This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail. The
Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages
arising from the translation.

To Those Shareholders with Voting Rights:

INFORMATION DISCLOSURE ON THE INTERNETREGARDING THE NOTICE OF
THE 99th ORDINARY GENERAL MEETING OF SHAREHOLDERS

Notes to the Consolidated Financial Statements
Notes to the Non-consolidated Financial Statements(April 1, 2021 to March 31, 2022)

The Notes to the Consolidated Financial Statements and Notes to the Non-consolidated Financial
Statements are made available to the shareholders on our website(https://www.iskweb.co.jp/ir/stockholders.html) in accordance with laws and ordinances, as well as theprovisions of Article 19 of our Articles of Incorporation.

ISHIHARA SANGYO KAISHA, LTD.

1

Notes to the Consolidated Financial Statements
1. Notes on Going Concern Assumption
Not applicable.
2. Notes on the Significant Items that Constitute the Basis of Preparation of Consolidated Financial
Statements(1) Scope of Consolidation
1) Number of Consolidated Subsidiaries and Names of Major Consolidated Subsidiaries
The Company has 17 consolidated subsidiaries.
Japan
ISK Bioscience K.K.
Ishihara Techno Corporation
Fuji Titanium Industry Co., Ltd.
ISK Engineering Partners Corporation
Overseas
ISK AMERICAS INCORPORATEDISK BIOSCIENCES EUROPE N.V.
ISK TAIWAN CO., LTD.
2) Name of Major Non-consolidated Subsidiaries
ISK BIOSCIENCES KOREA LTD.
The Company’s 16 non-consolidated subsidiaries are all small companies, and have been excluded
from the scope of consolidation as they do not have a material impact on the Company’s
consolidated financial statements individually or in the aggregate.
(2) Application of the Equity Method
1) Number and Names of Affiliates Accounted for Under the Equity Method
3 companies CERTIS EUROPE B.V.
HOKUSAN CO., LTD.
SUMMIT AGRO USA, LLC
On March 22, 2022, CERTIS EUROPE B.V.
became an equity method affiliate throughan exchange of shares with BELCHIM
CROP PROTECTION N.V., which waspreviously an equity method affiliate.
2) Names of Major Non-consolidated Subsidiaries and Affiliates Not Accounted for Under the
Equity Method
ISK BIOSCIENCES KOREA LTD.
The Company’s 16 non-consolidated subsidiaries and two affiliates have been excluded from thescope of application of the equity method, as their impact on the Company’s net income andretained earnings for the current fiscal year are immaterial, and are also immaterial in theaggregate.
(3) Fiscal Year of the Consolidated Subsidiaries

2

The fiscal closing date for all consolidated subsidiaries in Japan is March 31. The fiscal closing
date for all consolidated subsidiaries overseas is December 31. Their financial statements as of thatdate are used to prepare the consolidated financial statements, and necessary adjustments are madeto reflect significant transactions that occurred between that date and the consolidated fiscal
closing date.
(4)

Accounting Policies
1) Standards and Methods for Valuation of Assets
Securities
Held-to-maturity debt securities:

Carried at amortized cost

Available-for-sale securities
Securities apart from shares, etc. without market prices:
Carried at fair value (any valuation differences are reported as aseparate component of net assets; cost of securities sold is
calculated using the moving average method.)
Shares, etc. without market prices:
Carried at cost using the moving average method
Derivatives:

Carried at fair value

Inventories:

Inventories held for regular sales purposes
Principally stated at cost, determined by the gross average method(carrying amounts on the balance sheet are subject to the bookvalue reduction method based on decreased profit margin).
At other overseas consolidated subsidiaries, inventories are mainly
stated at lower of cost or net sales value, cost being determined by
the gross average method.

2) Depreciation or Amortization Method for Non-current Assets
Property, plant and equipment (except for leased assets):
Primarily the straight-line method
Intangible assets (except for leased assets):
Straight-line method
Computer software for internal use is amortized by the straight-line
method over their estimated useful lives of 5 years.
Leased assets:

Leased assets under finance lease contracts that transfer ownershipto the lessee are depreciated by using the same method as for selfheld non-current assets.
Leased assets under finance lease contracts that do not transfer
ownership to the lessee are depreciated to a residual value of zeroby the straight-line method over the lease term as the useful life.

3) Standards for Recording Allowances and Provisions
Allowance for doubtful receivables:
An estimated amount of uncollectible receivables is recorded basedon the aggregate historical experience of bad debts for ordinary
3

