan, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with the Audit and Supervisory Committee, we determine
those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe thesematters in our auditor’s report unless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act
of Japan.

4Ernst & Young ShinNihon LLC
Tokyo, Japan
June 29, 2023

Akira Sato
Designated Engagement Partner
Certified Public Accountant

Yasuhito Tateishi
Designated Engagement Partner
Certified Public Accountant

Notes to the Readers of Independent Auditor's Report
・This is an English translation of the Independent Auditor's Report as required by theCompanies Act of Japan for the conveniences of the reader.
・Some parts of subject which are included in an English translation of the Independent
Auditor's Report are not included in translated financial statements even if original
Japanese version includes.
・Our audit doesn’t include the translation of Japanese yen amounts into U.S. dollar amounts.
So the U.S. dollar amounts written in this translated report are out of our scope.

5

Toho Zinc Co., Ltd. and Consolidated Subsidiaries
Consolidated Balance Sheet
March 31,2023
2022
(Millions of yen)

AssetsCurrent assets:
Cash and time deposits (Notes 14 and 16)
Notes and accounts receivable, trade, and contract assets (Notes
14 and 19)
Electronically recorded monetary claims (Notes 14 and 19)
Inventories (Note 3)
Other current assets
Less: Allowance for doubtful accounts
Total current assets¥

Property, plant and equipment:
Buildings and structures (Note 7)
Machinery and equipment (Note 7)
Land (Notes 4 and 7)
Leased assets
Construction in progress
Less: Accumulated depreciation
Net property, plant and equipment

Investments and other assets:
Investment securities (Notes 7, 14 and 15)
Long-term loans receivable
Investments in unconsolidated subsidiaries and associates(Notes 6 and 15)
Net defined benefit asset (Note 8)
Deferred tax assets (Note 11)
Mining rights (Note 5)
Other assets
Less: Allowance for doubtful accounts
Total investments and other assets

Total assets

¥

9,536

¥

7,929

2023
(Thousands of
U.S. dollars)(Note 2)$

71,414

16,128938
47,4572,557(0)76,61817,594
1,160
52,0783,850(0)82,613

120,7817,024
355,403
19,149(0)573,788

25,66281,006
16,616250
2,015
125,551(89,482)
36,06825,24578,704
16,616
249
769
121,586(86,315)
35,271

192,181606,650
124,436
1,872
15,090940,245(670,126)
270,111

1,626
2,440

1,678
1,365

12,177
18,273

9,866
863
788
14,1471,468(887)
30,313

9,597
878
1,700
12,016
1,563(888)
27,91173,886
6,462
5,901
105,946
10,993(6,642)
227,012

145,796$ 1,070,912

142,999¥

6

March 31,
2023
2022
(Millions of yen)

Liabilities and net assets
Current liabilities:
Notes and accounts payable, trade (Note 14)
Short-term borrowings (Notes 7 and 14)
Current portion of long-term debt (Notes 7 and 14)
Commercial papers (Notes 7 and 14)
Lease obligations (Note 7)
Accrued income taxes
Accrued expenses
Asset retirement obligations (Note 9)
Other current liabilities (Note 19)
Total current liabilities¥

Long-term liabilities:
Long-term debt (Notes 7 and 14)
Lease obligations (Note 7)
Deferred tax liabilities (Note 11)
Deferred tax liabilities related to land revaluation (Notes 4
and 11)
Net defined benefit liability (Note 8)
Provision for environmental measures
Provision for loss on business of subsidiaries and associates
Asset retirement obligations (Note 9)
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets (Note 10):
Shareholders’ equity:
Common shares:
Authorized – 26,400,000 shares
Issued– 13,585,521 shares
Capital surplus
Retained earnings
Less: Treasury shares, at cost – 7,620 shares in 2023 and7,459 shares in 2022
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gains on other securities
Deferred losses on hedges
Revaluation reserve for land (Note 4)
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

¥

7,749
32,835
6,419
6,000
32
393
3,744
436
4,823
62,433¥

10,72030,10010,192
8,000
29
1,044
5,347
–
6,969
72,404

2023(Thousands of
U.S. dollars)(Note 2)$58,031
245,899
48,071
44,933239
2,943
28,0383,265
36,119467,557

21,11816
222

18,15333
207

158,151
119
1,662

4,173
124
18
102
3,830
438
30,04692,480

4,173
140
65
102
4,116
433
27,427
99,831

31,251928
134
763
28,6823,280
225,013692,578

14,6309,876
14,563

14,6309,876
14,787

109,563
73,960109,061(31)
39,040(31)
39,264(232)
292,368

371
(539)
8,610
2,585
451
11,47950,519142,999 ¥

315
2,778
(3,668)(4,036)8,610
64,479912
19,358
530
3,377
6,700
85,96545,964
378,334
145,796 $ 1,070,912

The accompanying notes are an integral part of these financial statements.

7

Toho Zinc Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Operations
Year ended March 31,
2023
2022
2023
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Net sales (Note 19)
Cost of sales
Gross profit¥ 145,764
133,407
12,356¥ 124,279
106,107
18,172$ 1,091,619
999,078
92,533

3,635
1,581
35
(0)
215
218
2,621
8,307
4,049

3,636
1,466
40
0
214
213
2,092
7,663
10,50927,222
11,840
262
(0)
1,610
1,632
19,62862,21030,322

231
(671)
(304)
354
(768)
12
–
(296)
(231)
18
(11)
–
–
–

92
(487)
(62)
102
(455)
242
(1)
(266)
–
53
(10)
(45)
(515)
70

1,729
(5,025)(2,276)
2,651(5,751)89–(2,216)(1,729)
134
(82)
–
–
–

(1,393)247(2,813)1,235–
99(1,183)
9,325(10,432)
1,849(21,066)
9,248

792
(351)
440
794
794

1,250
152
1,403
7,922
7,922

5,931
(2,628)
3,295
5,946
$
5,946
(U.S. dollars)(Note 2)

Selling, general and administrative expenses:
Transportation expense
Salaries and wages
Retirement benefit expenses
Provision of allowance for doubtful accounts
Depreciation
Research and development costs
Other
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses
Share of loss of entities accounted for using equity method
Foreign exchange gains
Environmental expenses
Gain on sales of property, plant and equipment
Loss on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Impairment loss on fixed assets (Note 5)
Gain on sales of investment securities
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of derivatives
Royalty income
Loss on valuation of investments in capital of subsidiaries andassociates
Other, net
Profit before income taxes
Income taxes (Note 11):
Current
DeferredProfitProfit attributable to owners of the parent

¥

¥

(Yen)
Per share:
Profit – basic

¥

58.52

¥

583.45$0.43

Cash dividends (Note 10)

¥

75.00

¥

75.00

$

0.56

The accompanying notes are an integral part of these financial statements.

8

Toho Zinc Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Comprehensive Income
Year ended March 31,
2023
2022
2023
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Profit¥794

Comprehensive income

¥

55
3,128
1,672
(78)
4,778
5,573

Comprehensive income attributable to:
Owners of the parent
Non-controlling interests¥

Other comprehensive income (Note 18):
Net unrealized gains (losses) on other securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income (loss)

5,573
–

¥

7,922

$

5,946

¥

(107)
(3,548)856
56(2,743)
5,179 $

411
23,425
12,521(584)
35,782
41,735

5,179–

41,735–¥$The accompanying notes are an integral part of these financial statements.

9

Toho Zinc Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets
Shareholders’ equity
Number ofshares ofcommonshares issued(Thousands)
Balance as of April 1, 2021
Cumulative effects of changes inaccounting policies
Restated balance
Dividends of surplus
Profit attributable to owners of the parent
Acquisition of treasury shares
Reversal of revaluation reserve for land
Net changes in items other than those inshareholders’ equity

13,585

Balance as of March 31, 2022
Dividends of surplus
Profit attributable to owners of the parent
Acquisition of treasury shares
Net changes in items other than those inshareholders’ equity

13,585–––

Balance as of March 31, 2023

Commonshares¥–
13,585
–
–
–
–

¥

–
14,630
–
–
–
–

–

–
13,585

14,630Capitalsurplus–14,630–––¥–14,630¥Retained
Treasury
earnings
shares (*)(Millions of yen)

9,876

¥

7,546

¥

(30)

Total
shareholders’equity¥32,022

–
9,876
–
–
–
–

0
7,546
(678)
7,922
–
(1)

–
(30)
–
–
(0)
–

0
32,023
(678)
7,922
(0)
(1)

–

–

–

–

9,876
–
–
–

14,787(1,018)
794
–

(31)
–
–
(0)

39,264(1,018)
794
(0)

–
9,876

¥

–
14,563

¥

–
(31)

¥

–
39,040Shareholders’ equity
CommonsharesBalance as of March 31, 2022
Dividends of surplus
Profit attributable to owners of the parent
Acquisition of treasury shares
Net changes in items other than those inshareholders’ equity$

Balance as of March 31, 2023$

109,563––––
109,563

CapitalRetained
Treasury
surplusearnings
shares (*)(Thousands of U.S. dollars)(Note 2)$$73,960––––73,960$$110,739(7,623)
5,946––
109,061

$

$

(232)
–
–
(0)
–
(232)

Total
shareholders’equity$$294,046(7,623)5,946(0)–292,368

10

Accumulated other comprehensive incomeNet
unrealized
gains onothersecurities
Balance as of April 1, 2021
Cumulative effects of changes inaccounting policies
Restated balance
Dividends of surplus
Profit attributable to owners of theparentAcquisition of treasury shares
Reversal of revaluation reserve for land
Net changes in items other than thosein shareholders’ equity¥

Balance as of March 31, 2022
Dividends of surplus
Profit attributable to owners of theparentAcquisition of treasury shares
Net changes in items other than thosein shareholders’ equity
Balance as of March 31, 2023¥

423

Deferred
losses onhedges¥(120)

Foreign
RemeasureRevaluation
currency
ments ofreserve fortranslation
definedland
adjustment benefit plans(Millions of yen)
¥
8,608
¥
56 ¥
473

Total
accumulated
othercomprehensive
income
¥

9,441

Total
net assets¥

41,464

–
423
–

–
(120)
–

–
8,608
–

–
56
–

–
473
–

–
9,441
–

0
41,464
(678)

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

–
–
–

7,922
(0)
(1)

(107)

(3,548)

1

856

56

(2,741)(2,741)315–(3,668)
–

8,610
–

912
–

530
–

6,700
–

45,964(1,018)

–
–

–
–

–
–

–
–

–
–

–
–

794
(0)

55
371

¥

3,128
(539)

¥

–
8,610

¥

1,672
2,585

¥

(78)
451

¥

4,778
11,479¥4,778
50,519

Accumulated other comprehensive incomeNet
unrealized
gains onothersecurities

Balance as of March 31, 2022
Dividends of surplus
Profit attributable to owners of theparentAcquisition of treasury shares
Net changes in items other than thosein shareholders’ equity$

Balance as of March 31, 2023$

Deferred
losses onhedges

Total
Foreign
Remeasureaccumulated
Revaluation
currency
ments ofother
reserve fortranslation
definedcomprehensive
land
adjustment benefit plansincome(Thousands of U.S. dollars)(Note 2)2,359–

$ (27,469)–$ 64,479
–

–
–

–
–

–
–

23,425(4,036)–$ 64,479

411
2,778

$

$

6,829
–

$

–
–
$

12,521
19,3583,969–$

50,175
–

–
–
$

(584)
3,377

Total
net assets

$

–
–
$

35,78285,965344,222(7,623)
5,946
(0)

$

35,782
378,334(*) There were 7,620 and 7,459 treasury shares as of March 31, 2023 and 2022, respectively. (Note 10)

The accompanying notes are an integral part of these financial statements.

