Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy
between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results
for the Year Ended June 30, 2024
[Japanese GAAP]
August 9, 2024
Company name: ENVIPRO HOLDINGS Inc.
Stock exchange listing: Tokyo Stock Exchange
Code number: 5698
URL: https://www.envipro.jp/
Representative: Tomikazu Sano
Representative Director, President/CEO
Contact: Naoki Takekawa
Director in charge of Management Department
Phone: +81-544-21-3160
Scheduled date of Annual General Meeting of Shareholders: September 27, 2024
Scheduled date of commencing dividend payments: September 30, 2024
Scheduled date of filing annual securities report: September 27, 2024
Availability of supplementary briefing material on annual financial results: Available
Schedule of annual financial results briefing session: Scheduled (No on-site event, video streaming only)(Yen amounts are rounded down to millions, unless otherwise noted.)
1. Consolidated Financial Results for the Fiscal Year Ended June 30, 2024 (July 1, 2023 to June 30, 2024)(1) Consolidated Operating Results(Percentages indicate year-on-year changes.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Millions of yen%
Millions of yen%
Millions of yen%
Millions of yen%
Fiscal year ended
June 30, 2024
52,214
6.1
1,409
(8.6)
1,782
(6.3)
537
(56.5)
June 30, 2023
49,189(14.2)
1,542(53.9)
1,901(54.4)
1,236(60.3)(Note) Comprehensive income:Fiscal year ended June 30, 2024:¥
595 million [(54.7) %]Fiscal year ended June 30, 2023:¥
1,313 million [(59.0) %]Basic earnings per Diluted earnings per Rate of return on
share
share
equityOrdinary profit tototal assets ratio

Yen
Yen
%
Fiscal year ended
June 30, 2024
17.87
17.16
3.2
June 30, 2023
41.64
39.94
7.7
(Reference) Equity in earnings (losses) of affiliated companies: Fiscal year ended June 30, 2024:
Fiscal year ended June 30, 2023:

Operating profit to
net sales ratio

%

%

5.3
6.1
¥
¥

2.7
3.1
469 million
521 million(2) Consolidated Financial Position
Total assets
As ofJune 30, 2024
June 30, 2023
(Reference) Equity:

Net assets

Millions of yen

Net assets per share

Millions of yen

33,786
33,686
As of June 30, 2024:
As of June 30, 2023:

Equity ratio¥¥

17,038
16,825
16,719 million
16,386 million

%

Yen

49.5
48.6

553.45551.66(3) Consolidated Cash Flows
Cash flows fromoperating activities
Fiscal year ended
June 30, 2024
June 30, 2023

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at the endof period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,940
2,332

(1,560)(3,838)(1,931)
(92)

6,771
7,245

2. Dividends
Annual dividends
1st
2nd
3rd
quarter-end quarter-end quarter-end
Fiscal year ended

Year-end

Total

Yen

Yen

Yen

Yen

June 30, 2023

-

0.00

-

14.00

14.00

June 30, 2024

-

0.00

-

6.00

6.00

-

0.00

-

15.00

15.00

Payoutratio

Total
dividends(consolidated)

Yen Millions of yen

Dividends
to netassets(consolidated)

%

%

415

33.6

2.6

181

33.6

1.1

Fiscal year ending
June 30, 2025

30.6

(Forecast)
3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2025 (July 1, 2024 to June 30, 2025)(Percentages indicate year-on-year changes.)
Profit attributable Basic earnings per
Net sales
Operating profit
Ordinary profit
to owners of parent
share
Full year

Millions ofyen%Millions ofyen%Millions ofyen%Millions of
yen

%

Yen

53,500

2.5

1,500

6.4

2,000

12.2

1,480

175.4

48.99

* Notes:(1) Significant changes in the scope of consolidation during the period:(Company name:
Newly included:
Excluded:(Company name:

None
)
)

(2) Changes in accounting policies, changes in accounting estimates, and restatement
1) Changes in accounting policies due to revisions to accounting standards and other regulations: None
2) Changes in accounting policies due to other reasons: None
3) Changes in accounting estimates: None
4) Restatement: None
(3) Number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
June 30, 2024:
30,211,042 Shares
June 30, 2023:
30,102,454 Shares
2) Number of treasury shares at the end of the period:
June 30, 2024:
483 Shares
June 30, 2023:
399,470 Shares
3) Average number of shares outstanding during the period:
Fiscal Year ended June 30, 2024:
Fiscal Year ended June 30, 2023:

30,084,763 Shares
29,688,361 shares(Reference) Overview of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended June 30, 2024 (July 1, 2023 to June 30, 2024)(1) Non-consolidated Operating Results(Percentages indicate year-on-year changes.)
Operating revenue
Fiscal year ended
June 30, 2024
June 30, 2023

Operating profit

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

1,271
1,482

(14.2)
26.8

73
368

(80.1)
70.0

8
352(97.5)
62.8

142
454

(68.7)
51.8

Basic earnings per share Diluted earnings per share
Fiscal year ended
June 30, 2024
June 30, 2023

Profit

Yen

Yen

4.73
15.30

4.54
14.68

(2) Non-consolidated Financial Position
Total assets
As ofJune 30, 2024
June 30, 2023
(Reference) Equity:

Net assets

Millions of yen

Millions of yen

11,246
12,208
As of June 30, 2024:
As of June 30, 2023:

Equity ratio

¥
¥

7,447
7,414
7,128 million
7,087 million

Net assets per share
%

Yen

63.4
58.1

235.96238.61* These consolidated financial results are outside the scope of audit by certified public accountants or audit firms* Explanation of the proper use of financial results forecast and other notes
The financial results forecast and other forward-looking statements in this material are based on information currently available to theCompany and certain assumptions deemed to be reasonable, and actual results may differ significantly due to various factors. Please see
the “(4) Future Outlook” from page 4 of the attached document of this material for the conditions for financial and other results, aswell as important matters to be aware of when using the financial results forecast.