receivables. For specific probable doubtful accounts from
customers experiencing financial difficulties and those inbankruptcy, bad debts amounts are estimated individually based on
their specific collectibility.
Provision for bonuses:
A provision for bonuses to be paid to employees is recorded for theestimated amount of such payments.
Provision for implementation of environmental and safety arrangements:
A provision for expenditure to implement environmental and safety
arrangements is recorded for the estimated amount of such expenditure.
Specifically, the provision pertains to expenses related to theremediation of soil and groundwater contamination and measures forburied waste at the Yokkaichi Plant.
Provision for maintenance: A provision for expenditure for the maintenance of certain equipment isrecorded for the estimated amount of such expenditure that is
attributable to the current fiscal year.
Provision for loss on withdrawal from business:
A provision for expenditure for the withdrawal from thebiopharmaceutical HVJ-E development business in the organic
chemicals business (healthcare) is recorded for the estimated amount ofsuch expenditure.
4) Standards for Translating the Value of Important Foreign Currency-denominated Assets andLiabilities into Japanese Yen
The amounts of monetary receivables and payables denominated in foreign currencies aretranslated into yen amounts at the spot rates of exchange in effect at the balance sheet date, anddifferences resulting from translation are recognized in income or loss. The assets and liabilities ofoverseas subsidiaries, etc. are translated into yen at the spot rates of exchange in effect at thebalance sheet date, revenue and expense accounts are translated at the average rates of exchange in
effect during the year, and differences resulting from translation are reported as translation
adjustments which is a component of net assets.
5) Method of Hedge Accounting
Hedging transactions are mainly accounted for using the deferral method. Forward exchange
contracts which meet certain conditions are accounted for at their contracted rates (the “allocation
method”), and interest-rate swaps which meet certain conditions are accounted for as if the interest
rates which apply to the swaps had originally applied to the underlying debt (the “special
method”).
6) Method of Accounting for Retirement Benefitsa)Method of attribution of expected retirement benefits to each period
In order to calculate the amount of retirement benefit obligations, expected future retirement
benefits are attributed to each period through the end of the current fiscal year on a straight-line
basis.
b) Method of recognizing actuarial gains and losses and prior service cost in profit or loss
Actuarial gain or loss is amortized from the following fiscal year in which such gain or loss isrecognized, by the straight-line method, over the estimated average remaining years of serviceof the employees at the time of occurrence of such gain or loss.
4

Prior service cost is amortized as incurred by the straight-line method over the estimatedaverage remaining years of service of the employees at the time of such occurrence.

57) Standards for Recording Revenue and Expenses
The details of the main performance obligations concerning revenue arising from contracts withcustomers in the Company’s main businesses, and the normal timing of revenue recognition, are as
follows.
The Company is mainly engaged in the manufacture and sale of products of the inorganic chemicals
business and those of the organic chemicals business. The Company generally considers performanceobligations associated with the sale of products to be satisfied at the time of delivery, when the customer
gains control over the products, and normally recognizes revenue from the sale of products at the time ofdelivery.
The Company considers performance obligations associated with construction contracts to be satisfied
over a certain period of time, and recognizes revenue based on the progress made in satisfying these
performance obligations. Progress is measured based on the ratio of the cost of works incurred as of theend of the reporting period to the forecast total cost of works. In cases where the progress made insatisfying performance obligations cannot be reasonably estimated, but the costs that arise are expected
to be recovered, the Company recognizes revenue based on the cost recovery method.

8) Application of Consolidated Taxation System
The Company has applied a consolidated taxation system from the current fiscal year.
9) Application of Tax Effect Accounting Associated with the Transition from a Consolidated Taxation
System to a Group Tax Sharing System
Regarding the transition to a group tax sharing system established under the Act to Partially
Amend the Income Tax Act (Act No.8 of 2020) and items in the non-consolidated taxation systemreviewed pursuant to this transition, the Company has not applied the provisions set forth inParagraph 44 of “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28,
February 16, 2018), in accordance with the treatment set forth in Paragraph 3 of “Practical Solution
on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation
System to the Group Tax Sharing System” (Accounting Standards Board of Japan PITF No.39,
March 31, 2020). As such, the amounts of deferred tax assets and deferred tax liabilities are basedon the tax law prior to amendment.
3. Notes on Changes in Accounting Policies(1) Application of the Accounting Standard for Revenue Recognition, etc.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020; hereinafter the “Revenue Recognition Standard”) and other guidance from the beginningof the fiscal year under review. The Company recognizes revenue when control of promised goods orservices is transferred to the customer, in an amount that reflects the consideration to which the Company
expects to be entitled in exchange for those goods and services.
The main changes pursuant to the application of the Revenue Recognition Standard, etc. are as follows.
(Revenue recognition for variable consideration)
Sales promotion expenses, etc., which the Company previously included in selling expenses, and sales
discounts, which the Company previously included in non-operating expenses, are deducted from net sales.
(Revenue recognition for principal/agent transactions)
For transactions where the role of the Company in the provision of products to customers is that of an agent,
whereas the Company previously recognized the amount receivable from the customer as revenue, it now
only recognizes the net amount after deducting the amount payable to the supplier of the products as revenue.