11

Toho Zinc Co., Ltd. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
Year ended March 31,
2023
2022
2023
(Millions of yen)(Thousands of
U.S. dollars)(Note 2)
Cash flows from operating activities:
Profit before income taxes
Depreciation
Impairment loss on fixed assets(Decrease) increase in allowance for doubtful accounts
Decrease (increase) in net defined benefit asset(Decrease) increase in net defined benefit liability
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Share of loss of entities accounted for using equity method
Net loss on sales and retirement of property, plant and equipment
Decrease (increase) in notes and accounts receivable, trade
Decrease (increase) in inventories(Decrease) increase in notes and accounts payable, trade
Loss on valuation of investment securities
Net gain on sales of investment securities
Loss on valuation of investments and other assets
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of intangible assets
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for loans receivable
Proceeds from collection of loans receivable
Purchases of shares of subsidiaries and associates
Payments for investments in capital of subsidiaries and associates
Other, net
Net cash used in investing activities

¥

1,235
4,385
231
(0)
15
(129)
(231)
671
33
304
284
1,438
4,786
(2,068)
–
(6)
1,393
589
12,932231(646)(1,508)11,009(3,072)12(2,551)(3)
142(1,092)79(182)(1,158)(303)(8,128)

¥

9,325
4,315
–
0
(155)
79
(92)
487
(141)
62
22
(3,170)(18,929)
3,891
45
(42)
–
322
(3,978)
85
(486)
(799)
(5,178)(2,650)267(2,168)
(4)
140
(502)
67
(3,299)–(254)(8,403)$

9,248
32,839
1,729
(0)
112
(966)
(1,729)
5,025
247
2,276
2,126
10,76935,842(15,487)–(44)
10,432
4,410
96,847
1,729(4,837)(11,293)
82,445(23,006)
89(19,104)(22)
1,063(8,177)591(1,362)(8,672)(2,269)(60,870)

12

Cash flows from financing activities:
Net increase in short-term borrowings
Proceeds from long-term debt
Repayments of long-term debt
(Decrease) increase in commercial papers
Cash dividends paid
Other, net
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 16)

¥

2,621
9,330
(10,257)(2,000)(1,018)(49)(1,373)

6,092
11,800(7,590)
6,000
(678)
(51)
15,571

19,62869,871(76,814)(14,977)(7,623)(366)(10,282)

100
1,606
7,929
9,536

5
1,995
5,934
7,929

748
12,02759,37971,414¥$

The accompanying notes are an integral part of these financial statements.

13

Toho Zinc Co., Ltd. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2023
Notes for Readers of Consolidated Financial Statements
・This is an English translation of the consolidated financial statements as required by theCompanies Act of Japan prepared for the convenience of readers outside Japan.
・ Certain information included in the Japanese Consolidated Financial Statements is notincluded in these translated consolidated financial statements.

1.

Summary of Significant Accounting Policies(a) Basis of presentation
Toho Zinc Co., Ltd. (the “Company”) and its domestic subsidiaries maintain their books of account inconformity with accounting principles generally accepted in Japan, and its foreign subsidiaries maintaintheir books of account in conformity with International Financial Reporting Standards (“IFRS”) or thoseof their countries of domicile.
The accompanying consolidated financial statements of the Company and its consolidated subsidiaries(collectively, the “Group”) are prepared on the basis of accounting principles generally accepted in Japan,
which are different in certain respects as to application and disclosure requirements of IFRS, and arecompiled from the consolidated financial statements prepared by the Company as required by the
Financial Instruments and Exchange Act of Japan.
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current
year’s presentation.
As permitted under the Financial Instruments and Exchange Act, amounts of less than one million yen
have been omitted. As a result, the totals shown in the accompanying consolidated financial statements(both in yen and in U.S. dollars) do not necessarily agree with the sums of the individual amounts.
Certain items presented in the consolidated financial statements submitted to the Director of Kanto Local
Finance Bureau in Japan have been reclassified in the accompanying consolidated financial statements
for the convenience of readers outside Japan.
(b) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its
significant subsidiaries that are controlled by the Company. Under the effective control approach, allsignificant majority-owned companies are to be consolidated. Additionally, companies in which shareownership equals 50% or less may be required to be consolidated in cases where such companies are
effectively controlled by other companies through the interests held by a party who has a close
relationship with the parent. All significant intercompany transactions and accounts are eliminated inconsolidation.

14

(c) Foreign currency translation(1) Foreign currency transactions
All receivables and payables denominated in foreign currencies are translated into Japanese yenat the exchange rate prevailing at the balance sheet date.
(2) Foreign currency financial statements
Assets and liabilities of the foreign consolidated subsidiaries are translated into Japanese yen at
the current exchange rate prevailing at the balance sheet date. Revenue and expense accounts aretranslated at the average exchange rate in effect during the year. Foreign currency translation
adjustments are included in net assets.
(d) Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of cash flows are composed of cash on hands,bank deposits withdrawable on demand and short-term investments with original maturities of threemonths or less and minor risk for the fair value fluctuation.
(e) Inventories
Merchandise, finished goods, semi-finished goods, work in process and raw materials are stated at thelower of cost or net selling value, for which cost is primarily determined by the first-in first-out method.
Supplies are stated at the lower of cost or net selling value, for which cost is determined by the moving
average method.
(f) Financial instruments(1) Investment securities
Marketable equity securities classified as other securities are carried at fair value with any changes
in unrealized gains or losses, net of income taxes, included directly in net assets. Cost of securities
sold is determined by the moving average method. Non-marketable equity securities classified asother securities are carried at cost determined by the moving average method.
(2) Derivatives
The Company has entered into various derivative transactions, including forward foreignexchange contracts, interest rate swaps and metal forward contracts, in order to manage certain
risks arising from adverse fluctuations in foreign currency exchange rates, interest rates andcommodity prices, respectively.
All derivatives are recognized in the balance sheet at fair value, with changes in fair value included
in profit or loss for the period in which they arise, except for derivatives that are designated as“hedging instruments” (see Note 1. (f) (3) Hedge accounting below).
(3) Hedge accounting
Gains or losses arising from changes in fair value of the derivatives designated as “hedging
instruments” are deferred as an asset or liability and included in profit or loss in the period during
which the gains and losses on the hedged items or transactions are recognized.

15

Hedging instruments are derivative transactions including metal forward contracts, interest rate
swaps, and forward exchange contracts. The related hedged items are raw materials and finishedgoods exposed to commodity price fluctuation risk, interest payments on debt loan, and products
exposed to foreign exchange fluctuation risk, respectively.
The Company has a policy to utilize the above hedging instruments in order to reduce theCompany’s exposure to the risks of fluctuations in prices of raw materials and products, interest
rates and cash flows.
The Company evaluates the effectiveness of its hedging activities by reference to the accumulated
gains or losses on the hedging instruments and the underlying hedged items from thecommencement of the hedging transactions regarding metal forward contracts and forward
exchange contracts. Hedge effectiveness is omitted for interest rate swaps which qualify for hedge
accounting and meet specific criteria.
(g) Property, plant and equipment and depreciation
Property, plant and equipment, except for leased assets, are stated at cost and mainly depreciated by thestraight-line method over the estimated useful lives of the respective assets.
(h) Intangible assets and amortization
Mining rights are mainly amortized by using the unit-of-production method. Other intangible assets aremainly amortized by using the straight-line method. Software for internal use is amortized by using thestraight-line method over the estimated useful life (5 years).
(i)

LeasesLeased assets which are capitalized under finance leases are primarily the storage equipment (structures)in the Smelting business and logistics facilities (buildings and structures) in the Mineral Resource
business and depreciated over the lease term of the respective assets by the straight-line method with noresidual value.

(j)

Allowance for doubtful accounts
Allowance for doubtful accounts is provided at an amount sufficient to cover possible losses oncollection. The allowance consists of the estimated uncollectible amounts with respect to specificreceivables plus an amount based on historical experience of bad debt with respect to other receivables.

(k) Retirement benefits(1) Method for attribution of expected retirement benefits to periods
In the calculation of retirement benefit obligations, the expected retirement benefits are attributed
to the period up to the end of the current fiscal year based on the benefit formula method.
(2) Accounting method for actuarial gains and losses and past service costs
Actuarial gains and losses are amortized by the straight-line method over a certain period (10years) which is within the average remaining years of service of the eligible employees when thegains or losses arise, from the year following the year in which the gains and losses arise.

16

Past service costs are amortized as incurred by the straight-line method over a certain period (10years) which is within the average remaining years of service of the eligible employees when thegains or losses arise.
(3) Accounting method for unrecognized actuarial gains and losses and unrecognized past service
costs
Unrecognized actuarial gains and losses and unrecognized past service costs are recorded asremeasurements of defined benefit plans under accumulated other comprehensive income of net
assets after tax effect adjustments.
(4) Application of the simplified method for small enterprises, etc.
Some of its consolidated subsidiaries apply the simplified method in the calculation of their net
defined benefit liability and retirement benefit expenses. Under the simplified method, the benefits
payable assuming the voluntary retirement of all eligible employees at the year-end are deemed as
retirement benefit obligations.
(l)Provision for environmental measures
Provision for environmental measures is estimated and recorded to provide for future potential costs
related to disposal of polychlorinated biphenyl waste and the land improvement business.

(m) Provision for loss on business of subsidiaries and associates
Provision for loss on business of subsidiaries and associates is recorded based on the estimated loss
burden amount corresponding to financial situation of those companies.
(n) Income taxes
Deferred tax assets and liabilities are determined based on the differences between the financial
reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates andlaws which will be in effect when the differences are expected to reverse.
(o) Recognition of revenues(1)

Smelting
The Smelting business engages in sales of nonferrous metal products such as zinc, lead and silver.
Revenue from this business is recognized at the time of delivery as the performance obligation issatisfied when control over the goods is transferred to the customer. Revenue from sales of theseproducts is measured at the transaction price under contracts with customers. The consideration
for the transaction is received primarily within six months after the performance obligation issatisfied and therefore does not include any significant financing component.

(2)

Environment and Recycling
The Environment and Recycling business engages in sales of zinc oxide and other products.
Revenue from this business is recognized at the time of delivery as the performance obligation issatisfied when control over the goods is transferred to the customer. Revenue from sales of theseproducts is measured at the transaction price under contracts with customers. The consideration
for the transaction is received primarily within six months after the performance obligation issatisfied and therefore does not include any significant financing component.

17

(3)

Mineral Resources
The Mineral Resources business engages in sales of lead and silver concentrates as well as zincconcentrates. Revenue from this business is recognized at the time of delivery as the performanceobligation is satisfied when control over the goods is transferred to the customer. Revenue fromsales of these products is measured at the transaction price under contracts with customers. The
consideration for the transaction is received primarily within six months after the performanceobligation is satisfied and therefore does not include any significant financing component.

(4)

Electronic Components and Advanced Materials
The Electronic Components and Advanced Materials business engages in sales of electronic parts,
plating products, electrolytic iron, and machine parts. Revenue from this business is recognized at
the time of delivery as the performance obligation is satisfied when control over the goods istransferred to the customer. For certain products, the business applies the alternative treatmentprescribed in Paragraph 98 of the “Implementation Guidance on Accounting Standard for Revenue
Recognition” and recognizes revenue from sales of products in Japan at the time of shipment if
the period from the time of shipment to the time when control of the product is transferred to thecustomer is within a normal period. Revenue from sales of these products is, in principle, measured
at the transaction price under contracts with customers. For products which use parts supplied
from customers for a fee, for which the Group does not obtain control, revenue from sales of suchproducts is measured at the transaction price under contracts with customers, less the amount forthe parts supplied from customers for a fee. The consideration for the transaction is received
primarily within six months after the performance obligation is satisfied and therefore does notinclude any significant financing component.

