Sanyo Special Steel Co., Ltd.

Financial Report for
The Year Ended March 31, 2024

Sanyo Special Steel Co., Ltd. and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETSAs of March 31, 2023 and 2024
Thousands of U.S.
Millions of yen

ASSETS
Current Assets:

2023

Cash and bank deposits (Notes 6 and 23)¥
Notes and accounts receivable - trade, and contract assets (Notes 6, 10, 11, 12 and 28)
Electronically recorded monetary claims (Notes 6 and 12)
Less: Allowance for doubtful accounts
Inventories (Notes 8 and 10)
Income taxes receivable
Deposits paid in parent company (Notes 6, 23 and 28)
Other (Notes 6 and 25)
Total current assets

21,653
66,372
11,637(449)
128,229
45
9,954
4,258
241,699

dollars (Note 3)

2024

¥

26,59259,541
13,381(435)
119,158
391
4,811
4,997
228,4362024$

175,719
393,454
88,426(2,876)
787,407
2,582
31,79033,0191,509,521

Property, Plant and Equipment:
Land (Note 10)
Buildings and structures (Note 10)
M achinery and equipment (Note 10)
Construction in progress (Note 10)
Other (Note 10)
Less: Accumulated depreciation
Total property, plant and equipment

13,49674,816284,450
9,026
15,651
397,439(282,256)
115,183

17,18378,648299,920
4,389
17,052
417,192(293,705)
123,487

113,548519,714
1,981,897
29,003112,671
2,756,833(1,940,821)
816,01232,441
3,677
36,11832,9544,030
36,984

217,764
26,629244,393

5,003
3
1,489
997
935
(209)
8,218

4,329
3
2,810
1,828
1,043
(213)
9,800

28,60523
18,56912,0786,890(1,406)64,759Intangible Assets:
Goodwill
Other
Total intangible assets

Investments and Other Assets:
Investments in securities (Notes 6, 7 and 9)
Long-term loans receivable
Deferred tax assets (Note 15)
Net defined benefit assets (Note 14)
Other (Notes 6 and 25)
Less: Allowance for doubtful accounts
Total investments and other assets
Total assets¥

1

401,218¥

398,707$2,634,685

Thousands of U.S.
dollars (Note 3)

Millions of yen

LIABILITIES AND NET ASSETS
Current Liabilities:

2023

Short-term loans (Notes 6, 10 and 13)
Current portion of long-term loans (Notes 6, 10 and 13)
Commercial paper (Note 6)
Current portion of bonds payable (Notes 6 and 13)
Notes and accounts payable - trade (Note 12)
Accounts payable - otherAccrued income taxes
Accrued expenses
Provision for environmental measures
Other (Notes 6, 11, 13 and 25)
Total current liabilities¥

35,4818,251
30,999－39,544
11,1204,654
11,823
4
5,516
147,3922024¥

54,124171－
10,00039,3589,866
4,441
12,104
4
6,626
136,6942024$

357,657
1,130－
66,081
260,078
65,197
29,34579,98528
43,784903,285

Long-term Liabilities:
Bonds payable (Notes 6 and 13)
Long-term loans (Notes 6, 10 and 13)
Accrued directors' and corporate auditors' retirement benefits
Deferred tax liabilities (Note 15)
Provision for loss on guarantees
Provision for environmental measures
Net defined benefit liabilities (Note 14)
Other (Notes 6, 13 and 25)
Total long-term liabilities

Total liabilities

10,00011,571
56
5,279
1
133
8,752
2,010
37,802－
16,300
45
4,680
1
188
10,3991,802
33,415－
107,712297
30,926
7
1,244
68,716
11,909220,811

185,194

170,109

1,124,096

Contingent Liabilities (Note 26)
Net Assets (Note 16)
Shareholders' Equity:
Common stock:
Authorized 94,878,400 shares in 2023 and 2024
Issued 54,507,307 shares in 2023 and 2024
Capital surplus
Retained earnings
Less: Treasury stock, at cost (21,557 shares in 2023 and 23,478 shares in 2024)
Total shareholders' equity¥

53,80051,503101,028(32)
206,299¥

53,80048,828105,725(37)
208,316$355,516
322,658
698,637(247)
1,376,564

Accumulated Other Comprehensive Income:
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans

1,894(1,101)
5,626
1,657
8,076

1,915
(417)
15,251
1,603
18,352

12,655(2,754)
100,780
10,590121,271

Non-controlling Interests

1,649

1,930

12,754

Total net assets

216,024

228,598

1,510,589

Total accumulated other comprehensive income

Total liabilities and net assets¥

2

401,218¥

398,707$2,634,685

Sanyo Special Steel Co., Ltd. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended March 31, 2023 and 2024
Thousands of U.S.
Millions of yen

2023

¥

Net Sales (Note 29)
Cost of Sales (Notes 8, 14 and 17)
Gross profit

Selling, General and Administrative Expenses (Notes 14, 17 and 18)
Operating income

393,844326,790
67,054

dollars (Note 3)

2024

¥

353,811304,101
49,7102024$

2,338,007
2,009,521
328,486

38,56228,492

38,343
11,367

253,375
75,111

478
347
－
－
494
287
1,606

954
380
433
409
825
519
3,520

6,301
2,513
2,864
2,703
5,449
3,433
23,263(960)(282)(1,242)28,856(2,384)(383)(2,767)
12,120(15,754)(2,531)(18,285)
80,089

250
15
－
(651)
(425)
(811)
28,045

37
913
308
(290)
(63)
905
13,025

245
6,030
2,034
(1,917)(414)
5,978
86,067

6,529
711
7,240
20,8056,660(2,762)
3,898
9,127

44,007(18,252)
25,75560,312Other Income:Interest and dividends
Rent income
Power supply and demand adjustment cooperation fund
Income from supplying data
Exchange gains
Other

Other Expenses:
Interest
Other

Ordinary income
Extraordinary Gains and Losses:
Gain on sale of property, plant and equipment (Note 19)
Gain on sale of investment in securities (Note 7)
Gain on sale of shares of subsidiaries and affiliates
Loss on sale and disposition of property, plant and equipment (Note 20)
Loss on liquidation of subsidiaries (Note 21)
Income before income taxes

Income Taxes: (Note 15)
Current

Deferred
Net income
Net Income Attributable to Non-controlling Interests
Net Income Attributable to Owners of the Parent¥

62
20,743

¥

71
9,056

Yen

2023

$

469
59,843

U.S. dollars (Note 3)

2024

2024

Per Share:
Net income (Note 22)
Cash dividends
Net assets¥

3

380.70100.003,934.50¥

166.21
65.00
4,160.27

$

1.10
0.43
27.49

Sanyo Special Steel Co., Ltd. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended March 31, 2023 and 2024
Thousands of U.S.
Millions of yen

2023

Net Income
Other Comprehensive Income (Loss):¥

Valuation difference on available-for-sale securities

20,805dollars (Note 3)

2024

¥

2024

9,127

$

60,312

511

21

142

Deferred gains (losses) on hedges
Foreign currency translation adjustments(3,235)
1,591

684
9,776

4,516
64,600Remeasurements of defined benefit plans
Total other comprehensive income (Note 4)

3,291
2,158

(54)
10,427(357)
68,901

22,963

19,554

129,21322,766

19,333

127,750

197

221

1,463

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

4

Sanyo Special Steel Co., Ltd. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended March 31, 2023
Millions of yen

Number ofoutstanding
common shares

54,487,741－－(1,991)

Balance at beginning of year
Net income attributable to owners of the parent
Cash dividends paid
Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2022, net
Total changes for fiscal year 2022

Balance at end of year

Common stock

Capital surplus¥¥

53,800－－－51,486－－－

Retainedearnings¥

85,733
20,743(5,448)
－

－

－

17

－

－
(1,991)
54,485,750－－
53,800－1751,503－
15,295101,028¥¥¥

Millions of yen

Balance at beginning of year

T reasury stock,at costValuationdifference on
available-forsale securities

Deferred gains(losses) onhedges¥¥¥

Net income attributable to owners of the parent(28)－

Cash dividends paid

－

－

－

－

Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2022, net

(4)

－

－

－

－

－

－

－

－

511

(3,235)

1,506

(4)
(32)

511
1,894

(3,235)(1,101)

1,506
5,626

Total changes for fiscal year 2022

Balance at end of year

¥

¥

1,383
－

¥

2,134
－

Foreigncurrencytranslation
adjustments

Millions of yen

Noncontrollinginterests

Remeasurementsof defined
benefit plans

Balance at beginning of year¥

(1,634)

¥

1,851

Total
¥

198,845

Net income attributable to owners of the parent
Cash dividends paid

－
－

－
－

20,743(5,448)Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2022, net
Total changes for fiscal year 2022

－

－

(4)

－

－

17

3,291
3,291

(202)
(202)

1,871
17,179Balance at end of year

¥

1,657

5

¥

1,649

¥

216,024

¥

¥

4,120
－

Sanyo Special Steel Co., Ltd. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFor the year ended March 31, 2024
Millions of yen

Number ofoutstanding
common shares

54,485,750－－(1,921)

Balance at beginning of year
Net income attributable to owners of the parent
Cash dividends paid
Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2023, net
Total changes for fiscal year 2023
Balance at end of year

Common stock

Capital surplus¥¥

53,800－－－51,503－－－Retainedearnings¥

101,028
9,056(4,359)－－－(2,675)－－(1,921)
54,483,829－－
53,800－(2,675)48,828－
4,697
105,725¥¥¥

Millions of yen

Balance at beginning of year

T reasury stock,at costValuationdifference on
available-forsale securities

Deferred gains(losses) onhedges¥¥¥

Net income attributable to owners of the parent(32)－

Cash dividends paid

－

－

－

－

Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2023, net

(5)

－

－

－

－

－

－

－

－

21

684

9,625

(5)
(37)

21
1,915

684
(417)

9,625
15,251

Total changes for fiscal year 2023
Balance at end of year

¥

¥

1,894
－

¥

(1,101)－

Foreigncurrencytranslation
adjustments

Millions of yen

Noncontrollinginterests

Remeasurementsof defined
benefit plans

Balance at beginning of year

¥

1,657

¥

1,649

Total
¥

216,024

Net income attributable to owners of the parent
Cash dividends paid

－
－

－
－

9,056
(4,359)Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2023, net
Total changes for fiscal year 2023

－

－

(5)

－

－

(2,675)

(54)
(54)

281
281

10,557
12,574

Balance at end of year

¥

1,603

6

¥

1,930

¥

228,598

¥

¥

5,626
－

Thousands of U.S. dollars (Note 3)

Number ofoutstanding
common shares

54,485,750－－(1,921)

Balance at beginning of year
Net income attributable to owners of the parent
Cash dividends paid
Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2023, net
Total changes for fiscal year 2023

Balance at end of year

Common stock

Capital surplus$$

355,516－－－

340,336－－－

Retainedearnings$

667,597
59,843(28,803)－－－(17,678)－－(1,921)
54,483,829－－
355,516－(17,678)
322,658－
31,040698,637$$$

Thousands of U.S. dollars (Note 3)

Balance at beginning of year

T reasury stock,at costValuationdifference on
available-forsale securities

Deferred gains(losses) onhedges

$

$

$

(214)

12,513(7,270)Foreigncurrencytranslation
adjustments$

37,175

Net income attributable to owners of the parent

－

－

－

－

Cash dividends paid
Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2023, net

－
(33)

－
－

－
－

－
－

－

－

－

－

－

142

4,516

63,605

Total changes for fiscal year 2023

Balance at end of year

(33)
$

(247)

