KANEMATSU CORPORATIONCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023

~CONSOLIDATED FINANCIAL STATEMENTS~

PAGES

Consolidated Statement of Financial Position ………………………………………………………………………………

1

Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ………………………………

3

Consolidated Statement of Changes in Equity ………………………………………………………………………………

5

Consolidated Statement of Cash Flows ………………………………………………………………………………………

9~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~
1. Reporting Entity …………………………………………………………………………………………………………

11

2. Basis of Preparing Consolidated Financial Statements …………………………………………………………………

11

3. Significant Accounting Policies …………………………………………………………………………………………

13

4. Standards and Interpretations issued but not yet adopted ………………………………………………………………

21

5. Business Combinations …………………………………………………………………………………………………

21

6. Segment Information.……………………………………………………………………………………………………

22

7. Trade and Other Receivables ……………………………………………………………………………………………

26

8. Inventories.………………………………………………………………………………………………………………

26

9. Property, Plant and Equipment.…………………………………………………………………………………………

27

10. Goodwill and Intangible Assets …………………………………………………………………………………………

29

11. Interests in Associates and Joint Ventures ………………………………………………………………………………

35

12. Other Investments ...………………………………………………………………………………………………………

35

13. Other Current Assets and Other Non-current Assets ……………………………………………………………………

36

14. Trade and Other Payables.………………………………………………………………………………………………

36

15. Bonds and Borrowings, etc.………………………………………………………………………………………………

37

16. Provisions …………………………………………………………………………………………………………………

39

17. Other Current Liabilities and Other Non-current Liabilities ……………………………………………………………

40

18. Equity.……………………………………………………………………………………………………………………

40

19. Revenue.…………………………………………………………………………………………………………………

43

20. Selling, General and Administrative Expenses …………………………………………………………………………

44

21. Gain or Loss on Sale or Disposal of Property, Plant and Equipment and Intangible Assets ……………………………

45

22. Impairment Loss …………………………………………………………………………………………………………

45

23. Exchange Differences ……………………………………………………………………………………………………

46

24. Finance Income and Finance Costs ………………………………………………………………………………………

46

25. Earnings Per Share Attributable to Owners of the Parent ………………………………………………………………

47

26. Other Components of Equity and Other Comprehensive Income ………………………………………………………

48

27. Cash Flow Information.…………………………………………………………………………………………………

49

28. Employee Benefits ………………………………………………………………………………………………………

51

29. Current and Deferred Income Tax ………………………………………………………………………………………

57

30. Financial Instruments ……………………………………………………………………………………………………

60

31. Leases ...…………………………………………………………………………………………………………………

80

32. Pledged Assets ……………………………………………………………………………………………………………

82

33. Contingent Liabilities.……………………………………………………………………………………………………

83

34. Significant Subsidiaries.…………………………………………………………………………………………………

84

35. Related Parties ……………………………………………………………………………………………………………

89

36. Share-based Payments ……………………………………………………………………………………………………

90

37. Subsequent Events ...……………………………………………………………………………………………………

90

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Consolidated Statement of Financial Position
JPY
2023

USD (Note 2)
2022

2023

(Assets)
Ⅰ. Current assets
1. Cash and cash equivalents (Note 27)
2. Trade and other receivables (Note 7)

79,462245,890

91,420236,453595,088
1,841,461

3. Inventories (Note 8)

156,071

121,018

1,168,812

4. Other financial assets (Note 30)
5. Other current assets (Note 13)

5,633
28,896

12,006
31,19042,189216,406

Total current assets

515,954492,090

3,863,957

1. Property, plant and equipment (Note 9)
2. Goodwill (Note 10)

47,18814,48142,087
10,624353,390
108,448

3. Intangible assets (Note 10)
4. Investments accounted for using the equity method(Notes 6 & 11)
5. Trade and other receivables (Note 7)

28,05524,912

210,103

19,947

15,121

149,385

1,606

807

12,031

6. Other investments (Note 12)
7. Other financial assets (Note 30)
8. Deferred tax assets (Note 29)

37,8886,656
2,221

35,997
7,101
2,175

283,745
49,850
16,637

Ⅱ. Non-current assets

9. Other non-current assets (Notes 13 & 28)
Total non-current assets
Total assets

3,589

3,537

26,884

161,634

142,365

1,210,474

677,588634,456

5,074,431(Notes) Presentation of fiscal year and amounts (Japanese Yen and U.S. dollars)
1. “2023” refers to the Company’s consolidated fiscal year ended March 31, 2023 and the other fiscal year is referred to in
the corresponding manner.
2. “JPY” means millions of Japanese Yen and “USD” means thousands of U.S. dollars.

- 1 -KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
JPY
2023

USD (Note 2)
2022

2023

(Liabilities)
Ⅰ. Current liabilities
1. Trade and other payables (Note 14)

206,609214,822

1,547,288

2. Bonds and borrowings (Note 15)
3. Lease liabilities (Note 31)

162,189
7,685

73,707
6,674

1,214,629
57,556

4. Other financial liabilities (Note 30)
5. Income taxes payable

23,939
6,488

7,567
4,893

179,278
48,5906. Provisions (Note 16)
7. Other current liabilities (Note 17)358
29,199503
30,2902,686
218,673

Total current liabilities

436,469

338,459

3,268,701

1. Bonds and borrowings (Note 15)
2. Lease liabilities (Note 31)

65,704
12,992

69,745
10,158492,061
97,298

3. Other financial liabilities (Note 30)
4. Retirement benefit liabilities (Note 28)
5. Provisions (Note 16)

3,512
6,198
2,155

1,608
6,842
1,712

26,30546,41916,143

6. Deferred tax liabilities (Note 29)

5,975

5,453

44,749Ⅱ. Non-current liabilities

7. Other non-current liabilities (Note 17)

1,156

1,193

8,660

Total non-current liabilities

97,69596,714

731,635

Total liabilities

534,164

435,173

4,000,336(Equity)
1. Share capital (Note 18)

27,781

27,781

208,052－
80,543(1,259)27,16489,280(1,305)－603,188(9,432)

8,878

5,296

66,48911,82910,06888,588

2. Capital surplus (Note 18)
3. Retained earnings (Note 18)
4. Treasury stock (Note 18)
5. Other components of equity (Note 26)
1) Exchange differences on translation of foreign
operations
2) Financial assets measured at fair value through othercomprehensive income3) Cash flow hedges

752

1,198

5,639

21,46016,563

160,716

Total equity attributable to owners of the Parent

128,525

159,484

962,523

6. Non-controlling interests

14,89839,798111,571

Total equity

143,423

199,282

1,074,095

Total liabilities and equity

677,588634,456

5,074,431

Total other components of equity- 2 -KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(a) Consolidated Statement of Income
JPY
2023

USD (Note 2)
2022

2023

I. Revenue (Notes 6 & 19)

911,408

767,963

6,825,495

II. Cost of sales(780,513)(656,161)(5,845,230)

Gross profit

130,894(96,305)

111,801(85,103)980,264(721,228)

(263)

(103)

(1,971)

(419)

(18)

(3,141)

3. Other income (Note 23)
4. Other expenses (Note 22)

6,006(1,016)

3,597
(826)

44,982(7,613)

Total other income (expenses)

4,307

2,649

32,25738,89629,347291,293

441
1,062

166
1,114

3,310
7,958

315

66

2,359

1,819

1,348

13,627(3,885)(1,690)(29,100)(611)(1,691)(4,581)(4,497)(3,381)(33,681)

(521)

1,451

(3,908)

Income tax expense (Note 29)

35,696(10,987)

28,765(8,206)

267,331(82,285)

Profit for the year

24,70920,559185,045

Owners of the Parent(Note 6)

18,575

15,986

139,114

Non-controlling interests

6,133

4,573

45,931

Total

24,70920,559185,045

III. Selling, general and administrative expenses (Note 20)
IV. Other income (expenses)
1. Gain (loss) on sale or disposal of property, plant andequipment and intangible assets, net (Note 21)
2. Impairment loss on property, plant and equipment andintangible assets (Note 22)

Operating profit (Note 6)
V. Finance income
1. Interest income (Note 24)
2. Dividend income (Note 24)
3. Other finance income (Notes 24 & 30)
Total finance income
VI. Finance costs
1. Interest expenses (Note 24)
2. Other finance costs (Notes 24 & 30)
Total finance costs
VII. Share of profit (loss) of investments accounted for using
the equity method (Notes 6 & 11)
Profit before tax

Profit for the year attributable to:

Yen

U.S. dollars

Earnings per share attributable to owners of the Parent:
Basic earnings per share (Note 25)

222.38191.42

1.67

Diluted earnings per share (Note 25)221.89191.15

1.66

- 3 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(b) Consolidated Statement of Comprehensive Income
JPY2023
Ⅰ. Profit for the year
Ⅱ. Other comprehensive income

USD (Note 2)
2022

2023

24,70920,559185,045

2,176

462

16,301

392

(7)

2,939

29

0

217

2,598

455

19,458

3,205

4,071

24,003(445)

642(3,334)

3. Share of other comprehensive income of investments
accounted for using the equity method (Note 26)

1,224

517

9,173

Total items that may be reclassified to profit or loss

3,984

5,231

29,842Other comprehensive income for the year, net of tax

6,583

5,686

49,300Total comprehensive income for the year

31,292

26,246234,345

Total comprehensive income for the year attributable to:
Owners of the Parent
Non-controlling interests

24,2097,082

20,433
5,812

181,304
53,041

31,292

26,246234,345

Items that will not be reclassified to profit or loss:
1. Financial assets measured at fair value through othercomprehensive income (Note 26)
2. Remeasurement of defined benefit pension plans(Note 26)
3. Share of other comprehensive income of investments
accounted for using the equity method (Note 26)
Total items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss:
1. Exchange differences on translation of foreign operations(Note 26)
2. Cash flow hedges (Notes 26 & 30)

Total

- 4 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Consolidated Statement of Changes in Equity(JPY)
Equity attributable to owners of the Parent
Other components of equity

Share capital Capital surplus

As of April 1, 2021

27,781

27,034

Profit for the year

Retainedearnings

78,070Treasurystock(1,311)

Cash flow
hedges

1,633

10,163

554

3,663

115

643

3,663

115

643

－

－

－

15,986

Other comprehensive income
Total comprehensive income for the year

Financial
Exchange
assetsdifferences on measured attranslation offair value
foreignthrough otheroperations comprehensive
income－－Dividends (Note 18)

15,986－(5,010)

Dividends to non-controlling interests
Acquisition of treasury stock(2)

Disposition of treasury stock0

Equity transactions with non-controlling

19

interests
Share-based payment transaction (Note 36)
Total transactions with owners

110
－

129

Transfer from other components of equity to(5,010)5235

retained earnings
As of March 31, 2022

8

27,781

27,164

Profit for the year

89,280(210)(1,305)

10,068

1,198

3,581

2,126

(445)

3,581

2,126

(445)

－

－

－

18,575

Other comprehensive income
Total comprehensive income for the year

5,296

－

－

Dividends (Note 18)

18,575－(6,055)

Dividends to non-controlling interests
Acquisition of treasury stock(2)

Disposition of treasury stock

(0)

47

Change due to business combination
Equity transactions with non-controllinginterests (Notes 18 & 34)(47,290)

Share-based payment transaction (Note 36)

106

Put options granted to non-controllinginterests
Total transactions with owners(1,972)－

Transfer from retained earnings tocapital surplus (Notes 18 & 34)(49,157)(6,055)21,993(21,993)

Transfer from other components of736

equity to retained earnings
As of March 31, 2023

45

27,781－- 5 -80,543(365)(1,259)8,878

11,829752

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(JPY)
Equity attributable to owners of the Parent
Other components of equity
Total equity
attributable toowners of the
ParentNon-controllinginterests

Total equity

12,351

143,926

36,566

180,492－

15,986

4,573

20,559

24

4,446

4,446

1,239

5,686

24

4,446

20,433

5,812

26,246

Dividends (Note 18)－(5,010)

Dividends to non-controlling interests－－

Acquisition of treasury stock

－

(2)

(2)

Disposition of treasury stock

－

8

8

－

19

－

110

－

－

(4,875)

(24)

(235)

－

－

16,563

159,484

39,798199,282－

18,575

6,133

24,709

371

5,633

5,633

949

6,583

371

5,633

24,2097,082

31,292

Dividends (Note 18)－(6,055)