Table of Contents of Appendix
1．Overview of Business Results, etc. .................................................................................................................................................... 2(1) Overview of Business Results for the Period under Review .............................................................................................................. 2(2) Overview of Financial Position for the Period under Review ............................................................................................................ 3(3) Overview of Cash Flows for the Period under Review ...................................................................................................................... 4(4) Future Outlook ................................................................................................................................................................................... 4(5) Significant Events regarding Going Concern Assumption ................................................................................................................. 4
2．Basic Stance Concerning Choice of Accounting Standards............................................................................................................. 5

3．Consolidated Financial Statements and Primary Notes ...................................................................................................................... 6(1) Consolidated Balance Sheets .............................................................................................................................................................. 6(2) Consolidated Statements of Income and Comprehensive Income ...................................................................................................... 8(3) Consolidated Statements of Changes in Net Assets .......................................................................................................................... 10(4) Consolidated Statements of Cash Flows .......................................................................................................................................... 12(5) Notes to the Consolidated Financial Statements .............................................................................................................................. 14(Notes on Going Concern Assumption) ............................................................................................................................................. 14(Notes in the Case of Significant Changes in Shareholders’ Equity) ................................................................................................. 14(Notes to Consolidated Statements of Income) .................................................................................................................................... 14(Segment Information)......................................................................................................................................................................... 14(Business Combinations, etc.).............................................................................................................................................................. 20(Per Share Information) ..................................................................................................................................................................... 22(Significant Subsequent Events) .......................................................................................................................................................... 23

1

1. Overview of Business Results, etc.
(1) Overview of Business Results for the Period under Review
In the Group’s business area, uncertainties continue resulting from the prolonged stagnation of the Chinese realestate market, the unsettled state of the world, and concerns about an economic downturn stemming fromprotracted global inflation, etc.
Under such circumstances, the average ferrous scrap price (Tokyo Steel (Tahara) Tokkyu Grade Seaborne
Price) was on a high level from the beginning of the fiscal year under review. The average price during the fiscal
year ended June 30, 2024 was ¥50,916, trending upward from ¥49,082 of the previous fiscal year.
In addition, with regard to the main materials for lithium-ion batteries, the average market prices of cobalt,
nickel, lithium and other minor metals were lower than in the previous fiscal year, although the average price ofcopper rose year on year.
Amid this environment, in the fiscal year ended June 30, 2024, the Company propelled its business to realizea large number of concrete cases of the circular economy ahead of other companies, with a strategy concept of“Lead a circular economy (CE)” and two sub-concepts of “CE supporting manufacturing” and “CE supporting
local communities.” In addition to actively investing in human capital, facilities, etc. and promoting safe
management, etc., the Company will push ahead with portfolio restructuring by withdrawing from unprofitablebusinesses and expanding new businesses.
At the same time, disagreements with tax authorities on export sales transactions and the effects of the fire etc.
resulted in extraordinary losses of ¥1,012 million.
As a result, for the fiscal year ended June 30, 2024, net sales were ¥52,214 million (up 6.1% year on year),
operating profit was ¥1,409 million (down 8.6% year on year), ordinary profit was ¥1,782 million (down 6.3%
year on year), and profit attributable to owners of parent was ¥537 million (down 56.5% year on year).
Results by segment are as follows, with net sales shown as inter-segment sales or sales including transfers.

Summary of Business Results by Segment<Net sales>(Million yen)
The 14th term
(Fiscal year ended
June 30, 2023)

Resource Circulation Business
Global Trading Business
Lithium-ion Battery Recycling Business
OthersAdjustment
Total

18,852
34,485
1,635
463(6,247)49,189The 15th term
(Fiscal year ended
June 30, 2024)

Increase/decreaseratio

21,25434,955
1,570
491(6,058)52,214<Segment profit (loss)>

12.7％
1.4％
(4.0)％
6.2％－
6.1％(Million yen)
The 14th term
(Fiscal year ended
June 30, 2023)

The 15th term
(Fiscal year ended
June 30, 2024)

Increase/decrease
ratio

1,565
1,621
Resource Circulation Business
220
411
Global Trading Business
575
218
Lithium-ion Battery Recycling Business
99
108
Others(558)(576)
Adjustment
1,901
1,782
Total
(Note) Segment profit (loss) is adjusted with ordinary profit in the consolidated statements of income.

2

3.6％
86.5％
(62.0％)
8.5％－(6.3％)