6

The Company applies the Revenue Recognition Standard, etc. in accordance with the transitional treatment
provided for in the proviso to Paragraph 84 of the Revenue Recognition Standard. The cumulative impact ofretrospectively applying the new accounting policies to prior periods is adjusted to retained earnings at the
beginning of the fiscal year under review, with the new accounting policy applied from the beginning balance.
However, the Company, applying the method provided for in Paragraph 86 of the Revenue Recognition
Standard, does not apply the new accounting policy retrospectively to contracts where substantially all
revenue has been recognized in accordance with the previous policy before the beginning of the fiscal year
under review.
As a result of this change, for the fiscal year under review, net sales decreased by 4,239 million yen, cost of
sales decreased by 1,126 million yen, selling, general and administrative expenses decreased by 3,084
million yen, and operating income decreased by 29 million yen. Ordinary income and income before income
taxes decreased by 18 million yen each. The impact on the balance of retained earnings at the start of the
fiscal year under review was immaterial.
Pursuant to the application of the Revenue Recognition Standard, etc., “trade receivables,” which were
presented under “current assets” in the consolidated balance sheet for the previous fiscal year, have been
included in “notes receivable - trade,” “accounts receivable - trade,” and “contract assets” from the fiscal
year under review. “Other,” which was presented under “current liabilities,” has been included in “contract
liabilities” and “other” from the fiscal year under review.
(2) Application of the Accounting Standard for Fair Value Measurement, etc.
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30,
July 4, 2019; hereinafter “Fair Value Measurement Standard”) and other guidance from the beginning of the
fiscal year under review, and will prospectively apply the new accounting policies stipulated by the Fair
Value Measurement Standard, etc. in accordance with the transitional treatment provided in Paragraph 19 of
the Fair Value Measurement Standard and Paragraph 44-2 of “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10, July 4, 2019). This change has no effect on the consolidated financial
statements for the fiscal year under review.
(3) Changes in the calculation method for retirement benefit obligation
From the fiscal year under review, the method used to calculate the retirement benefit obligation at theCompany’s consolidated subsidiary Fuji Titanium Industry Co., Ltd. has changed from the simplified method
to the standard method. The reason for this change is as follows. In view of a possible further increase in thenumber of employees due to business expansion under the new Mid-Term Management Plan established in
April 2021, the reliability of actuarial estimates concerning retirement benefits was verified, and it became
apparent that the application of the standard method would increase the accuracy of the calculation of theretirement benefit obligation, and enable retirement benefit expenses to be more appropriately reflected in
the calculation of income or loss.
This change in accounting policy has been applied prospectively from the beginning of the fiscal year underreview, as the standard treatment for retrospective application is not practically possible due to a lack of thenecessary accumulated data for previous fiscal years. The quantitative impact of this change is immaterial.

4. Notes on Changes in Presentation Method
Consolidated Balance Sheet
Software within intangible assets, included in “other” in the previous fiscal year (535 million yen in theprevious fiscal year), is presented as a separate item in the current fiscal year, due to increasedmateriality.

75. Notes on Accounting Estimates
Recoverability of Deferred Tax Assets
Amount recorded on the consolidated financial statements for the fiscal year under review:
Deferred tax assets 8,883 million yen
Other information useful for the understanding of estimates:
1) Calculation Method
Recoverability of deferred tax assets is judged through estimated taxable income based on future
earning capacity, set against deductible temporary differences and a loss carry-forward in tax
accounting. The estimate of taxable income is based on future business plans at the time of theestimate.
2) Main Assumptions
Estimated taxable income based on future earning capacity is based on future business plans. Mainassumptions include estimated future sales volumes, and the trends in selling prices and raw
materials prices.
3) Impact on the Consolidated Financial Statements for the Following Fiscal Year
Estimated sales volume, one of the main assumptions, is highly uncertain, and there is a risk thatchanges in forecast taxable income due to fluctuations in sales volume may have a significant
impact on the judgement regarding the recoverability of deferred tax assets. A decrease in futureforecast sales volume, on which the future business plans are premised, may lead to a reversal ofdeferred tax assets.
6. Notes to the Consolidated Balance Sheet(1) Accumulated Depreciation on Property, Plant and Equipment 125,865 million yen
Accumulated depreciation includes accumulated impairment loss.
(2) Assets Pledged as Collateral, and Related Obligations
Assets pledged as collateral
Investment securities

27 million yen

Buildings and structures

9,246 million yen

Machinery, equipment and vehicles

15,614 million yen

Land

868 million yen

Other property, plant and equipment

403 million yen

Total

26,159 million yen

Among the above assets, the total value of property, plant and equipment pledged as a floating
mortgage is 25,609 million yen, covering all classifications of assets.
Obligations related to the collateral
Short-term bank loans

6,020 million yen

Current portion of long-term bank loans

3,380 million yen

Long-term bank loans

7,638 million yen

Total

17,039 million yen

8(3) Trade Notes Receivable Discounted with Banks

55 million yen(4) Guarantee Obligations
The Company provides a guarantee on the borrowings from financial institutions and others of thefollowing non-consolidated company:
ISK (SHANGHAI) CHEMICAL CO., LTD.

125 million yen

7. Notes to the Consolidated Statement of Changes in Net Assets(1) Class and Total Number of Shares Outstanding at the Fiscal Year-end
Common stock 40,383,943 shares(2) Class and Total Number of Shares of Treasury Stock at the Fiscal Year-end
Common stock 430,740 shares(3) Dividends of Surplus
1) Dividend Amounts
Resolution

Class ofshares

Source ofdividend

Total amountof dividend

Dividend
per share

Recorddate

Effective dateOrdinary General
Meeting of
Shareholders on
June 25, 2021

Commonstock

Retainedearnings

719
million yen

18.00 yenMarch 31,2021

June 28,2021

2) Dividend for which the Record Date is During the Current Fiscal Year, but Whose Effective Date isafter the End of the Current Fiscal Year
Anticipated
Resolution
Ordinary General
Meeting of
Shareholders on
June 28, 2022