(5)

Other
This segment mainly consists of the business engaging in sales of sound insulation building
materials, and the civil engineering, construction and plant engineering business. Revenue fromsales of sound insulation building materials is recognized at the time of delivery as theperformance obligation is satisfied when control over the goods is transferred to the customer.
Revenue from sales of these products is measured at transaction price under contracts withcustomers. The consideration for the transaction is received primarily within six months after the
performance obligation is satisfied and therefore does not include any significant financing
component. On the other hand, revenue from the civil engineering, construction and plantengineering business is recognized based on the degree of completion of the construction work as
performance obligations of this business are satisfied over a certain period of time, or more
specifically satisfied based on the progress of construction over the contract period. Therefore,
revenue from this business is recognized according to the degree of completion of the construction
work. The degree of completion is measured by the input method based on costs incurred because
the costs incurred are considered to contribute to and be largely proportional to the entity’s
progress in satisfying its performance obligations. Revenue from these construction works ismeasured at the transaction price under construction contracts with customers. The consideration
for the transaction is received in stages in accordance with the terms and conditions of the contract
and largely in proportion to the progress of satisfaction of the performance obligation, andtherefore does not include any significant financing component.

(p) Appropriation of retained earnings
Cash dividends and transfers to legal reserve are recorded in the fiscal year in which the proposed
appropriation of retained earnings is approved at the shareholders’ meeting.

18

(q) Profit per share
Profit per share is computed based on the profit available for distribution to shareholders of commonshares and the weighted average number of common shares outstanding during the year.
(r) Asset retirement obligations
Asset retirement obligations are calculated based on the estimated life of mine from commencement ofoperations, which is deemed as the estimated usable period, using the discount rates of 1.1 to 2.1% for
the years ended March 31, 2023 and 2022. The amount mainly represents the obligations of CBH
Resources Ltd. (“CBH”) to restore its mine sites at Endeavor Mine and Rasp Mine to their original states
upon closure.
(s) Significant accounting estimates(1) Recoverability of deferred tax assets

The amounts recorded in the consolidated financial statements for the years ended March 31,
2023 and 2022

2023

March 31,2022

(Millions of yen)
Deferred tax assets
Deferred tax liabilities¥

2,816 ¥
2,250

2023
(Thousands of
U.S. dollars)

3,831 $
2,337

21,08816,850Information about significant accounting estimates for the identified item
The recoverability of deferred tax assets is assessed based on the expected reduction in the tax
burden in the future. Such assessment is based on the sufficiency of the taxable income before
adjustment of the temporary differences, etc. considering profitability, the sufficiency of thetaxable income before adjustment of the temporary differences, etc. under tax planning, and thesufficiency of future taxable temporary differences.
For the assessment for the sufficiency of taxable income before adjustment of temporary
differences, etc. considering profitability, the taxable income for the fiscal year when thetemporary differences are expected to be resolved and the taxable income during the carry-backor carry-forward period is estimated.
The main assumption for the future business plan used for the estimate of future taxable income
is based on the information about the market conditions such as metal market prices or foreignexchange rates, the sales volume and others.
If a reassessment of such estimates and assumptions is required due to changes in uncertain
economic conditions in the future, etc., it may have a significant impact on the amounts of deferred
tax assets and deferred income taxes recognized in the consolidated financial statements for the
next fiscal year.

19

(2) Calculation of retirement benefit obligations

The amounts recorded in the consolidated financial statements for the years ended March 31,
2023 and 2022
March 31,
2022

2023

(Millions of yen)
Net defined benefit asset (Toho Zinc)

863 ¥

¥

2023
(Thousands of
U.S. dollars)

878 $

6,462

Information about significant accounting estimates for the identified item
In the Group, some companies adopt defined benefit plans. Retirement benefit obligations andrelated service costs for the defined benefit plans are calculated by estimating and discounting the
expected retirement benefits based on actuarial assumptions. The main actuarial assumptions are
the discount rate and expected rate of return of plan assets, and the discount rate is determinedbased on the yield of long-term government bonds at the fiscal year end. The expected rate of
return of plan assets is determined based on the portfolio of the holding plan assets, operational
performance in the past, operational policies and market trends, etc.
If a reassessment of the discount rate and long-term expected rate of return, which are main
assumptions, is required due to changes in uncertain economic conditions in the future, etc., it may
have a significant impact on the amounts of net defined benefit asset, net defined benefit liability
and retirement benefit expenses recognized in the consolidated financial statements for the next
fiscal year.
(3) Impairment loss on fixed assets in Mineral Resource business

The amounts recorded in the consolidated financial statements for the years ended March 31,
2023 and 2022

2023

March 31,2022

(Millions of yen)
Property, plant and equipment (Mineral
Resource business)
Intangible assets (Mineral Resource business)
Impairment loss (Mineral Resource business)¥

6,679 ¥
14,137
231

2023(Thousands of
U.S. dollars)

6,202 $
12,003–50,018105,871
1,729

Information about significant accounting estimates for the identified item
Business assets of the Company are grouped based on the categories used for its managerial
accounting. The asset group with an indication of impairment is assessed to determine if
impairment loss should be recognized, and if it is determined that impairment loss should berecognized, the Company writes down the book value to its recoverable amount and recognizes
an impairment loss. The recoverable amount is measured at net sales amount or value in use, andfuture cash flows for which value in use is used as a recoverable amount is calculated based on
the business plan for the next fiscal year.

20The Group recorded impairment loss on fixed assets of the Mineral Resource business of ¥231
million ($1,729 thousand) for the year ended March 31, 2023 as described in Note 5. Impairment
Loss on Fixed Assets. In calculating the impairment loss, the recoverable amount is measured using
value in use. The main assumptions used to formulate the business plan for the next fiscal year
and onwards, which form the basis for future cash flows, are information about external factors
including business environment (the market conditions such as metal market prices or foreignexchange rates and the condition to buy metals), production volume and growth rate. In addition,
the discount rate before tax, which is used in the assumption, reflects both the time value of money
and the risk that future cash flows deviate from the original estimate, and is calculated based on
the weighted average cost of capital of debt capital and equity capital.
The Group recorded no impairment loss on fixed assets of the Mineral Resource business for theyear ended March 31, 2022. Specifically, the Mineral Resource business reported operating
income and no other businesses experienced events leading to an indication of impairment.
If a reassessment of such estimates and assumptions is required due to changes in uncertain
economic conditions in the future, etc., it may result in additional impairment loss (extraordinary
losses) recognized in the consolidated financial statements for the next fiscal year.
(t)

Changes in accounting policies
Not applicable.

(u) Accounting standards and guidance issued but not yet adopted
 “Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27, issued on October 28,
2022)
 “Accounting Standard for Presentation of Comprehensive Income” (ASBJ Statement No. 25, issued
on October 28, 2022)
 “Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, issued on
October 28, 2022)(1) Overview
In February 2018, ASBJ issued ASBJ Statement No. 28, “Partial Amendments to AccountingStandard for Tax Effect Accounting,” etc. (hereafter, “ASBJ Statement No. 28, etc.”), which
completed the transfer of implementation guidance on tax effect accounting from JICPA to ASBJ.
However, in the course of the deliberations, the following two issues were to be discussed again
after the release of ASBJ Statement No. 28, etc., and they were discussed and released.
 The classification of tax expenses (taxation on other comprehensive income) Tax effect on sales of shares of subsidiaries, etc. (shares of subsidiaries and associates) when agroup taxation regime is applied(2) Date of application
The Company plans to apply the accounting standard and guidance effective from the beginning of
the fiscal year ending March 31, 2025.
(3) Effect of applying the standard and guidance
The Company is currently evaluating the effect of applying the “Accounting Standard for Current
Income Taxes,” etc. on its consolidated financial statements.
(v) Reclassifications
Certain reclassifications have been made to the prior year amounts to conform to the current year
presentation.

21

2. U.S. Dollar Amounts
U.S. dollar amounts presented in the accompanying consolidated financial statements and notes are included
solely for the convenience of readers outside Japan, at the prevailing exchange rate of ¥133.53 to U.S. $1 on
March 31, 2023. These translations should not be construed as representations that the yen amounts actually
represent, or have been or could be converted into U.S. dollars at that or any other rate.

3.

Inventories

Inventories as of March 31, 2023 and 2022 consisted of the following:
March 31,2022
2023
(Millions of yen)
Merchandise and finished goods
Work in process
Raw materials and supplies
Total

4.

¥

¥

9,490
14,99822,96847,457¥¥

10,726
16,08825,26352,0782023(Thousands of
U.S. dollars)$$

71,070112,319
172,006
355,403

Land Revaluation

In accordance with the Act on Revaluation of Land, the Company’s land used for its business operations wasrevalued as follows:
Date of revaluation: March 31, 2000
The differences between total fair value of land and the total book value after revaluation of land as ofMarch 31, 2023 and 2022 were ¥7,682 million ($57,530 thousand) and ¥7,679 million, respectively.
The tax effect of the excess on revaluation is recorded as deferred tax liabilities related to land revaluation
which is included in liabilities, and the remainder, net of income taxes portion of the excess on revaluation,is presented as revaluation reserve for land which is included in net assets.

22

5.

Impairment Loss on Fixed Assets

The Group recognized impairment losses on certain asset groups for the years ended March 31, 2023 and2022 as follows:
For the year ended March 31, 2023

Location
The State of New
South Wales,
Australia

Use
Assets included in
Mineral Resource
business segment(Assets at Rasp
Mine)

Category(Thousands of
U.S. dollars)(Millions of yen)¥

Mining rights

231

$

1,729

Business assets of the Company are grouped based on the categories used for its managerial accounting. With
respect to idle assets, each asset is treated as an individual unit to apply the accounting for the impairment.
Regarding the Rasp Mine in the State of New South Wales, Australia and other locations, CBH ResourcesLtd. (“CBH”) wrote down the book value of the asset group included in the Mineral Resource businesssegment to its recoverable amount and recognized the reduction as impairment losses, since CBH could not
expect to generate cash inflows sufficient to recover the invested capital in future due to market conditions
and other external environment and a revision in the production plan for the mine.
The recoverable amount of the asset group is measured at value in use, and calculated by discounting future
cash flows at a rate of 14%.
For the year ended March 31, 2022
The Group recognized no impairment losses.

6.

Investments in Unconsolidated Subsidiaries and Associates

Investments in unconsolidated subsidiaries and associates as of March 31, 2023 and 2022 are summarized asfollows:
March 31,2022
2023
(Millions of yen)
Unconsolidated subsidiaries
Associates

¥
¥

9
9,857
9,866

¥
¥

9
9,587
9,597

2023
(Thousands of
U.S. dollars)$$

67
73,81873,88623

7. Short-Term Borrowings and Long-Term Debt
Short-term borrowings and long-term debt as of March 31, 2023 and 2022 consisted of the following:
March 31,

Amount(Millions ofyen)
Short-term borrowings
Commercial papers
Current portion of longterm debt
Current portion of leaseobligations

Due in2022

2023

Amount(Millions ofyen)Amount(Thousands of
U.S. dollars)¥$

30,1008,000

32,835
6,000

1.4%
0.2

6,419

1.2

10,19248,071

32

–

29

239

Long-term debt

21,1180.8

18,153

158,151

Lease obligations

16
66,422–

33
66,508

119497,431

Total

¥

2023
Weighted
averageinterest rate¥

April 2024 –March 2034
April 2024 –September 2025¥$

245,899
44,933

Average interest rates are calculated by using weighted-average interest rates as of March 31, 2023. Averageinterest rates on lease obligations are not provided because interest equivalents included in the total lease
payments are allocated to each applicable fiscal year on a straight-line basis.
The maturities of long-term debt and lease obligations outstanding as of March 31, 2023 were as follows:
Long-term
LeaseLong-term
Lease
debt
obligations
debt
obligations
Year ending March 31,(Millions of yen)(Thousands of U.S. dollars)
2024¥
6,419 ¥
32 $48,071 $
239
2025
7,573
13
56,713
97
2026
9,620
3
72,043
22
2027
943
–
7,062
–
2028
943
–
7,062
–
Thereafter
2,038–
15,262–
Total¥
27,537 ¥49 $206,223 $366

24Assets pledged as collateral for the long-term debt, including the current portion, as of March 31, 2023 and2022 were as follows:

Pledged assets

March 31,
2022

2023

(Millions of yen)
Land (*)
Buildings and structures (*)
Machinery and equipment (*)
Total
(*)

¥

¥

11,776
2,948
3,982
18,707¥¥

11,776
3,014
4,316
19,106

2023(Thousands of
U.S. dollars)$$

88,18922,077
29,821140,095

For the above assets, a revolving mortgage is set at the maximum amount of ¥1 million ($7thousand) with bank as of March 31, 2023 and 2022.