142
$

12,6554,516$(2,754)

Thousands of U.S. dollars (Note 3)

Noncontrollinginterests

Remeasurementsof defined
benefit plans

Balance at beginning of year$

10,947$

10,904

Total$

1,427,504

Net income attributable to owners of the parent－－

59,843

Cash dividends paid－－

(28,803)

Acquisition of treasury stock
Change in ownership interest due to transactions
with non-controlling interests
Other changes for fiscal year 2023, net

－

－

(33)

－

－

(17,678)

(357)

1,850

69,756

Total changes for fiscal year 2023

Balance at end of year

(357)
$

10,5907

1,850$

12,754

83,085$1,510,589

63,605$

100,780

Sanyo Special Steel Co., Ltd. and Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWSFor the years ended March 31, 2023 and 2024
Thousands of U.S.
Millions of yen

2023

dollars (Note 3)

2024

2024

Cash Flows from Operating Activities:
Income before income taxes¥

28,045¥13,025$86,067

Adjustments Depreciation and amortization

13,765

13,74590,825

Amortization of goodwill

2,925

3,247

21,454

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

74
156

(58)
(234)

(384)
(1,546)

Increase (decrease) in net defined benefit liabilities
Decrease in net defined benefit assets

53
227

(41)
75

(271)
494

Decrease in accrued directors' and corporate

(12)

(11)

(71)

auditors' retirement benefits, less payments
Increase (decrease) in provision for environmental measures

(80)

43

287

Increase (decrease) in provision for loss on guarantees

(0)

0

0

Interest and dividend income

(478)

(954)

(6,301)

Interest expense

960

2,384

15,754Gain on sale of investments in securities
Loss on evaluation of investments in securities

(15)
－

(913)
1

(6,030)6

Loss (gain) on sale of shares of subsidiaries and affiliates

－

(308)

(2,034)

Loss (gain) on sale and disposition of property, plant and equipment

401

254

1,676

Loss on liquidation of subsidiaries

425

63

414

Changes in assets and liabilities:
Notes and accounts receivable - trade, and contract assets

1,389

7,986

52,775Inventories
Notes and accounts payable - trade(11,411)(14,390)

15,275(3,785)100,939(25,015)

Other, net(2,165)(690)(4,555)
324,484

19,86949,104

Interest and dividend income received

Subtotal

477

951

6,281

Interest expense paid

(757)

(1,827)(12,075)(7,434)
12,155(7,584)40,644(50,110)
268,580(13,576)(17,294)(114,280)

Sale of property, plant and equipment
Acquisition of intangible assets

493
(276)

532
(804)

3,517
(5,314)

Acquisition of investments in securities
Sale of investments in securities

(3)
35

(203)
1,921

(1,338)
12,696

Proceeds from sales of investments in affiliates accounted for by the equity method

788

－

－

Proceeds from sale of shares of subsidiaries resulting in a change
in the scope of consolidation

－

404

2,669

Decrease in long-term loans receivable
Payments into time deposits

3(1,066)

2
(629)

12
(4,156)

Proceeds from withdrawal of time deposits

1,048

558

3,686

Payments of long-term loans receivable
Other, net

(4)
(208)

(1)
(411)

(4)
(2,720)(12,766)(15,925)(105,232)

Income taxes paid
Net cash provided by operating activities

Cash Flows from Investing Activities:
Acquisition of property, plant and equipment

Net cash used in investing activities8Thousands of U.S.
Millions of yen

2023

dollars (Note 3)

2024

2024

Cash Flows from Financing Activities:
Increase (decrease) in short-term loans

¥

(717)

¥

15,055$

99,482

Increase (decrease) in commercial paper
Proceeds from long-term loans
Repayment of long-term loans
Repayments of lease obligations

18,998300(3,414)(797)(30,999)
5,000(8,611)(903)(204,844)
33,040(56,900)(5,966)

Payments for purchases of treasury stock
Cash dividends
Cash dividends to non-controlling interests
Purchase of shares of subsidiaries not resulting in change
in scope of consolidation (Note 30)(4)(5,442)
(37)
(344)

(5)
(4,353)(24)(2,593)(33)(28,762)(157)(17,135)

Other, net
Net cash provided by (used in) financing activities

(17)
8,526

(13)
(27,446)(91)(181,366)

1,215

2,398

15,8429,130
21,85730,987(329)
30,98730,658(2,176)
204,764
202,588

Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of the Year
Cash and Cash Equivalents at End of the Year (Note 23)

9

¥

¥

$

Sanyo Special Steel Co., Ltd. and Consolidated Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of SanyoSpecial Steel Co., Ltd. (the “Company”) and its consolidated
subsidiaries (together, the “Companies”) have been prepared on thebasis of accounting principles generally accepted in Japan, which are
different in certain respects as to application and disclosure

requirements from International Financial Reporting Standards andare compiled from the consolidated financial statements prepared by
the Company as required by the Financial Instruments and Exchange
Law of Japan.

2. Summary of Significant Accounting Policies(1) Consolidation and investments in affiliates(a) Scope of consolidation and elimination
The Company had 34 subsidiaries as of March 31, 2024 (37subsidiaries as of March 31, 2023). The consolidated financial
statements include the accounts of the Company and its 34
subsidiaries. The 34 subsidiaries that have been consolidated for the
fiscal year ended March 31, 2024 are listed below:
Yohkoh Bussan Co., Ltd.
Santoku Kogyo Co., Ltd.
Santoku Tech Co., Ltd.
Santoku Seiken Co., Ltd.
Santoku Computer Service Co., Ltd.
Sanyo Special Steel Manufacturing de México, S.A. de C.V.
Ningbo Sanyo Special Steel Products Co., Ltd.
Siam Sanyo Special Steel Product Co., Ltd.
Sanyo Special Steel U.S.A., Inc.
SKJ Metal Industries Co., Ltd.
Sanyo Special Steel Manufacturing India Pvt. Ltd.
Sanyo Special Steel Trading (Shanghai) Co., Ltd.
Ovako Group AB and its 19 subsidiaries
and 2 subsidiaries(b) Investments in affiliates
The Company’s investment in AB Järnbruksförnödenheter, anaffiliate of the Company over which the Company has significant
influence, is accounted for by the equity method.

(2) Foreign currency translation
Foreign currency transactions are translated into Japanese yen at
the exchange rate prevailing at the respective transaction date. All
monetary assets and liabilities denominated in foreign currencies,
whether long-term or short-term, are translated into Japanese yen at
the exchange rate prevailing at each balance sheet date. Resulting
gains and losses are included in net income or loss for the period.
All assets and liabilities of the foreign subsidiaries are translated
into Japanese yen at the exchange rate prevailing at each balance
sheet date.
Revenues and expenses are translated into yen based on the
average exchange rate during the period.
These differences are recorded as foreign currency translation
adjustments.

(3) Securities

Ovako Mora AB, Ovako Forsbacka AB, and Ovako Twente B.V.,
which had been consolidated subsidiaries of Ovako Group AB, were
excluded from the scope of consolidation for the current fiscal year,
as Ovako Mora AB and Ovako Forsbacka AB were liquidated on
September 30, 2023, and all shares of Ovako Twente B.V. were soldon March 27, 2024.
The consolidated subsidiaries, except for the seven foreignsubsidiaries (Sanyo Special Steel Manufacturing de México, S.A. de
C.V., Ningbo Sanyo Special Steel Products Co., Ltd., Siam SanyoSpecial Steel Product Co., Ltd., Sanyo Special Steel U.S.A., Inc.,
P.T. Sanyo Special Steel Indonesia, SKJ Metal Industries Co., Ltd.,and Sanyo Special Steel Trading (Shanghai) Co., Ltd.,), use a fiscal
year ending March 31, which is the same as that of the Company.
The seven foreign subsidiaries use a fiscal year ending December 31.
Although Sanyo Special Steel Manufacturing India Pvt. Ltd. andSanyo Special Steel India Pvt. Ltd. use a fiscal year ending March
31, provisional financial statements as of December 31 are used in
preparing the consolidated financial statements.
For these nine subsidiaries, certain adjustments are made, if
appropriate, in preparing the consolidated financial statements toreflect material transactions which occur between their fiscal yearend and March 31.
For the purpose of preparing the consolidated financial statements,
all significant intercompany transactions, balances and unrealized
profits among the Companies have been eliminated.

The accounting standard for financial instruments (“AccountingStandards for Financial Instruments” (Accounting Standards Boardof Japan (“ASBJ”) Statement No. 10)) requires that securities beclassified into four categories: trading securities, held-to-maturity
debt securities, equity securities issued by subsidiaries and affiliates
and available-for-sale securities. Except for the equity securities
issued by subsidiaries and affiliates, securities that the Company has
are all classified as available-for-sale securities.
Under the standard, marketable securities classified as availablefor-sale securities are carried at fair value with changes in unrealized
holding gains and losses, net of the applicable income taxes,
included directly in net assets. Equality securities without market
prices classified as available-for-sale securities are carried at cost. A
decline in the value of available-for-sale securities is reflected in net
loss for the period unless deemed to be temporary. The cost of
securities sold is determined by the moving average method.

(4) Derivative transactions and hedge accounting
Derivative financial instruments are stated at fair value.
The Companies use foreign exchange forward contracts andcommodity futures contracts to reduce their exposure to market risks
from fluctuations in foreign currencies and electricity prices. The
Companies do not hold or issue financial derivative instruments for
trading purposes. If derivative transactions are used as hedges andmeet certain hedging criteria, the Companies use the deferred hedge
accounting method.
The Companies compare the total change in cash flow or rate
fluctuation of hedging instruments and those of hedged items every
half year and evaluate the hedge effectiveness based on the
differences.

10(5) Amortization of goodwill

benefit expenses, certain consolidated subsidiaries have adopted a
Goodwill is amortized using the straight-line method over a simplified method that determines the benefits payable assuming thereasonably determined period on individual basis.
voluntary retirement of all employees at the fiscal year-end as(6) Inventories
retirement benefit obligations.
Inventories are stated at the lower of moving average cost or net (15) Income taxes
realizable value.
The asset-liability method is used to recognize deferred tax assets(7) Depreciation and amortizationand liabilities for the expected future tax consequences of temporary
The Companies compute depreciation using the straight-line differences between the carrying amounts of assets and liabilities
method for property, plant and equipment.
and their tax bases.
For assets acquired on or before March 31, 2007, the Company (16) Accounting policy for revenue and expenses
and its domestic subsidiaries depreciated the assets using the
Revenue in the Companies are generated mainly from the sale ofstraight-line method over five years from the year following the special steel products in which the performance obligation is tofiscal year when depreciation up to the depreciable limit amount is transfer the merchandise and finished goods to the customer based
completed.
on the sales contracts.
Amortization of capitalized software costs for internal use is
The Companies recognize revenue when the customer receives
computed by the straight-line method based on the useful life of the the merchandise and finished goods, control of the goods is
asset estimated to be mainly five years. Amortization of other transferred to the customer and the performance obligations areintangible assets is computed by the straight-line method.
satisfied.
(8) Research and development costs
However, the Companies and its subsidiaries recognize revenue
Research and development costs are charged to profit or loss as from domestic sales at the point of shipment in cases in which
incurred.
control of the goods is transferred to the customer within a(9) Allowance for doubtful accounts
reasonable period according to Paragraph 98 of the Implementation
Allowance for doubtful accounts is provided at an amount based Guidance on Accounting Standard for Revenue Recognition.
on past loss experience plus the amount estimated to be uncollectible
The transaction price is measured based on the contract withbased on an assessment of certain individual accounts.
customers. In cases in which there is variable consideration in the(10) Provision for bonuses
contract, it is estimated and included in the transaction price to theProvision for employees bonuses is provided at the estimated extent that there is no material reversal.
amount of bonuses to be paid to the employees in the following year.
The consideration involved in the transaction does not contain a
It was recorded as accrued expenses on the consolidated balance significant financing component because the relevant payment
sheet.
period is within a short-term after the satisfaction of the performance(11) Accrued directors’ and corporate auditors’ retirement obligation.