Dividends to non-controlling interests－－

Acquisition of treasury stock

－

(2)

(2)

Disposition of treasury stock

－

47

47

Change due to business combination

－

－

1,188

1,188

－

(47,290)(30,795)(78,086)

－

106

106

－

(1,972)(1,972)－(55,168)

－

－

－

(371)

(736)

－

－

－

21,460128,525

As of April 1, 2021

Remeasurementof defined benefit
pension plans

Total othercomponents ofequity－Profit for the year
Other comprehensive income
Total comprehensive income for the year

Equity transactions with non-controllinginterests
Share-based payment transaction (Note 36)
Total transactions with owners
Transfer from other components of equity toretained earnings
As of March 31, 2022
Profit for the year
Other comprehensive income
Total comprehensive income for the year

Equity transactions with non-controllinginterests (Notes 18 & 34)
Share-based payment transaction (Note 36)
Put options granted to non-controllinginterests
Total transactions with owners－

Transfer from retained earnings tocapital surplus (Notes 18 & 34)
Transfer from other components ofequity to retained earnings
As of March 31, 2023

- 6 -(5,010)(2,564)(16)(2,564)

3
110(2,580)(7,455)－(6,055)(2,376)(31,982)

14,898(2,376)(87,150)

143,423

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(USD)
Equity attributable to owners of the Parent
Other components of equity

Share capital Capital surplus

As of March 31, 2022

208,052

203,432

Profit for the year

Retainedearnings

668,621

Treasurystock(9,774)

Cash flow
hedges39,66575,401

8,974

26,824

15,922(3,336)

26,824

15,922(3,336)－－－

139,114

Other comprehensive income
Total comprehensive income for the year

Financial
Exchange
assetsdifferences on measured attranslation offair value
foreignthrough otheroperations comprehensive
income－－Dividends (Note 18)

139,114－(45,353)

Dividends to non-controlling interests
Acquisition of treasury stock(16)

Disposition of treasury stock

(0)

358

Change due to business combination
Equity transactions with non-controlling(354,160)

interests (Notes 18 & 34)
Share-based payment transaction (Note 36)794

Put options granted to non-controlling(14,775)

interests
Total transactions with owners－

Transfer from retained earnings tocapital surplus (Notes 18 & 34)(368,141)(45,353)

164,709(164,709)

Transfer from other components of

5,515

equity to retained earnings
As of March 31, 2023

342

208,052－- 7 -603,188(2,735)(9,432)

66,48988,5885,639

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(USD)
Equity attributable to owners of the Parent
Other components of equity
Total equity
attributable toowners of the
ParentNon-controllinginterests

Total equity

Remeasurementof defined benefit
pension plans

Total othercomponents ofequity－124,041

1,194,371

298,048

1,492,419－

139,11445,931

185,045

2,780

42,19042,1907,110

49,3002,780

42,190181,304

53,041

234,345

Dividends (Note 18)－(45,353)

Dividends to non-controlling interests－－

Acquisition of treasury stock

－

(16)

(16)

Disposition of treasury stock

－

358

358

Change due to business combination

－

－

8,900

8,900

－

(354,160)(230,623)(584,783)

－

794

794

－

(14,775)(14,775)－(413,152)－－－(2,780)(5,515)－－－

160,716

962,523

As of March 31, 2022
Profit for the year
Other comprehensive income
Total comprehensive income for the year

Equity transactions with non-controllinginterests (Notes 18 & 34)
Share-based payment transaction (Note 36)
Put options granted to non-controllinginterests
Total transactions with owners－

Transfer from retained earnings tocapital surplus (Notes 18 & 34)
Transfer from other components ofequity to retained earnings
As of March 31, 2023

- 8 -(45,353)(17,795)(239,518)

111,571(17,795)(652,670)

1,074,095

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Consolidated Statement of Cash FlowsJPY
2023
Ⅰ. Cash flows from operating activities
Profit for the year
Depreciation and amortization
Impairment loss on property, plant and equipment andintangible assets
Finance income and costs
Share of (profit) loss of investments accounted for using
the equity method(Gain) loss on sale or disposal of property, plant and

USD (Note 2)
2022

2023

24,70920,559185,045

13,77812,242

103,190

419

18

3,141

2,677

2,033

20,054521(1,451)3,908

equipment and intangible assets, net
Income tax expense(Increase) decrease in trade and other receivables

263

103

1,971

10,987(3,820)8,206(21,869)

82,285(28,608)(Increase) decrease in inventories(31,998)(18,051)(239,636)

Increase (decrease) in trade and other payables
Increase (decrease) in retirement benefits liabilities
Other (Note 19)(6,814)
(662)
4,139

22,732
184(3,283)(51,030)(4,961)
31,002Sub total

14,202

21,425

106,362Interest received
Dividends received

306
1,233

171
1,656

2,294
9,241

Interest paid
Income taxes paid

(3,977)(12,061)(1,673)(6,196)(29,791)(90,327)(296)

15,382(2,221)

Payments for property, plant and equipment(4,655)(3,613)(34,866)

Proceeds from sale of property, plant and equipment

1,287

1,776

9,644

Net cash provided by (used in) operating activities
Ⅱ. Cash flows from investing activities

Payments for intangible assets
Purchases of other investments
Proceeds from sale of other investments
Proceeds from (payments for) acquisition of subsidiaries(Note 27)
Proceeds from (payments for) sale of subsidiaries (Note 27)
Payments for acquisition of businesses (Note 27)
Proceeds from transfer of business (Note 27)

(882)

(694)

(6,608)(5,198)2,033(6,534)
1,801(38,932)
15,231(9,205)(2,362)(68,938)

－
(195)
750

12
(688)

－
(1,463)
5,617

Increase in loans receivable(2,633)－(269)

Proceeds from collection of loans receivable
Other

559
1,455

421
(396)

4,190
10,899Net cash provided by (used in) investing activities(16,684)(10,547)(124,948)- 9 -(19,721)

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
JPY
2023

USD (Note 2)
2022

2023

Ⅲ. Cash flows from financing activities
Increase (decrease) in short-term (maturing before 3 months)
borrowings, net (Note 27)
Proceeds from short-term (maturing after 3 months)
borrowings (Note 27)
Repayments of short-term (maturing after 3 months)
borrowings (Note 27)
Proceeds from long-term borrowings (Note 27)
Repayments of long-term borrowings (Note 27)
Proceeds from issuance of bonds (Note 27)
Redemption of bonds (Note 27)
Dividends paid
Payments for acquisition of interests in subsidiaries from
non-controlling interests
Proceeds from stock issuance to non-controllinginterests
Repayments to non-controlling interests
Dividends paid to non-controlling interests
Repayments of lease liabilities (Note 27)
Other
Net cash provided by (used in) financing activities

28,89814,264

216,420

58,707582

439,661

(511)

(500)

(3,829)17,324(16,118)

16,326(20,430)

129,739(120,712)－(5,014)(6,045)

9,929
(114)
(5,004)－(37,551)(45,278)(61,571)－(461,107)

7

6

53

－
(2,213)(8,707)(17)(2,564)(8,229)－(16,573)(65,208)

(3)

(3)

(28)

4,751

4,245

35,586

Ⅳ. Increase (decrease) in cash and cash equivalents, net(12,228)

9,080(91,582)

Ⅴ. Cash and cash equivalents at the beginning of the year

91,42081,045

684,647

270

1,295

2,024

79,46291,420595,088

Ⅵ. Effect of exchange rate changes on cash and cash
equivalents
Ⅶ. Cash and cash equivalents at the end of the year (Note 27)- 10 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
1. Reporting Entity
Kanematsu Corporation (the “Company”) is located in Japan. The addresses of the Company’s registered headquarters and main
offices are available on its corporate website (https://www.kanematsu.co.jp/en/). The consolidated financial statements of theCompany as of and for the year ended March 31, 2023 comprise the Company and its subsidiaries (collectively, the “Consolidated
Group”), and the Consolidated Group’s interests in associates and joint ventures. The Consolidated Group operates its businesses as
an integrated trading company by providing a broad array of products and services through the organic integration of domestic andinternational business networks; expertise acquired in various fields; and the functions of a trading company, includingcommodities trading, information gathering, market exploration, business development and organization, risk management, anddistribution. Detailed information on the business operations for each reportable segment are provided in Note 6 Segment
Information.

2. Basis of Preparing Consolidated Financial Statements(1) Statement of compliance with IFRSThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standards(“IFRSs”) pursuant to the provision of Article 93 of the Ordinance on Terminology, Forms, and Preparation Methods ofConsolidated Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976) as all the requirements of the“Specified Company for Designated IFRSs” set forth in Article 1-2 of said Ordinance have been fulfilled.
The consolidated financial statements were authorized by Shuji Masutani, Chief Officer, Finance, Accounting, BusinessAccounting, on July 25, 2023.

(2) Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis except for:・Financial assets and liabilities measured at fair value through profit or loss, which are measured at fair value;・Financial assets measured at fair value through other comprehensive income, which are measured at fair value;
・Defined benefit assets or liabilities, which are measured at the present value of the defined benefit obligations less the fairvalue of plan assets; and・Impairment of non-financial assets, which are measured at value in use or fair value.

(3) Functional currency and presentation currency
The consolidated financial statements are presented in Japanese yen, which is the Company’s functional currency. All financial
information presented in Japanese yen has been rounded down to the nearest million.
The U.S. dollar amounts appearing in the consolidated financial statements and the notes thereto represent the arithmeticalresults of translating yen to dollars at the rate of ¥133.53 to U.S.$1.00, the approximate exchange rate prevailing on March 31,
2023. The translation of such dollar amounts is solely for convenience of the readers outside Japan and should not be construed
as a representation that the Japanese yen amounts have been, or could be readily converted, realized or settled in dollars at theabove, or any other rate.

(4) Use of estimates and judgments
The preparation of the consolidated financial statements in accordance with IFRSs requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results could differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change in an accounting estimate isrecognized in the period of the change and future periods. The following notes include information on critical judgments in theapplication of accounting policies that have a significant effect on the amounts recognized in the consolidated financial
statements:
・Note 3. Significant Accounting Policies: (11) Revenue

The following notes include information on uncertainties of assumptions and estimates that have a significant risk to causematerial revisions in the next fiscal year:
・Note 10. Goodwill and Intangible Assets
・Note 22. Impairment Loss・Note 30. Financial Instruments: (6) Fair value of financial instruments- 11 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
When measuring the fair value of an asset or a liability, the Consolidated Group uses observable market data as much as it isavailable. Fair values are categorized into the following three hierarchy levels based on the inputs to the valuation techniques:・Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Consolidated Group can accessat the measurement date・Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly
・Level 3: unobservable inputs

The following notes include detailed information on assumptions made when measuring the fair value:・Note 22. Impairment Loss・Note 30. Financial Instruments: (6) Fair value of financial instruments- 12 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
3. Significant Accounting Policies
The accounting policies set out below have been applied consistently to all the periods presented in these consolidated financial
statements and have been applied consistently by the Consolidated Group.