Class ofshares

Source ofdividend

Total amountof dividend

Dividend
per share

Recorddate

Effective dateCommonstock

Retainedearnings

1,438
million yen

36.00 yenMarch 31,2022

June 29,2022

9

8. Notes on Financial Instruments(1) Status of Financial Instruments
In consideration of plans for capital expenditures, etc., the Company and its consolidated
subsidiaries (collectively, the “Group”) raise required funds through loans from financial
institutions such as banks, or issuing bonds, for its domestic and overseas business. The Groupmanages temporary cash surpluses through only low-risk short-term deposits and the like. The useof derivatives is limited within the extent of risk arising at the actual demand and the Group does
not enter into derivative contracts for speculative trading purposes.
Trade receivables – trade notes and accounts receivable – are exposed to credit risk in relation tocustomers. The risk is mitigated in accordance with the Credit Control Rules. The Group manages
market price fluctuation risk associated with investment securities by regularly monitoring market
prices and the financial condition of the securities issuer.
Bank loans are used for working capital and capital expenditure purposes, and the Group enters
into interest rate swap transactions for some bank loans to reduce the risk of interest rate
fluctuations.
(2) Fair Value, etc. of Financial Instruments
The value recorded on the consolidated balance sheet, fair value, and difference between them asof the end of the current fiscal year, are as follows.
Note that shares, etc. without market prices (unlisted shares with a consolidated balance sheet
amount of 6,089 million yen) are not included in “available-for-sale securities.”
Notes on “cash” have been omitted. Those on “deposits,” “notes receivable - trade,” “accounts
receivable - trade,” “notes and accounts payable - trade,” and “short-term bank loans” have also
been omitted as they are settled in a short period of time, and balance sheet amounts approximate
fair values.
(Millions of yen)
Consolidated balance
Fair value
Difference
sheet amount(1) Securities and investment securities
Held-to-maturity debt securities
9100
Available-for-sale securities
1,366
1,366
(2) Long-term bank loans, including
33,13033,123(6)
current portion(3) Derivatives*
(13)
(13)
*The value of derivative transactions is presented net of claims and obligations. Net obligations areshown in parentheses.
(3) Fair Value Information by Level Within the Fair Value Hierarchy
The fair value of financial instruments is classified into the following three levels based on theobservability and materiality of the inputs used to calculate fair value.
Level 1 fair value:
Fair value calculated using (unadjusted) quoted prices in active markets for
identical assets or liabilities
Level 2 fair value:
Fair value calculated using directly or indirectly observable inputs other than thosein Level 1
Level 3 fair value:
Fair value calculated using significant unobservable inputs
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement
is categorized in its entirety in the level of the lowest level input that is significant to the entire
measurement.

10(1) Financial assets and financial liabilities carried on the consolidated balance sheet at fair value(Millions of yen)
Category

Fair Value
Level 1

Investment securities
Available-for-sale securities
SharesLevel 2

1,366

Level 3

-

Total

-

1,366

(2) Financial assets and financial liabilities not carried on the consolidated balance sheets at fair value(Millions of yen)
Category

Fair Value
Level 1

Securities
Held-to-maturity debt securities
Discounted Japanese
government bonds
Long-term bank loans, including
current portion
Derivatives

Level 2

Level 3

Total

10

-

-

10

-

33,123-33,123

-

(13)

-

(13)

Note: Methods and inputs used to determine the fair value of financial instruments
Securities and investment securities
The fair value of listed shares and government bonds is measured based on quoted
market prices. As listed shares and government bonds are traded in an active market,
their fair value is classified as Level 1 fair value.
Long-term bank loans, including current portion
Fair value is calculated as the present value of the total of principal and interest of thelong-term bank loans, discounted using an interest rate that takes account of theremaining life and credit risk of the loan, and is classified as Level 2 fair value. The
special method of interest rate swaps is applicable for long-term bank loans with floatinginterest rates (see “Derivatives” below), and fair value is calculated using the total of
their principal and interest payments that are accounted for together with the relevantinterest rate swap.
Derivatives
The fair value of interest-rate swaps that meet certain conditions for the special method is
included in the fair value of the long-term bank loans that they hedge (see “Long-termbank loans, including current portion” above).
9. Notes on Real Estate for Rent, etc.
Notes omitted due to lack of materiality.

1110. Notes on Per Share Information
Net assets per share
2,299.42 yen
Net income per share
292.58 yen*The basis for calculating net assets per share is as follows:
Total net assets
Amount deducted from total net assets
Total net assets attributable to common stock at the end of the fiscal
year
Number of shares of common stock used to calculate net assets per
share*The basis for calculating net income per share is as follows:
Net income attributable to the owners of the parent company recordedon the consolidated statement of income
Amount not attributable to common shareholders
Net income attributable to the owners of the parent company
attributable to common stock
Average number of shares of common stockduring the period

91,869 million yen―
91,869 million yen
39,953 thousand shares

11,690 million yen―
11,690 million yen
39,954 thousand shares

11. Significant Subsequent Events
Not applicable.
12. Notes on Revenue Recognition(1) Breakdown of revenue arising from contracts with customers
The net sales of the Company mainly comprise revenue recognized from contracts with customers. A
breakdown of this revenue by geographical region for each reportable segment is shown below.
(Millions of yen)