Assets pledged as collateral for the loan borrowed by Abra Mining Pty Limited, the Company’s equity
method associate, from financial institutions as of March 31, 2023 and 2022 were as follows:

Pledged assets

March 31,
2022

2023

(Millions of yen)
Investment securities (*)
(*)

¥

8,988

¥

8,483

2023
(Thousands of
U.S. dollars)$

67,310Investment securities above are common shares of Abra Mining Pty Limited.

Liabilities secured by collateral for the long-term debt as of March 31, 2023 and 2022 were as follows:

Pledged liabilities

March 31,
2022

2023

(Millions of yen)
Current portion of long-term debt
Long-term debt
Total

2023
(Thousands of
U.S. dollars)

¥

1,592
5,810

¥

717
7,348

$

11,92243,510

¥

7,402

¥

8,066

$

55,43325

8.

Retirement Benefit Plans

The Company and its domestic consolidated subsidiaries have funded and unfunded defined benefit plansand defined contribution plans. The defined benefit corporate pension plans, all of which are funded, provide
lump-sum or pension benefits based on salaries and the length of service. The lump-sum payment plans,
which are unfunded, provide lump-sum benefits based on salaries and the length of service. In addition,certain consolidated subsidiaries apply the simplified method to calculate retirement benefit liabilities andretirement benefit expenses, where the required contributions to the pension fund are accounted for as
retirement benefit expenses.
Information regarding the Company’s defined benefit plans for the years ended March 31, 2023 and 2022
was as follows:(a) The changes in the retirement benefit obligations for the years ended March 31, 2023 and 2022 are as
follows:
Year ended March 31,
2022
2023
2023
(Thousands of(Millions of yen)
U.S. dollars)
Retirement benefit obligation at beginning of year
Service costs
Interest costs
Actuarial gains and losses arising during year
Retirement benefits paid¥

Retirement benefit obligation at end of year

¥

4,013
292
6
(65)
(284)
3,962

¥

¥

3,979 $
293
2
(33)
(229)
4,013 $

30,053
2,186
44
(486)
(2,126)
29,671(b) The changes in plan assets for the years ended March 31, 2023 and 2022 are as follows:Year ended March 31,
2022
2023
2023
(Thousands of(Millions of yen)
U.S. dollars)
Plan assets at beginning of year
Expected return on plan assets
Actuarial gains and losses arising during year
Contributions from employer
Retirement benefits paid¥

Plan assets at end of year

¥

4,891
97
(90)
210
(284)
4,825

¥

¥

4,702 $
94
112
211
(229)
4,891 $

36,628
726
(674)
1,572
(2,126)36,13426

(c) The changes in net defined benefit liability accounted for using the simplified method for the years
ended March 31, 2023 and 2022 are as follows:Year ended March 31,
2022
2023
2023
(Thousands of(Millions of yen)
U.S. dollars)
Net defined benefit liability at beginning of year
Retirement benefit expenses
Retirement benefits paid¥

Net defined benefit liability at end of year

¥

140
10
(27)
124

¥

141 $
9
(11)
140 $

¥

1,048
74
(202)
928

(d) The following table sets forth the funded status of the plans and the amounts recognized in the
consolidated balance sheets as of March 31, 2023 and 2022.
March 31,
2022

2023

(Millions of yen)
Retirement benefit obligation for funded plans
Plan assets¥

Retirement benefit obligation for unfunded plans
Net balance of liability and asset recognized on the
consolidated balance sheet
Net defined benefit liability
Net defined benefit asset
Net balance of liability and asset recognized on the
consolidated balance sheet¥

4,013 $
(4,891)(878)

29,671(36,134)(6,462)

124

140

928

(738)

(738)

(5,526)

124
(863)

140
(878)

928
(6,462)(738) $

(5,526)

3,962(4,825)
(863)

(738)

¥

2023
(Thousands of
U.S. dollars)¥(e) The components of retirement benefit expenses for the years ended March 31, 2023 and 2022 are as
follows:
Year ended March 31,
2022
2023
2023
(Thousands of(Millions of yen)
U.S. dollars)Service costs (excluding employee contributions)Interest costs
Expected return on plan assets
Amortization of actuarial gains and losses
Amortization of past service costs
Retirement benefit expenses calculated using thesimplified method
Retirement benefit expenses under defined benefit
plans

¥

289
6
(97)
(88)
–

¥

10
¥

120

¥

290 $
2
(94)
(64)
–

2,164
44
(726)
(659)
–

9

74

144

$

898

27

(f) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans included in other comprehensive income(before tax effect) for the years ended March 31, 2023 and 2022 are as follows:Year ended March 31,
2022
2023
2023
(Thousands of(Millions of yen)
U.S. dollars)
Actuarial gains and losses
Past service costs

¥

(113)
–

¥

81
–

$

(846)
–

Total

¥

(113)

¥

81

$

(846)

(g) The components of remeasurements of defined benefit plans included in accumulated othercomprehensive income (before tax effect) as of March 31, 2023 and 2022 are as follows:
March 31,
2022

2023

(Millions of yen)
Unrecognized actuarial gains and losses
Unrecognized past service costs

¥

Total

¥

650
–
650

¥
¥

764
–
764

2023
(Thousands of
U.S. dollars)
$
$

4,867
–
4,867

(h) Plan assets(1) Breakdown of plan assets
Percentage of each main category to total plan assets is as follows:Year ended March 31,
2022
2023
Debt securities
Equity securities
Life insurance general account
Other
Total

39%
49
10
2
100%

38%
50
10
2
100%

(2) Determination of expected long-term rate of return on plan assets
In determining the expected long-term rate of return on plan assets, the Company takes into
consideration the current and future plan asset allocation as well as the current and expectedlong-term rate of return on various asset categories comprising plan assets.

28

(i)

Actuarial assumptions
Year ended March 31,
2022
2023
Weighted-average actuarial assumptions at end of year:
Discount rate
Expected long-term rate of returnLump-sum election rate

0.2 %
2.0
100.0

0.3 %
2.0
100.0

Contribution required for defined contribution plans of the Company and its consolidated subsidiaries
were ¥34 million ($254 thousand) and ¥32 million for the years ended March 31, 2023 and 2022,
respectively.

9.

Asset Retirement Obligations

The changes in asset retirement obligations for the years ended March 31, 2023 and 2022 were as follows:Year ended March 31,
2022
2023
(Thousands of(Millions of yen)
U.S. dollars)

2023

Balance at beginning of year
Increase associated with the change in estimate
Adjustment due to passage of time
Decrease due to performance of asset retirement
obligations
Other

¥

Balance at end of year

¥

4,116
(99)
(12)
(41)
304
4,267

¥

¥

3,871
60
0
(39)
223
4,116

$

$

30,824
(741)
(89)
(307)
2,276
31,95529

10. Net Assets
Information regarding changes in net assets for the years ended March 31, 2023 and 2022 is as follows:(a) Shares issued and outstanding / Treasury shares
For the year ended March 31, 2023

Types of shares

Number ofshares as ofApril 1, 2022

Increase
Decrease(Thousands of shares)

Number ofshares as ofMarch 31, 2023

Shares issued and outstanding:Common shares
13,585––
13,585
Treasury shares:
Common shares (Note)70–7
Note: The increase of 0 thousand shares was due to purchase of shares of less than standard unit.
For the year ended March 31, 2022

Types of shares

Number ofshares as ofApril 1, 2021

Increase
Decrease(Thousands of shares)

Number ofshares as ofMarch 31, 2022

Shares issued and outstanding:Common shares
13,585––
13,585
Treasury shares:
Common shares (Note)70–7
Note: The increase of 0 thousand shares was due to purchase of shares of less than standard unit.
(b) Dividends(1) Dividends paid
For the year ended March 31, 2023

Resolution

Type ofsharesAnnual general meeting of theshareholders on June 29, 2022

CommonsharesTotal dividends(Millions of yen)
¥

1,018

Dividends per
share
(Yen)
¥

75

Cut-off
date

Effective
date

March 31,2022

June 30,
2022

Cut-off
date

Effective
date

March 31,2021

June 30,2021

For the year ended March 31, 2022

Resolution

Type ofsharesAnnual general meeting of theshareholders on June 29, 2021

CommonsharesTotal dividends(Millions of yen)

Dividends per
share
(Yen)

¥

¥

678

50

30

For the year ended March 31, 2023
Type ofsharesResolution

Annual general meeting of theshareholders on June 29, 2022

CommonsharesTotal dividends(Thousands of U.S.
dollars)$

7,623

Dividends per
share

Cut-off
date

Effective
date

March 31,2022

June 30,
2022(U.S. dollars)$

0.56(2) Dividends with the cut-off date in the current fiscal year and the effective date in the following fiscal
year
For the year ended March 31, 2023

Resolution

Type ofsharesAnnual general meeting of theshareholders on June 29, 2023

CommonsharesTotal
dividends(Millions of
yen)
¥

1,018

Source ofdividends

Dividends
per share

Cut-off
date

Effective
date

June 30,2023

Effective
date

(Yen)
Retainedearnings¥

75

March 31,2023

Source ofdividends

Dividends
per share

Recorddate

For the year ended March 31, 2022

Type ofsharesResolution

Annual general meeting of theshareholders on June 29, 2022

CommonsharesTotal
dividends(Millions of
yen)
¥

1,018

(Yen)
Retainedearnings¥

75

March 31, June 30,
2022
2022

For the year ended March 31, 2023

Resolution

Type ofsharesAnnual general meeting of theshareholders on June 29, 2023

CommonsharesTotal
dividends(Thousands of
U.S. dollars)
$

7,623

Source ofdividends

Retainedearnings

Dividends
per share(U.S.
dollars)$0.56

Cut-off
date

Effective
date

March 31,2023

June 30,
2023

The Companies Act of Japan provides that an amount equal to 10% of the amount to be disbursed as
distributions of capital surplus (other than the capital reserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve and the legal reserve, respectively, until the sum of the capitalreserve and the legal reserve equals 25% of the common shares. Such distributions can be made at any timeby resolution of the shareholders, or by the board of directors if certain conditions are met.

31

11.

Income Taxes

As of March 31, 2023 and 2022, significant components of deferred tax assets and liabilities were as follows:
March 31,
2022

2023

(Millions of yen)
Deferred tax assets:
Net operating loss carry forwards (Note 2)
Asset retirement obligations
Depreciation in excess of tax limit
Foreign exchange losses
Deferred losses on hedges
Other
Gross deferred tax assets
Valuation allowance on net operating loss
carryforwards (Note 2)
Valuation allowance on deductible temporary
differences
Less: Valuation allowance (Note 1)
Total deferred tax assets

¥

2,102
1,280
3,448
–
265
2,534

¥

1,693
1,235
4,036
1
1,488
2,093

2023
(Thousands of
U.S. dollars)$

15,741
9,585
25,821–
1,984
18,977

9,631

10,54972,126(1,981)(1,648)(14,835)(4,833)(6,814)
2,816(5,070)(6,718)3,831(36,194)(51,029)
21,088¥(136)(1,194)
(314)
(136)
(269)
(286)
(2,337)
1,493$(1,198)(7,181)(2,928)(1,018)(1,977)(2,523)(16,850)
4,231¥(4,173)$(31,251)

Deferred tax liabilities:

Net deferred tax assets (liabilities)

¥

(160)
(959)
(391)
(136)
(264)
(337)
(2,250)565

Deferred tax liabilities:
Deferred tax liabilities related to land revaluation¥(4,173)

Unrealized gains on other securities
Depreciation in foreign subsidiary
Inventories
Reserve for overseas exploration
Net defined benefit asset
Other
Total deferred tax liabilities

Notes 1. The increase of ¥97 million ($726 thousand) in valuation allowance was mainly due to an additionalrecognition of valuation allowance related to loss on valuation of investments in capital ofsubsidiaries and associates of ¥426 million ($3,190 thousand), despite of the decrease of ¥551
million ($4,126 thousand) in the valuation allowance for net operating loss carry forwards incurredby the Company.
2. The expiry schedule of net operating loss carryforwards and the related amount of deferred tax assets
is as follows:32

As of March 31, 2023

Due in1 yearDue after
1 yearthrough
2 years

Due after Due after Due after
2 years
3 years
4 years
throughthroughthrough
3 years
4 years
5 years(Millions of yen)

Net operating loss
carryforwards (a)
¥
– ¥
– ¥
– ¥
– ¥
Valuation allowance––––
Deferred tax assets
–
–
–
–
(a)
Net operating loss carryforwards are multiplied by the statutory tax rate.