(1) Basis of consolidation
1) Subsidiaries
Subsidiaries are entities which are controlled by the Consolidated Group. The Consolidated Group controls an entity when it
has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its powerover the entity. When the Consolidated Group holds more than half of the voting rights of another entity, such entity is
included in the subsidiaries of the Consolidated Group as it is determined that control exists, unless it can be clearly
demonstrated that such ownership does not constitute control. In addition, even when the Consolidated Group holds only halfor less of the voting rights of another entity, such entity is included in the subsidiaries of the Consolidated Group if it isdetermined through agreements with other investors that the Consolidated Group has control over such entity’s financial andoperating policies and thus has the ability to affect returns from such entity.
The financial statements of subsidiaries are included in the consolidated financial statements of the Consolidated Group fromthe date the Consolidated Group obtains control of the subsidiaries until the date it loses such control of the subsidiaries. Whenthe accounting policies adopted by the subsidiaries are different from those adopted by the Consolidated Group and thedifference is considered material, the financial statements of the subsidiaries are adjusted as necessary.
Changes in the Consolidated Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions. The Company recognizes directly in equity any difference between the amounts by which the non-controllinginterests are adjusted, and the fair value of the consideration paid or received, and attribute it to the owners of the Company.
If the Consolidated Group loses control of a subsidiary, the Consolidated Group derecognizes the assets and liabilities of theformer subsidiary, and any non-controlling interests and other components of equity related to the former subsidiary. Any gains
or losses arising from such loss of control are recognized in profit or loss. If the Consolidated Group retains any interest in theformer subsidiary after the control is lost, such interest is measured at fair value at the date that control is lost.
2) Associates and joint ventures
Associates are those entities over which the Consolidated Group has significant influence, where significant influence isdefined as the power to participate in the financial and operating policy decisions of the entities but is not control or joint
control of those entities. If the Consolidated Group holds between 20 percent and 50 percent of the voting rights of each thoseentities, it is presumed that the Consolidated Group has significant influence over each of those entities.
Even if the Consolidated Group holds less than 20 percent of the voting rights of another entity, such entity is included in theassociates of the Consolidated Group as long as it is determined that the Consolidated Group has significant influence over theentity through the dispatch of the board members, the shareholders’ agreement or the like.
Joint ventures are those entities with respect to which multiple parties, including the Consolidated Group, have joint control
over the economic activities by contract and unanimous consent of all of such parties is required when deciding on the relevant
activities, whereby the Consolidated Group has rights to the net assets of the arrangement.
Except for those that are classified as assets held for sale in accordance with IFRS 5 Non-current Assets Held for Sale andDiscontinued Operations, investments in associates and joint ventures (“equity method investee”) are measured at the carrying
amount following the application of the equity method (including goodwill recognized at the time of acquisition) less any
accumulated impairment losses.
The consolidated financial statements include the Consolidated Group’s share of profit or loss and other comprehensive incomeof the associates and joint ventures from the date the Consolidated Group obtains significant influence or joint control until thedate it loses such significant influence or joint control. When the accounting policies adopted by the equity method investees
are different from those adopted by the Consolidated Group, the financial statements of the equity method investees areadjusted as necessary.

- 13 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
3) Business combinations
Business combinations are accounted for using the acquisition method. The Consolidated Group recognizes goodwill as thesum of the fair value of the consideration transferred, the amounts of any non-controlling interests in the acquiree and the fairvalue of the acquirer’s previously held equity interest in the acquiree measured at the acquisition date; less, the net of theacquisition-date amounts of the identifiable assets acquired and the liabilities assumed (generally measured at fair value). Whensuch difference results in a negative balance, it is immediately recognized in profit or loss. Non-controlling interests aremeasured either at fair value or at the non-controlling interests’ proportionate share in the recognized amounts of the acquiree’s
identifiable net assets. The measurement method to be applied at the acquisition date is determined on a transaction-bytransaction basis. Acquisition-related costs, which are costs that the Consolidated Group incurs to effect a business combination(excluding costs to issue debt or equity securities), are accounted for as expenses in the periods in which the costs are incurred,
and thus not included in the cost of goodwill. In a business combination achieved in stages, the Consolidated Group remeasures
its previously held equity interest in the acquiree at its acquisition-date fair value and recognizes any gains or losses arisingfrom such remeasurement in profit or loss. Changes in the value of the Consolidated Group’s equity interest in the acquiree that
had been recognized in other comprehensive income prior to the acquisition date are recognized in profit or loss, or othercomprehensive income, on the same basis as would be required if the Consolidated Group had disposed of the previously held
equity interest.
4) Transactions eliminated in consolidation
Intragroup balances and transactions, as well as any unrealized gains and losses arising from intragroup transactions, areeliminated when preparing the consolidated financial statements.

(2) Foreign currency translation
1) Translation of foreign currency transactions
Foreign currency transactions are translated into functional currencies of individual companies using the exchange rates at thedates of such transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign
currencies are translated into functional currencies using the exchange rate at the end of each reporting period. Exchange
differences on monetary items are recognized in profit or loss in the period in which they arise. Non-monetary items that aremeasured on a historical cost basis in a foreign currency are translated into the functional currency using the exchange rate at
the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated into thefunctional currency using the exchange rates at the date when the fair value was measured.
With respect to the exchange differences of a non-monetary item, when a gain or loss on a non-monetary item is recognized inother comprehensive income, the Consolidated Group recognizes any exchange component of that gain or loss in othercomprehensive income. Conversely, when a gain or loss on a non-monetary item is recognized in profit or loss, theConsolidated Group recognizes any exchange component of that gain or loss in profit or loss.
2) Translation of foreign operations
The assets and liabilities of foreign operations, including any goodwill and fair value adjustments arising on the acquisition offoreign operations, are translated using the exchange rate at the end of the reporting period. In addition, income and expenses
of foreign operations are translated using the average exchange rate for the reporting period unless exchange rates fluctuatesignificantly.
Exchange differences arising from the translation are recognized in other comprehensive income and the cumulative amountsof the exchange differences are included in other components of equity. When the Consolidated Group’s foreign operations aredisposed of, the cumulative amounts of the exchange differences related to foreign operations are reclassified to profit or loss
when the gain or loss on disposal is recognized.

(3) Cash and cash equivalents
Cash and cash equivalents are comprised of cash on hand; demand deposits; and short-term, highly liquid investments with amaturity of three months or less from the date of acquisition that are readily convertible to known amount of cash and which are
subject to an insignificant risk of changes in value.

(4) Inventories
Inventories are measured at the lower of cost determined by the moving-average method and net realizable value.

- 14 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(5) Property, plant and equipment
The Consolidated Group uses the cost model to measure an item of property, plant and equipment after initial recognition andcarries it at its cost less any accumulated depreciation and any accumulated impairment losses. The cost of property, plant andequipment include the cost directly attributable to the acquisition of the asset.
Property, plant and equipment are depreciated using the straight-line method over the estimated useful life of each component
thereof. The ranges of principal estimated useful lives are approximately presented as follows:
Buildings and structures:
3 to 50 years
Machinery, vehicles, tools, furniture & fixtures: 3 to 20 years

Right-of-use assets are fully depreciated over the shorter of the lease term and their estimated useful lives if there is no
reasonable certainty that the Consolidated Group will obtain ownership by the end of the lease term.
The depreciation method, useful life and residual value of an asset are reviewed at least at the end of each reporting period andamended as necessary.

(6) Goodwill and intangible assets
1) Goodwill
Goodwill is carried at cost less any accumulated impairment losses.
2) Intangible assets
The Consolidated Group uses the cost model to measure an intangible asset after initial recognition and carries it at its cost lessany accumulated amortization and any accumulated impairment losses.
A separately acquired intangible asset is initially recognized and measured at cost. The cost of an intangible asset acquired in abusiness combination is its fair value at the acquisition date. With respect to an internally generated intangible asset that does
not qualify for asset recognition, expenditures on such an internally generated intangible asset are recognized as expenses when
they are incurred. Conversely, the cost of an internally generated intangible asset that qualifies for asset recognition is the sumof expenditures incurred from the date when it first meets the recognition criteria.
An intangible asset with a finite useful life is amortized using the straight-line method over its estimated useful life. The
Consolidated Group’s intangible assets with finite useful lives are comprised mainly of software whose estimated useful life is
5 years.
The amortization method, useful life and residual value of an intangible asset with a finite useful life are reviewed at the end ofeach reporting period and amended as necessary.
Certain intangible assets with indefinite useful lives such as carrier shop operating rights are not amortized, but instead tested
for impairment based on the cash-generating unit at least once a year and whenever there is an indication that they may be
impaired.

(7) Impairment of non-financial assets
The Consolidated Group assesses at the end of each reporting period whether there is any indication that an asset may be
impaired. If any such indication exists, the Consolidated Group estimates the recoverable amount of the asset or the cashgenerating unit to which the asset belongs. Goodwill and an intangible asset with an indefinite useful life are tested for
impairment annually and whenever there is an indication that such assets may be impaired. If the carrying amount of anindividual asset or the cash-generating unit exceeds its recoverable amount, the carrying amount of the asset is reduced to its
recoverable amount and that reduction is recognized as an impairment loss.
The Consolidated Group assesses at the end of each reporting period whether there is any indication that an impairment loss
recognized in prior fiscal years for an asset other than goodwill may no longer exist or may have decreased. If any such
indication exists, the Consolidated Group will estimate the recoverable amount of that asset. If the recoverable amount exceeds
the carrying amount of that asset or the cash-generating unit to which the asset belongs, the carrying amount is increased to its
recoverable amount, which is, however, limited up to the carrying amount that would have been determined (net of amortization
or depreciation) had no impairment loss been recognized for the asset in prior fiscal years; and that increase is recognized as areversal of an impairment loss. An impairment loss recognized for goodwill is not reversed in a subsequent period.
In addition, because goodwill that forms part of the carrying amount of an investment in an equity method investee is notseparately recognized, it is not tested for impairment separately. If it is indicated that the investment in an equity method
investee may be impaired, the entire carrying amount of the investment is tested for impairment as a single asset, by comparing
its recoverable amount with its carrying amount.

- 15 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(8) Financial instruments
1) Financial assets
The Consolidated Group classifies financial assets at initial recognition as financial assets measured at fair value through profit
or loss, financial assets measured at fair value through other comprehensive income or financial assets measured at amortizedcost. The Consolidated Group initially recognizes financial assets measured at amortized cost on the date that they arise and theother financial assets on the transaction date.
The Consolidated Group derecognizes a financial asset when, and only when (a) the contractual rights to cash flows from thefinancial asset expire, or (b) it transfers the contractual rights to cash flows and substantially all the risks and rewards ofownership of the financial asset.
(ⅰ) Financial assets measured at amortized cost
A financial asset that meets both of the following conditions is classified as a financial asset measured at amortized cost:
・The financial asset is held within a business model whose objective is to hold financial assets in order to collectcontractual cash flow and,・The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.

The Consolidated Group initially recognizes and measures a debt instruments measured at amortized cost at its fair value
plus any transaction costs directly attributable to the acquisition of the financial asset. The Consolidated Group
subsequently measures it at amortized cost using the effective interest method.
(ⅱ) Financial assets measured at fair value through other comprehensive income(a) Debt instruments
Debt instruments that meet both of the following conditions is classified as a financial asset measured at fair value
through other comprehensive income:・The financial asset is held within a business model whose objective is achieved by both collecting contractual cash
flow and selling financial assets and,・The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest on the principal amount outstanding.

The Consolidated Group initially recognizes and measures a debt instruments measured at fair value through othercomprehensive income at its fair value plus any transaction costs directly attributable to the acquisition of the financial
asset. The Consolidated Group subsequently measures it at fair value and recognizes the subsequent changes in fairvalue as other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss isreclassified to profit or loss.
(b) Equity instruments
With regard to a financial asset that has classified as a financial asset measured at fair value through profit or loss, IFRS
9 permits an entity to make an irrevocable election to present in other comprehensive income changes in fair value of aninvestment in an equity instrument that is not held for trading. The Consolidated Group makes this election on an
instrument-by-instrument basis.
The Consolidated Group initially recognizes and measures an equity instrument measured at fair value through othercomprehensive income at its fair value plus any transaction costs directly attributable to the acquisition of the financial
asset. The Consolidated Group subsequently measures it at fair value and recognizes the subsequent changes in fairvalue as other comprehensive income. When the equity instrument is derecognized, or its fair value substantiallydecreases, the Consolidated Group reclassifies the cumulative amount of other comprehensive income to retained
earnings and not to profit or loss. Dividends are recognized in profit or loss unless the dividend clearly represents a
recovery of part of the cost of the investment.
(ⅲ) Financial assets measured at fair value through profit or loss
A financial asset other than those classified as (ⅰ), (ⅱ) and (ⅲ) above is classified as a financial asset measured at fair value
through profit or loss.
The Consolidated Group initially recognizes and measures a financial asset measured at fair value through profit or loss at
its fair value and expenses the transaction costs as incurred that are directly attributable to the acquisition of the financial
asset. The Consolidated Group subsequently measures it at fair value and recognizes the subsequent changes in fair value
in profit or loss.