Reportable segment
Total

Inorganic
chemicals business

Organic chemicals
business

Other businessesJapan

35,642

12,0682,764

50,475

Asia

20,0256,737

126,764

Americas

2,805

14,091

16

16,913

Europe1,318

15,156-

16,475

82

243

-

325

59,87548,296

2,783

110,955

Other regions
Net sales toexternal customers(2) Information Fundamental to an Understanding of Revenue Arising from Contracts with Customers
1) Revenue from the sale of products
The Group’s main performance obligations consist of providing customers with inorganic chemical
products and organic chemical products. The Group generally considers these performance obligations to
be satisfied at the time of delivery, when the customer gains control over the products, and normally12

recognizes revenue from the sale of products at the time of delivery. However, the Group applies thealternative treatment prescribed in Paragraph 98 of the Implementation Guidance on Accounting Standard
for Revenue Recognition, and recognizes revenue at the time of shipment for domestic sales transactions
where there is a normal period of time between the shipment of the product and the transfer of control tothe customer. Such revenue is measured as the net consideration promised under the contract with thecustomer, after deducting discounts, rebates, returns, or other similar consideration payable to thecustomer.
2) Revenue from construction contracts
The Group considers performance obligations associated with construction contracts in other businesses
to be satisfied over a certain period of time, and recognizes revenue based on the progress made insatisfying these performance obligations. Progress is measured based on the ratio of the cost of works
incurred as of the end of the reporting period to the forecast total cost of works. In cases where theprogress made in satisfying performance obligations cannot be reasonably estimated, but the costs thatarise are expected to be recovered, the Company recognizes revenue based on the cost recovery method.
3) Revenue from principal/agent transactions
The Group identifies performance obligations through a consideration of whether it is acting as a principal
or agent. For performance obligations judged to comprise arrangements for other companies, etc. toprovide the goods or services promise under the contract with the customer, the Group is acting as anagent, and recognizes revenue equal to the net amount of consideration to which it expects to be entitledin return for arranging the provision of said goods or services by other companies, etc.
The Group considers the following three indicators when judging whether it is acting as a principal.
•
Whether it is primarily responsible for fulfilling the promise to provide the relevant goods orservices•
Whether it has inventory risk prior to the transfer of the relevant goods or services to thecustomer, or after the transfer of control to the customer•
Whether it has the discretion to set the prices for the goods or services(3) Information to Enable the Understanding of the Amount of Revenue for the Fiscal Year under Review and
Subsequent Fiscal Years
1) Balance of contract assets and contract liabilities
Contract assets comprise accounts receivable - trade that have not yet been invoiced, mainly associatedwith the recognition of revenue based on the measurement of progress on construction contracts. They
are transferred to accounts receivable - trade when the customer accepts delivery and the work is invoiced.
Contract liabilities are related to considerations received in advance of fulfillment based on the contract,and are transferred to income when the Group fulfills its contractual obligations.
All contract liabilities outstanding at the end of the previous fiscal year were recognized as revenue during
the fiscal year under review.
2) Transaction price allocated to remaining performance obligations
The Group has applied a practical expedient and omitted presentation of the transaction price allocatedto remaining performance obligations because there are no material contracts for which the initially
expected contract term exceeds one year.

1313. Other Notes(1) Gain on Forgiveness of Debts
Gain of forgiveness of debts was recorded due to exemption of the Group by the Japan Science andTechnology Agency from its obligation to return development expense subsidies associated with the HVJE business.
(2) Notes on Business Combinations
1) Overview of transactiona) Name and business description of combined company
Combined company: CERTIS EUROPE B.V. (equity method affiliate of the Company)
Business description: import/export, registration, promotion, sale, etc. of agrochemicalsb) Date of business combination
March 22, 2022c) Legal form of business combination
ISK BIOSCIENCES EUROPE N.V., a consolidated subsidiary of the Company, exchanged theshares of BELCHIM CROP PROTECTION N.V., which was previously an equity method
affiliate, with the shares of CERTIS EUROPE B.V.
d) Name after business combination
Unchanged.
e) Other matters concerning the overview of the transaction
CERTIS EUROPE B.V. has net sales of approximately 700 million euros after the businesscombination. The Company has positioned CERTIS EUROPE B.V. as its strategic alliancepartner and prime distributor in Europe, and will endeavor to further strengthen its presence there.
2) Reason for the recognition of gain on change in equity

The Company recognized gain on change in equity of 2,736 million yen as extraordinary income dueto the conclusion of a share exchange agreement for this transaction.
(3) Impairment Loss
The Group has recorded impairment loss on the following asset groups.
Location
Use
Classification
ISHIHARA SANGYOBuildings and structures
KAISHA, LTD.
Machinery, equipment, andProduction equipment(Yokkaichi City, MievehiclesPrefecture)
Other
Buildings and structures
Fuji Titanium Industry
Machinery, equipment, andCo., Ltd.
Production equipment vehicles(Hiratsuka City,
Construction in progress
Kanagawa Prefecture)
Other

Impairment loss
12 million yen

150 million yen

1) Method of asset grouping
The Company and its consolidated subsidiaries group their assets based on relation in the businesssegment and production process for assessment of impairment loss. For example, real estate forrent and idle assets which are not anticipated to be utilized in the future are classified as individual
asset group if they are deemed to generate cash flow independently. Assets not clearly linked to a
specific business, such as the head-office building, the facilities for research and development andthe facilities for welfare, are classified as corporate assets.