benefits(17) Net income and cash dividends per share

Certain consolidated subsidiaries provide for lump-sum payments
Net income per share is computed by dividing net income
to retiring directors and corporate auditors based on internal rules.
available for distribution to shareholders of common stock by the(12) Provision for loss on guarantees
weighted average number of shares of common stock outstanding
To provide for losses on guarantees, the Company makes a during the year. Diluted net income per share is not disclosed
provision for potential losses at the end of the fiscal year.
because potentially dilutive securities are not issued.
(13) Provision for environmental measures
Cash dividends per share shown for each year in the consolidated
Reserve for environmental measures for obligatory PCB statements of operations represent dividends declared as applicable
treatment in Japan and removing soil pollution at overseas steel- to the respective years rather than those paid during the years.
making plants is stated as the estimated cost at the end of the fiscal (18) Cash and cash equivalents
year.
Cash and cash equivalents in the consolidated statements of cash(14) Accounting methods for employees’ retirement benefits flows consists of cash on hand, bank deposits able to be withdrawn
In the calculation of retirement benefit obligations, the estimated on demand, short-term investments with an original maturity ofamount of retirement benefits is attributed to the consolidated fiscal three months or less and which represent a minor risk of fluctuations
year using the benefit formula basis.
in value and deposits paid in parent company.
Prior service costs are posted in expenses from the consolidated (19) Significant accounting estimatesfiscal year of accrual by the straight-line method over a period of 10
Property, Plant and Equipment and Intangible Assets
years, which is within the average remaining service years of the (a) Carrying amounts in the current year’s financial statements
Thousands of
employees.
Millions of yen
U.S. dollars
Actuarial gains and losses are posted in expenses after the(Note 3)
consolidated fiscal year of accrual by the straight-line method over
2023
2024
2024
periods of mainly 10 years and 15 years, which are within theProperty, Plant
average remaining service years of the employees.
¥ 115,183¥ 123,487 $ 816,012
and Equipment
Providing for lump-sum payments to retiring executive officers is
Intangible
calculated based on internal rules.
¥ 36,118¥ 36,984$ 244,393
AssetsIn the calculation of net defined benefit liabilities and retirement

11(b) Significant accounting estimates for identified items
For property, plant and equipment and intangible assets, todetermine whether the recognition of an impairment loss is required,
it is necessary to compare the undiscounted future cash flows thatare expected to be generated from the asset or the asset group withits book value whenever there is an indication of impairment in theasset or the asset group. If the recognition of an impairment loss isdeemed necessary, the book value is reduced to the recoverable
amount, and the resulting decrease in the book value is recognized
as an impairment loss.
The Companies group assets with consideration for business
management segments. In principle, the Company is classified bybusiness segment, and each consolidated subsidiary is classified as
one asset group. In addition to the asset groups that recorded
impairment loss in the current consolidated fiscal year, the asset
groups of Sanyo Special Steel Manufacturing de México, S.A.de
C.V. and SKJ Metal Industries Co., Ltd., which had recognizedindications of impairment, did not record impairment loss because
the undiscounted future cash flows for each asset group exceeded

the book value.
Property, plant and equipment and intangible assets which wererecorded on the consolidated balance sheet at the end of the current
consolidated fiscal year have a significant impact on the
consolidated financial statements for the following consolidated
fiscal year when the business circumstances of the Companies areaffected by extreme changes in future economic conditions andbusiness declines significantly.

(20) Changes in Accounting Estimates
The number of years over which the amortization of actuarial
gains and losses were expensed to account for the termination andretirement benefits was 17 years. However, since the averageremaining service years of the employees was shortened, the numberof years over which the amortization of actuarial gains and losses
are expensed has been changed to 15 years from the current fiscal
year.
The effect of this change on profit or loss for the current
consolidated fiscal year is immaterial.

123. U.S. Dollar Amounts
The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan.
These translations should not be construed as representations that the Japanese yen amounts actually represent or have been or could be
converted into U.S. dollars. The rate of ¥151.33 to U.S. $1.00, the approximate rate of exchange as at March 31, 2024, has been used forthese translations.

4. Consolidated Statements of Comprehensive Income
Amounts reclassified to net income in the current year that were recognized in other comprehensive income in the current or previous
periods and the tax effects for each component of other comprehensive income were as follows:
Thousands of U.S.
Millions of yen

2023

Valuation difference on available-for-sale securities
Increase during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense)
Subtotal, net of tax
Deferred gains on hedges
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense)
Subtotal, net of tax
Foreign currency translation adjustments
Increase during the year
Remeasurements of defined benefit plans
Increase during the year
Reclassification adjustments
Subtotal, before tax
Tax (expense)
Subtotal, net of tax
Total other comprehensive income

¥

¥

726
(11)
715
(204)
511

dollars (Note 3)

2024

¥

1,043
(913)
130
(109)
21

2024

$

6,895
(6,030)
865
(723)
142

(1,220)(2,854)(4,074)839(3,235)

2,095(1,235)
860
(176)
684

13,847(8,160)5,687(1,171)
4,516

1,591

9,776

64,600

4,229
150
4,379
(1,088)
3,291
2,158

250
(204)
46
(100)
(54)
10,4271,650(1,346)
304
(661)
(357)
68,901¥$

5. Statements of cash flows
There were no significant non-cash transactions as of March 31, 2023 and 2024.

6. Financial Instruments(1) Status of financial instruments
The Companies procure funds required by their business plans through bank loans and bonds payable. Temporary surplus funds areinvested in short-term bank deposits, etc., with a low probability of loss of principal. The Companies use derivative transactions mainly tohedge foreign currency operating transactions and electricity price fluctuation risk and limit the amounts to actual demand.
Notes and accounts receivable - trade and electronically recorded monetary claims are exposed to the credit risk of customers. In orderto reduce the risk, the Companies regularly monitor the maturity dates and balances of receivables of all customer accounts and evaluate
the credit risk of its main customers arising from any deterioration in their financial situation, etc., according to the Company regulations.
Notes and accounts receivable - trade denominated in foreign currencies are exposed to exchange rate risks. The Companies reduce therisks by settling both notes and accounts receivable - trade and notes and accounts payable within the same foreign currencies and executing
derivative transactions (forward exchange contracts).
Deposits paid in parent company are deposits to Nippon Steel Corporation. The deposit and withdrawal of such funds are possible atany time. Investments in securities are mainly the shares of business partners. These shares are exposed to the risk of volatility in market
prices, and the Companies periodically monitor the market prices and regularly review their share portfolios taking into consideration theirrelationships with their business partners.
Notes and accounts payable are paid within one year. Notes and accounts payable denominated in foreign currencies are exposed to
exchange rate risk. The Companies reduce the risk by settling both notes and accounts receivable - trade and notes and accounts payable
within the same foreign currencies and executing derivative transactions (forward exchange contracts).
Certain foreign subsidiaries enter into derivative transactions (commodity futures trading) to manage the risk of purchased electricity
price fluctuation. The Companies execute and manage derivative transactions in accordance with the internal rules which stipulate thetransaction authority. For details on hedging instruments, hedging items, hedging policy and the methods used to evaluate hedge

13effectiveness, refer to - Note 2(4), “Derivative transactions and hedge accounting.”
Bank loans, bonds payable and commercial paper are primarily used to procure funds related to operating and investing activities.
To manage liquidity risks, the Companies prepare and update cash flow plans as appropriate and maintain the liquidity on hand necessary
to meet their obligations. Further, the Company has commitment line contracts in preparation for contingencies.
Because the risk of fluctuation is incorporated into the calculation of the fair values of financial instruments, the fair values may fluctuate
due to the adoption of different assumptions and other factors. In addition, the contract amounts of derivative transactions in the notes to"Derivative Transactions" are not indicative of the market risk associated with derivative transactions themselves.

(2) Fair values of financial instruments
Carrying amounts, fair values and differences between carrying amounts and fair values of relevant items were as follows:
2023
Millions of yen

Book value(1) Investments in securities
Available-for-sale securities¥(2) Bonds payable(3) Long-term loans (including current portion)(4) Derivative transactions① Hedge accounting not applied

4,716(10,000)(19,822)

Fair value

¥

4,716
(9,982)(19,684)(4)

Difference

－
18
138

¥

－

(4)

② Hedge accounting applied(1,198)(1,198)－(※1) Debt is displayed by parentheses.
(※2) “Cash and bank deposits,” “Notes and accounts receivable - trade,” “Electronically recorded monetary claims,” “Deposits paid inparent company,” “Notes and accounts payable - trade,” “Short-term loans” “Commercial paper” and “Accounts payable” are omitted
because they are settled in a short period of time and their fair values approximate their book values.
(※3) Equity securities without market prices are not included in “(1) Investments in securities.” The book values of those financial
instruments were as follows:
Millions of yen

Unlisted equity securities¥

287

Carrying amounts, fair values and differences between carrying amounts and fair values of relevant items were as follows:
2024
Millions of yen

Book value(1) Investments in securities
Available-for-sale securities¥
3,841(2) Bonds payable (including current portion)(10,000)(3) Long-term loans (including current portion)(4) Derivative transactions① Hedge accounting not applied② Hedge accounting applied

Fair value

¥

3,841
(9,983)Thousands of U.S. dollars (Note 3)

Difference－¥Book value$

Fair value$

25,381(65,968)

Difference

$

－

17

25,381(66,081)(16,471)(16,382)89(108,842)(108,257)

585

(6)
(446)

(6)
(446)

－
－

(41)
(2,946)(41)(2,946)－－113(※1) Debt is displayed by parentheses.
(※2) “Cash and bank deposits,” “Notes and accounts receivable - trade,” “Electronically recorded monetary claims,” “Deposits paid inparent company,” “Notes and accounts payable - trade,” “Short-term loans,” and “Accounts payable” are omitted because they are settled
in a short period of time and their fair values approximate their book values.
(※3) Equity securities without market prices are not included in “(1) Investments in securities.” The book values of those financial
instruments were as follows:
Millions of yen

Unlisted equity securities

¥

14

488

Thousands of U.S.
dollars (Note 3)

$

3,224

(3) Financial assets with maturities were as follows:
The aggregate maturities subsequent to M arch 31, 2023:
Millions of yen

1 year or more but
within 5 years

Within 1 year

Cash and bank deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims
Deposits paid in parent company
Total

¥

21,653
66,372
11,637
9,954
109,616

¥

¥

¥

－
－
－
－
－

5 years or more but
within 10 years

¥

¥

－
－
－
－
－

10 years or more

¥

¥

－
－
－
－
－

The aggregate maturities subsequent to M arch 31, 2024:
Millions of yen

1 year or more but
within 5 years

Within 1 year

Cash and bank deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims
Deposits paid in parent company
Total

¥

26,59259,541
13,381
4,811
104,325

¥

¥

¥

－
－
－
－
－

5 years or more but
within 10 years

¥

¥

－
－
－
－
－

10 years or more

－
－
－
－
－

¥

¥

Thousands of U.S. dollars (Note 3)