–––

Due after
5 years¥ 2,102(1,981)
121

Total

¥

2,102
(1,981)121

As of March 31, 2022

Due in1 yearDue after
1 yearthrough
2 years

Due after Due after Due after
2 years
3 years
4 years
throughthroughthrough
3 years
4 years
5 years(Millions of yen)

Net operating loss
carryforwards (b)
¥
– ¥
– ¥
– ¥
– ¥
Valuation allowance––––
Deferred tax assets
–
–
–
–
(b)
Net operating loss carryforwards are multiplied by the statutory tax rate.

–––

Due after
5 years¥ 1,693(1,648)
45

Total

¥

1,693
(1,648)45

As of March 31, 2023

Due in1 yearDue after
1 yearthrough
2 years

Due after Due after Due after
2 years
3 years
4 years
throughthroughthrough
3 years
4 years
5 years(Thousands of U.S. dollars)

Net operating loss
carryforwards (a)
$
– $
– $
– $
– $
Valuation allowance––––
Deferred tax assets
–
–
–
–
(a)
Net operating loss carryforwards are multiplied by the statutory tax rate.

–––

Due after
5 years

Total$ 15,741(14,835)906$ 15,741(14,835)
906

33

The reconciliation between the statutory tax rate and the effective tax rate for the years ended March 31, 2023
and 2022, when there is a significant difference was as follows.
Year ended March 31,
2022
2023
Statutory tax rate
Increase (decrease) due to:
Expenses such as entertainment expenses not tax
deductible
Income such as dividend income not taxable
Effects of consolidated elimination of dividend income
Tax loss carryforwards of foreign consolidated subsidiaries
Elimination of intercompany profits
Change in valuation allowance
Per capita inhabitant tax
Special deduction of corporate tax
Tax rate differential of consolidated subsidiaries
Other
Effective tax rate

12.

30.62%

30.62%

1.39(10.09)
7.01
–
5.92
7.81
1.95
(6.70)(2.19)(0.04)
35.68%

0.06(1.45)
1.37(4.86)
0.51(11.88)0.24(0.09)
0.00
0.52
15.05%

LeasesAs lessee:
There were no impairment losses allocated to leased assets for the years ended March 31, 2023 and 2022.

13.

Commitments and Contingent Liabilities(a) Guarantees
The Company guarantees bank loans of its associates as follows:
March 31,
2022

2023

(Millions of yen)

2023
(Thousands of
U.S. dollars)

Abra Mining Pty Limited
TIANJIN TOHO LEAD RECYCLING CO., LTD.

¥

5,875
807

¥

3,182
1,156

$

43,997
6,043

Total

¥

6,682

¥

4,338

$

50,041(b) Loan commitments
In addition, the Company has entered into loan commitments amounting to ¥16,000 million ($119,823
thousand) and ¥16,000 million with 10 financial institutions as of March 31, 2023 and 2022, respectively.
There were no related loans payable outstanding, and therefore, the unused balance was ¥16,000 million($119,823 thousand) and ¥16,000 million under the credit facilities as of March 31, 2023 and 2022,
respectively.
As financial covenants are attached to these loan commitment agreements, any infringements of the following

34

clauses may result in forfeiture of the benefit of time for all the debts under the loan commitment agreements.
(1) Maintaining consolidated shareholders’ equity as of March 31, 2023 at no less than ¥25.0 billion($187,223 thousand).
(2) Maintaining consolidated shareholders’ equity as of September 30, 2023 at no less than 75% of theconsolidated shareholders’ equity as of March 31, 2023.
(3) Maintaining the consolidated capital adequacy ratio as of March 31, 2023 and September 30, 2023 noless than 20%.
(c) Contingent liabilities
As a result of an investigation, it was discovered that some of the nonferrous slag products shipped from theCompany’s Annaka Smelter and Refinery in the past included those with features not meeting environmental
quality standards for soil under the Soil Contamination Countermeasures Act and that there is a possibilityof inappropriate usage or contamination due to insufficient management by the Company. Going forward,
the Company may incur expenses to collect and remove such products. However, it is difficult to reasonably
estimate the impact on the consolidated financial statements at this point in time.
(d) Notes receivable discounted and others
The Company had repurchase obligations of ¥167 million ($1,250 thousand) and ¥230 million in connection
with the securitization of receivables as of March 31, 2023 and 2022, respectively.

14.

Financial Instruments(a) Overview(1) Policy for financial instruments
The Group raises funds mainly through bank borrowings in consideration of their business plans. The
Group invests temporary surplus funds in highly liquid financial assets and raises short-term operating
capital through bank borrowings and issuances of commercial papers. The Group uses derivatives toavoid after-mentioned risks and does not enter into derivatives for speculative or trading purposes.
(2) Descriptions of financial instruments and related risks
Trade receivables––notes and accounts receivable, trade and electronically recorded monetary claims –are exposed to customer credit risk. Trade receivables denominated in foreign currencies, which arederived from foreign operations, are exposed to foreign currency risk, and such risk is hedged by forward
foreign exchange contracts.
Investment securities are mainly composed of equity securities of companies with business relationships
and exposed to market risk.
Trade payables––notes and accounts payable, trade––are mostly due within two months or less. Certain
trade payables denominated in foreign currencies are exposed to foreign currency risk, and such risk ishedged by forward foreign exchange contracts.
Trade receivables and payables in connection with the Smelting business are exposed to commodity
price fluctuation risk of London Metal Exchange (“LME”), and such risk is hedged by metal forward
contracts.
Borrowings are principally for the purpose of working capital (mainly short-term), and capital

35

investments (long-term). Certain long-term debt is exposed to interest rate fluctuation risk, and such risk
is hedged by derivatives (interest rate swaps). The due date is 11 years from the balance sheet date at
maximum.
As for derivatives, the Group has entered into the forward foreign exchange contracts and others tohedge the foreign currency risk arising from the trade receivables and payables denominated in foreign
currencies, metal forward contracts to hedge the commodity price fluctuation risk of LME arising fromthe trade receivables and payables on the Smelting business and interest rate swaps to hedge thefluctuation risk deriving from interest payment of long-term debt. See Note 1. (f) (3) Hedge accounting
for information about the method of hedge accounting, hedging instruments and hedged items, hedging
policy, and assessment of hedge effectiveness.
(3) Risk management for financial instruments(i)Management of credit risk (risk of default by customers or counterparties)
For trade receivables, sales departments of each division of the Group periodically monitor
creditworthiness of their main customers and manage due dates and outstanding balances bycustomer in accordance with the internal rules of the Company. In addition, the Group is making
efforts to identify uncollectibility in the earlier stage and mitigate risks of bad debts, due tocustomers with financial difficulties.
The Group believes that the credit risk of derivatives is insignificant as they enter into derivativetransactions only with financial institutions with high credit ratings.

(ii)Management of market risks (risks of fluctuations in foreign exchange rates, commodity prices,interest rates and others)
For trade receivables and payables denominated in foreign currencies, the foreign currency risk of
the Company identified by currency on a monthly basis is hedged by forward foreign exchange
contracts and others. In order to mitigate the commodity price fluctuation risks of LME for tradereceivables and payables on the Smelting business, the Company has entered into the metal
forward contracts. In addition, the Company has entered into interest rate swap transactions to
mitigate the interest rate fluctuation risk for interest payment of long-term debt.
For investment securities, the Group periodically monitors the fair values and financial positionof the issuers and continuously review the holding status taking into account market conditions
and relationships with the issuers.
Derivative transactions are conducted and managed by treasury personnel including directors andeach division, and risk management is sufficiently conducted by making reports to management
every time transactions are executed as well as on a periodical basis.

(iii) Management of liquidity risk on funding (risk of default at due dates)
Based on the report from each department, subsidiaries and associates, the department in chargeof the Company prepares and updates its cash flow plan on a timely basis and manages liquidity
risk by maintaining liquid funds.
(4) Supplementary explanation of the fair value of financial instruments
Since various assumptions and factors are reflected in the calculation of the fair value of financial
instruments, different assumptions and factors could result in different fair value. In addition, the36notional amounts of derivatives in Note 17. Derivative Transactions are not indicative of the market risk
involved in derivative transactions.
(b) Fair values of financial instruments
Carrying values of financial instruments on the consolidated balance sheets as of March 31, 2023 and 2022
and their fair values are shown in the following table.

Carrying value

March 31, 2023
Fair value(Millions of yen)

(1) Investment securities (*2)
Total assets

¥
¥

1,015
1,015

¥
¥

1,015
1,015

¥
¥

–
–

(1) Long-term debt (*3)
Total liabilities
Derivatives (*4)¥¥

27,537
27,537¥¥27,36527,365

¥
¥

(172)
(172)

¥

(756)

¥

(756)

¥

–

Difference

March 31, 2023
Carrying value
Fair value
Difference(Thousands of U.S. dollars)(1) Investment securities (*2)
Total assets(1) Long-term debt (*3)
Total liabilities
Derivatives (*4)

$
$

7,601
7,601

$
$

7,601
7,601

$
$

–
–

$
$

206,223
206,223$$

204,935
204,935$$(1,288)(1,288)$(5,661)$(5,661)$–(*1) “Cash and time deposits,” “Notes and accounts receivable, trade, and contract assets,” “Electronicallyrecorded monetary claims,” “Notes and accounts payable, trade,” “Short-term borrowings,” and“Commercial papers” are omitted as they represent cash and are settled in a short period of time, andtherefore the carrying value approximates the fair value.
(*2) “(1) Investment securities” does not include non-marketable equity securities. The carrying value ofsuch financial instruments is as follows:
Category
As of March 31, 2023
Unlisted equity securities¥9,682 million ($72,508 thousand)(*3) Current portion of long-term debt is included in long-term debt.
(*4) The value of receivables or payables arising from derivative transactions is shown at net value, and the
net liability position is shown in parentheses.

Carrying value

March 31, 2022
Fair value(Millions of yen)

(1) Investment securities (*2)
Total assets

¥
¥

1,068
1,068

¥
¥

1,068
1,068

¥
¥

–
–

(1) Long-term debt (*3)
Total liabilities
Derivatives (*4)¥¥

28,34528,345¥¥28,27428,274

¥
¥

(70)
(70)

¥

(5,165)¥(5,165)¥–Difference(*1) “Cash and time deposits,” “Notes and accounts receivable, trade, and contract assets,” “Electronicallyrecorded monetary claims,” “Notes and accounts payable, trade,” “Short-term borrowings,” and37

“Commercial papers” are omitted as they represent cash and are settled in a short period of time, andtherefore the carrying value approximates the fair value.
(*2) “(1) Investment securities” does not include non-marketable equity securities. The carrying value ofsuch financial instruments is as follows:
Category
As of March 31, 2022
Unlisted equity securities¥9,177 million(*3) Current portion of long-term debt is included in long-term debt.
(*4) The value of receivables or payables arising from derivative transactions is shown at net value, and the
net liability position is shown in parentheses.
Notes:
1.