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KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
2) Impairment of financial assets
The Consolidated Group assesses impairment of financial assets measured at amortized cost and financial assets measured atfair value through other compressive income based on the expected credit loss approach.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, theConsolidated Group measures the loss allowance for that financial instrument at an amount equal to the 12-month expectedcredit losses, i.e., the expected credit losses that result from default events on that financial instrument that are possible within
the 12-months after the reporting date. Conversely, if, at the reporting date, the credit risk on that financial instrument has
increased significantly since initial recognition, the Consolidated Group measures the loss allowance for that financial
instrument at an amount equal to the lifetime expected credit losses, i.e., the expected credit losses that result from all possible
default events over the expected life of that financial instrument.
However, the Consolidated Group always measures the loss allowance for trade receivables, contract assets and leasereceivables at an amount equal to the lifetime expected credit losses despite the above requirement.
If there is any objective evidence that financial assets are credit-impaired, such as a borrower’s significant financial difficulty, abreach of contract of default or delinquency by the borrower, etc., the Consolidated Group measured interest income to net
carrying amount after deducting loss allowance following the effective interest method.
Detailed information on the assessment of significant increases in credit risk and the measurement of expected credit losses isprovided in Note 30. Financial Instruments: (3) Credit risk management.
3) Financial liabilities
The Consolidated Group classifies financial liabilities at initial recognition as financial liabilities measured at fair value throughprofit or loss or financial liabilities measured at amortized cost. The Consolidated Group initially recognizes financial liabilities
measured at amortized cost on the date that they arise and the other financial liabilities on the transaction date.
The Consolidated Group derecognizes financial liabilities when they are extinguished, i.e., when obligations specified under acontract is discharged, cancelled or expires.
(ⅰ) Financial liabilities measured at amortized cost
The Consolidated Group classified financial liabilities, other than financial liabilities measured at fair value through profit
or loss, as financial liabilities measured at amortized cost. The Consolidated Group initially recognizes and measures afinancial liability measured at amortized cost at its fair value less any transaction costs directly attributable to incurring of
the liability, and subsequently measures it at amortized cost using the effective interest method.
(ⅱ) Financial liabilities measured at fair value through profit or loss
The Consolidated Group initially recognizes and measures a financial liability measured at fair value through profit or loss
at its fair value, and subsequently measures it at fair value and recognizes subsequent changes in fair value in profit orloss.
4) Derivatives and hedge accounting
In order to hedge the foreign currency fluctuation risk, interest rate fluctuation risk and commodity price fluctuation risk, theConsolidated Group enters into derivative transactions, such as forward exchange transactions, interest rate swap transactions
and commodity futures and forwards transactions.
When initiating a hedge, the Consolidated Group designates and documents the risk management purposes and strategies
regarding the hedge relationship and initiation of such hedge. Such documentation includes the designation of the hedging
instrument, the hedged item or transaction, the nature of the risk being hedged and methods of assessing the hedging
instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to thehedged risk. In addition, such hedging is assessed on an ongoing basis whether it was actually effective throughout thereporting periods was designated.
The Consolidated Group initially recognizes and measures derivatives at fair value and subsequently measures them at fairvalue and accounts for subsequent changes in fair value as follows:(ⅰ) Fair value hedge
The Consolidated Group recognizes the changes in fair value of a derivative used as a hedging instrument in profit or loss,
and the changes in fair value of a hedged item attributable to the hedged risk in profit or loss by adjusting the carrying
amount of the hedged item.

- 17 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(ⅱ) Cash flow hedge
Of the changes in fair value of a derivative used as a hedging instrument, the portion determined to be effective isrecognized in other comprehensive income and the cumulative amount is included in other components of equity.
Conversely, the portion determined to be ineffective is recognized in profit or loss. The amounts accumulated in othercomponents of equity are reclassified from other components of equity to profit or loss in the same period that thetransaction of the hedged item affects profit or loss; provided, however, that if hedging of a forecast transaction
subsequently results in the recognition of a non-financial asset or liability, the amounts accumulated in other componentsof equity are then accounted for as an adjustment to the initial carrying amount of the non-financial asset or liability.
When the hedging instrument expires or is sold, terminated or exercised; or when the hedge no longer meets the criteria
for the hedge accounting, the Consolidated Group discontinues the hedge accounting prospectively. The amounts
accumulated in other components of equity remain in equity when hedge accounting is discontinued and are recognized in
profit or loss when the forecast transaction is recognized in profit or loss. However, if the forecast transaction is no longer
expected to occur, the amounts accumulated in other components of equity are reclassified immediately from othercomponents of equity to profit or loss.
(ⅲ) Derivatives not designated as hedging instruments
The Consolidated Group recognizes the changes in fair value of derivatives not designated as hedging instruments in profit
or loss.
5) Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount of such offset is presented in the consolidated statementsof financial position only when the Consolidated Group has a legally enforceable right to offset the recognized amounts andintends either to settle them on a net basis or realize the assets and settle the liabilities simultaneously.

(9) Provisions
The Consolidated Group recognizes a provision when, only when (a) the Consolidated Group has a present obligation (legal orconstructive) as a result of a past event; (b) it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation.
Where the effect of the time value of money is material, the Consolidated Group recognizes the provision by discounting it
using a current pre-tax discount rate that reflects the risks specific to the liability.

(10) Equity
When the Consolidated Group repurchases the shares of treasury stock, it is measured at cost and is presented as a deduction
from equity. Transaction costs directly attributable to the repurchase of the shares of treasury stock are deducted from capitalsurplus. When the Consolidated Group sells the shares of treasury stock, the consideration received is recognized as an increasein equity.

(11) Revenue
1) Revenue recognition policies
The Group recognizes revenue from contracts with customers based on the following five-step approach. When determining
whether a performance obligation is satisfied by a principal or an agent and when determining the timing at which the Groupsatisfies the performance obligation, the Group makes judgments that have a significant impact on the amounts recognized in
the consolidated financial statements.
Step 1: Identifying the contracts with customers
Step 2: Identifying the performance obligations in the contracts
Step 3: Determining the transaction price
Step 4: Allocating the transaction price to the performance obligations in the contracts
Step 5: Recognizing revenue when (or as) the Group satisfies the performance obligations
When a single contract consists of multiple performance obligations, the Group allocates the transaction price to the separate
performance obligations and recognizes revenue as each performance obligation is satisfied. When multiple contracts must be
combined and considered a single contract because of the economic substance of those contracts, the Group recognizes revenue
by combining those contracts.
In identifying a performance obligation, the Group reviews whether it is a principal or an agent, and if the nature of the Group’s
promise with the customer is a performance obligation to provide the identified goods or services itself. The Group recognizes
revenue at the total amount of consideration received from the customer as a principal. On the other hand, if the performanceobligation is to arrange for the identified goods or services to be provided by another party, the Group recognizes revenue at the
net amount of the commission, and other contract-related costs as an agent.

- 18 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
In reviewing to identify whether a principal or an agent, the Group makes a comprehensive judgement based on the following
indicators.
- Whether the Group is primarily responsible for fulfilling the contract.
- Whether the Group has the inventory risk both when goods are shipped and when goods are returned before and after thecustomer places an order for the goods.
- Whether the Group has discretion in establishing the price for the goods or services of the other party.
The Group measures revenue based on the consideration promised under contracts with customers, there is no significant
variable consideration.
Consideration for transactions does not include a significant financing component, because payment typically occurs within
one year after performance obligations are fulfilled.
2)Timing of revenue recognition
The Group mainly sells goods such as Information and Communication Technology (ICT) and communications equipment,
security devices, mobile communication terminals, grain, meat products and seafoods, petroleum products, and aerospace- andship-related products in the four segments of Electronics and Devices, Foods, Meat and Grain, Steel, Materials and Plant, andMotor Vehicles and Aerospace. It recognizes revenue at the time when performance obligations are generally delivered
because customers obtain control of the goods and the performance obligations are satisfied at the time of delivery.
With respect to service transactions such as maintenance and operations of ICT and communications systems, which occur
mainly in the Electronics and Devices segment, the Group recognizes revenue over a period of time for each individual contractin accordance with the satisfaction of the performance obligations of the contract.

(12) Finance income and finance costs
Finance income comprises interest income, dividend income, gain on sale of financial instruments and gain arising fromchanges in fair value of financial instruments. Interest income is recognized at the time of receipt by using the effective interest
method. Dividend income is recognized on the date when the Consolidated Group’s right to receive payment is established.
Finance costs comprise interest expenses, loss on sale of financial instruments and loss arising from changes in the fair value offinancial instruments.

(13) Employee benefits
1) Post-retirement benefits(ⅰ) Defined benefit plans
Defined benefit plans are retirement benefit plans other than defined contribution plans. Defined benefit obligations arecalculated separately for each plan by estimating the future amounts of benefits that employees will earn in return for theirservices provided in the current and prior periods, and discounting such amounts in order to determine the present value.
The fair value of any plan assets is deducted from the present value of the defined benefit obligations. The discount rate isdetermined by reference to the market yields on highly rated corporate bonds at the fiscal year-end that have maturity
terms that are approximately the same as those of the Consolidated Group’s defined benefit obligations and use the same
currencies as those used for future benefits payments.
When the retirement benefit plans are amended, the change in defined benefit obligations related to past service by
employees is immediately recognized in profit or loss.
The Consolidated Group recognizes the changes in the net defined benefit liability (asset) due to remeasurements in othercomprehensive income and immediately reclassifies them to retained earnings.
(ⅱ) Defined contribution plans
Defined contribution plans are retirement benefit plans under which an employer pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay further contributions. The obligations already paid or to be
paid as contributions under the defined contribution plans are recognized as expenses in the period in which the employees
render the related services.
2) Other long-term employee benefits
The Consolidated Group recognizes obligations for long-term employee benefits other than post-employment benefits as aliability by estimating the amounts as of the reporting date that will be paid to the employees in return for their services
without discounting that amounts unless it is material.
3) Short-term employee benefits
The Consolidated Group recognizes short-term employee benefits as a liability and an expense by estimating the amounts thatwill be paid to the employees in return for their services without discounting those amounts. The Consolidated Group
recognizes bonuses to be paid pursuant to the bonus system as a liability when it has present legal or constructive obligations to
pay as a result of past employee service, and when the amounts of the obligations can be estimated reliably.

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KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(14) Income taxes
Income tax expenses comprises current tax expense and deferred tax expense. The Consolidated Group recognizes them in
profit or loss, except when they arise from items that are recognized in other comprehensive income or directly equity, andfrom business combinations.
Current tax expense is measured by the expected taxes receivable from or taxes payable to tax authorities, and the tax rates or
tax laws that are used to calculate the tax amount are those that have been enacted or substantially enacted by the end of the
fiscal year.
The Consolidated Group recognizes deferred tax assets and deferred tax liabilities for temporary differences between the
carrying amount of an asset and liability in the statements of financial position and its tax base, the unused tax losses carriedforward and unused tax credits carried forward. The amounts of deferred tax assets and deferred tax liabilities are calculated byapplying the expected tax rate or tax law applicable as of the period in which assets are realized or liabilities are settled inaccordance with a statutory tax rate or a substantially enacted statutory tax rate and the tax law as of the fiscal year-end. The
Consolidated Group does not recognize deferred tax assets and deferred tax liabilities in the following cases:
・When taxable temporary differences arise from the initial recognition of goodwill;
・When they arise from the initial recognition of an asset or a liability in a transaction which is not a business combination;and on the transaction date, affects neither accounting profit nor taxable profit (tax loss); or,・With respect to taxable temporary differences associated with investments in subsidiaries and associates, when theConsolidated Group is able to control the timing of the reversal of the temporary differences; and it is probable that thetemporary differences will not reverse in the foreseeable future.

Deferred tax assets and deferred tax liabilities are offset only when the Consolidated Group has a legally enforceable right tooffset the current tax assets against current tax liabilities, and such deferred tax assets and liabilities relate to income taxes
levied on the same taxation entity. However, even in the case of different taxable entities, the Consolidated Group can offset if
the tax taxable entities intend either to settle current tax liabilities and assets on a net bases, or to realize the assets and settle theliabilities simultaneously. Deferred tax assets are recognized for deductible temporary differences, the unused tax losses carriedforward and unused tax credits carried forward to the extent that it is probable that they can be used against future taxable
profit. The carrying amounts of deferred tax assets are reassessed at each fiscal year-end, and such carrying amount will be
reduced to the extent it is no longer probable that related tax benefits from such assets will be realized. Unrecognized deferred
tax assets are also reassessed at the end of each reporting period and are recognized to the extent that it is probable that futuretaxable profit will be available to recover the deferred tax assets.
The Company and its wholly owned domestic subsidiaries apply the Group Tax Sharing System, by which the Company andits wholly owned domestic subsidiaries are allowed to file a tax return and pay the corporation tax as a group.