1 year or more but
within 5 years

Within 1 year

Cash and bank deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims
Deposits paid in parent company
Total

$

175,719
393,454
88,426
31,790689,389

$

$

$

－
－
－
－
－

5 years or more but
within 10 years

$

$

－
－
－
－
－

10 years or more

－
－
－
－
－

$

$

(4) Bonds payable, short-term loans, commercial paper and long-term loans were as follows:
The aggregate maturities subsequent to M arch 31, 2023:
Millions of yen

1 year or more but
within 5 years

Within 1 year

Short-term loans
Commercial paper
Bonds payable
Long-term loans (including current portion)
Total

¥

35,48130,999－8,251
74,731

¥

¥

¥

－
－
10,00011,571
21,571

5 years or more but
within 10 years

¥

¥

－
－
－
－
－

10 years or more

¥

¥

－
－
－
－
－

The aggregate maturities subsequent to M arch 31, 2024:
Millions of yen

1 year or more but
within 5 years

Within 1 year

Short-term loans
Commercial paper
Bonds payable (including current portion)
Long-term loans (including current portion)
Total

¥

¥

54,124－10,000171
64,295¥¥－－－16,30016,3005 years or more but
within 10 years

¥

¥

－
－
－
－
－

10 years or more

¥

¥

－
－
－
－
－

Thousands of U.S. dollars (Note 3)

1 year or more but
within 5 years

Within 1 year

Short-term loans
Commercial paper
Bonds payable (including current portion)
Long-term loans (including current portion)
Total

$

$

357,657－
66,081
1,130
424,868

15

$

$

－
－
－
107,712
107,7125 years or more but
within 10 years

$

$

－
－
－
－
－

10 years or more

$

$

－
－
－
－
－

(5) Fair values of financial instruments by level of inputs
Based on the observability and the significance of the inputs used to determine fair values, fair values of financial instruments arepresented by categorizing measurements into the following three levels:
Level 1 fair value: fair values measured by quoted prices of identical assets or liabilities in active markets.
Level 2 fair value: fair values measured using observable inputs other than Level 1.
Level 3 fair value: fair values measured using unobservable inputs.
When multiple inputs of different categories are used in measuring fair value, the Companies classify the fair value into the category
from which the lowest inputs are used.
(a) Financial instruments measured at fair values in the consolidated balance sheet
2023
Millions of yen

Level1

Investments in securities
Available-for-sale securities
Stock
Derivative transactions
Currency related
Commodity related
Total assets

Level2

¥

4,716

¥

－
－
4,716

Level3

¥

－

¥

6
184
190

T otal

¥

－

¥

－
－
－

¥

4,716

¥

6
184
4,906

Millions of yen

Level1

Derivative transactions
Currency related
Commodity related
Total liabilities

Level2

－
－
－

¥
¥

¥
¥

Level3

1,392
－
1,392

T otal

－
－
－

¥
¥

¥
¥

1,392
－
1,392

2024
Millions of yen

Level1

Investments in securities
Available-for-sale securities
Stock
Derivative transactions
Currency related
Commodity related
Total assets

Level2

¥

3,841

¥

－
－
3,841

Level3

¥

－

¥

0
－
0

T otal

¥

－

¥

－
－
－

¥

3,841

¥

0
－
3,841

Millions of yen

Level1

Derivative transactions
Currency related
Commodity related
Total liabilities

Level2

－
－
－

¥
¥

¥

Level3

452
－
452

¥

T otal

－
－
－

¥
¥

¥

452
－
452

¥

Thousands of U.S. dollars (Note 3)

Level1

Investments in securities
Available-for-sale securities
Stock
Derivative transactions
Currency related
Commodity related
Total assets

Level2$

25,381$－－
25,381

Level3

$

－

$

0
－
0

T otal

$

－

$

－
－
－

$

25,381$

0－
25,381Thousands of U.S. dollars (Note 3)

Level1

Derivative transactions
Currency related
Commodity related
Total liabilities$$

Level2

－
－
－

16

$
$

2,987
－
2,987

Level3

$$

T otal

－
－
－

$
$

2,987
－
2,987

(b) Financial instruments other than those measured at fair values in the consolidated balance sheet

2023
Millions of yen

Level1

Bonds payable
Long-term loans (including current portion)
Total liabilities

Level2

－
－
－

¥
¥

¥

Level3

9,982
19,68429,666¥

T otal

¥
¥

－
－
－

¥

－
－
－

¥

9,982
19,68429,666¥2024
Millions of yen

Level1

Bonds payable (including current portion)
Long-term loans (including current portion)
Total liabilities

Level2

－
－
－

¥
¥

¥

Level3

9,983
16,382
26,365¥

T otal¥¥9,983
16,382
26,365¥

Thousands of U.S. dollars (Note 3)

Level1

Level2

Level3

T otalBonds payable (including current portion)$－$
65,968$－$65,968Long-term loans (including current portion)－
108,257－
108,257
Total liabilities$－$
174,225$－$
174,225(※) Valuation techniques and inputs used in measuring fair values
Investments in securities
The fair values of listed equity securities are measured using quoted prices. The fair values are classified as Level 1 because thesecurities are exchanged in active markets.

Derivative transactions
The fair values of currency forward contracts are classified as Level 2 because the fair values are based on prices, etc., provided byfinancial institutions. The fair values of derivative transactions for commodity related purchased electricity price risk are classified
as Level 2 because the fair values are measured using the discounted present value method using quoted market prices and otherobservable inputs.
Bonds payable
The fair values of bonds payable issued by the Company are based on quoted market prices. However, the fair values of the bonds
are classified as Level 2 because the fair values are not determined by quoted market prices in an active market.
Long-term loans
The fair values of long-term loans are classified as Level 2 because the fair values are measured using the discounted present value
method, i.e., the interest rates that would be applicable to similar new loans and reflect the total amount of payment obligations ofprincipal and interest and the remaining payment period adjusted by credit risks.

7. Securities
The aggregate acquisition costs and fair values (book values) of marketable securities classified as available-for-sale securities as of
M arch 31, 2023 and 2024 were as follows:
Millions of yen

Thousands of U.S. dollars (Note 3)

2023

2024

2024

Acquisition

Fair value

Unrealized gain

Acquisition

Fair value

Unrealized gain

Acquisition

Fair value

Unrealized gain

cost

(book value)(loss)

cost(book value)(loss)

cost(book value)(loss)

1,197

¥

3,841

¥

2,644

$

7,908

$ 25,381$

17,473

－
1,197

¥

－
3,841

¥

－
2,644

$

－
7,908

－
$ 25,381$－
17,473

Securities whose book value exceeds acquisition cost:Stock¥ 2,203 ¥ 4,716 ¥
2,513 ¥
Securities whose acquisition cost exceeds book value:
Stock
－
－
－
Total ¥ 2,203 ¥ 4,716 ¥
2,513 ¥

Available-for-sale securities sold in the year ended M arch 31, 2023 and 2024 were as follows:
Millions of yen

Thousands of U.S. dollars (Note 3)

2023

Stock

¥

2024

2024

Amounts

Realized

Realized

Amounts

Realized

Realized

Amounts

Realizedof salesgains

lossesof salesgains

lossesof sales

gains

35

¥

15

¥

－

¥

1,924

¥

17

913

¥

－

$ 12,716$

6,030

Realized
losses$－The Companies recognize impairment loss on available-for-sale securities when the market value declines by more than 50 percent, or
the market value declines by more than 30 percent but less than 50 percent and the Companies' management determines the decline to beother than temporary. For available-for-sale securities for which fair values are deemed extremely difficult to assess, when the value of
those securities substantially declines, the Companies recognize impairment loss, except for cases in which the future recoverability of thevalue of those securities is reasonably supported.

8. Inventories
Inventories held by the Companies at M arch 31, 2023 and 2024 consisted of the following:Thousands of U.S.
Millions of yen

2023

M erchandise
Finished products
Work-in-process
Raw materials and supplies
Total

¥

¥

dollars (Note 3)

2024

3,226
30,45558,79235,756
128,229

¥

¥

2024

2,721
27,141
54,59534,701
119,158$$

17,981
179,351
360,770229,305
787,407

The net loss (gain) included in cost of sales due to inventories written down for the years ended M arch 31, 2023 and 2024 were ¥673
million and ¥(300) million ($(1,980) thousand), respectively.

9. Affiliates
Items relevant to affiliates at M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.

Millions of yen

2023

Investments in securities (stocks)¥

dollars (Note 3)

2024

13

¥

2024

13

$

83

10. Assets Pledged as Collateral
A breakdown of assets pledged as collateral and the related secured liabilities as of M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Assets pledged as collateral:
Notes and accounts receivable - trade, and contract assets
Inventories
Property, plant and equipment
Total
Secured liabilities:
Short-term loans (including current portion of long-term loans payable)
Long-term loans
Total

¥

dollars (Note 3)

2024

¥

4,984
4,281
4,601
13,866

¥

421
271
692

¥

2024

¥

5,315
3,966
4,857
14,138

¥

－
－
－

$

$

35,122
26,21032,09693,428$－－－The assets above were pledged as collateral for bank guarantees in addition to the liabilities above.

11. Receivables arising from contracts with customers, contract assets and contract liabilities
Receivables arising from contracts with customers, contract assets as of M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Notes receivable - trade
Accounts receivable - trade¥dollars (Note 3)

2024

3,478
62,894¥－Contract assets

2024

2,458
57,083$

16,246377,208－－

Receivables arising from contracts with customers, contract liabilities as of March 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Contract liabilities¥

18

dollars (Note 3)

2024

42

¥

2024

18

$

119

12. Accounting for Notes Receivable - trade and Payable and Electronically Recorded Monetary Claims Which
Reached Maturity at Year-end
Notes receivable - trade and payable and electronically recorded monetary claims which reached maturity at the year-end are treated asif they were settled at the clearing date for notes. Consequently, as March 31, 2024 was a holiday for banking institutions, the following
notes receivable - trade and payable and electronically recorded monetary claims which reached the maturity at the year-end were includedin the ending balance of notes receivable - trade and payable and electronically recorded monetary claims:
Thousands of U.S.
Millions of yen

2023

Notes receivable - trade
Electronically recorded monetary claims
Notes payable - tradedollars (Note 3)

2024

－
－
－

¥

¥

2024

426
1,922
47

$

2,816
12,703309

13. Short-term Loans, Bonds Payable, Long-term Loans and Lease Obligations
Short-term loans at March 31, 2023 and 2024 represent mainly bank overdrafts with weighted-average interest rates of 2.48% and 1.86%,
respectively. In business in Japan, it is customary for short-term borrowings to be rolled over every year. For short-term financing, theCompanies have commitment line contract arrangements with several financial institutions for an aggregate maximum amount of ¥13,632
million ($90,084 thousand). At March 31 2024, the total ¥13,632 million ($90,084 thousand) was unused.
Bonds payable at M arch 31, 2023 and 2024 consisted of the following:Thousands of U.S.
Millions of yen

2023

Bonds payable due 2024 with interest rates of 0.30％ at M arch 31, 2023 and 2024 ¥dollars (Note 3)2024

10,000¥2024

10,000$66,081

The annual maturities of bonds payable outstanding at March 31, 2024 were as follows:
Thousands of U.S.