1) Resource Circulation Business
Higher costs resulting from new capital expenditures associated with the operation of the advanced sorting plantand higher labor costs due to improved treatment put pressure on profits. Meanwhile, NITTO KAKO Co., Ltd.,
becoming a Group company, increases in the collection of gold, silver & copper sediment sludge from increasing
volumes of collected waste incineration ash, and strong cleaning and dismantling work contributed to profits.
As a result, net sales in the Resource Circulation Business segment were ¥21,254 million (up 12.7% year onyear), while segment profit was ¥1,621 million (up 3.6% year on year).
2) Global Trading BusinessAs a result of strengthening domestic sales and dynamic sales activities, shipment volume increased in thetransactions of recycled resources, which increased both sales and profit together with the impact of the foreignexchange market. However, export conditions for raw materials for steelmaking are expected to remain difficult,and we will continue to transform our business model by continuously developing products, expanding our bases,
and strengthening our functions.
In logistics agency services, profit increased owing to strong shipments to land-locked countries, cost reduction
from bulk purchases as well as the in-house customs clearance business among other factors.
As a result, net sales in the Global Trading Business segment were ¥34,955 million (up 1.4% year on year),while segment profit was ¥411 million (up 86.5% year on year).
3) Lithium-ion Battery Recycling Business
Handling volume increased due to aggressive sales activities, despite a weakening demand for materials forbatteries. Meanwhile, market prices of minor metals, which are materials for batteries, were lackluster due toeasing demand and supply.
As a result, net sales in the Lithium-ion Battery Recycling Business segment were ¥1,570 million (down 4.0%
year on year), while segment profit was ¥218 million (down 62.0% year on year).
4) Others
In addition to increases in TNFD response support and consulting services related to circular economy, steadyincreases in demand for consulting services related to carbon neutrality contributed to revenue. The developmentof a GHG calculation system and a circular economy traceability system have also progressed.
Concerning the Welfare Service Business for People with Disabilities, due to a reimbursement revision in the
Act on Providing Comprehensive Support for the Daily Life and Life in Society of Persons with Disabilities, there
was a review of the compensation standards for Type B Continuous Employment Support. In addition, the numbers
increased for both new users and total users.
As a result, net sales in the Others segment were ¥491 million (up 6.2% year on year), while segment profit
was ¥108 million (up 8.5% year on year).
(2) Overview of Financial Position for the Period under Review
Total assets at the end of the fiscal year under review amounted to ¥33,786 million (up ¥99 million, or 0.3%
from the end of the previous fiscal year). Current assets amounted to ¥18,366 million (down ¥721 million, or 3.8%
from the end of the previous fiscal year). This was primarily due to decreases of ¥1,311 million in other current
assets, ¥475 million in cash and deposits, and ¥198 million in notes and accounts receivable – trade, despite a¥1,130 million increase in merchandise and finished goods. Non-current assets amounted to ¥15,419 million (up¥821 million, or 5.6% from the end of the previous fiscal year). This was mainly due to increases of ¥474 million
in machinery, equipment and vehicles and ¥327 million in investment securities, despite decreases of ¥210 million
in buildings and structures.
Total liabilities at the end of the fiscal year under review amounted to ¥16,747 million (down ¥113 million, or
0.7% from the end of the previous fiscal year). Current liabilities amounted to ¥11,090 million (up ¥674 million,
or 6.5% from the end of the previous fiscal year). This was mainly due to increases of ¥108 million in income
taxes payable, ¥504 million in other current liabilities and ¥679 million in notes and accounts payable – trade,
despite decreases of ¥660 million in short-term borrowings. Non-current liabilities amounted to ¥5,657 million
3

(down ¥788 million, or 12.2% from the end of the previous fiscal year). This was mainly due to a decrease of ¥727
million in long-term borrowings.
Total net assets at the end of the fiscal year under review amounted to ¥17,038 million (up ¥213 million, or
1.3% from the end of the previous fiscal year). This was mainly due to increases of ¥131 million in disposal oftreasury shares and ¥121 million in retained earnings, despite a decrease of ¥112 million in non-controllinginterests.

(3) Overview of Cash Flows for the Period under Review
Cash and cash equivalents at the end of the fiscal year under review decreased by ¥474 million, or 6.5%, fromthe end of the previous fiscal year, to ¥6,771 million.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to ¥2,940 million, compared with ¥2,332 million provided
in operating activities in the previous fiscal year. This net cash inflow mainly reflected cash inflows of ¥1,267
million in depreciation, ¥816 million in profit before income taxes, and ¥673 million in increase in trade payables,
despite cash outflows of ¥1,157 million in increase in inventories, ¥469 million in share of profit of entities
accounted for using equity method.
(Cash flows from investing activities)
Net cash used in investing activities amounted to ¥1,560 million, compared with ¥3,838 million used ininvesting activities in the previous fiscal year. This net cash outflow mainly reflected a cash outflow of ¥1,578
million in purchase of property, plant and equipment, compared with a cash inflow of ¥92 million in proceedsfrom sale of property, plant and equipment.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥1,931 million, compared with ¥92 million used in financing
activities in the previous fiscal year. This net cash outflow mainly reflected cash outflows of ¥1,005 million in
repayments of long-term borrowings, ¥660 million in net decrease in short-term borrowings, and ¥415 million in
dividends paid, compared to a cash inflow of ¥301 million in proceeds from long-term borrowings.

(4) Future Outlook
Regarding the future outlook, demand for steel products is expected to rise further as private sector capital
investment gradually recovers. In the Group’s business environment, resource recycling has an important role toplay in achieving carbon neutrality by 2050. The concept of a circular economy has begun to permeate the supply
chain as a whole amid the global trend toward decarbonization, and we believe that demand for recycled raw
materials will further increase going forward. Amid this environment, the Group will tackle the challenges offinding solutions to the issues that confront society based on our mission statement “Contribute to create asustainable society,” and with the strategic concept of “Lead a circular economy,” the vision for the organization
we build will be “A disciplined group of autonomous individuals with emergent abilities.” The financial results
forecasts for the next fiscal year are based on the assumption of ferrous scrap price of ¥50,000 per ton, copper
price of ¥1,500 per kilogram, and an average yen exchange rate of ¥140 to the U.S. dollar, with net sales of ¥53,500
million (up 2.5% year on year), operating profit of ¥1,500 million (up 6.4% year on year), ordinary profit of ¥2,000
million (up 12.2% year on year), and profit attributable to owners of parent of ¥1,480 million (up 175.4% year onyear).
* The financial results forecasts are based on information available to the Company as of the release of thisdocument and certain assumptions judged to be valid, and actual results may differ significantly due to various
factors. Should the need arise to revise the financial results, revisions will be disclosed promptly.

(5) Significant Events regarding Going Concern Assumption
There is no relevant information.
42. Basic Stance Concerning Choice of Accounting Standards
The Group has adopted Japanese GAAP in consideration of the comparability of its consolidated financial
statements with domestic industry peers.
Please note that application of IFRS (International Financial Reporting Standards) will be considered, basedon various circumstances in Japan and overseas.