(15) Leases
At inception of a contract, the Consolidated Group assesses whether the contract is, or contains, a lease. A contract is, or
contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange forconsideration. For a contract that is, or contains, a lease, the Consolidated Group recognizes the lease liability and the right-ofuse asset.
Lease liability is measured at the present value of discounted unpaid lease payments, using the interest rate implicit in the leaseor the Consolidated Group’s incremental borrowing rate, at the commencement date of the lease contract. After thecommencement date, the lease liability is measured by increasing or reducing the carrying amount to reflect interest rate andlease payments made. In addition, if there is a revision to the lease term or a change in the assessment of an option, leaseliability is remeasured to be reflected in the carrying amount. The lease term is determined by taking into consideration an
option to terminate the lease and an option to extend the lease term during the non-cancellable period of the lease.
A right-of-use asset is measured at the acquisition cost that adjusts the initial measurement amount of lease liability on thecommencement date of the lease contract mainly for initial direct costs and expenses for restoration to the condition requiredby the terms and conditions of the lease, and it is depreciated by the straight-line method over the shorter of the estimateduseful life and the lease term.
For short-term leases with a lease term of 12 months or less, the Consolidated Group does not recognize lease liability and aright-of-use asset by applying recognition exemption, and recognizes them as expenses on a straight-line basis over the leaseterm.

- 20 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
When the Consolidated Group is the lessor, it classifies each of its leases as either an operating lease or a finance lease, andaccounts as follows:
1) Finance lease
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an underlying asset. At
the commencement date of the lease, the Consolidated Group recognizes assets held under a financial lease in its consolidated
statement of financial position and presents them as a receivable at an amount equal to net investment in the lease.
2) Operating lease
An operating lease is a lease other than a finance lease. The Consolidated Group presents the assets subject to the operatinglease in its consolidated statement of financial position and recognizes lease payments from operating leases as income oneither a straight-line basis or another systematic basis.

(16) Share-based payments
The Consolidated Group introduces a performance-linked stock compensation plan as an incentive plan for its Directors andExecutive Officers. Grants under the equity-settled share-based payment plan are measured at the fair value on the date of
grant, and are recognized as an expense from the date of grant through the vesting period and recognize the same amount as anincrease in capital surplus.

(17) Put options granted to non-controlling interests
For written put options on the shares of subsidiaries, which the Consolidated Group granted to the owners of non-controllinginterests, the present value of the exercised amounts is, initially recognized as other financial liabilities, and the same amount isdeducted from capital surplus. After the initial recognition, they are measured at amortized cost based on the effective interest
method, and the amount of subsequent changes is recognized as capital surplus.

(18) Government grants
Government grants are recognized when there is reasonable assurance that the Consolidated Group will comply with conditionsof the grant and receive the grants. The government grants are measured at fair value. The amount of grants related to an asset
is deducted from acquisition cost of the asset. The amount of grants related to revenue is recognized in profit or loss bydeducting the amount of grants from related expenses.

4. Standards and Interpretations issued but not yet adopted
The newly issued or amended standards and interpretations, which were publicly announced prior to the date of the authorization
for issuance of the consolidated financial statements is presented as follows, and the Consolidated group has not applied this.
However, there are no material effects on the financial statements.
Standards
IAS 12 Income Taxes

When to apply forcibly
January 1, 2023

The consolidated
group applies
For the fiscal year
ending March 31,
2024

Overview of newly issued or amended
Clarification of the accounting methods which isdeferred tax assets and deferred tax liabilities
from a single transaction

5. Business Combinations
No significant business combinations took place in the current fiscal year (from April 1, 2022 to March 31, 2023) and the previous
fiscal year (from April 1, 2021 to March 31, 2022).

- 21 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
6. Segment Information(1) Overview of Reportable Segments
The reportable segments of the Consolidated Group are components of the Consolidated Group for which discrete financial
information is available and are reviewed by the Board of Directors of the Company normally and regularly assesses its
business performance and examines the allocation of management resources.
The Consolidated Group offers a broad array of merchandise and services, using expertise in each business field and trading
function from Japan and its international network. Trading functions include commercial trade, information gathering, market
development, business development, risk management and logistics.
The Consolidated Group therefore consists of merchandise and service segments based on its business units: “Electronics andDevices”, “Foods, Meat and Grain”, “Steel, Materials and Plant”, and “Motor Vehicles and Aerospace”.
The principal merchandise and services handled by each segment are presented as follows:(Electronics and Devices)
The Electronics and Devices segment provides a wide range of products including electronic parts and components,
semiconductor and LCD manufacturing equipment, materials and indirect materials related to electronics, coupled with
development and proposal services. This segment also deals with mobile communications terminals, mobile internet systems,
and information and telecommunication equipment and security equipment and services.
(Foods, Meat and Grain)
The Foods, Meat and Grain segment integrates the handling of a broad array of food and foodstuffs, with operations ranging
from sourcing raw materials reliably to providing food and foodstuffs, including high value-added products. Merchandise in thissegment includes cooked foods, processed fruits and vegetables, processed agricultural products, plant based meats, alcoholic
beverages, beverage ingredients, animal and fishery products, wheat, rice, soybeans, feedstuff ingredients and pet foods.
(Steel, Materials and Plant)
The Steel, Materials and Plant segment operates the domestic and international trade of general steel products including steel
plates, bars and wire rods, pipes, and stainless products, carries out overseas projects such as plant and infrastructuredevelopment, and sells machine tools and industrial machinery. Additionally, this segment operates the domestic andinternational trade of petroleum products, LPG, functional chemicals and food products, pharmaceuticals and pharmaceuticalintermediates, and other products. It also operates businesses related to environmental and emissions rights.
(Motor Vehicles and Aerospace)
The Motor Vehicles and Aerospace segment primarily operates international trade of aircrafts, helicopters, satellite- andaerospace-related products, defense-related products, automobiles, motorcycles, industrial vehicles and related parts, etc., andalso provides products and service with added value based on demand or use.

(2) Information on reportable segments
The accounting methods for the reportable operating segments are consistent with those stated in Note 3. Significant Accounting
Policies. Inter-segment revenue and transfers are based on the transaction prices to external customers.

- 22 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(JPY)
Electronics &Devices

Reportable segment
Foods,
Steel,
Motor
Meat &
Materials & Vehicles &
Grain
Plant
Aerospace

Total

Others(Note 1)

Adjustment(Note 2)

Consolidated

Revenue
External
Inter-segment282,513559

340,4482

193,393
97

81,344
14

897,700
673

13,707
236

－
(910)

911,408

Total revenue
Operating profit (loss)

283,072
20,331

340,450
4,063

193,491
12,33981,3591,485

898,374
38,21913,944
662

(910)
13

911,408
38,896

8,776

2,192

6,694

803

18,467219(111)

18,575

7,221

2,060

2,939

1,235

13,456340(17)

13,778

(506)

(9)

(296)

－

(812)

290

－

(521)

232,145

171,901

161,977

62,138628,163

12,577

36,847

677,588

4,070

2,063

10,358－16,4913,459(3)

19,947

1,872

508

907

1,023

4,311

52

1,970

6,335

Segment profit (loss)
Other profit or loss:
Depreciation and amortization
Share of profit (loss) of investments
accounted for using the equity method
Segment assets
Other assets:
Investments accounted for using theequity method
Capital expenditures (Note 3)

－

(USD)
Electronics &Devices
Revenue
External
Inter-segment

Reportable segment
Foods,
Steel,
Motor
Meat &
Materials & Vehicles &
Grain
Plant
Aerospace

Total

Others(Note 1)

Adjustment(Note 2)

Consolidated

2,115,733
4,187

2,549,602
18

1,448,317
730

609,188108

6,722,841
5,043

102,654
1,774－(6,817)

6,825,495

Total revenue

2,119,920

2,549,620

1,449,047

609,296

6,727,884

104,428(6,817)

6,825,495

Operating profit (loss)
Segment profit (loss)
Other profit or loss:
Depreciation and amortization
Share of profit (loss) of investments
accounted for using the equity method
Segment assets
Other assets:
Investments accounted for using theequity method
Capital expenditures (Note 3)

152,259
65,72930,434
16,421

92,41050,136

11,124
6,019

286,226
138,305

4,962
1,642

104
(833)

291,293
139,11454,085

15,42922,011

9,251

100,776

2,547

(133)

103,190(3,793)(69)(2,220)－(6,082)

2,174－(3,908)

1,738,527

1,287,364

1,213,045

465,351

4,704,288

94,196

275,947

5,074,431

30,483

15,451

77,574－

123,507

25,907(29)

149,385

14,023

3,807

6,794

7,668

32,292393

14,76047,445－(Notes) 1. The “Others” column is an operating segment that is not included in the reportable segments and includes the logistics andinsurance service business and the geographic improvement business.
2. Adjustments are presented as follows:(1) Adjustment for operating profit (loss) of ¥13 million ($104 thousand) includes inter-segment elimination of ¥13
million ($104 thousand).
(2) Adjustment for segment profit (loss) of ¥(111) million ($(833) thousand) includes inter-segment elimination of ¥(1)million ($(9) thousand) and corporate costs of ¥(110) million ($(824) thousand) that are not allocated to any reportablesegment. The corporate costs consist mainly of difference between deferred income tax that are arising in the
Company's and deferred income tax that are allocated to any reportable segment by calculation.
(3) Adjustment for segment assets of ¥36,847 million ($275,947 thousand) includes inter-segment elimination of ¥(8,982)
million ($(67,272) thousand) and corporate assets of ¥45,829 million ($343,219 thousand) that are not allocated to any
reportable segment. The corporate assets consist mainly of cash and bank deposits associated with financing activities
and assets such as investment securities.
(4) Adjustment for depreciation and amortization of ¥(17) million ($(133) thousand) includes inter-segment elimination of¥(17) million ($(133) thousand).
(5) Adjustment for investments accounted for using the equity method of ¥(3) million ($(29) thousand) includes intersegment elimination of ¥(3) million ($(29) thousand).
(6) Adjustment for capital expenditures of ¥1,970 million ($14,760 thousand) includes inter-segment elimination of ¥(12)
million ($(96) thousand) and corporate assets of ¥1,983 million ($14,856 thousand) that are not allocated to any
reportable segment. The corporate assets consist mainly of buildings and structures for head office relocation.
3. Capital expenditures do not include right-of-use assets.

- 23 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(JPY)
Electronics &Devices

Reportable segment
Foods,
Steel,
Motor
Meat &
Materials & Vehicles &
Grain
Plant
Aerospace

Total

Others(Note 1)

Adjustment(Note 2)

Consolidated

Revenue
External
Inter-segment

255,463501

285,284
1

147,99335

65,827
6

754,567544

13,395
229

－
(773)

767,963

Total revenue
Operating profit (loss)

255,964
19,064285,285
3,541

148,028
4,052

65,833
1,663

755,11228,321

13,624
1,009

(773)
16

767,963
29,347

7,944

2,519

3,259

1,457

15,180465

340

15,986

6,700

1,578

2,558

1,040

11,879384(20)

12,242

(28)

75

1,154

44

1,246

204

－

1,451

214,649

151,945

156,952

54,186

577,734

13,39443,327

634,456

369

1,872

9,625

－

11,8683,256(2)

15,121

1,739

887

1,120

347

4,096

99

641

4,837

Segment profit (loss)
Other profit or loss:
Depreciation and amortization
Share of profit (loss) of investments
accounted for using the equity method
Segment assets
Other assets:
Investments accounted for using theequity method
Capital expenditures (Note 3)－(Notes) 1. The “Others” column is an operating segment that is not included in the reportable segments and includes the logistics andinsurance service business and the geographic improvement business.
2. Adjustments are presented as follows:(1) Adjustment for operating profit (loss) of ¥16 million includes inter-segment elimination of ¥16 million.
(2) Adjustment for segment profit (loss) of ¥340 million includes inter-segment elimination of ¥4 million and corporate
costs of ¥336 million that are not allocated to any reportable segment. The corporate costs consist mainly of difference
between deferred income tax that are arising in the Company's and deferred income tax that are allocated to any
reportable segment by calculation.
(3) Adjustment for segment assets of ¥43,327 million includes inter-segment elimination of ¥(9,413) million and corporate
assets of ¥52,740 million that are not allocated to any reportable segment. The corporate assets consist mainly of cash
and bank deposits associated with financing activities and assets such as investment securities.
(4) Adjustment for depreciation and amortization of ¥(20) million includes inter-segment elimination of ¥(20) million.
(5) Adjustment for investments accounted for using the equity method of ¥(2) million includes inter-segment eliminationof ¥(2) million.
(6) Adjustment for capital expenditures of ¥641 million includes inter-segment elimination of ¥(94) million and corporate
assets of ¥735 million that are not allocated to any reportable segment. The corporate assets consist mainly of leaseequipment for information systems of the subsidiary.
3. Capital expenditures do not include right-of-use assets.