Year ending at March 31,
2025

Millions of yen¥

10,000dollars (Note 3)$

66,081Long-term loans and lease obligations at March 31, 2023 and 2024 consisted of the following:Thousands of U.S.
dollars (Note 3)

Millions of yen

2023

Current portion of long-term loans
with interest rate of 0.68% at March 31, 2023 and 9.05% at March 31, 2024¥

Loans from banks and other financial institutions
due 2024 to 2027 with interest rates of 0.53% at March 31, 2023
due 2025 to 2029 with interest rates of 0.39% at March 31, 2024

8,251

2024

¥

171

2024

$

1,130

11,571

16,300107,712Current portion of lease obligations with interest rate of 1.51% at March 31, 2024

753

860

5,681

Lease obligations due 2025 to 2030 with interest rate of 1.50% at March 31, 2024

1,240

1,438

9,503

Less: Current portion of long-term loans and lease obligations

21,815(9,004)
12,811

18,769(1,031)
17,738124,026(6,811)
117,215¥¥$

The annual maturities of long-term loans and lease obligations outstanding at March 31, 2024 were as follows:Year ending at March 31,
2026
2027
2028
2029
2030 and thereafter

Millions of yen

¥

¥

19

927
11,437247
5,107
20
17,738

Thousands of U.S.
dollars (Note 3)

$

$

6,128
75,577
1,632
33,744
134
117,215

14. Retirement Benefits
The Company has funded defined benefit lump-sum payment plans and defined contribution pension plans for employee retirement
benefits. The domestic consolidated subsidiaries have similar plans.
As a result of setting up retirement benefit trusts, some severance indemnity plans are funded and make lump-sum payments based onsalary and length of service as retirement benefits.
Certain overseas consolidated subsidiaries have funded or unfunded defined benefit pension plans and defined contribution pension plansfor employee retirement benefits.
The defined benefit pension plans of the Company and certain consolidated subsidiaries calculate net defined benefit liabilities andretirement benefit costs by the simplified method.

(1) Defined benefit plans(a) Movements in retirement benefit obligations, except plans applying the simplified method:
Thousands of U.S.
Millions of yen

2023

Balance at beginning of year
Service cost
Interest cost
Actuarial gain (loss)
Benefits paid
Foreign currency translation
Balance at end of year¥¥

dollars (Note 3)2024

20,626750
351(3,895)(687)(159)
16,986¥¥2024

16,986
492
430
624
(834)
963
18,661$$

112,246
3,249
2,843
4,119
(5,509)6,360
123,308(b) Movements in plan assets, except plans applying the simplified method:
Thousands of U.S.
Millions of yen

2023

Balance at beginning of year
Expected return on plan assets
Actuarial gainContributions paid by employer
Benefits paid
Foreign currency translation
Balance at end of year¥¥

dollars (Note 3)

2024

9,736
206
341
34
(195)
42
10,164¥¥2024

10,164
227
846
36
(347)
159
11,085$$

67,167
1,498
5,588
240
(2,294)
1,048
73,247(c) Movements in liability for retirement benefits of defined benefit plans applying the simplified method:
Thousands of U.S.
Millions of yen

2023

Balance at beginning of year
Retirement benefit costs
Benefits paid
Foreign currency translation
Balance at end of year¥¥

dollars (Note 3)

2024

975
147
(192)
3
933

¥

2024

933
136
(77)
3
995

¥

$

$

6,165
900
(509)
21
6,577

(d) Reconciliation from retirement benefits obligations and plan assets to liability (asset) for retirement benefits:
Thousands of U.S.
Millions of yen

2023

Funded retirement benefit obligations
Plan assets¥

Unfunded retirement benefit obligations
Total net liability (asset) for retirement benefits at end of year

16,986(10,164)
6,822
933
7,755

Net defined benefit liabilities
Net defined benefit assets
Total net liability (asset) for retirement benefits at end of year

8,752
(997)
7,755

¥

20

dollars (Note 3)

2024

¥

¥

18,661(11,085)
7,576
995
8,571
10,399(1,828)
8,571

2024

$

$

123,308(73,247)
50,061
6,577
56,63868,716(12,078)
56,638(e) Retirement benefit costs:
Thousands of U.S.
Millions of yen

2023

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gain (loss)
Amortization of prior service cost
Retirement benefit costs based on the simplified method¥

Total retirement benefit costs¥

Extra retirement payments

dollars (Note 3)

2024

750
351
(206)
182
(26)
146
1,197
117

¥

2024

492
430
(227)
(150)
(26)
136
655
63

¥

$

3,249
2,843
(1,498)
(992)
(173)
900
4,329
414

$

(f) Remeasurements of defined benefit plans:
Thousands of U.S.
Millions of yen

2023

Prior service cost
Actuarial gain
Total

¥
¥

dollars (Note 3)

2024

(26)
4,405
4,379

¥

2024

(26)
72
46

¥

$

(173)
477
304

$

(g) Accumulated remeasurements of defined benefit plans:
Thousands of U.S.
Millions of yen

2023

Prior service cost yet to be unrecognized
Actuarial gain yet to be unrecognized
Total

¥
¥

dollars (Note 3)

2024

(231)
(1,873)(2,104)¥¥(205)(2,062)(2,267)2024$(1,354)(13,628)(14,982)$(h) Plan assets:① Plan assets comprise:

Equity securities
Cash and bank deposits
Other
Total

2023

2024

64%
31%
5%
100%

8%
87%
5%
100%

The retirement benefit trusts, funded for the defined benefit and lump-sum payment plans of our company, constituted 89% of total plan
assets in the fiscal year ended March 31, 2023, and 89% in the fiscal year ended March 31, 2024.
② Long-term expected rate of return
Current and target asset allocations and historical and expected returns on various categories of plan assets have been considered indetermining the long-term expected rate of return.
(i) Actuarial assumptions
The principal actuarial assumptions at March 31, 2023 and 2024 were as follows:
2023

2024

Discount rate (mainly)
0.6%, 3.9%
0.9%, 3.4%
Long-term expected rate of return (mainly)
1.5%, 4.8%
1.6%, 4.9%
Expected rate of pay increase
2.8%
2.6%
Certain foreign consolidated subsidiaries use the expected rate of pay increase.
The Companies do not describe the expected rate of pay increase because they, other than certain foreign consolidated subsidiaries,
mainly adopt a point basis and the effect on the calculation of retirement benefit obligations is immaterial.

(2) Defined contribution plans
The Company and certain consolidated subsidiaries have contributed a total of ¥1,603 million and ¥2,110 million ($13,944 thousand) tothe defined contribution plans for the years ended March 31, 2023 and 2024, respectively.

2115. Income Taxes
Significant components of deferred tax assets and liabilities at M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Deferred tax assets:
Tax loss carryforwards
Net defined benefit liabilities
Amount of retirement benefit trusts
Impairment loss
Accrued bonuses
Unrealized gains
Devaluation loss on marketable securities
Excess depreciation of depreciable assets
Devaluation loss on inventories
Business tax payable
Other
Gross deferred tax assets
Valuation allowance for tax loss carryforwards
Valuation allowance for deductible temporary differences
Less: Valuation allowance
Total deferred tax assets¥¥

Deferred tax liabilities:
Depreciation, etc., of foreign subsidiaries
Adjustment of carrying amount based on fair value
Reserve for deferred capital gains from property, plant and equipment
Securities to employee retirement benefit trusts
Net defined benefit assets
Unrealized holding gains on securities
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)¥¥

dollars (Note 3)

2024

3,030
694
1,935
863
724
646
176
437
406
179
1,086
10,176(2,974)(1,666)(4,640)5,536¥(3,569)(1,387)
(828)
(530)
(232)
(620)
(2,160)(9,326)(3,790)

¥

¥

¥

2024

2,498
882
3,052
562
651
498
88
1,801
307
218
924
11,481(2,484)(3,032)(5,516)
5,965$(3,587)(1,423)
(480)
(79)
(496)
(729)
(1,041)(7,835)(1,870)$16,504
5,831
20,165
3,711
4,304
3,294
580
11,898
2,027
1,443
6,108
75,865(16,415)(20,036)(36,451)
39,414$(23,704)(9,401)(3,170)(521)(3,276)(4,819)(6,880)(51,771)(12,357)$

Valuation allowance increased by ¥876 million ($5,796 thousand). The main factors in the increase were recognition of valuation
allowance for excess depreciation of depreciable assets.
Tax loss carryforwards and their deferred tax assets by expiration periods:
As of March 31, 2023
Millions of yen

2024

Tax loss carryforwards (a)Valuation allowance
Net deferred tax assets

¥
¥

246
(246)
－

2025

¥
¥

181
(176)
5

2026

¥

134
(134)
－

¥

2027

¥
¥

113
(113)
－

2029 andbeyond

2028

¥
¥

283
(283)
－

¥
¥

2,073
(2,022)
51

T otal¥¥3,030(2,974)56(a) The amount of tax loss carryforwards shown in the table above is after multiplying by the statutory income tax rate.
As of March 31, 2024
Millions of yen

2025

Tax loss carryforwards (b)Valuation allowance
Net deferred tax assets

¥
¥

133
(125)
8

2026

¥
¥

235
(235)
－

2027

¥

114
(114)
－

¥

22

2028

¥
¥

326
(326)
－

2029

¥
¥

389
(389)
－

2030 andbeyond¥¥1,301(1,295)
6

Total

¥
¥

2,498
(2,484)14

Thousands of U.S. dollars (Note 3)

2025

Tax loss carryforwards (b)Valuation allowance
Net deferred tax assets

$
$

876
(827)
49

2026

$
$

1,552
(1,552)
－

2027

$

757
(757)
－

$

2028

$
$

2,154
(2,154)
－

2029

$
$

2,572
(2,572)－2030 andbeyond$$8,593(8,553)
40

Total

$

16,504(16,415)$89(b) The amount of tax loss carryforwards shown in the table above is after multiplying by the statutory income tax rate.
The reconciliation between the statutory income tax rate and the effective income tax rate for the year ended M arch 31, 2023 was asfollows:
2023

Statutory income tax rate
Add (deduct)
Non-deductible expenses, including entertainment expenses
Non-taxable income, including dividend income
Equalization tax
Effect of special tax credits
Difference in applicable tax rates between consolidated subsidiaries
Amortization of goodwill
Other
Effective income tax rate2024

30.6 %

－%

0.2
(0.1)
0.1
(1.7)
(7.3)
3.2
0.8

－
－
－
－
－
－
－

25.8 %－%For the year ended March 31, 2024, note is omitted because the difference between the statutory income tax rate and effective income
tax rate was less than 5/100 of the statutory tax rate.
With the promulgation of the Tax Reform Act of 2024 on March 30, 2024, the external standard taxation will be applied to certain
consolidated subsidiaries. As a result, the effective statutory income tax rate used to measure deferred tax assets and deferred tax
liabilities for the current fiscal year has been changed from 34.6% for the previous fiscal year to 30.6% for those expected to be collectedor paid on or after April 1, 2026.
The effect of this change on the consolidated financial statements for the current fiscal year is immaterial.