5

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)
As of June 30, 2023

As of June 30, 2024

AssetsCurrent assets
Cash and deposits
Notes receivable - trade

7,390,449
712,575

6,915,029
514,194

Accounts receivable - trade
Merchandise and finished goods

4,049,125
3,857,343

4,157,700
4,988,235

81,724
630,437

83,140680,302

Other
Allowance for doubtful accounts

2,377,737(11,175)

1,066,295(37,917)

Total current assets

19,088,218

18,366,982

Work in process
Raw materials and supplies

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

8,674,502

8,683,509(5,204,026)(5,423,881)

Buildings and structures, net

3,470,476

3,259,627

Machinery, equipment and vehicles

15,113,483

15,764,547

Accumulated depreciation(12,359,773)(12,536,352)

2,753,709

3,228,194

3,839,023

3,843,049

622,877
978,459

683,180
987,533

Accumulated depreciation(819,738)(825,791)

Other, net

158,721

161,742

10,844,809

11,175,794

Machinery, equipment and vehicles, net
LandConstruction in progress
Other

Total property, plant and equipment
Intangible assets
Goodwill

26,72923,521

Other

122,223

165,598

Total intangible assets

148,952

189,119

Investments and other assets
Investment securities

3,172,757

3,500,444

Investments in capital
Deferred tax assets

17,224
332,771

17,103
431,513

Other
Allowance for doubtful accounts

288,418(206,166)

179,734(73,923)

Total investments and other assets

3,605,005

4,054,872

14,598,767

15,419,786

33,686,985

33,786,769

Total non-current assets
Total assets

6

(Thousands of yen)
As of June 30, 2023

As of June 30, 2024

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings

2,816,158
4,230,000

3,495,729
3,570,000

Current portion of long-term borrowings
Lease liabilities

967,280
93,655990,450
99,853

Income taxes payable
Provision for bonuses

149,139
108,123

257,624
120,895

Other

2,050,985

2,555,605

Total current liabilities

10,415,342

11,090,158

Non-current liabilities
Long-term borrowings

4,822,781

4,095,631

Lease liabilities
Deferred tax liabilities for land revaluation

213,549
64,022

183,495
64,022Retirement benefit liability
Asset retirement obligations

950,773
198,579

962,283
199,011

Other

196,431

153,3366,446,137

5,657,779

16,861,480

16,747,938

Share capital
Capital surplus

1,524,830
1,982,822

1,553,348
1,995,521

Retained earnings
Treasury shares

12,889,079(131,732)

13,010,720-

Total shareholders' equity

16,264,999

16,559,589

18,21826,857

8,598
94,228

8,598
124,885

121,045

160,341

326,584
112,875

318,899-

16,825,505

17,038,831

33,686,985

33,786,769

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

7

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Thousands of yen)
For the fiscal year
ended June 30, 2023

For the fiscal year
ended June 30, 2024

Net sales
Cost of sales

49,189,601
40,690,594

52,214,192
43,734,168

Gross profit

8,499,007

8,480,024

Selling, general and administrative expenses

6,956,384

7,070,035

Operating profit

1,542,622

1,409,988

Non-operating income
Interest income

1,789

963

2,867

4,417

521,743

469,745

35,70055,971

46,162
86,774

618,071

608,063

29,31537,794Foreign exchange losses
Depreciation

180,391
22,797105,22162,449Other

26,23529,667

Dividend income
Share of profit of entities accounted for using equity
methodRental income
Other
Total non-operating income
Non-operating expenses
Interest expenses

Total non-operating expenses

258,740

235,132

1,901,953

1,782,919

35,77025,525National subsidies
Gain on extinguishment of tie-in shares

60,000-18,9591,009

Total extraordinary income

95,77045,494Extraordinary losses
Loss on sale of non-current assets

1,837

3,588

16,6109,950

60,00018,959160,110-

121,999

Ordinary profit
Extraordinary income
Gain on sale of non-current assets

Loss on retirement of non-current assets
Loss on tax purpose reduction entry of non-current
assetsLoss on liquidation of business
Loss on disaster
Consumption taxes for prior periods-

857,769

238,558

1,012,266

Profit before income taxes

1,759,165

816,146

Income taxes - current
Income taxes - deferred

378,792
118,364

364,438(104,550)

Total income taxes

497,157

259,887

1,262,007

556,259

25,891

18,776

1,236,116

537,482

Total extraordinary losses

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

8

Consolidated Statements of Comprehensive Income(Thousands of yen)
For the fiscal year
ended June 30, 2023
ProfitOther comprehensive income

For the fiscal year
ended June 30, 2024

1,262,007

556,259

Valuation difference on available-for-sale securities
Revaluation reserve for land

19,631
(34)

8,638
-

Foreign currency translation adjustment

31,94430,657

Total other comprehensive income

51,54139,296Comprehensive income

1,313,548

595,555

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

1,287,321

576,779

26,226

18,7769

(3) Consolidated Statements of Changes in Net Assets
For the fiscal year ended June 30, 2023
(Thousands of yen)
Shareholders' equity

Balance at beginning of
periodChanges during period

Share capital

Capital surplus

1,524,830

1,964,621

Retainedearnings
12,395,449

Treasury shares

Total
shareholders'equity(145,964)

15,738,937

Issuance of new shares
Dividends of surplus
Profit attributable toowners of parent
Disposal of treasury
sharesChange in scope of
consolidation
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Reversal of revaluation
reserve for land
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period(741,502)(741,502)

1,236,116

1,236,116

20,85914,23135,091(1,019)(1,019)(2,659)(2,659)34

34-

18,200493,629

14,231

526,061

1,524,830

1,982,822

12,889,079(131,732)

16,264,999

Accumulated other comprehensive income
Total
Share
Valuation
Foreign
Revaluation
accumulated acquisitiondifference on
currency
reserve forotherrightsavailable-fortranslation
landcomprehensive
sale securities
adjustment
incomeBalance at beginning of
periodChanges during period(1,077)

8,633

62,283

69,840326,584

Noncontrollinginterests

Total net
assets

83,95016,219,312

Issuance of new shares-

Dividends of surplus
Profit attributable toowners of parent
Disposal of treasury
sharesChange in scope of
consolidation
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Reversal of revaluation
reserve for land
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period(741,502)
1,236,116
35,091(1,019)(2,659)
(34)