(3) Information on products and services
The information on products and services is disclosed in Note 19. Revenue.

- 24 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(4) Geographic information
1) External revenue
JPY
2023

USD
2022

2023

Japan
Asia

728,161
77,440629,116
66,946

5,453,165
579,951

North America
Europe74,20820,78547,225
16,905555,747
155,665

Others10,811

7,769

80,966

911,408

767,963

6,825,495

Total

Revenue is classified by country or region based on the locations of customers.
2) Non-current assets (excluding financial assets and deferred tax assets)
JPY
2023

USD
2022

2023

Japan
Asia

73,212
5,038

67,234
1,703

548,282
37,732

North America

12,505

9,235

93,654

EuropeOthers

2,508
49

2,905
83

18,785373

93,314

81,162

698,826

Total(5) Information on major customers
There is no customer whose transaction amount is equal to or more than 10% of the Consolidated Group’s revenue during the
fiscal years ended March 31, 2023 and March 31, 2022.

- 25 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
7. Trade and Other Receivables
The breakdown of trade and other receivables is presented as follows:
JPY
2023

USD
2022

2023

Notes and accounts receivable
Loans receivable

235,153
4,937

226,665
2,919

1,761,055
36,977Other
Less: loss allowance

9,766(2,360)9,937(2,260)73,138(17,677)

247,496237,261

1,853,492

245,890
1,606

236,453807

1,841,461
12,031

247,496237,261

1,853,492

Total
Current assets
Non-current assets
Total

Information on changes in loss allowance is provided in Note 30. Financial Instruments: (3) Credit risk management.

8. Inventories
The breakdown of inventories is presented as follows:
JPY
2023
Merchandise and finished goods

USD
2022

2023

150,588

116,550

1,127,752

Raw materials and supplies

3,580

3,110

26,814Work in progress

1,902

1,357

14,247156,071

121,018

1,168,812

Total

The amount of inventories recognized as expense during the fiscal years ended March 31, 2023 and March 31, 2022 were ¥759,955
million ($5,691,275 thousand) and ¥637,585 million, respectively.
The amount of any write-down of inventories recognized as expense during the fiscal year ended March 31, 2023 were ¥1,001
million ($7,498 thousand) and the reversals of any write-down of inventories recognized as gain during the fiscal year ended March
31, 2022 were ¥335 million.

- 26 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
9. Property, Plant and Equipment(1) Changes in property, plant and equipment
Changes in costs, accumulated depreciation and accumulated impairment losses of property, plant and equipment are presented
as follows:[Costs](JPY)
Machinery,
vehicles,Buildings andtools,
structures
furniture andfixtures
As of April 1, 2021
15,46728,176
Acquisitions
655
1,553
Acquisitions through business combinations
384
55
Transfers from construction in progress
1,323
541
Disposals(567)(1,157)
Exchange differences
247
969
Other
38
17
As of March 31, 2022
17,54930,157
Acquisitions
1,751
2,429
Acquisitions through business combinations
283
204
Transfers from construction in progress
349
782
Disposals(1,866)(5,043)
Exchange differences
256
836
Other
372
11
As of March 31, 2023
18,696
29,378

Land
8,886
25
565
－
(3,060)
66
16
6,501
－
388
－
(504)
62
－
6,447

Construction Right-of-use
in progress
assets
2,232
1,081
－
(1,865)
(163)
110
(66)
1,329
563
－
(1,132)
(3)
93
(1)
849

27,312
7,877
327－(5,679)220(170)
29,887
12,882493－(8,317)138(254)
34,829Total
82,076
11,193
1,332－(10,627)
1,614
(163)
85,425
17,627
1,370－(15,735)
1,386
127
90,201[Accumulated depreciation and accumulated impairment losses](JPY)

As of April 1, 2021
Depreciation
Impairment losses
Disposals
Exchange differences
Other
As of March 31, 2022
Depreciation
Impairment losses
Disposals
Exchange differences
Other
As of March 31, 2023

Machinery,
vehicles,Buildings andtools,
structures
furniture andfixtures(8,268)(19,978)(856)(1,806)
(5)
－
469
858
(46)
(564)
7
31
(8,694)(21,464)(954)(1,979)
(35)
(297)
1,618
3,806
(49)
(468)
37
32
(8,079)(20,371)- 27 -

Land(1,645)
－
(13)
1,596
(1)
0
(63)
－
－
－
－
－
(63)

Construction Right-of-use
in progress
assets
－
－
－
－
－
－
－
－
－
－
－
－
－

(9,937)(8,295)
－
4,955
(89)
251
(13,114)(9,055)
(86)
7,488
(53)
322
(14,499)

Total(39,829)(10,959)
(18)
7,881
(701)
290
(43,337)(11,988)(419)
12,912(571)
391(43,013)

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
[Carrying amount](JPY)

As of March 31, 2022
As of March 31, 2023

Machinery,
vehicles,Buildings andtools,
structures
furniture andfixtures
8,854
8,692
10,617

9,006

Construction Right-of-use
in progress
assets

Land

Total

6,437

1,329

16,772

42,087

6,384

849

20,33047,188[Costs](USD)

As of March 31, 2022

Machinery,
vehicles,Buildings andtools,
structures
furniture andfixtures131,427
225,847

Total

48,686

9,957

223,827

639,745

－
2,910

4,221

96,473132,008－(8,479)
(27)

3,698

10,261－(3,779)－(62,290)－(117,841)

6,262

470

699

1,036

10,38485－(9)(1,909)955

220,011

48,287

6,363

260,836

675,513

Acquisitions

13,117

18,197

Acquisitions through business combinations
Transfers from construction in progress
Disposals

2,126
2,618
(13,977)

1,528
5,861
(37,768)

Exchange differences

1,917

Other

2,788
140,015

As of March 31, 2023

Construction Right-of-use
in progress
assetsLand[Accumulated depreciation and accumulated impairment losses](USD)

As of March 31, 2022

Machinery,
vehicles,Buildings andtools,
structures
furniture andfixtures(65,116)(160,746)

Construction Right-of-use
in progress
assets

Land

Total

(473)

－

(98,217)(324,552)

Depreciation
Impairment losses
Disposals
Exchange differences
Other(7,145)(267)
12,119(374)
279(14,826)(2,227)28,503(3,505)
241

－
－
－
－

－
－
－
－

－

－

(67,813)(647)
56,082(403)
2,415(89,785)(3,141)
96,704(4,282)
2,934

As of March 31, 2023

(60,504)(152,562)

(474)

－

(108,584)(322,124)[Carrying amount](USD)

As of March 31, 2023

Machinery,
vehicles,Buildings andtools,
structures
furniture andfixtures79,51267,449Land

47,813

Construction Right-of-use
in progress
assets6,363

152,253

Total

353,390

The amounts of expenditures relating to property, plant and equipment under construction are presented in the table above as“Construction in progress”.
Depreciation for property, plant and equipment are included in “Cost of sales” and “Selling, general and administrative
expenses” in the consolidated statement of income.

- 28 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(2) Right-of-use assets
The breakdown of underlying assets is presented as follows:
JPY
2023
Right-of-use assets for which buildings and structures are theunderlying asset
Right-of-use assets for which machinery, vehicles, tools,
furniture and fixtures are the underlying asset
Other
Total

USD
2022

2023

18,73415,032

140,303

1,150

1,253

8,614

445

487

3,336

20,33016,772

152,253

10. Goodwill and Intangible Assets(1) Goodwill
Costs, accumulated impairment losses and carrying amount.
Changes in costs, accumulated impairment losses and carrying amount of goodwill are presented as follows:[Costs]
JPY
2023

2022

Balance at the beginning of the year

11,949Acquisitions through business combinations
Exchange differences
Other
Balance at the end of the year

USD
2023
11,64689,492

3,781

96

28,316

152

1,145

－

237
(31)

15,883

11,949118,954－[Accumulated impairment losses]
JPY
2023
Balance at the beginning of the year
Impairment losses
Other
Balance at the end of the year

USD
2022

2023

(1,325)(1,349)(9,925)

(77)

(5)

(581)

－

29

－

(1,402)(1,325)(10,505)[Carrying amount]
JPY
2023
Carrying amount2022
14,481- 29 -

USD
2023
10,624

108,448

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(2) Intangible assets
1) Changes in intangible assets
Changes in costs, accumulated amortization and accumulated impairment losses of intangible assets are presented as follows:[Costs](JPY)
Carrier shop
operating rights

Right-of-use
assets

11,143

17,14071

7,677

36,034

Acquisitions

575

－

20

209

805

Acquisitions through businesscombinations

15

－

－

7

22

(819)

－

(9)

(2)

(832)

Exchange differences

64

－

－

358

423

Other

238

－

4

81

324

11,217

17,14087

8,332

36,777

Acquisitions

889

－

3

5

898

Acquisitions through businesscombinations

16

－

－

4,143

4,160

(298)

－

－

(9)

(308)

Software
As of April 1, 2021

Disposals

As of March 31, 2022

Disposals
Exchange differences
Other
As of March 31, 2023

Other

Total

52

－

－

242

295

(221)

－

－

6

(215)

11,65617,14090

12,72041,608- 30 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
[Accumulated amortization and accumulated impairment losses](JPY)
Carrier shop
operating rights

Software
As of April 1, 2021

Right-of-use
assets

Other

Total

(7,975)

(234)

(16)

(2,881)(11,107)

Amortization

(682)

－

(10)

(590)

(1,283)

Disposals

799

－

2

0

803

Exchange differences

(50)

－

(0)

(221)

(271)

1

－

(6)

(0)

(4)

(7,907)

(234)

(29)

(3,692)(11,864)

(886)

－

(13)

(889)

(1,790)(0)

Other
As of March 31, 2022
Amortization
Impairment loss

－

－

－

(0)

Disposals

281

－

－

2

284

Exchange differences

(46)

－

－

(214)

(261)

Other

78

－

－

0

78

(8,479)

(234)

(43)

(4,795)(13,553)

As of March 31, 2023
[Carrying amount](JPY)
Software

Carrier shop
operating rights

Right-of-use
assets

Other

Total

As of March 31, 2022

3,310

16,90657

4,639

24,912As of March 31, 2023

3,176

16,90646

7,925

28,055- 31 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
[Costs](USD)
Software

Carrier shop
operating rights

Right-of-use
assets

Other

Total

As of March 31, 2022

84,007

128,367652

62,399275,425

Acquisitions

6,660

－

25

45

6,730

125

－

－

31,032

31,157(2,239)

－

－

(74)

(2,313)

395

－

－

1,819

2,214

Other

(1,657)－－45(1,612)As of March 31, 2023

87,292

128,367677

95,266311,601

Acquisitions through businesscombinations
Disposals
Exchange differences[Accumulated amortization and accumulated impairment losses](USD)
Carrier shop
operating rights

SoftwareRight-of-use
assets

Other

Total

As of March 31, 2022

(59,217)(1,757)(224)(27,657)(88,855)

Amortization(6,641)－(101)(6,664)(13,405)

Impairment loss

－

－

－

(0)

(0)

Disposals

2,111

－

－

17

2,128

Exchange differences

(347)

－

－

(1,610)(1,957)

Other

591

－

－

0

591

(63,503)(1,757)(325)(35,913)(101,498)

As of March 31, 2023
[Carrying amount](USD)
Software
As of March 31, 2023

Carrier shop
operating rights

Right-of-use
assets126,610352

23,789Other
59,352

Total
210,103

There are no material internally-generated intangible assets as of March 31, 2023 and March 31, 2022.
Amortization expenses are included in “Cost of sales” and “Selling, general and administrative expenses” in the consolidated
statement of income.
2) Right-of-use assets
The breakdown of underlying assets is presented as follows:
JPY
2023