16. Net Assets
Under the Japanese Corporate Law (the “Law”), the entire amount of the issue price of new shares is required to be accounted for ascommon stock. However, a company may, by a resolution of the Board of Directors, account for an amount not exceeding 50% of theissue price of the new shares as additional paid-in capital, which is included in capital surplus. However, an increase resulting from ashare exchange can be included in capital surplus up to the full amount.
The Law provides that the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25% of common stock over the
total of additional paid-in capital and legal earnings reserve must be set aside as additional paid-in capital or legal earnings reserve, incases in which a dividend distribution of surplus is made.
Under the Law, additional paid-in capital may be used to eliminate or reduce a deficit or may be capitalized by a resolution of theshareholders' meeting, and legal earnings reserve may be used to eliminate or reduce a deficit by a resolution of the shareholders’meeting. Legal earnings reserve is included in retained earnings in the accompanying financial statements.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, however, all additional paidin capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings respectively, which arepotentially available for dividends.
The maximum amount that a company can distribute as dividends is calculated based on its non-consolidated financial statements inaccordance with the Law.
At the Company’s Board of Directors meeting held on, May 18, 2023, the directors approved cash dividends in the amount of ¥2,452
million ($16,202 thousand). At the Company’s Board of Directors meeting held on, October 31, 2023, the directors approved cash
dividends in the amount of ¥1,907 million ($12,601 thousand). At the Company’s Board of Directors meeting held on, May 17, 2024, thedirectors approved cash dividends in the amount of ¥1,635 million.

17. Research and Development Costs
Research and development costs charged to manufacturing costs and selling, general and administrative expenses for the years ended
March 31, 2023 and 2024 totaled ¥2,019 million and ¥2,228 million ($14,723 thousand), respectively. For the year ended March 31,
2024, research and development cost in the Steel Products, Metal Powders and Formed and Fabricated Materials segments amounted to¥1,780 million ($11,764 thousand), ¥413 million ($2,726 thousand) and ¥35 million ($233 thousand), respectively.

2318. Selling, General and Administrative Expenses
The main components of selling, general and administrative expenses for the years ended M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Packing and delivery expenses
Salaries
Provision of allowance for doubtful accounts
Provision for bonuses
Retirement benefit expenses
Provision for directors' retirement benefits¥

dollars (Note 3)

2024

14,815
9,588
43
576
585
16

¥

2024

14,027
9,730
0
545
518
17

$

92,69064,295
2
3,604
3,423
114

19. Gain on Sale of Property, Plant and Equipment
The components of gain on sale of property, plant and equipment for the years ended M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Land
Buildings and structures
M achinery and equipment
Total

¥

183
37
30
250

¥

dollars (Note 3)

2024

¥

2024

3
－
34
37

¥

$

19
－
226
245

$

20. Loss on Sale and Disposition of Property, Plant and Equipment
The components of loss on sale and disposition of property, plant and equipment for the years ended M arch 31, 2023 and 2024 wereas follows:
Thousands of U.S.
Millions of yen

2023

Buildings and structures
M achinery and equipment
Other
Total

¥

¥

dollars (Note 3)

2024

38
162
451
651

¥

¥

2024

63
146
81
290

$

$

415
968
534
1,917

21. Loss on Liquidation of Subsidiaries
In the fiscal year ended March 31, 2023, the Company decided to liquidate certain subsidiaries of Ovako Group AB, a consolidated
subsidiary. As a result, the estimated amount of facility removal costs and special severance payments, etc., (¥403 million) was recorded
as loss on liquidation of subsidiaries.
In addition, the amount of special retirement benefits to be incurred as a result of a transfer a portion of the business of Siam SanyoSpecial Steel Product Co., Ltd., a consolidated subsidiary (¥22 million) was recorded as loss on liquidation of subsidiaries.
Although in the previous fiscal year, the Company decided to liquidate certain subsidiaries of Ovako Group AB, a consolidated
subsidiary, and recorded the estimated amount of facility removal costs and special severance payments, etc., as loss on liquidation ofsubsidiaries, in the fiscal year ended March 31, 2024, additional special severance payments (¥63 million yen (414 thousand U.S.
dollars)) was recorded in loss on liquidation of subsidiaries.

2422. Net Income Per Share
Net income per share for the years ended M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Net income attributable to owners of the parent
Net income of common stock attributable to owners of the parent

20,743
20,743¥

dollars (Note 3)

2024

¥

2024

9,056
9,056

59,843
59,843$Thousands of shares

2023
54,486Weighted-average number of shares of common stock

2024
54,484

Yen

2023

Net income per share

U.S. dollars (Note 3)2024

380.702024

166.21

1.10

The Companies had no dilutive securities for the years ended M arch 31, 2023 and 2024.

23. Cash and Cash Equivalents
Cash and cash equivalents at M arch 31, 2023 and 2024 consisted of the following:Thousands of U.S.
Millions of yen

2023

Cash and bank deposits
Time deposits with deposit terms of over 3 months and other
Deposits paid in parent company
Cash and cash equivalents¥¥

dollars (Note 3)

2024

21,653(620)
9,954
30,987¥¥2024

26,592(745)
4,811
30,658$$

175,719(4,921)
31,790202,588

24. Accounting for Leases(1) Non-cancelable operating leases(a) As a lessee
Outstanding future lease payments under non-cancelable operating leases at M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

Due within one year
Due after one year
Total

¥
¥

200
852
1,052

dollars (Note 3)

2024

¥
¥

2024

209
690
899

$
$

1,381
4,562
5,943

(2) IFRS 16 or U.S. Accounting Standards Codification “Leases”(a) Outline of leased assets
Some overseas consolidated subsidiaries have applied IFRS 16 or U.S. Accounting Standards Codification (“ASC”) Topic 842,
“Leases”. The vehicle and rent expenses on real estate of the subsidiary are recorded as right-of-use assets. Right-of-use assets areincluded in “Other” of property, plant and equipment in the consolidated balance sheet.
(b) Accounting for the depreciation and amortization of leased assets
Right-of-use assets are depreciated using the straight-line method over the shorter period of the lease term or the estimated useful life.

2525. Derivatives(1) Derivative transactions to which hedge accounting was not applied
Currency-related transactions
The contracted amount, fair value and unrealized gain (loss) of forward exchange contracts recognized for the year ended M arch 31,
2023 were as follows:
Millions of yen
Contract

Contract

amountamountForward exchange contracts:
BuyingU.S. dollars
Japanese yen
Selling
U.S. dollars
Euros
Total

¥

¥

Fair value

after 1 year

122
70

¥

0
1
193

¥

－
－
－
－
－

¥

(1)
2
0
(5)
(4)

¥

Unrealized
gain (loss)

¥

¥

(1)
2
0
(5)
(4)

The contracted amount, fair value and unrealized gain (loss) of forward exchange contracts recognized for the year ended M arch 31,
2024 were as follows:
Millions of yen
Contract

Contract

amountamountForward exchange contracts:
BuyingU.S. dollars
Japanese yen
Selling
U.S. dollars
Euros
Total

¥

¥

Fair value

after 1 year

86
3
－
－
－
89

¥

¥

－
－
－
－
－
－

¥

(6)
0
－
－
－
(6)

¥

Unrealized

Contract

gain (loss)

amount

¥

¥

(6)
0
－
－
－
(6)

$

$

Thousands of U.S. dollars (Note 3)
Contract
amountFair value

after 1 year

569
17
－
－
－
586

$

$

－
－
－
－
－
－

$

$

(41)
0
－
－
－
(41)

Unrealized
gain (loss)$$(2) Derivative transactions to which hedge accounting was applied
Derivative transactions to which hedge accounting was applied for the years ended M arch 31, 2023 and 2024 were as follows:(a) Currency-related transactions
2023
2024
Principle method
Principle method
M ethod of hedge accounting
Forward exchange contracts
Forward exchange contracts
Type of derivative transactions
Selling Euros
S elling Euros
Accounts payable - trade
Accounts payable - trade
M ain hedged items¥33,559 million¥29,938 million ($197,834 thousand)Contract amount¥13,883 million¥10,839 million ($71,626 thousand)1 year or more amount of contract¥(1,382) million¥(446) million ($(2,946) thousand)Fair value(b) Interest rate and currency swap transactions
Not applicable.
(c) Other
M ethod of hedge accounting
Type of derivative transactions
M ain hedged items
Contract amount1 year or more amount of contract
Fair value

2023
Principle method
Commodity futures contract
Electricity¥159 million－¥184 million

26

2024
Principle method
Commodity futures contract
Electricity
－
－
－

(41)
0
－
－
－
(41)

26. Contingent Liabilities
Guarantees for loans of employees and others at M arch 31, 2023 and 2024 were as follows:
Thousands of U.S.
Millions of yen

2023

UCHIDA-SATO TECH (THAILAND) CO., LTD.

¥

dollars (Note 3)

2024

3

¥

2024

3

$

20

27. Segment Information(1) General information about reportable segments
The Companies' reportable segments are the business units for which the Company is able to obtain separate financial information inorder for the Board of Directors to determine the distribution of management resources and evaluate business results. Each operating
division develops business activities and establishes comprehensive strategies for domestic and overseas markets according to the
products it handles. Therefore, the Companies consist of business segments according to their products based on operating divisions andhave determined the reportable segments, as "Steel Products," "Metal Powders" and "Formed and Fabricated Materials."
The "Steel Products" segment includes the manufacture and sale of various special steel products such as bearing steel, engineering
steel, stainless steel, heat resistant steel and tool steel. The "Metal Powders" segment includes the manufacture and sale of metal powder
products. The "Formed and Fabricated Materials" segment includes the manufacture and sale of formed and fabricated materials madefrom special steel bars and tubes.

(2) Accounting methods and basis of measurement for reportable segment profit or loss and other material items
The accounting methods applied to the reportable segments are generally the same as those described in Note 2, "Summary of
Significant Accounting Policies," except that inventories are stated at cost to evaluate business results. Segment income is based on
operating income. Intersegment transactions are based on market prices.

(3) Information about reportable segment profit or loss and other material items
Segment information for the years ended M arch 31, 2023 and 2024 were as follows:
For the year ended March 31, 2023
Millions of yen
Reportable segments(a) Sales and operating income :Net sales
Outside customers
Intersegment transactions
Total
Segment income(b) Other:
Depreciation
Amortization of goodwill

Steel P roducts

Metal Powders¥

368,508
8,546
377,054
26,983¥13,015
2,925

¥

¥
¥

¥

Formed andFabricated Materials

5,312
－
5,312
1,004

¥

97
－

¥

¥

Other

19,860019,860
367

¥

684
－

¥

¥

164
1,270
1,434
31

¥

4
－

¥

¥

Total

Adjustments

393,8449,816
403,660
28,385¥13,8002,925¥¥

Consolidated
total－(9,816)(9,816)
107

¥

(35)
－

¥

¥

393,844－393,844
28,492
13,7652,925

1. The "Other" category is the information service segment not included in reportable segments.
2. Segment income adjustments are intersegment eliminations.
3. Segment income is adjusted with operating income in the consolidated statements of operations.
4. As information about segment assets and liabilities is not used to determine the distribution of management resources and evaluatebusiness results, the Companies are not required to disclose information about segment assets and liabilities.