(34)

-

19,295-31,944

51,240-28,92580,165

19,295(34)

31,944

51,205-28,925606,192

18,218

8,598

94,228121,045

326,584

112,875

16,825,505

10

For the fiscal year ended June 30, 2024
(Thousands of yen)
Shareholders' equity

Balance at beginning of
periodChanges during period
Issuance of new shares
Dividends of surplus
Profit attributable toowners of parent
Disposal of treasury
sharesChange in scope of
consolidation
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Reversal of revaluation
reserve for land
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period

Share capital

Capital surplus

1,524,830

1,982,822

28,51728,517Retainedearnings
12,889,079

Treasury shares

Total
shareholders'equity(131,732)

16,264,999

57,034(415,841)(415,841)

537,482

537,482-(15,818)

131,732

115,914-28,517

12,699121,640

131,732

294,589

1,553,348

1,995,521

13,010,720-

16,559,589

Accumulated other comprehensive income
Total
Share
Valuation
Foreign
Revaluation
accumulated acquisitiondifference on
currency
reserve forotherrightsavailable-fortranslation
landcomprehensive
sale securities
adjustment
incomeBalance at beginning of
periodChanges during period

18,218

8,598

94,228121,045

326,584

Noncontrollinginterests

Total net
assets

112,875

16,825,505

Issuance of new shares

57,034

Dividends of surplus
Profit attributable toowners of parent
Disposal of treasury
sharesChange in scope of
consolidation
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Reversal of revaluation
reserve for land
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period(415,841)
537,482
115,914
8,638-

30,65739,296(7,684)(112,875)(81,264)

8,638-

30,65739,296(7,684)(112,875)

213,325

26,857

8,598

124,885

160,341

318,899-

17,038,831

11

(4) Consolidated Statements of Cash Flows(Thousands of yen)
For the fiscal year
ended June 30, 2023
Cash flows from operating activities
Profit before income taxes

For the fiscal year
ended June 30, 2024

1,759,165

816,146

Depreciation
Amortization of goodwill

935,998
3,207

1,267,780
3,207

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses(467,379)(30,197)(138,929)
12,772

Increase (decrease) in retirement benefit liability
Interest and dividend income

45,860(4,656)

10,193(5,381)

Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss on disposal of non current assets

29,31564,11137,794(36,823)(521,743)(469,745)

1,837

3,588

16,6109,950

60,00018,959(35,770)-(25,525)
857,769

Loss on disasterState subsidy(60,000)

121,999(18,959)

Loss (gain) on extinguishment of tie-in shares
Loss on liquidation of business

160,110(1,009)-Decrease (increase) in trade receivables
Decrease (increase) in inventories

1,868,045
440,840

125,389(1,157,102)

Increase (decrease) in trade payables
Decrease (increase) in advance payments to suppliers(108,458)(17,496)

673,393
97,027

Other, net(1,063,391)

892,493

Subtotal

3,076,009

3,094,990

94,268132,896

Interest paid
Income taxes paid

(30,177)(808,091)(37,883)(249,603)

Net cash provided by (used in) operating activities

2,332,009

2,940,399

Loss on retirement of non-current assets
Loss on tax purpose reduction entry of non-current
assetsGain on sale of non-current assets
Consumption taxes for prior periods

Interest and dividends received12(Thousands of yen)
For the fiscal year
ended June 30, 2023
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from state subsidy

For the fiscal year
ended June 30, 2024

(58,552)(1,100)57,891(2,627,023)

2,431(1,578,080)

71,199(40,389)

92,840(65,790)(1,303,908)-

60,00018,9592,309(29,691)(3,838,473)(1,560,431)

Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings(2,300,000)
4,213,005(660,000)
301,666

Repayments of long-term borrowings
Repayments of finance lease liabilities(1,027,556)(236,044)(1,005,646)(157,809)(741,502)

6,029(415,841)

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Proceeds from issuance of shares
Dividends paid
Purchase of treasury shares
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Decrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation
Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period

13

(64)

-

(92,163)(1,931,601)(62,753)

37,954(1,661,380)(513,678)

8,913,450

7,245,339(6,730)--39,5907,245,339

6,771,250

(5) Notes to the Consolidated Financial Statements(Notes on Going Concern Assumption)
There is no relevant information.
(Notes in the Case of Significant Changes in Shareholders’ Equity)
There is no relevant information.
(Notes to Consolidated Statements of Income)The consumption tax for prior periods recorded in the fiscal year under review is due to corrective action with a tax
audit conducted by the Tokyo Regional Taxation Bureau (hereinafter referred to as "the authority") at NEWSCON
Inc., a consolidated subsidiary of the Company, and its receipt of a "notice of correction of consumption tax and local
consumption tax" on July 30, 2024. This is due to a difference of opinion between NEWSCON Inc. and the authority
regarding the recording of tax exempt sales and taxable purchases in export sales transactions.

The Company plans to appeal against this correction.
In addition, loss on disaster recorded in the fiscal year under review is due to such as the loss of buildings,
production facilities, and products etc. owned by NITTO KAKO Co., Ltd., a consolidated subsidiary of theCompany, as a result of a plant fire that occurred on June 10, 2024.