USD
2022

2023

Right-of-use assets for which software is the underlying assets

46

57

352

Total

46

57

352

- 32 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(3) Impairment test of goodwill and intangible assets with indefinite useful lives
The Consolidated Group’s cash-generating units to which goodwill and intangible assets with indefinite useful lives has been
allocated are tested for impairment annually, and whenever there is an indication that such assets may be impaired. The carrying
amount of significant goodwill and intangible assets with indefinite useful lives allocated to the Consolidated Group’s cashgenerating units are as follows:
JPY
USD
2023

2022

2023

Goodwill
Electronics & Devices segment
Electronics business of the domestic subsidiaries
Electronics business of the foreign subsidiaries

5,588
2,171

Mobile business of the domestic subsidiaries
Steel, Materials & Plant segment
Steel pipe business of the foreign subsidiaries

4,743

41,853
16,265

2,824

－
2,211

2,703

2,478

20,25016,906

16,906

126,610

21,151

Carrier shop operating rights
Electronics & Devices segment
Mobile business of the domestic subsidiaries

The impairment test of goodwill and intangible assets with indefinite useful lives is conducted by evaluating the recoverable
amount of the cash-generating units. The recoverable amounts of the Consolidated Group’s cash-generating units to whichsignificant goodwill and intangible assets with indefinite useful lives have been allocated were calculated based on its value in
use forecast for up to five years and the growth rate that were approved by management. The cash-generating unit is the smallest
identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets orgroups of assets, based on the nature and geographical location of the business.
In addition, the main assumptions used to determine the value in use was the estimation of gross profits, growth rates anddiscount rates. The growth rates are determined by considering the forecasts of the nominal GDP growth rates of the countries
in which such Consolidated Group’s cash-generating units are located and the average long-term growth rates of the markets orcountries to which the Consolidated Group’s cash-generating units operate. The cash-generating unit is the smallest identifiablegroup of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets,based on the nature and geographical location of the business. The growth rate after the fifth year used in the impairment test for
the electronics business and the mobile business of the domestic and foreign subsidiaries are 0% and for the steel pipe businessof the foreign subsidiaries is 2.0% as of the fiscal year ended March 31, 2023. The growth rate after the fifth year used in the
impairment test is 0% as of the previous fiscal year ended March 31, 2022.

- 33 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
The pre-tax discount rates which were used in calculating the value in use of the Consolidated Group’s cash-generating units towhich significant goodwill and carrier shop operating rights have been allocated are as follows:
2023

2022

Goodwill
Electronics & Devices segment
Electronics business of the domestic subsidiaries

6.4％

6.9％

Electronics business of the foreign subsidiaries

12.9％

－％

Mobile business of the domestic subsidiaries

6.6％

6.9％

15.7％

13.8％

6.6％

6.9％

Steel, Materials & Plant segment
Steel pipe business of the foreign subsidiaries
Carrier shop operating rights
Electronics & Devices segment
Mobile business of the domestic subsidiaries

It is unlikely to be impaired significantly even if major assumptions used for the impairment test changed within a reasonable
and predictable scope.
The contents of significant goodwill and intangible assets with indefinite useful lives are presented as follows:
Mobile business of the domestic subsidiaries
Goodwill and the carrier shop operating rights in the mobile business of the domestic subsidiaries were recognized uponacquisition of the mobile business by Kanematsu Communications Ltd., a consolidated subsidiary of the Company. For the
fiscal year ended March 31,2023, goodwill was recognized at ¥2,824 million ($21,151 thousand) and carrier shop operatingrights of ¥16,906 million ($126,610 thousand) were recognized. The purpose of the acquisition was to expand market share, andthe acquisition increased the size of the mobile business of the domestic subsidiaries on the consolidated financial statements. In
addition, the gross profit of the mobile business of domestic subsidiaries may fluctuate due to the uncertainty of future earnings
caused by changes in the external environment, such as amendments to the Telecommunications Business Act and cell phone
rate plan changes by mobile carriers. The carrier shop operating rights are rights to earn revenue by operating mobile
communications device distribution shops for specific carriers. The rights are identified as indefinite-lived intangible assets
because the intangible assets are considered to continue to exist as long as the business continues.
The value in use that used in the impairment test for goodwill and carrier shop operating rights is assessed using the present
value of cash flows based on five-year forecast and growth rates that reflect the most recent business environment.
Card printer business
Goodwill in the card printer business, one of the key business of the Electronics business of the domestic subsidiaries, wasrecognized as upon acquisition of G-Printec, Inc. For the fiscal year ended March 31,2023, goodwill was recognized at ¥2,485
million ($18,615 thousand). In addition, the gross profit of the card printer business of domestic subsidiaries may fluctuate dueto the uncertainty of future earnings since card printer business faces sales competition with overseas and domestic competitors,
and the overseas market, which is the main market, is exposed to changes in market conditions and trends in each country.
The value in use that used in the impairment test for goodwill is assessed using the present value of cash flows based on fiveyear forecast and growth rates that reflect the most recent business environment.
Steel pipe business of the foreign subsidiaries
Goodwill in the steel pipe business was recognized upon the acquisition of Benoit Premium Threading, LLC located in the
United States. For the fiscal year ended March 31, 2023, goodwill of ¥2,703 million ($20,250 thousand) was recognized. In
addition, the gross profit of the steel pipe business may fluctuate due to the uncertainty of future earnings since steel pipebusiness is greatly affected by international crude oil prices and trading volumes, and the volatility of long-term earnings
forecasts is relatively high.
The value in use used in the impairment test for goodwill is assessed using the present value of cash flows based on four-year
forecast and growth rates that reflect the most recent business environment.

- 34 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
11. Interests in Associates and Joint Ventures
There are no associates or joint ventures that are material to the Consolidated Group.
The aggregate amounts of interests in individually immaterial associates and joint ventures that are accounted for using the equity
method are presented as follows:[Aggregate carrying amount]
JPY
2023

USD
2022

2023

Associates

19,573

14,733

146,583

Joint ventures

374

388

2,802

[Profit or loss from continuing business]
JPY
2023
Associates
Joint ventures

USD
2022

(496)
(24)

2023
1,470
(19)

(3,721)(187)[Other comprehensive income]
JPY
2023
Associates
Joint ventures

USD
2022

2023

1,253

517

9,391

－

－

－

[Total comprehensive income]
JPY
2023

USD
2022

2023

Associates

757

1,988

5,669

Joint ventures

(24)

(19)

(187)

12. Other Investments
The breakdown of other investments is presented as follows:
JPY
2023

USD
2022

2023

Financial assets measured at fair value through profit or loss

2,774

2,382

20,777

Financial assets measured at fair value through othercomprehensive income

35,11433,614

262,968

37,88835,997283,745

Total- 35 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
13. Other Current Assets and Other Non-current Assets
The breakdown of other current assets and other non-current assets is presented as follows:
JPY
2023

USD
2022

2023

Advance payments
Prepaid expenses

16,742
6,419

21,1595,618

125,387
48,073

Other

9,324

7,949

69,831

32,48634,727

243,291

28,896
3,589

31,1903,537

216,406
26,884

Total
Current assets
Non-current assets

Total
32,48634,727
243,291(Note) "Contract assets", which was listed in the breakdown in the previous fiscal year, is presented in “Other” in the current fiscal
year, because the amount has decreased in significance. There was no balance for "Contract assets" as of the previous fiscal
year ended March 31, 2022.

14. Trade and Other Payables
The breakdown of trade and other payables is presented as follows:
JPY
2023

USD
2022

2023

Notes and accounts payable
Import bills payable

133,018
58,159135,20765,478996,170
435,557

Accounts payable - commission
Other

15,426
4

14,136－

115,53131

206,609214,822

1,547,288

206,609214,822

1,547,288－－－

206,609214,822

1,547,288

Total
Current liabilities
Non-current liabilities
Total- 36 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
15. Bonds and Borrowings, etc.
The breakdown of bonds, borrowings and lease liabilities is presented as follows:

14

111

5,009

Averageinterest rate(%)－

Short-term borrowings

140,870

1,054,972

52,662

1.32－

Current portion of long-termborrowings

21,304

159,547

16,035

0.54

－

2023
JPY
Current portion of bonds

2022
USD

JPY

Maturity date－Current portion of lease liabilities

7,685

57,556

6,674

－

－

Bonds (excluding the current portion)

14,934

111,840

14,931－－Long-term borrowings (excluding thecurrent portion)

50,770380,22154,8130.59 From April 2024 to May 2033

Lease liabilities (excluding the current
portion)12,992

97,298

10,158－ From April 2024 to April 2059

Total

248,572

1,861,545

160,285

Current liabilities

169,874

1,272,185

80,381

Non-current liabilities

78,696589,359

79,903

Total
248,572
1,861,545
160,285(Notes) 1. The “average interest rate” is presented as the weighted average interest rate against the borrowings outstanding at the endof the fiscal year.
2. There is no description of the average interest rate of lease liabilities because value of interest equivalent included in total
amount of lease payments is allocated to each consolidated fiscal year by straight-line method.
3. At the end of the current consolidated fiscal year, repayments of bonds, borrowings, and lease liabilities after thedate of consolidated financial statement is presented follows.
Within one year

Over one year and Over two years andwithin two years
within three years

Over three years
andwithin four years
JPY
USD

Over four years
andwithin five years
JPY
USD

JPY

USD

JPY

USD

JPY

USD

Corporate
bonds

14

111

4,991

37,381

－

－

4,971

37,233－Long-term
borrowings

21,304

159,547

17,316

129,679

15,667

117,336

12,93596,877Lease
liabilities

7,685

57,556

4,581

34,3092,741

20,5322,404

18,005- 37 -

Over five years
JPY

USD

－

4,970

37,226

4,631

34,687

219

1,642

880

6,592

2,384

17,860KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Summary of the issuance terms of corporate Bonds is presented follows.
IssuerKanematsu
Corporation

Bond Name
Unsecured Straight
Bonds No 3(5-year bonds)

Issue date

2023
JPY

2022
USD

JPY

Coupon rate(%)

Collateral

Maturity
date

0.42

None

December
14, 2022

4,995

December
14, 2017－－(4,995)

Kanematsu
Corporation

Unsecured Straight
Bonds No 4(7-year bonds)

December
14, 2017

4,991

37,381

4,986

0.57

None

December13, 2024

Kanematsu
Corporation

Unsecured Straight
Bonds No 5(5-year bonds)

March 3,
2022

4,971

37,233

4,964

0.42

None

March 3,
2027

4,970

37,226

4,966

0.65

None

14

111

29

Kanematsu
Corporation

Unsecured Straight
Bonds No 6
(7-year bonds)
Other

March 3,2022

(Note) The figures in the parentheses indicate the current portion.

- 38 -March 2,2029

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
16. Provisions
Changes in provisions are presented as follows:(JPY)
Asset retirement
obligations
As of April 1, 2022

Other

Total

1,992

223

2,215

Acquisitions through business combinations

50

－

50

Provisions made

457

15

473

Provisions used

(58)

(185)

(244)

Provisions reversed

(18)

－

(18)

Unwinding of discount

37

－

37

Foreign exchange translation differences

－

(0)

(0)

2,460

53

2,514

As of March 31, 2023

(USD)
Asset retirement
obligations
As of April 1, 2022

Other

Total

14,918

1,673

16,591

377

－

377

Provisions made

3,429

119

3,548

Provisions used

(439)

(1,390)(1,829)Provisions reversed

(135)

－

(135)

Unwinding of discount

279

－

279

Foreign exchange translation differences

－

(2)

(2)

18,430399

18,829Acquisitions through business combinations

As of March 31, 2023

The current and non-current portions of provisions are presented as follows:
JPY
2023
Current liabilities
Non-current liabilities
Total

USD
2022

2023

358
2,155

503
1,712

2,686
16,143

2,514

2,215

18,829Asset retirement obligations are obligations for restoring offices and shops in accordance with provisions of the property leasing
contracts. While these expenditures will be made after at least one year has passed, the amounts may be affected by the futurebusiness plan and other factors.