142) Reason for the recognition of a loss on impairment
As a part of production equipment located at the Company’s plant in the above table is not
anticipated to be utilized in the future, the Company classified the production equipment as idle
assets and recorded an impairment loss.
Furthermore, as the cumulative future cash flow from the filter materials business, etc. at the plantof the Company’s consolidated subsidiary Fuji Titanium Industry Co., Ltd. in the table above
became zero, Fuji Titanium Industry Co., Ltd. recorded an impairment loss.
3) Method for determining the recoverable amountAs the equipment at the Yokkaichi Plant in the above table is not anticipated to be utilized in the
future, the net book value of these assets was reduced to zero. Furthermore, as the value based on
future cash flow of the equipment at the Hiratsuka Plant in the table above is zero, its recoverable
amount was determined to be zero, and its net book value of was reduced to memorandum value.
4) Impairment loss by non-current asset classification
ISHIHARA SANGYOClassification
Fuji Titanium Industry Co., Ltd.
KAISHA, LTD.
Buildings and structures
9 million yen
111 million yen
Machinery, equipment, and2 million yen
35 million yen
vehiclesConstruction in progress- million yen
1 million yen
Other
1 million yen
1 million yen(4) Loss on valuation of investment securities
A loss on valuation of investment securities of 2,344 million yen was recorded as an impairment
loss, due to a significant decline in the net asset value of investment securities held by the Company
and its consolidated subsidiaries.
(5) Amounts presented are rounded down to the nearest million yen.

15

Notes to the Non-consolidated Financial Statements
1. Notes on Going Concern Assumption
Not applicable.
2. Notes on Significant Accounting Policies(1) Standards and Methods for Valuation of Assets
Securities
Held-to-maturity debt securities:

Carried at amortized cost

Shares of subsidiaries and affiliates: Carried at cost using the moving average method
Available-for-sale securities
Securities apart from shares, etc. without market prices:
Carried at fair value (any valuation differences are reported as aseparate component of net assets; cost of securities sold is
calculated using the moving average method)
Shares, etc. without market prices:
Carried at cost using the moving average method.
Derivatives:

Carried at fair value

Inventories:

Inventories held for ordinary sales purposesStated at cost, determined by the gross average method (carrying
amounts on the balance sheet are subject to the book value
reduction method based on decreased profit margin).

(2) Depreciation or Amortization Method for Non-current Assets
Property, plant and equipment (except for leased assets):
Straight-line method
Intangible assets (except for leased assets):
Straight-line method

Leased assets:

Computer software for internal use is amortized by the straight-line
method over their estimated useful lives of 5 years.
Leased assets under finance lease contracts that transfer ownershipto the lessee are depreciated by using the same method as for selfheld non-current assets.
Leased assets under finance lease contracts that do not transfer
ownership to the lessee are depreciated to a residual value of zeroby the straight-line method over the lease term as the useful life.

(3) Standards for Recording Allowances and Provisions
Allowance for doubtful receivables:
An estimated amount of uncollectible receivables is recorded basedon the aggregate historical experience of bad debts for ordinary
receivables. For specific probable doubtful accounts from16

customers experiencing financial difficulties and those inbankruptcy, bad debts amounts are estimated individually based on
their specific collectibility.
Provision for bonuses:
A provision for bonuses to be paid to employees is recorded for theestimated amount of such payments.
Provision for retirement benefits
A provision for retirement benefits to be paid to employees is recorded
for the estimated amount of such payments as of the end of the current
fiscal year.
1) Method of attribution of expected retirement benefits to each period
In order to calculate the amount of retirement benefit obligations,
expected future retirement benefits are attributed to each period
through the end of the current fiscal year on a straight-line basis.
2) Method of recognizing actuarial gains and losses and prior service
cost in profit or loss
Actuarial gain or loss is amortized from the following year in whichsuch gain or loss is recognized, by the straight-line method, over theestimated average remaining years of service of the employees at thetime of occurrence of such gain or loss. Prior service cost isamortized as incurred by the straight-line method over the estimatedaverage remaining years of service of the employees at the time ofsuch occurrence.
Unrecognized actuarial differences and unrecognized prior service
cost are carried on the non-consolidated balance sheet in a different
manner compared to that on the consolidated basis.
Provision for implementation of environmental and safety arrangements:
A provision for expenditure to implement environmental and safety
arrangements is recorded for the estimated amount of such expenditure.
Specifically, the provision pertains to expenses related to theremediation of soil and groundwater contamination and measures forburied waste at the Yokkaichi Plant.
Provision for maintenance: A provision for expenditure for the maintenance of certain equipment isrecorded for the estimated amount of such expenditure that is
attributable for the current fiscal year.
Provision for loss on withdrawal from business:
A provision for expenditure for the withdrawal from thebiopharmaceutical HVJ-E development business in the organic
chemicals business (healthcare) is recorded for the estimated amount ofsuch expenditure.
(4) Standards for Recording Revenue and Expenses
The details of the main performance obligations concerning revenue arising from contracts withcustomers in the Company’s main businesses, and the normal timing of revenue recognition, are as17

follows. The Company is mainly engaged in the manufacture and sale of inorganic chemical products andorganic chemical products. The Company generally considers performance obligations associated withthe sale of products to be satisfied at the time of delivery, when the customer gains control over the
products, and normally recognizes revenue from the sale of products at the time of delivery.