Redemption schedule for monetary receivables

Due in one
year or less

Cash and time deposits
Notes receivable, trade
Accounts receivable, trade
Electronically recorded monetary claims
Total

¥

¥

9,529
427
15,700938
26,596Due in one
year or less

Cash and time deposits
Notes receivable, trade
Accounts receivable, trade
Electronically recorded monetary claims
Total

¥

¥

7,921
697
16,652
1,160
26,432Due in one
year or less

Cash and time deposits
Notes receivable, trade
Accounts receivable, trade
Electronically recorded monetary claims
Total

$

71,362
3,197
117,576
7,024$ 199,176

March 31, 2023
Due after
Due after
one yearfive years
through fivethrough ten
years
years
(Millions of yen)
¥

¥

–
–
–
–
–

¥

¥

–
–
–
–
–

Due after
ten years¥¥

March 31, 2022
Due after
Due after
one yearfive years
through fivethrough ten
years
years
(Millions of yen)
¥

¥

–
–
–
–
–

¥

¥

–
–
–
–
–

Due after
ten years¥¥

March 31, 2023
Due after
Due after
one yearfive years
through fivethrough ten
years
years
(Thousands of U.S. dollars)
$

$

–
–
–
–
–

$

$

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

Due after
ten years

$

$

–
–
–
–
–

38

2.

The redemption schedule for long-term debt and other interest-bearing debt is disclosed in Note 7. ShortTerm Borrowings and Long-Term Debt.

3.

Breakdown of financial instruments by fair value hierarchy
The fair value of financial instruments is classified into the following three levels based on theobservability and materiality of the inputs used to determine the fair value.
Level 1 fair value:

Level 2 fair value:

Level 3 fair value:

Among inputs for determining observable fair value, Level 1 fair value is the fairvalue determined based on quoted market prices in an active market for identicalassets or liabilities subject to the fair value measurement.
Among inputs for determining observable fair value, Level 2 fair value is the fairvalue determined using inputs for the fair value measurement other than Level 1
inputs.
Level 3 fair value is the fair value determined using inputs for determining fairvalue that are unobservable.

When the Group uses multiple inputs with a significant impact on the determination of fair value, fairvalue is classified to the level with the lowest priority in the determination of fair value among the levels
to which each of those inputs belongs.
(1) Financial instruments carried at fair value in the consolidated balance sheet
March 31, 2023
Level 2
Level 3
(Millions of yen)

Level 1
Investment securities
Other securities
Equity securities
Derivative transactions
Currency-related
Commodity-related
Total assets
Derivative transactions
Currency-related
Commodity-related
Total liabilities¥

1,015 ¥

– ¥

–

¥

–
–
1,015 ¥

126
61
188 ¥

–
–
–

– ¥
–
– ¥

39 ¥
904
944 ¥

–
–
–

¥
¥

Derivative transactions
Currency-related
Commodity-related
Total liabilities

¥

1,015

¥

126
61
1,204

¥

39
904
944

¥

March 31, 2022
Level 2
Level 3
(Millions of yen)

Level 1
Investment securities
Other securities
Equity securities
Total assets

Total

Total

¥
¥

1,068 ¥
1,068 ¥

– ¥
– ¥

–
–

¥
¥

1,068
1,068

¥

– ¥
–
– ¥

52 ¥
5,112
5,165 ¥

–
–
–

¥

52
5,112
5,165

¥

¥

39

Level 1
Investment securities
Other securities
Equity securities
Derivative transactions
Currency-related
Commodity-related
Total assets
Derivative transactions
Currency-related
Commodity-related
Total liabilities

March 31, 2023
Level 2
Level 3(Thousands of U.S. dollars)$

7,601 $

– $

–

$

–
–
7,601 $

943
456
1,407 $

–
–
–

– $
–
– $

292 $
6,770
7,069 $

–
–
–

$
$

Total

$

7,601

$

943
456
9,016

$
$

292
6,770
7,069

(2) Financial instruments other than those carried at fair value in the consolidated balance sheet
March 31, 2023
Level 1
Level 2
Level 3
Total
(Millions of yen)¥– ¥27,365 ¥– ¥27,365Long-term debt
Total liabilities¥– ¥27,365 ¥– ¥27,365Long-term debt
Total liabilities

March 31, 2022
Level 1
Level 2
Level 3
(Millions of yen)¥– ¥28,274 ¥–¥– ¥28,274 ¥–Long-term debt
Total liabilities

March 31, 2023
Level 1
Level 2
Level 3(Thousands of U.S. dollars)$– $204,935 $–$– $204,935 $
–

Total
¥
¥

28,27428,274

Total$$

204,935
204,935

Notes: Explanation of valuation technique and inputs used to determine fair value
Investment securities
The fair value of listed equity securities is based on a quoted market price. As listed equity securities
are traded in an active market, the fair value is categorized into Level 1.
Derivative transactions(1) Currency-related
The fair value of currency-related derivatives is based on prices obtained from counterparty financial
institutions and others and is categorized into Level 2.
(2) Commodity-related
The fair value of commodity-related derivatives is based on prices obtained from counterparties andothers and is categorized into Level 2.
Long-term debt

40

For long-term debt with floating interest rates, its carrying value approximates fair value since thedebt reflects the market interest rates in a short period of time and the credit condition of theCompany has not changed significantly since the debt was executed. For long-term debt with fixedinterest rates, the fair value is based upon the present value of the total of principal and interest
discounted by the interest rate to be applied if similar new borrowings were entered into. The fairvalue is therefore categorized into Level 2.

15.

Investment Securities

Investment securities held by the Group are all classified as other securities.
The aggregate cost and fair value (carrying value) of marketable securities classified as other securities as ofMarch 31, 2023 and 2022 were as follows:

Cost

March 31, 2023
Fair value(carrying value)(Millions of yen)

Unrealized gains(losses)

Securities whose fair value exceeds theircost:
Equity securities

¥

354

¥

906

¥

552

Securities whose fair value does notexceed their cost:
Equity securities
Total

¥

128
483

¥

109
1,015

¥

(19)
532

Cost
Securities whose fair value exceeds theircost:
Equity securities
Securities whose fair value does notexceed their cost:
Equity securities
Total

¥

455

¥

160
615

Cost
Securities whose fair value exceeds theircost:
Equity securities
Securities whose fair value does notexceed their cost:
Equity securities
Total

$

2,651

$

958
3,617

March 31, 2022
Fair value(carrying value)(Millions of yen)

Unrealized gains(losses)

¥

955

¥

499

¥

113
1,068

¥

(47)
452

March 31, 2023
Fair value
Unrealized gains(carrying value)(losses)(Thousands of U.S. dollars)

$

6,784

$

816
7,601

$

4,133

$

(142)
3,984

As of March 31, 2023 and 2022, unlisted equity securities amounting to ¥9,682 million ($72,508 thousand)41

and ¥9,177 million, respectively, were not included in the above table because there were no market prices
available and it was extremely difficult to determine the fair value.
Information about sales of securities classified as other securities for the years ended March 31, 2023 and2022 was as follows:Year ended March 31,
2023
2022
2023
(Thousands of(Millions of yen)
U.S. dollars)
Sales proceeds
Aggregate gains
Aggregate losses

¥

142
18
(11)

¥

140
53
(10)

$

1,063
134
(82)

The Company recognized impairment loss on securities (equity securities categorized into other securities)of nil for the year ended March 31, 2023 and ¥45 million for the year ended March 31, 2022.
If the fair value declines by 50% or more compared to the acquisition cost, the acquisition cost will be written
down to the fair value. If the fair value declines between 30% and 50% compared to the acquisition cost, theacquisition cost will be written down to the amount deemed appropriate taking into consideration monetarysignificance, recoverability and other factors.

16. Cash and Cash Equivalents
Cash and cash equivalents as of March 31, 2023 and 2022 were composed of the following:
March 31,
2022

2023

(Millions of yen)
Cash and time deposits
Cash and cash equivalents

¥
¥

9,536
9,536

¥
¥

7,929
7,929

2023
(Thousands of
U.S. dollars)$$

71,414
71,41442

17.

Derivative Transactions(a) Summarized below are the notional amounts and the fair value of derivative instruments outstanding asof March 31, 2023 and 2022, for which hedge accounting has not been applied.
(1) Commodity-related transactions
March 31, 2023
Notional amountContract
Maturing after
amountone year
Fair value(Millions of yen)

Unrealized
gains (losses)

OTC transactions:
Metal forward contracts
Sell:
Metals

¥

37

¥

–

¥

(1)

¥

(1)

¥
¥

–
37

¥
¥

–
–

¥
¥

–
(1)

¥
¥

–
(1)

Buy:
MetalsTotal

March 31, 2022
Notional amountContract
Maturing after
amountone year
Fair value(Millions of yen)

Unrealized
gains (losses)

OTC transactions:
Metal forward contracts
Sell:
Metals

¥

61

¥

–

¥

(8)

¥

(8)

¥
¥

–
61

¥
¥

–
–

¥
¥

–
(8)

¥
¥

–
(8)

Buy:
MetalsTotal

March 31, 2023
Notional amountContract
Maturing after
amountone year
Fair value(Thousands of U.S. dollars)

Unrealized
gains (losses)

OTC transactions:
Metal forward contracts
Sell:
Metals

$

277

$

–

$

(7)

$

(7)

$
$

–
277

$
$

–
–

$
$

–
(7)

$
$

–
(7)

Buy:
MetalsTotal

43

(b) Summarized below are the notional amounts and the fair value of derivative instruments outstanding asof March 31, 2023 and 2022, for which hedge accounting has been applied.
(1) Currency-related transactions
March 31, 2023
Notional amountContract
Maturing after
amountone year(Millions of yen)

Fair value

Forward foreign exchange contracts to hedge
forecast foreign currency denominatedtransactions, accounted for by standard
treatment:
Sell:
USD
Total

¥
¥

5,141
5,141

¥
¥

–
–

¥
¥

March 31, 2022
Notional amountContract
Maturing after
amountone year(Millions of yen)

86
86

Fair value

Forward foreign exchange contracts to hedge
forecast foreign currency denominatedtransactions, accounted for by standard
treatment:
Sell:
USD
Total

¥
¥

4,796
4,796

¥
¥

–
–

¥
¥

(52)
(52)

March 31, 2023
Notional amountContract
Maturing after
amountone year
Fair value(Thousands of U.S. dollars)
Forward foreign exchange contracts to hedge
forecast foreign currency denominatedtransactions, accounted for by standard
treatment:
Sell:
USD
Total

$
$

38,50038,500

$
$

–
–

$
$

644
644

44

(2) Interest-related transactions
March 31, 2023
Notional amountContract
Maturing after
amountone year(Millions of yen)Interest rate swaps to hedge long-term debt,
accounted for by exceptional treatment:
Receive/floating and pay/fixed
Total

¥
¥

680
680

¥
¥

–
–

Fair value(Note)

Note: Interest rate swaps to which exceptional treatment is applied are accounted for together with thelong-term debt designated as a hedged item. Therefore, their fair values are included in the fairvalue of long-term debt (including current portion of long-term debt).
March 31, 2022
Notional amountContract
Maturing after
amountone year(Millions of yen)Interest rate swaps to hedge long-term debt,
accounted for by exceptional treatment:
Receive/floating and pay/fixed
Total

¥
¥

2,401
2,401

¥
¥

680
680

Fair value(Note)

Note: Interest rate swaps to which exceptional treatment is applied are accounted for together with thelong-term debt designated as a hedged item. Therefore, their fair values are included in the fairvalue of long-term debt (including current portion of long-term debt).
March 31, 2023
Notional amountContract
Maturing after
amountone year
Fair value(Thousands of U.S. dollars)Interest rate swaps to hedge long-term debt,
accounted for by exceptional treatment:
Receive/floating and pay/fixed
Total

$
$

5,092
5,092

$
$

–
–

(Note)

Note: Interest rate swaps to which exceptional treatment is applied are accounted for together with thelong-term debt designated as a hedged item. Therefore, their fair values are included in the fairvalue of long-term debt (including current portion of long-term debt).