(Segment Information)(Segment information)
1. Description of reportable segments(1) Method of determining segments
Reportable segments of the Group are determined as segments whose separate financial information isaccessible from among the constituent units of the Group and are regularly considered by the Board of
Directors to determine the allocation of management resources and to evaluate achievements.
The Group’s businesses include the Resource Circulation Business, Global Trading Business, Lithium-ion
Battery Recycling Business, Environment Management Consulting Business, Welfare Service Business for
People with Disabilities, and others. Each business unit formulates its own comprehensive strategies anddevelops its business activities.
Therefore, the Group consists of segments based on products and services and has three reportablesegments: Resource Circulation Business, Global Trading Business, and Lithium-ion Battery Recycling
Business.
(2) Type of products and services belonging to each reportable segment
The Resource Circulation Business mainly handles metal scrap and industrial waste (including somedomestic waste; hereinafter referred to as “waste”) that are discharged from factories and demolished properties,
etc. The Company collects and transports these waste materials to intermediate processing factories, where it
cuts/fuses, manually dismantles, shreds/sorts, compresses/molds the waste, and produces ferrous scrap,
nonferrous metals (copper, aluminum, stainless steel, etc.), plastic, and rubber, which are then sold both
domestically and overseas, including at bases for the Global Trading Business.
The Global Trading Business collects recycled resources produced by the Group, as well as recycledresources purchased from domestic industry peers at our collection bases throughout Japan, which are thensold both domestically and overseas. It also imports and is engaged in trilateral trade of recycled resources. In
addition, it provides logistics agency services for importers and exporters. The Global Trading Business
operates overseas bases in the form of local subsidiaries in Chile for the sale of used cars, etc., representative
offices in Vietnam and the U.K., and a branch in Netherlands for the sale of metal scrap, etc.
The Lithium-ion Battery Recycling Business mainly handles process waste and used batteries discharged
from battery factories, etc., which it dries, shreds, and sorts to produce minor metal concentrated sandcontaining cobalt and nickel, which is then sold.
14

2. Method of measurement for the amounts of net sales, profit (loss), assets, liabilities and other items foreach reportable segment
The accounting method used for reporting business segments is generally the same as stated in “Important
Matters That Form the Basis for Preparing Consolidated Financial Statements.” Reporting segment profit
figures are based on ordinary profit. Inter-segment revenues and transfers are mainly based on market prices.

15

3. Information on net sales, profit (loss), assets, liabilities and other items by reportable segment
For the fiscal year ended June 30, 2023
Reportable segment
Others(Note 1)

Total

(Thousand yen)Amountrecorded in
Adjustmentconsolidated(Note 2)
financialstatements(Note 3)Resource
Circulation

GlobalTrading

Lithium-ion
Battery
Recycling

Ferrous scrap

3,372,336

23,893,902－

27,266,238－

27,266,238－

27,266,238

Nonferrous scrap

3,197,516

3,167,685－

6,365,201－

6,365,201－

6,365,201

Rubber products

3,149,485

2,092

－

3,151,578－

3,151,578－

3,151,578

Used car－

6,305,791－

6,305,791－

6,305,791－

6,305,791

Related LIB－－

1,293,590

1,293,590－

1,293,590－

1,293,590

3,546,551

815,458－

4,362,009

445,191

4,807,201－

4,807,201

13,265,889

34,184,929

1,293,590

48,744,410

445,191

49,189,601－

49,189,601

13,265,889

34,184,929

1,293,590

48,744,410

445,191

49,189,601－

49,189,601

5,586,562

300,145

342,359

6,229,067

18,035

6,247,102(6,247,102)

－

Total

18,852,452

34,485,074

1,635,950

54,973,477

463,226

55,436,703(6,247,102)

49,189,601

Segment profit

1,565,479

220,509575,090

2,361,078

99,5702,460,649(558,696)

1,901,953

Segment assets

21,313,456

7,399,533

1,318,451

30,031,441

367,203

30,398,644

3,288,340

33,686,985

Depreciation

789,313

79,261

26,873

895,449

4,742

900,191

35,806935,998

Amortization of
goodwill

3,207

－

－

3,207

－

3,207

－

3,207

Interest income

17

1,455

3

1,476

2

1,479

310

1,789

Total

Net sales

Others
Revenue fromcontracts withcustomers
Net sales tooutsidecustomers
Inter-segment
sales or transfers

Other items

Interest
14,444
10,61925,06475
25,1394,175
29,315－expenses
Share of profit ofentities
521,743
521,743
521,743
521,743－－－－
accounted forusing equity
methodInvestment inentities
2,998,443
2,998,443
2,998,443
2,998,443－－－－
accounted forusing equity
methodIncrease inproperty, plant
3,484,822
93,277132,135
3,710,236
7,512
3,717,748
930,724
4,648,472
and equipment
and intangible
assets(Notes) 1. The “Others” business segment, which is not included in the reportable segments, includes the Environment Management
Consulting Business and the Welfare Service Business for People with Disabilities.

162. Figures are adjusted as follows:(1) The adjustment for segment profit of negative ¥558,696 thousand is corporate expenses not allocated to eachreportable segment. Corporate expenses primarily consist of general and administrative expenses that are not
attributed to each reportable segment.
(2) The adjustment for segment assets of ¥3,288,340 thousand mainly includes corporate assets not allocated to eachreportable segment.
(3) The adjustments for depreciation of ¥35,806 thousand, interest income of ¥310 thousand, interest expenses of ¥4,175
thousand, as well as increase in property, plant and equipment and intangible assets of ¥930,724 thousand areassociated with company assets not allocated to each reportable segment.
3. Segment profit is adjusted with ordinary profit in the consolidated statements of income.

4. Information about impairment loss on non-current assets and goodwill, etc. by reportable segment(Significant impairment loss on non-current assets)
There is no relevant information.
(Significant changes in the amount of goodwill)
There is no relevant information.
(Significant gain on bargain purchase)
There is no relevant information.