(5) Method of Hedge Accounting
Hedging transactions are mainly accounted for using the deferral method. Forward exchange
contracts which meet certain conditions are accounted for using the allocation method, andinterest-rate swaps which meet certain conditions are accounted for using the special method.
(6) Application of Consolidated Taxation System
The Company has applied a consolidated taxation system during the current fiscal year.
(7) Application of Tax Effect Accounting Associated with the Transition from a Consolidated Taxation
System to a Group Tax Sharing System
Regarding the transition to a group tax sharing system established under the Act to Partially
Amend the Income Tax Act (Act No.8 of 2020) and items in the non-consolidated taxation systemreviewed pursuant to this transition, the Company has not applied the provisions set forth inParagraph 44 of “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28,
February 16, 2018), in accordance with the treatment set forth in Paragraph 3 of “Practical Solution
on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation
System to the Group Tax Sharing System” (Accounting Standards Board of Japan PITF No.39,
March 31, 2020). As such, the amounts of deferred tax assets and deferred tax liabilities are basedon the tax law prior to amendment.
3. Notes on Changes in Accounting Policies(1) Application of the Accounting Standard for Revenue Recognition, etc.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020; hereinafter the “Revenue Recognition Standard”) and other guidance from the beginningof the fiscal year under review. The Company recognizes revenue when control of promised goods orservices is transferred to the customer, in an amount that reflects the consideration to which the Company
expects to be entitled in exchange for those goods and services.
The main changes pursuant to the application of the Revenue Recognition Standard, etc. are as follows.
(Revenue recognition for variable consideration)
Sales promotion expenses, etc., which the Company previously included in selling expenses, and sales
discounts, which the Company previously included in non-operating expenses, will be deducted from net
sales.
(Revenue recognition for principal/agent transactions)
For transactions where the role of the Company in the provision of products to customers is that of anagent, whereas the Company previously recognized the amount receivable from the customer as revenue,
it now only recognizes the net amount after deducting the amount payable to the supplier of the products
as revenue.
The Company applies the Revenue Recognition Standard, etc. in accordance with the transitional
treatment provided for in the proviso to Paragraph 84 of the Revenue Recognition Standard. The
cumulative impact of retrospectively applying the new accounting policies to prior periods is adjusted toretained earnings brought forward at the beginning of the fiscal year, with the new accounting policy
18

applied from the beginning balance. However, the Company, applying the method provided for in
Paragraph 86 of the Revenue Recognition Standard, does not apply the new accounting policy
retrospectively to contracts where substantially all revenue has been recognized in accordance with theprevious policy before the beginning of the fiscal year under review.
As a result of this change, for the fiscal year under review, net sales decreased by 2,929 million yen,selling, general and administrative expenses decreased by 2,929 million yen, and operating income
decreased by 0 million yen.
(2) Application of the Accounting Standard for Fair Value Measurement, etc.
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.
30, July 4, 2019; hereinafter “Fair Value Measurement Standard”) and other guidance from the beginningof the fiscal year under review, and will prospectively apply the new accounting policies stipulated by the
Fair Value Measurement Standard, etc. in accordance with the transitional treatment provided in
Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). This change has no effect on the nonconsolidated financial statements for the fiscal year under review.

4. Notes on Changes in Presentation Method
Not applicable.
5. Notes on Accounting Estimates
Recoverability of Deferred Tax Assets
Amount recorded on the non-consolidated financial statements for the current fiscal year:
Deferred tax assets 6,670 million yen
Other information useful for the understanding of estimates:
Identical to the information provided in the Notes to Consolidated Financial Statements “Recoverabilityof Deferred Tax Assets”
6. Notes to the Non-consolidated Balance Sheet(1) Monetary Claims and Obligations to Subsidiaries and Affiliates
Short-term monetary claims
26,693 million yen
Long-term monetary claims

2 million yen

Short-term monetary obligations

8,962 million yen

Long-term monetary obligations

68 million yen(2) Accumulated Depreciation on Property, Plant and Equipment 108,659 million yen
Accumulated depreciation includes accumulated impairment loss.

19

(3) Assets Pledged as Collateral, and Related Obligations
Assets pledged as collateral
Buildings

4,862 million yen

Structures

4,665 million yen

Machinery and equipment

16,317 million yen

Tools, furniture and fixtures

403 million yen

Land

868 million yen

Total

27,116 million yen

Among the above assets, the total value of property, plant and equipment pledged as a floating
mortgage is 26,594 million yen, covering all classifications of assets.
Obligations related to the collateral
Short-term bank loans

6,020 million yen

Current portion of long-term bank loans

3,380 million yen

Long-term bank loans

7,638 million yen

Total

17,039 million yen(4) Guarantee Obligations
The Company provides a guarantee on the borrowings from financial institutions and others of thefollowing affiliate:
ISK (SHANGHAI) CHEMICAL CO., LTD.