27

For the year ended March 31, 2024
Millions of yen
Reportable segments
Metal Powders

Steel P roducts

Formed andFabricated Materials

Other

Consolidated

Total

Adjustments

353,811
10,069363,880
11,310¥－(10,069)(10,069)¥
57¥

13,779
3,247

¥

¥

total

(a) Sales and operating income (loss):
Net sales
Outside customers
Intersegment transactions
Total
Segment income (loss)(b) Other:
Depreciation
Amortization of goodwill¥¥

329,986
8,661
338,647
10,831¥

13,031
3,247

¥

¥

¥

5,337
－
5,337
932

¥

94
－

¥

¥

18,3890
18,389
(491)

¥

651
－

¥

¥

99
1,408
1,507
38

¥

3
－

¥

¥

(34)
－

¥

353,811－353,811
11,367
13,745
3,247

Thousands of U.S. dollars (Note 3)
Reportable segments
Metal Powders

Steel P roducts

Formed andFabricated Materials

Other

Total

Adjustments

Consolidated
total(a) Sales and operating income (loss):
Net sales
Outside customers
Intersegment transactions
Total
Segment income (loss)(b) Other:
Depreciation
Amortization of goodwill$ 2,180,571
57,2302,237,801$
71,572$ 35,269－
35,269$ 6,157

$

$

$

$

86,10921,454

622－$

121,515
0
121,515(3,247)

$

4,305
－

$

652
9,307
9,959
251

$

19
－

$ 2,338,007
66,5372,404,544$
74,733$－(66,537)(66,537)$378$ 2,338,007－
2,338,007$
75,111$$$

91,055
21,454(230)－

90,825
21,454

1. The "Other" category is the information service segment not included in reportable segments.
2. Segment income (loss) adjustments are intersegment eliminations.
3. Segment income (loss) is adjusted with operating income in the consolidated statements of operations.
4. As information about segment assets and liabilities is not used to determine the distribution of management resources and evaluatebusiness results, the Companies are not required to disclose information about segment assets and liabilities.

(4) Related Information(a) Segment related information for the year ended March 31, 2023 was as follows:① Information about products and services
As described in “General information about reportable segments,” the Companies are not required to disclose information about
products and services.
② Information about geographic areas
For the year ended March 31, 2023
Millions of yen

Net Sales

Japan

Europe¥ 150,488¥ 160,076(Sweden of(Germany ofEurope)Europe)¥ (41,198)¥ (40,467)

¥

Asia

North America

66,533¥

13,499

Other

¥

3,248

Total

¥ 393,844

Net sales are classified by country or region based on the location of the customer.
As of March 31, 2023
Millions of yen
Japan

Property, plant and equipment ¥67,010Europe¥37,287(Sweden of

Asia

Europe)¥ (29,992)

28

¥

6,030

North America

¥

48

Other

¥

4,808

Total

¥ 115,183

③ Information about major customers
Not applicable because there are no external customers whose sales account for 10% or more of the net sales in the consolidated
statements of income.
(b) Segment related information for the year ended March 31, 2024 is as follows:① Information about products and services
As described in “General information about reportable segments,” the Companies are not required to disclose information about
products and services.
② Information about geographic areas
For the year ended March 31, 2024
Millions of yen

Net Sales

Japan

Europe¥ 144,367¥ 132,306(Sweden of(Germany ofEurope)Europe)¥ (35,726)¥ (32,745)

¥

Asia

North America

58,863¥

13,554

Other

¥

Total

4,721

¥ 353,811

Thousands of U.S. dollars (Note 3)

Net Sales

Japan

Europe$ 953,989$ 874,287(Sweden of(Germany ofEurope)Europe)$ (236,079)$ (216,379)

Asia

North America$ 388,972$

89,564

Other

$

Total

31,195$2,338,007

Net sales are classified by country or region based on the location of the customer.
As of March 31, 2024
Millions of yen
Japan

Property, plant and equipment ¥67,990(Sweden ofEurope¥Asia

Europe)42,831¥ (35,050)¥

North America

6,201

¥

58

Other

¥

Total

6,407

¥ 123,487

Thousands of U.S. dollars (Note 3)
Japan

Property, plant and equipment $ 449,283(Sweden ofEuropeEurope)$ 283,029$ (231,616)

$

Asia

North America

40,974

$

386

Other

$

Total

42,340$ 816,012③ Information about major customers
Not applicable because there are no external customers whose sales account for 10% or more of the net sales in the consolidated
statements of income.

(5) Information about the amount of amortization of goodwill and the unamortized amount of goodwill by reportablesegments
As of March 31, 2023
Millions of yen
Reportable segments
Steel P roducts

Unamortized amount of goodwill ¥32,441

Metal Powders¥－

Formed andFabricated Materials

－

¥

Other

－

¥

¥

Total

Adjustments

32,441¥

Total

Adjustments

32,954¥－

Consolidated
total

¥

32,441

As of March 31, 2024
Millions of yen
Reportable segments
Steel P roducts

Unamortized amount of goodwill ¥32,954

Metal Powders¥－

Formed andFabricated Materials

－

¥

Other

¥

－

¥

－

Consolidated
total

¥

32,954

Thousands of U.S. dollars (Note 3)
Reportable segments
Steel P roducts

Unamortized amount of goodwill $

217,764

Metal Powders$－

Formed andFabricated Materials

－

$

Other

$

－

$

Total

Adjustments

217,764$－

Consolidated
total

$

217,764

The amount of amortization of goodwill is omitted because the information is disclosed in “(3) Information about reportable segment
profit or loss and other material items.”

2928. Related Party Information(1) Related party transactions
Related party transactions for the year ended M arch 31, 2023 were as follows:
T ransactions during the year ended

Resulting account balances

March 31, 2023

Description oftransaction

AmountAmountAccount

Millions of yen

Millions of yen

Category:
Parent company
Name:
Nippon Steel Corporation
Head office address:
Chiyoda-ku, Tokyo
Paid-in capital:¥419,524 million

Deposit of funds

¥

7,066

Business content:
Production and selling of steel
products, etc.
Equity ownership percentage:
Holding 53.07% directly

Deposits paid inparent company

¥

9,954

Holding 0.10% indirectly
Relation with related party:
Deposit of funds

Deposit of funds is transaction by CMS and the transaction amount represents the average outstanding balance during the fiscal year.
Related party transactions for the year ended M arch 31, 2024 were as follows:
T ransactions during the year ended

Resulting account balances

March 31, 2024

AmountDescription oftransaction

AmountThousands ofMillions of

U.S. dollars

yenAccount

Millions ofyen(Note 3)Thousands of
U.S. dollars(Note 3)Category:
Parent company
Name:
Nippon Steel Corporation
Head office address:
Chiyoda-ku, Tokyo
Paid-in capital:¥419,799 million
Business content:
Production and selling of steel
products, etc.
Equity ownership percentage:
Holding 53.07% directly
Holding 0.10% indirectly
Relation with related party:

Deposit of funds
Borrowing of funds

¥

8,405
18,000$55,538
118,945

Deposits paid inparent company
Short-term loans

¥

4,811
18,000$31,790118,945

Deposit of funds
Borrowing of funds
1. Deposit of funds is transaction by CMS and the transaction amount represents the average outstanding balance during the fiscal year.
2. For borrowing of funds, the interest rate is reasonably determined in consideration of the market interest rate.

30

Related party transactions with subsidiaries owned by the same parent company and subsidiaries of other related companies for theyear ended M arch 31, 2023 were as follows:
T ransactions during the year ended

Resulting account balances

March 31, 2023

Description oftransaction

AmountAmountAccount

Millions of yen

Millions of yen

Category:
Subsidiaries owned by the same
parent company
Name:
Nippon Steel Finance Co., Ltd.
Head office address:
Chiyoda-ku, Tokyo
Paid-in capital:¥1,000 million
Business content:
Engages in the group’s financing
operations
Equity ownership percentage:

Transfers of trade¥receivable

47,417

Accounts
receivable-other¥

10,178

Not applicable
Relation with related party:
Transfers of trade receivables
Regarding the Company’s accounts receivables, “Account Receivable Sales Contract” with Nippon Steel Finance Co., Ltd. has beenconcluded and the account receivables have been transferred.

Related party transactions with subsidiaries owned by the same parent company and subsidiaries of other related companies for theyear ended M arch 31, 2024 were as follows:
T ransactions during the year ended
March 31, 2024

Resulting account balances

AmountDescription oftransaction

Millions ofyenAmountThousands of
U.S. dollars

Account

Millions ofyen(Note 3)Thousands of
U.S. dollars(Note 3)Category:
Subsidiaries owned by the same
parent company
Name:
Nippon Steel Finance Co., Ltd.
Head office address:
Chiyoda-ku, Tokyo
Paid-in capital:¥1,000 million
Business content:
Engages in the group’s financing
operations
Equity ownership percentage:Not applicable
Relation with related party:

Transfers of trade¥receivable

42,616$281,608

Accounts
receivable-other¥

11,987$

79,213

Transfers of trade receivables
Regarding the Company’s accounts receivables, “Account Receivable Sales Contract” with Nippon Steel Finance Co., Ltd. has beenconcluded and the account receivables have been transferred.
Related party transactions between a consolidated subsidiaries and related parties for the years ended March 31, 2023 and 2024 wereas follows:
Not applicable.

31(2) Disclosures about the parent company and significant affiliates(a) Information about the parent company
Nippon Steel Corporation is listed on the Tokyo Stock Exchange, Nagoya Stock Exchange, Fukuoka Stock Exchange and Sapporo
Stock Exchange.
(b) Financial statements of significant affiliates
Not applicable.

29. Revenue Recognition(1) Information about disaggregation of revenue from contracts with customers
The Companies operate in the Steel Products business, the Metal Powders business, the Formed and Fabricated Materials business,
and Other business. The main products of each business segment were as follows. The Steel Products business includes various special
steel products such as bearing steel, engineering steel, stainless steel, heat resistant steel and tool steel. The Metal Powders businessincludes metal powder products, and the Formed and Fabricated Materials business includes formed and fabricated materials made from
special steel bars and tubes. Each business sells products to Japan, Europe, Asia, etc.
Net sales of each business segment by geographic areas for the year ended M arch 31, 2023 were as follows:
For the year ended March 31, 2023
Millions of yen
Business segments
Metal Powders

Steel P roducts

Net Sales
Japan
EuropeAsia
North America
Other
Total

¥

¥

135,512160,053
60,076
11,275
1,592
368,508

¥

¥

4,391
23
710
188
－
5,312

Formed andFabricated Materials¥¥

10,421
－
5,747
2,036
1,656
19,860Total¥

150,324
160,076
66,533
13,4993,248
393,680¥

Consolidated

Other

¥

total

164
－
－
－
－
164

¥

¥

¥

150,488
160,076
66,533
13,4993,248
393,844

1. All net sales to outside customers are revenues arising from contracts with customers and are classified by country or region basedon the location of the customer.
2. The "Other" category is the information service segment and not included in the business segments.

Net sales of each business segment by geographic areas for the years ended M arch 31, 2024 were as follows:
For the year ended March 31, 2024
Millions of yen
Business segments
Metal Powders

Steel P roducts

Net Sales
Japan
EuropeAsia
North America
Other
Total

¥

¥

129,956
132,291
52,96812,5252,246
329,986

¥

¥

4,535
15
531
256
－
5,337

Formed andFabricated Materials

¥

¥

9,777
－
5,364
773
2,475
18,389

Total

¥

¥

144,268
132,306
58,863
13,554
4,721
353,712

Consolidated

Other

¥

total

99
－
－
－
－
99

¥

¥

¥

144,367
132,306
58,863
13,554
4,721
353,811

Thousands of U.S. dollars (Note 3)
Metal Powders

Steel P roducts

Net Sales
Japan
EuropeAsia
North America
Other
Total

$

$

858,760
874,185
350,016
82,766
14,8442,180,571$$

29,970
102
3,510
1,687
－
35,269Formed andFabricated Materials$$

64,607－35,446
5,111
16,351
121,515

Total

$

$

953,337
874,287
388,972
89,564
31,1952,337,355

Consolidated

Other

$

$

total

652
－
－
－
－
652

$

$

953,989874,287
388,972
89,564
31,1952,338,007

1. All net sales to outside customers are revenues arising from contracts with customers and are classified by country or region basedon the location of the customer.
2. The "Other" category is the information service segment and not included in the business segments.