45

(3) Commodity-related transactions
March 31, 2023
Notional amountContract
Maturing after
amountone year(Millions of yen)
Metal forward contracts to hedge part of raw
materials and finished goods, accounted for bystandard treatment
Sell: Metals
Buy: Metals
Total

¥
¥

30,8494,419
35,269¥¥–––Fair value¥¥

March 31, 2022
Notional amountContract
Maturing after
amountone year(Millions of yen)
Metal forward contracts to hedge part of raw
materials and finished goods, accounted for bystandard treatment
Sell: Metals
Buy: Metals
Total

¥
¥

42,526
3,574
46,100

¥
¥

–
–
–

(831)
(9)
(841)

Fair value¥¥(5,544)439(5,105)

March 31, 2023
Notional amountContract
Maturing after
amountone year
Fair value(Thousands of U.S. dollars)
Metal forward contracts, accounted for as part of
raw materials and finished goods:
Sell: Metals
Buy: Metals
Total

$
$

231,026
33,093
264,127

$
$

–
–
–

$
$

(6,223)(67)(6,298)46

18.

Other Comprehensive Income

Reclassification adjustments and tax effects allocated to each component of other comprehensive income(loss) for the years ended March 31, 2023 and 2022 were as follows:
Years ended March 31,
2022
2023
2023
(Millions of yen)(Thousands of
U.S. dollars)
Net unrealized gains (losses) on other securities:
Gains (losses) arising during the year
Reclassification adjustments
Amount before tax effectTax effect¥

Deferred gains (losses) on hedges:
Gains (losses) arising during the year
Reclassification adjustments
Amount before tax effectTax effectForeign currency translation adjustment:
Adjustments arising during the year
Tax effectRemeasurements of defined benefit plans:(Losses) gains arising during the year
Reclassification adjustments
Amount before tax effectTax effectTotal other comprehensive income (loss)

¥

86
(6)
79
(24)
55

¥

(112)
(42)
(155)
47
(107)

$

644
(44)
591
(179)
411

4,519
(116)
4,402
(1,273)
3,128(8,804)3,820(4,984)
1,435(3,548)33,842(868)
32,966(9,533)23,425

1,672
–
1,672

856
–
856

12,521–
12,521

(25)
(88)
(113)
34
(78)
4,778

146
(64)
81
(24)
56
(2,743)

(187)
(659)
(846)
254
(584)
35,782¥$47

19． Revenue Recognition(a) Information on disaggregated revenue from contracts with customers
For the year ended March 31, 2023
Reportable segment
Environment
andRecycling

Smelting
Zinc products¥

39,820¥–Electronic
Components
andMineralAdvanced
Resource
Materials(Millions of yen)
¥
– ¥
– ¥

Other
(Note)

Total
39,820

¥

Total
–

¥

39,820

Lead products

27,199–––27,199–27,199

Electric silver

34,359–––34,359–34,359Sulfuric acid
Environment and recycling
products
Sales of ores, etc.

1,545

–

–

–

1,545

–

1,545

–
6,223

–
–

6,199
6,223

–
–

6,199
6,223

–
–

Electronic parts
Electrolytic ironSound isolation building
materials
Civil engineering,
construction and plantengineering
Other
Revenue from contracts withcustomers
Other revenues
Net sales to external customers

¥

6,199
–

¥

–

–

–

3,036

3,036

–

3,036

–

–

–

1,263

1,263

–

1,263

–

–

–

–

–

1,462

1,462

–
19,044

–
–

–
–

–
1,638

–
20,682

1,543
2,130

1,543
22,813

5,938 ¥

140,330– ¥296

5,938 ¥

140,627¥

121,969

¥

6,199

¥

6,223

¥

384

¥

(261) ¥

173¥

122,353

¥

5,937

¥

6,397

¥

¥
¥

¥

¥
¥

5,137

¥

–

¥

145,467
296

5,137

¥

145,764

For the year ended March 31, 2022
Reportable segment
Environment
andRecycling

Smelting
Zinc products¥

35,621¥–

Electronic
Components
andMineralAdvanced
Resource
Materials(Millions of yen)
¥
– ¥
– ¥

Other
(Note)

Total
35,621

¥

Total
–

¥

35,621

Lead products

26,068–––26,068–26,068

Electric silver

29,078–––29,078–29,078Sulfuric acid
Environment and recycling
products
Sales of ores, etc.

1,439

–

–

–

1,439

–

1,439

–
8,303

–
–

4,674
8,303

–
–

4,674
8,303

–
–

Electronic parts
Electrolytic ironSound isolation building
materials
Civil engineering,
construction and plantengineering
Other
Revenue from contracts withcustomers
Other revenues
Net sales to external customers

¥

¥

4,674
–

¥

–

–

–

2,139

2,139

–

2,139

–

–

–

1,440

1,440

–

1,440

–

–

–

–

–

1,421

1,421

–
12,439

–
–

–
–

–
1,687

–
14,127

1,705
1,903

1,705
16,030¥5,267 ¥

122,893– ¥(3,644)¥

5,267 ¥

119,248

104,647¥¥(3,218) ¥¥101,428

¥

4,674

¥

(91) ¥
4,583

¥

8,303

¥

(333)
7,969

¥

¥

5,031

¥

127,924–¥(3,644)

¥

5,031

¥

124,27948

For the year ended March 31, 2023
Reportable segment
Environment
andRecycling

Smelting
Zinc products$

298,210$–

Electronic
Components
andMineralAdvanced
Resource
Materials
Total(Thousands of U.S. dollars)
$
– $
– $
298,210

Other(Note)
$

Total
–

$

298,210

Lead products

203,692–––

203,692

Electric silver

257,312–––257,312–257,312

Sulfuric acid
Environment and recycling
products
Sales of ores, etc.

11,570–––11,570–11,570–46,603––

46,42446,603––

46,42446,603$–

Electronic parts
Electrolytic ironSound isolation building
materials
Civil engineering,
construction and plantengineering
Other
Revenue from contracts withcustomers
Other revenues
Net sales to external customers

46,424
–

$

–

–

–

22,736

22,736–

22,736

–

–

–

9,458

9,458

–

9,458

–

–

–

–

–

10,948

10,948–142,619

–
–

–
–

–
12,266–
154,886

11,555
15,951

11,555
170,845

38,470$ 1,089,395$

913,420$

46,424$46,603

$

2,875

$

(1,954) $

1,295

$

916,295$

44,46147,906$$

203,692$

44,469 $ 1,050,924
– $

$

$

$

2,216

44,469 $ 1,053,149–$

38,470$2,216$ 1,091,619

Note: “Other” represents business segments not belonging to reportable segments and includes sound insulation building
materials; civil engineering, construction and plant engineering; transportation; environmental analysis; and others.

(b) Information that provides a basis for understanding revenue from contracts with customers
The information that provides a basis for understanding revenue is described “1. Summary of Significant
Accounting Policies, (o) Recognition of revenues” in the “Notes to Consolidated Financial Statements.”(c) Information about the relationship between the satisfaction of performance obligations under contracts
with customers and cash flows from such contracts, as well as the amount and timing of revenue
expected to be recognized in the following fiscal year or later from contracts with customers that existed
at the end of the current fiscal year
(1) Balances of contract assets and contract liabilities, etc.
Year ended March 31,
2022
2023
(Thousands of(Millions of yen)
U.S. dollars)

2023
Receivables from contracts with customers (beginning balance)
Notes receivables, trade
Electronically recorded monetary claims
Accounts receivable, trade
Receivables from contracts with customers (ending balance)
Notes receivables, trade
Electronically recorded monetary claims
Accounts receivable, trade
Contract assets (beginning balance)
Contract assets (ending balance)
Contract liabilities (beginning balance)
Contract liabilities (ending balance)

¥
¥
¥
¥
¥
¥
¥
¥

697
1,160
16,652
18,511¥427
938
15,667
17,033
244
33
237
83

¥

¥

¥
¥
¥
¥
¥

833
1,412
13,07015,316

$

697
1,160
16,652
18,511
157
244
119
237

$

$

$
$
$
$
$

5,219
8,687
124,706
138,628
3,197
7,024
117,329
127,559
1,827
247
1,774
621

49

Contract assets are those related to the rights of consolidated subsidiaries to construction contracts
with customers in the civil engineering, construction and plant engineering business for whichrevenue over a certain period of time had been recognized but the corresponding invoices had notbeen issued yet as of the end of the current fiscal year. The contract assets are reclassified toreceivables from contracts with customers when the rights of consolidated subsidiaries to theconsideration become unconditional. The consideration for such construction contracts is received
largely in stages in reference to the progress of satisfying the performance obligations in accordancewith the terms and conditions of the contract.
Contract liabilities are those primarily related to advances received for sales in each business.
Contract liabilities are reduced when revenue is recognized.
The amount of revenue recognized in the current fiscal year that was included in the beginningbalance contract liabilities was ¥215 million ($1,610 thousand). The amount of revenue recognizedin the current fiscal year from performance obligations that have been satisfied in prior periods(mainly due to changes in transaction prices) was immaterial.
The amount of revenue recognized in the previous fiscal year that was included in the beginningbalance contract liabilities was ¥117 million. The amount of revenue recognized in the previous
fiscal year from performance obligations that have been satisfied in prior periods (mainly due tochanges in transaction prices) was immaterial.
(2) Transaction price allocated to remaining performance obligations
The Company and its consolidated subsidiaries have applied the practical expedient on the notes ontransaction prices allocated to the remaining performance obligations. As a result, the contracts withan initial expected contract period of one year or less are not included in the notes. Suchperformance obligations are those related to the contracted construction works in the civilengineering, construction and plant engineering business. The aggregate transaction price allocatedto the remaining performance obligations and the timing in which the Group expects to recognize
revenue are as follows:2023
One year or lessMore than one year but not more than two years
Total

¥
¥

March 31,2022

(Millions of yen)
248
¥
–
248
¥

309
6
316

2023
(Thousands of U.S.
dollars)
$
1,857
–
$
1,857

As of March 31, 2023, the aggregate transaction price allocated to the remaining performanceobligations for the contracted construction works was ¥248 million ($1,857 thousand). The
Company expects to recognize revenue for these remaining performance obligations over the next
6 months as the work is completed.
As of March 31, 2022, the aggregate transaction price allocated to the remaining performanceobligations for the contracted construction works was ¥316 million. The Company expects torecognize revenue for these remaining performance obligations over the next 11 to 17 months as
the work is completed.

50

20.

Segment Information(a) Overview of reportable segments(1) Definition of reportable segments
The Company defines reportable segments as components of the Company for which separate financial
information is available and whose operating results are regularly evaluated by the board of directors tomake decisions about how resources are allocated and assess its performance.
Operating departments of the Company are organized according to products and services, and eachdepartment plans comprehensive domestic and overseas strategies for its products and services anddevelops business activities through the Company and its consolidated subsidiaries. Thus, reportablesegments of the Company are determined based on such operating departments; namely, “Smelting,”“Environment and Recycling,” “Mineral Resource” (organized based on CBH Resources Ltd., aconsolidated subsidiary), and “Electronic Components and Advanced Materials.”(2) Products and services of each reportable segment
 The Smelting segment engages in sales and production of zinc and lead products, electric silver andsulfuric acid.
 The Environment and Recycling segment engages in sales and production of zinc oxide andrecycling of waste materials.
 The Mineral Resource segment engages in exploration, development and production of non-ferrous
metal resources and sales of their output.
 The Electronic Components and Advanced Materials segment engages in sales and production ofelectronic parts, electrolytic iron, plating and machine parts.
(b) Basis of measurement for the amounts of net sales, profit or loss, assets and other items for eachreportable segment
The accounting policies of each reportable segment are consistent to those described in Note 1. Summaryof Significant Accounting Policies. The segment profit is based on operating income, and intersegment
sales and transfers are based on prevailing market prices.