125 million yen

7. Notes to the Non-consolidated Statement of Income
Transactions with Subsidiaries and Affiliates
Sales

40,441 million yen

Purchases, etc.

9,845 million yen

Transactions other than trade

1,563 million yen

8. Notes to the Non-consolidated Statement of Changes in Net Assets
Class and Total Number of Shares of Treasury Stock at the Fiscal Year-end
Common stock 430,740 shares

209. Notes on Tax Effect Accounting
Breakdown of deferred tax assets and deferred tax liabilities by major causes[Deferred tax assets]
Tax loss carryforwards

2,956 million yen

Loss on valuation of shares of subsidiaries and affiliates

1,891 million yen

Provision for retirement benefits

3,386 million yen

Allowance for doubtful receivables

409 million yen

Loss on valuation of investment securities

800 million yen

Accrued expenses, etc.

178 million yen

Provision for bonuses

180 million yen

Provision for implementation of environmental and safety arrangements
442 million yen
Asset retirement obligations

48 million yen

Other1,094 million yen

Gross deferred tax assets

11,389 million yen

Valuation allowance(4,640) million yen

Total deferred tax assets

6,749 million yen[Deferred tax liabilities]
Valuation difference on available-for-sale securities

79 million yen

Total deferred tax liabilities

79 million yen

Net deferred tax assets

6,670 million yen

21

10. Notes on Transactions with Related Parties
Subsidiaries and Affiliates
Name of
Voting right
Relationship withcompany
holdings
the related party(Subsidiaries)(held)

Details oftransactions

Transaction
amount(Millions of
yen)

Item

Year-endbalance(Millions ofyen)Sale of
Accounts
agrochemicals
9,307 receivable –Sale of the(Note 1)trade
ISK
Company’s
DirectBioscience
products
Deposit of surplus
100%
―
K.K.
Concurrent service
funds (Note 2)
Depositsby directors, etc. Payment of interest
received
10(Note 3)
ISK
Sale of the
BIOSCIENC
Company’s
Sale of
Accounts
DirectES
products
agrochemicals
11,271 receivable –100%
EUROPE
Concurrent service(Note 1)
trade
N.V.
by directors, etc.
Purchase of raw
Accounts
Purchase of raw
materials, fuel,5,133 payable –materials
packaging materials,
tradeIshihara
Sale of theetc. (Note 1)
DirectTechnoCompany’s
100%
Sale of titanium
Corporation
products
Accounts
dioxide andConcurrent service
5,487 receivable –agrochemicals
by directors, etc.
trade
(Note 1)
Supply of raw
Accounts
materials, etc.
1,262 receivable –Supply of raw(Note 1)
trade
Fuji Titanium
Directmaterials, etc.
Industry Co.,
Deposit of surplus
100%
Concurrent service―Ltd.
funds (Note 2)
Depositsby directors, etc.
received
Payment of interest
20(Note 3)Contracted
ISK
construction andConstruction of
Accounts
Engineering
Directmaintenance of
production equipment
2,236 payable Partners
100%
equipment(Note 4)other
Corporation
Concurrent service
by directors, etc.
Sale of the
ISK BIOCompany’s
Sale of
Accounts
Indirect
SCIENCES
products
agrochemicals
6,325 receivable –
100%
CORP.
Concurrent service(Note 1)
tradeby directors, etc.
Transaction terms and method of determining transaction terms, etc.
Notes: 1. Transaction terms for the sale of products and the purchase of raw materials are
determined based on market prices, etc.
2. Deposit of surplus funds is carried out based on a deposit agreement. It is notrecorded in the Transaction amount column, since the amount is moving daily.
22

8,096

548

6,769

2,159

2,188

468

2,470

1,133

5,206

3. Interest rates for interest payment are determined in view of prevailing market values.
4. Terms for the construction of production equipment are determined in view ofprevailing market values, etc.
11. Notes on Per Share Information
Net assets per share

1,891.21 yen

Net income per share

172.15 yen*The basis for calculating net assets per share is as follows:
Total net assets
Amount deducted from total net assets
Total net assets attributable to common stock at the end of the fiscal
year
Number of shares of common stock used to calculate net assets per
share

75,559 million yen―
75,559 million yen
39,953 thousand shares*The basis for calculating net income per share is as follows:
Net income recorded on the non-consolidated statement of income
Amount not attributable to common shareholders
Net income attributable to common stock
Average number of shares of common stock during the period

6,878 million yen―
6,878 million yen
39,954 thousand shares

12. Notes on Significant Subsequent Events
Not applicable.
13. Notes on Revenue Recognition
Information fundamental to an understanding of revenue arising from contracts with customers is
identical to the information provided in the Notes to Consolidated Financial Statements “Notes on
Revenue Recognition.”
14. Other Notes(1) Gain on Forgiveness of Debts
Identical to the information provided in the Notes to Consolidated Financial Statements “Gain on
Forgiveness of Debts.”(3) Loss on Valuation of Investment Securities
Identical to the information provided in the Notes to Consolidated Financial Statements “Loss on
valuation of investment securities.”(3) Impairment Loss
Identical to the information provided in the Notes to Consolidated Financial Statements “Impairment
Loss.”(4) Amounts presented are rounded down to the nearest million yen.

23