32

(2) Basic information to understand revenue from contracts with customers
Basic information to understand revenue from contracts with customers is as described in Note 2(16) "Accounting policy for revenue
and expenses.”(3) Information to understand the amount of revenue in the current and subsequent fiscal years
A description of contract assets and contract liabilities recorded on the consolidated balance sheet was omitted because those balanceswere immaterial.
Since there were no material transactions of the Companies with initial contract terms of more than 1 year, a description of transaction
price allocated to remaining obligations has been omitted.

30. Business Combination(Transactions conducted by commonly controlled entities)(Additional acquisition of subsidiary’s shares)(1) Overview of the Business Combination(a) Name of acquired company and description of business
Acquired company: Sanyo Special Steel Manufacturing India Pvt. Ltd.
Business: Production and sale of special steel products(b) Date of the business combination
April 27, 2023
(c) Legal form of the business combination
Acquisition of shares from non-controlling shareholders(d) Name of the company after the business combination
Not changed(e) Other items regarding overview of transactions
On April 20, 2022, the Company was notified by Mahindra and Mahindra Limited (hereinafter "M&M"), one of the minority
shareholders of Sanyo Special Steel Manufacturing India Pvt. Ltd (hereinafter "SSMI"), that M&M was exercising its put-option under
the shareholders agreement. As a result of negotiations and discussions with M&M, on April 27, 2023, the Company purchased from
M&M all SSMI shares (3,475,264 shares) held by M&M.
The Company acquired an additional 22.81% of the voting rights of SSMI, resulting in the Company holding 80.0% of the voting
rights of SSMI.

(2) Overview of accounting treatment to be applied
In accordance with the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21) as well as the “Implementation
guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No.
10), the Company will account for the business combination as a transaction with non-controlling shareholders under the classification oftransactions under common control.

(3) Matters to be provided upon additional acquisition of subsidiary’s shares
Acquisition cost and breakdown by type of consideration
Consideration for acquisition: cash in the amount of INR (India rupee) 1,581 million (¥2,593 million, $17,135 thousand)Acquisition cost: INR (India rupee) 1,581 million (¥2,593 million, $17,135 thousand)(4) Change in the Company’s ownership interest due to transactions with non-controlling shareholders(a) Cause for change in capital surplus
Additional acquisition of subsidiary’s shares(b) Amount of capital surplus decreased by transactions with non-controlling shareholders¥2,366 million ($15,637 thousand)3331. Subsequent Events(Additional acquisition of subsidiary’s shares)(1) Overview of the Business Combination(a) Name of acquired company and description of business
Acquired company: Sanyo Special Steel Manufacturing India Pvt. Ltd.
Business: Production and sale of special steel products(b) Date of the business combination
May 24, 2024(c) Legal form of the business combination
Acquisition of shares from non-controlling shareholders(d) Name of the company after the business combination
Not changed(e) Other items regarding overview of transactions
On March 9, 2023, the Company was notified by MITSUI & CO., LTD (hereinafter "Mitsui"), a minority shareholder of SSMI, that
Mitsui was exercising its put-option under the shareholders agreement. As a result of negotiations and discussions with Mitsui, theCompany purchased all SSMI shares (3,046,821 shares) held by Mitsui on May 24, 2024.
The Company acquired an additional 15.43% of the voting rights of SSMI, resulting in the Company holding 100.0% of the voting
rights of SSMI.

(2) Overview of accounting treatment to be applied
In accordance with the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21) as well as the “Implementation
guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No.
10), the Company will account for the business combination as a transaction with non-controlling shareholders under the classification oftransactions under common control.

(3) Matters to be provided upon additional acquisition of subsidiary’s shares
Acquisition cost and breakdown by type of consideration
Consideration for acquisition: cash in the amount of INR (India rupee) 1,325 million (¥2,492 million, $16,465 thousand)Acquisition cost: INR (India rupee) 1,325 million (¥2,492 million, $16,465 thousand)(4) Change in the Company’s ownership interest due to transactions with non-controlling shareholders(a) Cause for change in capital surplus
Additional acquisition of subsidiary’s shares(b) Amount of capital surplus decreased by transactions with non-controlling shareholders¥1,923 million ($12,707 thousand)34

英文監査報告書

Independent auditor’s report
To the Board of Directors of Sanyo Special Steel Co., Ltd.:

Report on the Audit of the Consolidated Financial Statements
OpinionWe have audited the accompanying consolidated financial statements of Sanyo Special Steel Co., Ltd.
(“the Company”) and its consolidated subsidiaries (collectively referred to as “the Group”), which
comprise the consolidated balance sheets as at March 31, 2024 and 2023, the consolidated statements ofoperations, comprehensive income, changes in net assets and cash flows for the years then ended, andnotes, comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2024 and 2023, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance 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 Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.

Appropriateness of the Company’s judgment as to whether an impairment loss should berecognized on property, plant and equipment and intangible assets of Sanyo Special Steel
Manufacturing de México, S.A. de C.V.
The key audit matter

How the matter was addressed in our audit

In the consolidated balance sheets of theCompany as of March 31, 2024, property,
plant and equipment of ¥6,428 million andintangible assets of ¥160 million related to
Sanyo Special Steel Manufacturing deMéxico, S.A. de C.V. (hereinafter referred to
as “SMM”) .

The primary procedures we performed to assess theappropriateness of the Company’s judgment as towhether an impairment loss should be recognized on
property, plant and equipment and intangible assets of
SMM included the following:

While these assets are depreciated/amortizedin a systematic manner, they need to betested for impairment whenever there is anindication of impairment. The impairment
test is performed by comparing theundiscounted future cash flows that are
expected to be generated from the asset
groups with their carrying amounts. If therecognition of an impairment loss is deemednecessary, the carrying amount is reduced to
the recoverable amount, and the resulting
decrease in the carrying amount isrecognized as an impairment loss.
SMM identified an indication of impairment
since operating loss has continued in spite of
the improvement of the revenue due toincreased sales volume. Accordingly, theCompany performed an impairment test
during the current fiscal year. In the
impairment testing, undiscounted future cash
flows were estimated based on the businessplan of SMM prepared by management thatincorporated an increase in sales volume
including prospective new orders, and such
estimate accompanies a degree of
uncertainty. Accordingly, management’s
judgment thereon had a significant effect on
the estimated undiscounted future cash flows.
We, therefore, determined that theappropriateness of the Company’s judgment
as to whether an impairment loss should berecognized on property, plant and equipment
and intangible assets of SMM was one of themost significant matters in our audit of theconsolidated financial statements for thisfiscal year, and accordingly, a key audit
matter.

(1) Internal control testing
We tested the design and operating effectiveness of theCompany’s internal controls to determine whether an
impairment loss should be recognized on property,
plant and equipment and intangible assets.
(2) Assessment of the reasonableness of the estimatedundiscounted future cash flows
In order to assess the appropriateness of key
assumptions adopted in estimating the undiscounted
future cash flows, we inquired of the planningdepartment about the future uncertainty (increase insales volume) incorporated into the business plan of
SMM and the undiscounted future cash flows, which
served as the basis for the estimate. In addition, we:• compared the sales volume included in the businessplan with the available external data on the
projection of automobile sales volume in North
America; and• assessed the consistency of the projected increase insales volume from prospective new orders with themost recent orders and the progress of negotiations
with customers.

Appropriateness of the Group’s determination of an accounting period in which revenue wasrecognized from sales in its Steel Products segment
The key audit matter

How the matter was addressed in our audit

The Group manufactures and sells various
special steel products, including bearing
steel, engineering steel, stainless steel, heat
resistant steel and tool steel, in its Steel
Products segment.

The primary procedures we performed to assess
whether revenue from sales in the Steel Products
segment was recognized in the appropriate accounting
period included the following. We also instructed thecomponent auditor of Ovako Group AB, aconsolidated subsidiary of the Company, to perform anaudit. Then we evaluated the report of the component
auditor and review the audit documentation as towhether sufficient and appropriate audit evidence wasobtained from the following procedures among others:

As described in Note 27, “Segment
information” to the consolidated financial
statements, the net sales to outside customers
in Steel Products segment for the current
fiscal year amounted to ¥329,985 million,
representing approximately 93% of Net Sales
in the consolidated statements of operations.
This business is mainly conducted by theCompany and its consolidated subsidiaries,
Yohkoh Bussan Co., Ltd., Ovako Group AB
and its subsidiaries.
As described in Note 2 (16) , “Accounting
policy for revenue and expenses” to theconsolidated financial statements, revenue
from sale of merchandise and finished goods
is recognized when the customer receives themerchandise and finished goods. This isbecause control of the goods is transferred tothe customer, and the performanceobligations are satisfied at the time of thedelivery. However, revenue from domestic
sales is recognized at the time of shipment incases where control of the goods istransferred to the customer within areasonable period of time.
In the revenue recognition, there is apotential risk that revenue may not berecorded in the appropriate accounting period
because sales may not accurately reflect thetiming of delivery or shipment to thecustomer.
We, therefore, determined that ourassessment of the appropriateness of theGroup’s determination of an accounting
period in which revenue is recognized fromsales in its Steel Products segment was oneof the most significant matters in our audit of
the consolidated financial statements for thecurrent fiscal year, and accordingly, a key
audit matter.

(1) Internal control testing
We tested the design and operating effectiveness of theGroup’s internal controls relevant to the process ofrecognizing revenue from sales in the Steel Products
segment. In this assessment, we focused our testing on
the internal controls to ensure that sales are recorded in
the appropriate accounting period that adequatelyreflects the timing of delivery or shipment to thecustomer.
(2) Assessment of whether revenue was recognized in
the appropriate accounting period
In order to assess whether revenue from sales in the
Steel Products segment was recognized in theappropriate accounting period, we:⚫

⚫

selected sales transactions based on certain criteria
from the sales data recorded before the end of thecurrent fiscal year and compared them withsupporting evidence used as the basis for therecording of sales; andselected transactions based on certain criteria thatwould reduce sales after the end of the current fiscal
year, inquired about the reasons for any returns andcorrections, and compared them with thesupporting evidence.

Other Information
The other information comprises the information included in the disclosure documents that contain or
accompany the audited consolidated financial statements, but does not include the consolidated
financial statements and our auditor’s report thereon.
We do not perform any work on the other information as we determine such information does not exist.
Responsibilities of Management and the Audit & Supervisory Committee for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the 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 preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
The Audit & Supervisory Committee is responsible for overseeing the directors’ performance of theirduties with regard to the design, implementation and maintenance of 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, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our 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, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions 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’sreport 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 our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.


Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with the Audit & Supervisory Committee regarding, among other matters, theplanned scope and timing of the audit, significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the Audit & Supervisory Committee with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit & Supervisory Committee, we determine those mattersthat 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 these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.

Fee-related Information
Fees paid or payable to our firm and to other firms within the same network as our firm for audit andnon-audit services provided to the Company and its consolidated subsidiaries for the current year are
206 million yen and 10 million yen, respectively.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2024 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 3 to the consolidated financial statements.
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 which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Yasuhiro Wada
Designated Engagement Partner
Certified Public Accountant

Yu Kohno
Designated Engagement Partner
Certified Public Accountant

Tatsuya Furusawa
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Osaka Office, Japan
August 30, 2024
Notes to the Reader of Independent Auditor’s Report:
This is a copy of the Independent Auditor’s Report and the original copies are kept separately by theCompany and KPMG AZSA LLC.