17

For the fiscal year ended June 30, 2024
Reportable segment
Others(Note 1)

Total

(Thousand yen)Amountrecorded in
Adjustmentconsolidated(Note 2)
financialstatements(Note 3)Resource
Circulation

GlobalTrading

Lithium-ion
Battery
Recycling

Ferrous scrap

2,938,953

24,897,005－

27,835,959－

27,835,959－

27,835,959

Nonferrous scrap

3,659,667

3,613,237－

7,272,904－

7,272,904－

7,272,904

Rubber products

5,647,250

80,514－

5,727,764－

5,727,764－

5,727,764

Used car－

4,641,400－

4,641,400－

4,641,400－

4,641,400

Related LIB－－

1,101,588

1,101,588－

1,101,588－

1,101,588

3,714,818

1,452,604－

5,167,422

467,152

5,634,575－

5,634,575

15,960,690

34,684,761

1,101,588

51,747,040

467,152

52,214,192－

52,214,192

15,960,690

34,684,761

1,101,588

51,747,040

467,152

52,214,192－

52,214,192

5,294,073

270,600

468,938

6,033,612

24,806

6,058,419△6,058,419

－

Total

21,254,763

34,955,361

1,570,527

57,780,652

491,959

58,272,612△6,058,419

52,214,192

Segment profit

1,621,504

411,235

218,3762,251,116

108,055

2,359,172△576,253

1,782,919

Segment assets

21,797,490

7,532,562

1,440,022

30,770,076

430,654

31,200,730

2,586,038

33,786,769

1,071,012

69,09638,2481,178,357

5,410

1,183,767

84,013

1,267,780

Amortization of
goodwill

3,207

－

－

3,207

－

3,207

－

3,207

Interest income

19

623

5

648

2

651

312

963

Total

Net sales

Others
Revenue fromcontracts withcustomers
Net sales tooutsidecustomers
Inter-segment
sales or transfers

Other items
Depreciation

Interest
18,203
8,987
192
27,382
12
27,395
10,39937,794
expenses
Share of profit ofentities
469,745469,745469,745469,745－－－－accounted forusing equity
methodInvestment inentities
3,340,925
3,340,925
3,340,925
3,340,925－－－－
accounted forusing equity
methodIncrease inproperty, plant
955,069
15,962628,905
1,599,937
9,468
1,609,405
64,483
1,673,889
and equipment
and intangible
assets(Notes) 1. The “Others” business segment, which is not included in the reportable segments, includes the Environment Management
Consulting Business and the Welfare Service Business for People with Disabilities.
2. Figures are adjusted as follows:18(1) The adjustment for segment profit of negative ¥576,253 thousand is corporate expenses not allocated to eachreportable segment. Corporate expenses primarily consist of general and administrative expenses that are not
attributed to each reportable segment.
(2) The adjustment for segment assets of ¥2,586,038 thousand mainly includes corporate assets not allocated to eachreportable segment.
(3) The adjustments for depreciation of ¥84,013 thousand, interest income of ¥312 thousand, interest expenses of ¥10,399
thousand, as well as increase in property, plant and equipment and intangible assets of ¥64,483 thousand are associatedwith company assets not allocated to each reportable segment.
3. Segment profit is adjusted with ordinary profit in the consolidated statements of income.

4. Information about impairment loss on non-current assets and goodwill, etc. by reportable segment(Significant impairment loss on non-current assets)
There is no relevant information.
(Significant changes in the amount of goodwill)
There is no relevant information.
(Significant gain on bargain purchase)
There is no relevant information.

19

(Business Combinations, etc.)
Transactions under Common Control, etc.
(Acquisition of Full Ownership through Simplified Share Exchange)
Based on a resolution passed at its Board of Directors meeting held on August 10, 2023, the Company
conducted a share exchange where, effective September 19, 2023, it became the wholly owning parent company
in share exchange and BRIGHT INNOVATION Co., Ltd. (hereinafter “Bright Innovation”) became the wholly
owned subsidiary in share exchange (hereinafter referred to as the “Share Exchange”).
1. Overview of the Transaction(1) Name of constituent enterprise and description of business
Acquired company
BRIGHT INNOVATION Co., Ltd.
Description of business
Consulting firm specialized in the fields of environment
management and sustainability management(2) Date of business combination
September 19, 2023
(3) Legal form of business combination
Share exchange with consideration of the common share of the Company(4) Name after business combination
No change(5) Other matters related to overview of transaction
As the simplified share exchange procedure based on the main clause of Article 796, paragraph 2 of
the Companies Act (Act No. 86 of 2005, as amended) was used for the Share Exchange, the Company
did not need to obtain the approval of the General Meeting of Shareholders. Bright Innovation
obtained the approval for the share exchange agreement at its Annual General Meeting of Shareholders
held on September 15, 2023. As a result, the transaction took effect on September 19, 2023.
The purpose of making Bright Innovation into a wholly owned subsidiary is to increase the mobility
and flexibility of group management and to establish a more efficient consolidated management
structure.
2. Overview of the Accounting Treatment Applied
The Share Exchange was treated as a transaction with non-controlling interest among transactions undercommon control, etc., set forth in the Accounting Standard for Business Combinations (ASBJ Statement
No.21, January 16, 2019) and the Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures (ASBJ Guidance No.10, January 16, 2019).
3. Matters Related to Acquisition of Additional Shares of Subsidiary(1) Acquisition cost of the acquired company and breakdown by type of consideration
Consideration for acquisition

Common share of the Company

Acquisition cost

¥ 273,208 thousand¥ 273,208 thousand(2) Exchange ratio of by type of share, calculation method of exchange ratio, and number of shares issued
1) Exchange ratio by type of share
20

The Company allotted 4,356 shares of its common share for each share of Bright Innovation’s share.
2) Calculation method of exchange ratio
The Company and Bright Innovation took into account the calculated exchange ratio they each
received from a third-party organization, advice from their respective legal advisers, and other factors,
and made careful consideration based mainly on the results of due diligence they conducted against
each other. Giving comprehensive consideration to the other party’s financial position, performancetrends, and share price trends, as well as to other aspects, the two companies engaged in a series ofcareful negotiations and discussions on the share exchange ratio. They finally came to judge that theabove exchange ratio is appropriate, and agreed on and determined the ratio.
3) Number of shares issued
426,888 shares
4. Matters related to changes in the Company's shares related to transactions with noncontrolling shareholders(1) Main reasons for changes in capital surplus
Additional acquisition of shares of a subsidiary(2) Amount of capital surplus decreased due to transactions with noncontrolling shareholders¥15,818 thousand