51

(c) Information about net sales, profit or loss, assets and other items
Year ended March 31, 2023
Reportable segment
Environment
andRecycling

Smelting
Net sales:
External customers
Intersegment
Total
Segment profit (loss)
Segment assets
Other items:
Depreciation
Investments in entities
accounted for using
equity method
Increase in property,
plant and equipment
and intangible assets
Impairment losses on
fixed assets

MineralResource

Electronic
Components
and Advanced
Materials

Other(Note 1)

Total

Amounts on
consolidated
Reconciliafinancial
tion
statements(Note 2)
(Note 3)

Total

(Millions of yen)
¥ 122,353
1,134¥ 123,488¥
2,822¥ 76,597

¥

¥

1,531

¥

¥
¥
¥

5,937
–
5,937
1,462
5,869

¥

¥
¥
¥

6,397
4,133
10,530(1,344)33,050

¥

230

¥

2,201

¥

¥
¥
¥

5,938 ¥ 140,627–
5,268
5,938 ¥ 145,895
688 ¥
3,628
9,844 ¥ 125,362
170 ¥

4,134

¥

¥

¥
¥
¥

5,137
4,754
9,891
747
3,874

¥

181

¥

¥
¥
¥

145,764
10,023
155,787
4,375
129,237¥–(10,023)¥ (10,023)¥(326)¥ 13,762

4,315 ¥

69

¥ 145,764–¥ 145,764¥
4,049¥ 142,999
¥

4,385

–

–

8,988

–

8,988

–

8,988

–

8,988

1,931

229

3,676

222

6,059

124

6,183

8

6,192

–

–

231

–

231

–

231

–

231

Year ended March 31, 2022
Reportable segment
Environment
andRecycling

Smelting
Net sales:
External customers
Intersegment
Total
Segment profit
Segment assets
Other items:
Depreciation
Investments in entities
accounted for using
equity method
Increase in property,
plant and equipment
and intangible assets
Impairment losses on
fixed assets

MineralResource

Electronic
Components
and Advanced
Materials

Other(Note 1)

Total

Amounts on
consolidated
Reconciliafinancial
tion
statements(Note 2)
(Note 3)

Total

(Millions of yen)
¥ 101,428
930¥ 102,359¥
6,470¥ 85,098

¥

¥

1,556

¥

¥
¥
¥

4,583
–
4,583
1,481
5,392

¥

¥
¥
¥

7,969
4,874
12,844
1,535
28,611

¥

233

¥

2,081

¥

¥
¥
¥

5,267 ¥ 119,248–
5,805
5,267 ¥ 125,054
665 ¥ 10,152
9,434 ¥ 128,536
184 ¥

4,056

¥

¥

¥
¥
¥

5,031
5,302
10,333
855
3,751

¥

190

¥

¥
¥
¥

124,279
11,108135,387
11,008132,287¥–(11,108)¥ (11,108)¥(498)¥ 13,508

4,246 ¥

69

¥ 124,279–¥ 124,279¥ 10,509¥ 145,796
¥

4,315

–

–

8,483

–

8,483

–

8,483

–

8,483

1,461

189

2,664

88

4,403

118

4,522

18

4,540

–

–

–

–

–

–

–

–

–

Year ended March 31, 2023
Reportable segment
Environment
andRecycling

Smelting
Net sales:
External customers
Intersegment
Total
Segment profit (loss)
Segment assets
Other items:
Depreciation
Investments in entities
accounted for using
equity method
Increase in property,
plant and equipment
and intangible assets
Impairment losses on
fixed assets

MineralResource

Electronic
Components
and Advanced
Materials

Other(Note 1)

Total

Total

Amounts on
consolidated
Reconciliafinancial
tion
statements(Note 2)
(Note 3)(Thousands of U.S. dollars)$ 916,295
8,492$ 924,795$ 21,133$ 573,631$$

11,465$47,90630,951$ 78,858$ (10,065)$ 247,509

$

$
$
$

44,461–
44,461
10,94843,952

$

1,722

$

16,483$$$$

44,469 $ 1,053,149–
39,451
44,469 $ 1,092,600
5,152 $
27,16973,721 $ 938,830$$$

38,47035,602
74,073
5,594
29,012$ 1,091,619
75,061$ 1,166,681$
32,764$ 967,849$

1,273 $

30,959

$

1,355

$

$

–
(75,061)$ (75,061)$ (2,441)$ 103,062

32,314 $516$ 1,091,619–$ 1,091,619$ 30,322$ 1,070,912$

32,839––67,310–67,310–67,310–67,31014,461

1,714

27,5291,662

45,375928

46,30459

46,371

–

–

1,729

–

1,729

–

1,729

–

1,729

52

Notes 1. “Other” represents business segments not belonging to reportable segments and includes soundinsulation building materials; civil engineering, construction and plant engineering;transportation; environmental analysis; and others.
2. “Reconciliation” included the followings:

Segment profit (loss)
Intersegment elimination
Corporate expenses (*)

¥

Total

¥

Year ended March 31,
2022
2023
2023
(Millions of yen)(Thousands of
U.S. dollars)¥(168) $
247
1,849
(330)
(573)
(4,291)(498) $
(326) ¥
(2,441)(*) “Corporate expenses” represents mainly general and administrative expenses that are notallocated to reportable segments.

Segment assets:
Corporate assets (*)¥

Year ended March 31,
2022
2023
2023
(Millions of yen)(Thousands of
U.S. dollars)¥ 13,508
13,762$ 103,062(*) “Corporate assets” represents mainly the Company’s investments of surplus funds
including cash, time deposits and investment securities and assets relating to administrative
divisions.

Other items:
Depreciation
Increase in property, plant and equipment
and intangible assets (*)¥

Year ended March 31,
2022
2023
2023
(Millions of yen)(Thousands of
U.S. dollars)
¥
69
69
$
516
8

18

59

(*) “Increase in property, plant and equipment and intangible assets” represents mainly capital
expenditures that do not belong to reportable segments.
3. Segment profit (loss) is reconciled to operating income on the consolidated statement ofoperations.

53

(d) Related information(1) Information by product and service
Information by product and service has been omitted since similar information is disclosed insegment information described above.
(2) Information by geographical area
Net sales information by geographical area for the years ended March 31, 2023 and 2022 was asfollows:
Year ended March 31,
2022
2023
2023
(Millions of yen)(Thousands of
U.S. dollars)
Japan
Asia
Oceania¥

132,082
9,131
4,549

¥ 107,708
11,613
4,958

$

Total

¥

145,764¥ 124,279$ 1,091,619

989,155
68,381
34,067

Property, plant and equipment information by geographical area as of March 31, 2023 and 2022
was as follows:
March 31,
2022
2023
2023
(Millions of yen)(Thousands of
U.S. dollars)
Japan
Australia

¥

Total

¥

29,3896,679
36,068¥¥29,0696,202
35,271$$

220,092
50,018270,111(3) Information by major customer
Information by major customer has been omitted since there were no sales to a single externalcustomer accounting for 10% or more of consolidated net sales.

54

21.

Related Party Information(a) The Company had related party transactions with its unconsolidated subsidiary/associate as follows.
For the year ended March 31, 2023
CompanyType

Commonname

Address

sharesBusiness

Ownership[owned] ratio

Relationshipwith theof voting rights

related party

Transaction amountTransactions

Underwriting of
capital increase
Tianjin
Production
TIANJIN
Development RMBof lead
TOHO LEAD
Associate
Area, People’s 264
alloy for
RECYCLING
Republic of million automobileCO., LTD.
China
batteries

Interest income(Note 1)

Direct49.3%

Lending offunds
Concurrency Repayment ofof officerloans receivable
Guarantee of
liabilities(Note 2)

Associate

Abra
Mining Pty
Limited

Notes

Western
Australia,
Australia

AUD
164
millionMiningIndirect
40.0%

Purchase ofraw
Guarantee ofmaterials
liabilities
Concurrency
of officer(Millions of yen)

Balance at year end
Account¥1,158($8,672 thousand) Other (accrued
receivable)¥59($441 thousand) Other (short-termloans receivable¥79 from associates)($591 thousand)
Other (long-term¥807 loans receivable($6,043 thousand) from associates)

Other (advance¥5,875payments to($43,997 thousand)suppliers)(Millions of yen)

¥14($104 thousand)¥80($599 thousand)¥1,365($10,222 thousand)¥761($5,699 thousand)Terms and conditions of transactions and policies to determine them
1. The Company determined the interest rate for the lending of funds to TIANJIN TOHO LEAD
RECYCLING CO., LTD reasonably based on market interest rates, and has not received
collateral for them.
2. The Company provides guarantees for the entity’s borrowings and receives guarantee fees
based on general guarantee fee rates.

For the year ended March 31, 2022
CompanyType

Commonname

Address

sharesBusiness

Tianjin
Production
TIANJIN
Development RMBof lead
TOHO LEAD
Associate
Area, People’s 151
alloy for
RECYCLING
Republic of million automobileCO., LTD.
China
batteries

Ownership[owned] ratio

Relationshipwith theof voting rights

related party

Direct46.5%

Transaction amountTransactions(Millions of yen)

Lending of funds(Note 1)

¥502

Interest income(Note 1)

¥37

Lending offunds
Concurrency Repayment ofof officerloans receivable
Guarantee of
liabilities(Note 2)

Associate

Abra
Mining Pty
Limited

Notes

Western
Australia,
Australia

AUD
159
millionMiningIndirect40.0%

Concurrency Guarantee ofof officer
liabilities

Balance at year end
Account(Millions of yen)

Other (accrued
receivable)¥15

Other (short-termloans receivable¥67 from associates)¥73

Other (long-term¥1,156 loans receivablefrom associates)¥3,182–¥1,365–

Terms and conditions of transactions and policies to determine them
1. The Company determined the interest rate for the lending of funds to TIANJIN TOHO LEAD
RECYCLING CO., LTD reasonably based on market interest rates, and has not received
collateral for them.
2. The Company provides guarantees for the entity’s borrowings and receives guarantee fees
based on general guarantee fee rates.

55

(b) A consolidated subsidiary of the Company had related party transactions with its unconsolidated
subsidiary/associate as follows.
For the year ended March 31, 2023
Company
Type

Associate

Note

name

Abra
Mining Pty
LimitedCommonAddress

Western
Australia,
Australia

sharesAUD
164
millionBusiness

MiningOwnership[owned] ratio

Relationshipwith theof voting rights

related party

Indirect40.0%

Transaction amountTransactions(Millions of yen)

Undertaking of
capital increase¥182($1,362 thousand)Undertakingof capital
Guarantee ofincreaseliabilities
Concurrency
of officer
Provision ofcollateral (Note)¥5,875($43,997 thousand)

Balance at year end
Account(Millions of yen)––

¥8,988($67,310 thousand)Terms and conditions of transactions and policies to determine them
The Company’s consolidated subsidiary provides its own shares as collateral to a financial institution
from which Abra Mining Pty Limited borrows funds.

For the year ended March 31, 2022
CompanyType

nameCommonAddress

sharesBusiness

Ownership[owned] ratio

Relationshipwith theof voting rights

related party

Transaction amountTransactions

Undertaking of
capital increase

Associate

Note

Abra
Mining Pty
LimitedWestern
Australia,
Australia

AUD
159
millionMiningIndirect40.0%

Undertakingof capital
Guarantee ofincreaseliabilities
Concurrency
of officer
Provision ofcollateral (Note)(Millions of yen)

Balance at year end
Account(Millions of yen)––

¥3,299¥3,182¥8,483

Terms and conditions of transactions and policies to determine them
The Company’s consolidated subsidiary provides its own shares as collateral to a financial institution
from which Abra Mining Pty Limited borrows funds.

22. Subsequent Events
Not applicable.

56