21

(Per Share Information)
For the fiscal year
ended June 30, 2023

For the fiscal year
ended June 30, 2024

Net assets per share¥551.66¥553.45

Basic earnings per share¥41.64¥17.87

Diluted earnings per share¥39.94(Notes) 1. The basis for calculating basic earnings per share and diluted earnings per share is as follows.
Item

For the fiscal year
ended June 30, 2023

Basic earnings per share
Profit attributable to owners of parent(Thousand yen)Amount not attributable to common shareholders(Thousand yen)
Profit attributable to owners of parent relating tocommon shares (Thousand yen)
Average number of shares of common shares
outstanding during each fiscal year (Shares)¥17.16

For the fiscal year
ended June 30, 2024

1,236,116

537,482－－

1,236,116

537,482

29,688,361

30,084,763－－

1,260,031

1,230,237

1,260,031

1,230,237－－

For the fiscal year
ended June 30, 2023
16,825,505

For the fiscal year
ended June 30, 2024
17,038,831

439,460

318,899

326,584

318,899

112,875－

16,386,044

16,719,931

29,702,984

30,210,559

Diluted earnings per share
Adjustment for profit attributable to owners ofparent (Thousand yen)
Increase in number of shares of common shares(Shares)
Share acquisition rights included in the above(Shares)
Overview of dilutive shares not included in
calculation of diluted earnings per share due to lackof dilutive effect

2. The basis for calculating net assets per share is as follows.
Item
Total amount of net assets (Thousand yen)Amount deducted from total amount of net assets(Thousand yen)
Share acquisition rights included in the above(Shares)Non-controlling interests included in the above(Shares)
Net assets at end of the period relating to commonshares (Thousand yen)
Number of common shares at end of the period used
to calculate net assets per share (Shares)

22

(Significant Subsequent Events)
Transactions under Common Control, etc.
(Reorganization of Consolidated Subsidiaries (Merger between Wholly Owned Subsidiaries) )The Company passed a resolution at its board of directors meeting held on April 12, 2024, to implement anabsorption-type merger (hereafter, "Merger No. 1") wherein ECONECOL Inc. (hereafter, "ECONECOL"),
which is a consolidated subsidiary of the Company, is to be the surviving company and KURODA RecycleCo., Ltd. (hereafter, "Kuroda Recycle") and SYN ECO Inc. ("SYN ECO"), which are also consolidated
subsidiaries of the Company, are to be the absorbed companies, and to implement an a bsorption-type merger(hereafter, "Merger No.2") wherein NITTO KAKO Co., Ltd., ("NITTO KAKO"), which is a consolidated
subsidiary of the Company, is to be the surviving company and TOYO RUBBER CHIP Co., Ltd ( hereafter,"TOYO RUBBER CHIP"), which is also a consolidated subsidiary of the Company, is to be the absorbed
company. The effective date of both mergers is July 1, 2024.
(Merger No. 1)
1. Overview of the Transaction(1) Name of constituent enterprise and description of business
Name of the surviving company ECONECOL Inc.
Description of business
Recycling of ferrous and non-ferrous metals, recycling of industrial waste, recycling of incineration ash,plant demolition, processing of bulky waste for local governments, export of recycled materials etc.
Name of company absorbed in the merger KURODA Recycle Co., Ltd.
Description of business
Recycling of ferrous and non-ferrous metals, recycling of industrial waste, recycling of general waste,collection and transportation of industrial waste and specially controlled industrial waste etc.
Name of company absorbed in the merger SYN ECO Inc.
Description of business
Recycling of ferrous and non-ferrous metal, recycling of industrial waste, recycling of small consumer
electronics, recycling of used paper etc.
(2) Date of business combination
July 1, 2024
(3) Legal form of business combination
ECONECOL is the surviving company and Kuroda Recycle and SYN ECO is the absorbed companies(4) Name after business combination
ECONECOL Inc.
(5) Other matters related to overview of transaction
The purpose of Merger No. 1 is to integrate three companies involved in the recycling of metal andother resources, namely ECONECOL, Kuroda Recycle and SYN ECO, thereby strengthening theGroup's ability to handle projects through expansion in business scale and also strengthening
profitability and further promoting the circular economy through the efficient use of management
resources held across the Group and the streamlining of organizations and businesses.
2. Overview of the Accounting Treatment Applied
The transaction was treated as a transaction under common control in accordance with the Accounting Standard
for Business Combinations (ASBJ Statement No.21, January 16, 2019) and the Guidance on Accounting
23

Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No.10,
January 16, 2019).
(Merger No. 2)
1. Overview of the Transaction(1) Name of constituent enterprise and description of business
Name of the surviving company NITTO KAKO Co., Ltd.,
Description of business Manufacture and sale of rubber products and resin products
Name of company absorbed in the merger TOYO RUBBER CHIP Co., Ltd.
Description of business
Sale of recycled materials made by shredding scrap tires and other rubber waste, manufacture and sale ofrecycled rubber, manufacture and sale of elastic paving material (colored rubber chips), manufacture andsale of rubber molding products(2) Date of business combination
July 1, 2024
(3) Legal form of business combination
NITTO KAKO is the surviving company and TOYO RUBBER CHIP is the absorbed company(4) Name after business combination
NITTO KAKO Co., Ltd.,(5) Other matters related to overview of transaction
The purpose of Merger No. 2 is to promote the recycling of polymers (plastics and rubber etc.)
through the vertical integration of NITTO KAKO, which manufactures and sells rubber products andresin products, and TOYO RUBBER CHIP, which manufactures and sells recycled rubber produced
from scrap tires, and to achieve business expansion through the marketing of circular economy
products and the optimization of human capital achieved through integration of the entire supply chain
from the processing of waste rubber to the manufacture of products.
2. Overview of the Accounting Treatment Applied
The transaction was treated as a transaction under common control in accordance with the Accounting Standard
for Business Combinations (ASBJ Statement No.21, January 16, 2019) and the Guidance on AccountingStandard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No.10,
January 16, 2019).

24