- 39 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
17. Other Current Liabilities and Other Non-current Liabilities
The breakdown of other current liabilities and other non-current liabilities is presented as follows:
JPY
2023

USD
2022

2023

Advances received
Contract liabilities

6,741
6,134

7,342
10,53950,48545,938

Accrued expenses
Accrued paid leave

4,399
2,370

3,321
2,115

32,94817,752

Other

10,7108,16580,21030,35531,484

227,333

Current liabilities

Total

29,19930,290218,673

Non-current liabilities

1,156

1,193

8,660

Total
30,35531,484
227,333(Note) "Accrued paid leave", which was presented in "Other" in the previous fiscal year, is listed in the breakdown in the current
fiscal year. "Unearned revenue", which was listed in the breakdown in the previous fiscal year, is presented in "Other" in thecurrent fiscal year, because the amount has decreased in significance. The balance of "Unearned revenue" was ￥95 million
as of the previous fiscal year ended March 31, 2022.

18. Equity(1) Capital management
The Consolidated Group has a policy of increasing shareholders’ equity (See Note 1) up to a certain level and strengthening its
financial base to enhance its enterprise value through building new businesses and increasing revenues while maintaining asound financial position.
The Company sets the maximum ratio of risk assets (See Note 2) and examines the appropriateness of scale of shareholders'equity in terms of it being a risk buffer to potential loss that could result from a deterioration in the companies' respective
businesses, to manage shareholders' equity.
The key indices which the Consolidated Group uses for management of shareholders' equity are as follows, and these indices
are periodically reported to and monitored by management.
・Ratio of risk assets
・Net DER(See Note 3)(Note 1) Shareholders’ equity is defined as equity attributable to owners of the Parent.
(Note 2) Ratio of risk assets is defined as a ratio of the amount of maximum potential loss to shareholders' equity. The amountof maximum potential loss is the amount of all assets and off-balance sheet transactions on the consolidated financial
statements multiplied by the original risk weight set by the Consolidated Group according to the potential risk of loss.
(Note 3) Net DER is defined as a ratio of net interest-bearing debt to shareholders’ equity, while net interest-bearing debt is thetotal amount of interest-bearing debt excluding lease liabilities (bonds and borrowings) less cash and deposits.
The figures of net DER as of March 31, 2023 and March 31, 2022 are presented as follows:
Times
2023
Net DER

1.15

2022
0.32

The Consolidated Group is subject to financial covenants including capital requirements with respect to a portion of its
borrowings from financial institutions. The Consolidated Group monitors each compliance status to maintain the level requiredby such financial covenants and has complied with such covenants for the fiscal years ended March 31, 2023 and March 31,
2022.

- 40 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(2) Number of shares authorized to be issued, issued shares and shares of treasury stock(Unit: share)
2023
Shares authorized to be issued(No-par common stock)2022
200,000,000

200,000,000

84,500,202

84,500,202－－

84,500,202

84,500,202

Issued shares(No-par common stock)
Balance at the beginning of the year
Changes during the period
Balance at the end of the year

Shares of treasury stock
1,026,028
1,054,730(No-par common stock)(Note) Shares of treasury stock in the current fiscal year includes 95,000 shares of the Company held by the associate and 667,100
shares of the Company held by the stock issuance trust for officers. Shares of treasury stock in the previous fiscal year
included 95,000 shares of the Company held by the associate and 697,300 shares of the Company held by the stock issuancetrust for officers.

(3) Surplus
1) Capital surplus
The amount of capital surplus as of March 31, 2023 decreased by ¥27,164 million ($203,432 thousand). There is no balance asof the fiscal year ended March 31, 2023.
The main reason was the effect of additional investment in shares in Kanematsu Electronics Ltd. The detail is provided in
Notes to CONSOLIDATED FINANCIAL STATEMENTS: 34. Significant Subsidiaries: (3) Transaction with non-controllinginterests.
2) Retained earnings
Retained earnings consist of legal retained earnings and other retained earnings.
The Companies Act of Japan provides that an amount equal to 10% of distribution of surplus for each fiscal year must be
appropriated as legal capital surplus or legal retained earnings until the total aggregate amount of legal capital surplus and legal
retained earnings equals 25% of share capital.
Under the Companies Act, the amounts available for distribution are calculated based on the amounts of capital surplus andretained earnings, exclusive of legal capital surplus and legal retained earnings, all of which are recorded in accordance withthe accounting principles generally accepted in Japan.

- 41 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(4) Dividends
1) Amounts of dividends paid
Resolution

Type of stock

May 24, 2022
Board of Directors Common stock
meetingNov. 4, 2022
Board of Directors Common stock
meeting

Resolution

Type of stock

May 24, 2021
Board of Directors Common stock
meeting

Source ofdividends

Total amounts ofdividends

Dividends
per share

JPY

USD

Yen

Retainedearnings

2,948

22,08035.00

Retainedearnings

3,158

23,65737.50

Source ofdividends

Total amounts ofdividends

Dividends
per share

JPY

Yen

Retained

2,527

earnings

Record date

Effective date

0.262

Mar. 31, 2022

Jun. 8, 2022

0.281

Sep. 30, 2022

Dec. 6, 2022

Record date

Effective dateMar. 31, 2021

Jun. 8, 2021

U.S. dollars

30.00

Nov. 2, 2021
Retained
Board of Directors Common stock
2,527
30.00 Sep. 30, 2021
Dec. 3, 2021
earnings
meeting(Note) The total amount of dividends resolved by the board of directors meeting on May 24, 2022, November 4, 2022, May 24, 2021
and November 2, 2021 includes ¥24 million ($183 thousand), ¥25 million ($187 thousand), ¥21 million and ¥20 million of
the dividends to the shares of the Company held by the stock issuance trust for officers.
2) Dividends with record date in the current fiscal year, and effective date in the following fiscal year
Resolution

Type of stock

Source ofdividends

Total amounts ofdividends
JPY

USD

Dividends
per share
Yen

Record date

Effective date

U.S. dollars

May 25, 2023
Retained
Board of Directors Common stock
3,158
23,65737.50
0.281 Mar. 31, 2023 Jun. 12, 2023
earnings
meeting(Note) The total amount of dividends resolved by the board of directors meeting on May 25, 2023 includes ¥25 million ($187
thousand) of the dividends to the shares of the Company held by the stock issuance trust for officers.

- 42 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
19. Revenue(1) Disaggregation of revenue
As disclosed in Note 6. Segment information, the Consolidated Group has four reportable segments: Electronics and Devices,
Foods, Meat and Grain, Steel, Materials and Plant and Motor Vehicles and Aerospace. In addition, the Consolidated Groupdisaggregates revenue in Electronics and Devices recognized from contracts with customers into three categories: ICT solutions,
Mobile and Others. Similarly, revenue in Steel, Materials and Plant is disaggregated into Energy and Others. The reconciliationsof the disaggregated revenue with the group’s sales components are as follows.
The accounting methods for the revenue are consistent with those stated in Note 3. Significant Accounting Policies.
JPY
USD
2023
Electronics & Devices
ICT solution

2022

2023

84,06769,563

629,578

107,742
90,681

107,041
78,763806,878
679,107

Foods, Meat & Grain

340,448285,2842,549,602

Steel, Materials & Plant
Energy95,707

79,687

716,749

OthersMotor Vehicles & Aerospace

97,683
81,25668,30365,720731,547
608,528

Total reportable segment

897,587754,363

6,721,989

13,707

13,395

102,654

Total revenue arising from contracts with customers

911,294

767,758

6,824,643

113

204

851

Total
911,408
767,963(Note) Revenue arising from other sources includes revenue recognized in accordance with IFRS 16 "Lease".

6,825,495

MobileOthersOthers
Revenue arising from other sources(2) Contract balances
Information on receivables from contracts with customers, contract assets and liabilities arising from contracts with customers
are as follows:
Fiscal year ended March 31, 2023
JPY

USD

2023

2023

As of April 1,
2022
Receivables from contracts with customers
Contract assets
Contract liabilities

As of March 31,2023

As of April 1,
2022

As of March 31,
2023

226,665

235,150

1,697,489

1,761,029

－

0

－

4

10,5396,134

78,93045,938

Fiscal year ended March 31, 2022
JPY
2022
As of April 1,
2021
Receivables from contracts with customers
Contract assets
Contract liabilities

As of March 31,
2022
199,116

226,665

17－
10,53910,152- 43 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Contract assets primarily relate to the Consolidated Group’s rights to receive consideration for performance obligations thathave been completed, but not yet billed for, as of the reporting date and they are reclassified as receivables when theConsolidated Group’s rights to payment becomes unconditional.
Contract liabilities are mainly consideration for maintenance and operation transactions of information and telecommunication
systems and service-type transactions with product warranties, where the performance obligation is satisfied over a certain
period of time, and are reversed and recognized as revenue in accordance with the fulfillment of the performance obligations
during the maintenance or warranty period. In addition, the Consolidated Group recognizes as a contract liability that alreadyreceived a part of consideration upon delivery of goods. Of the revenue recognized in the current and previous fiscal years,¥8,764 million ($65,635 thousand) and ¥4,305 million were included in the balance of contract liabilities as of April 1, 2022 andApril 1, 2021. There are no significant amounts of revenue recognized during the fiscal years ended March 31, 2023 and March
31, 2022 from performance obligations satisfied in the prior fiscal years. The increase of contract liabilities is included in a
reduction of other from operating activities in the Consolidated Statement of Cash Flows.

(3) Transaction price allocated to the remaining performance obligations
Transaction prices allocated to remaining performance obligations are mainly related to transactions for the maintenance andoperation of ICT & communications systems and sales of goods such as aerospace and ship-related products, and the timing of
fulfillment of these obligations is as follows. It`s not included expected transactions term within one year. There are no material
amounts not included in transaction prices in consideration arising from contracts with customers.
JPY
2023

USD
2022

2023

Within one year

4,072

7,831

30,496

Over one year and within two years

1,798

3,537

13,469Over two years and within three years
Over three years and within four years
Over four years and within five years

1,203
740
302

1,236
650
248

9,012
5,546
2,263

63

31

475

8,180

13,53561,261

Over five years
Total(4) Assets recognized from the costs of obtaining or fulfilling contracts with customers
There are no assets recognized from the costs of obtaining or fulfilling contracts with customers as of the years ended March 31,
2023 and March 31, 2022. In addition, if the amortization period of the assets that the group otherwise would have recognized is
one year or less, the group applies the practical expedient of recognizing the incremental costs of obtaining the contract as an
expense when incurred.

20. Selling, General and Administrative Expenses
The breakdown of selling, general and administrative expenses is presented as follows:
JPY
2023

USD
2022

2023

Personnel expenses

52,92648,274396,363

Depreciation and amortization

11,286

9,978

84,526

Outsourcing service charges

8,712

8,332

65,246

Other

23,38018,518175,094

96,305

85,103

721,228

Total- 44 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
21. Gain or Loss on Sale or Disposal of Property, Plant and Equipment and Intangible Assets
The breakdown of gain or loss on sale or disposal of property, plant and equipment and intangible assets is presented as follows:
JPY
2023
Gain on sale of property, plant and equipment
Gain on sale of intangible assets

USD
2022

2023

58
1

69
－

435
15

60

69

450

(9)
(0)

(6)
－

(74)
(1)

(10)

(6)

(76)

Loss on disposal of property, plant and equipment

(294)

(144)

(2,208)Loss on disposal of intangible assets

Total gain on sale of property, plant and equipment andintangible assets
Loss on sale of property, plant and equipment
Loss on sale of intangible assets
Total loss on sale of property, plant and equipment andintangible assets

(18)

(21)

(137)

Total loss on disposal of property, plant and equipment
and intangible assets

(313)

(166)

(2,345)Gain (loss) on sale or disposal of property, plant andequipment and intangible assets, net

(263)

(103)

(1,971)

22. Impairment Loss
(1) Breakdown of impairment loss by each class of assets
The breakdown of impairment losses by class of assets is presented as follows. Impairment losses for property, plant andequipment and intangible assets are included in “Impairment loss on property, plant and equipment and intangible assets”, andimpairment losses for goodwill are included in “Other expenses” in the consolidated statement of income.
JPY
2023
Property, plant and equipment
Goodwill
Intangible assets
Total

USD
2022

2023

(419)
(77)
(0)

(18)
(5)
－

(3,141)
(581)
(0)

(496)

(23)

(3,722)(2) Breakdown by reportable segment
The breakdown of impairment losses by reportable segment is presented as follows:
JPY
2023
Electronics and Devices
Steel, Materials and Plant
Total

USD
2022

2023

(196)

(5)

(1,475)

(299)

(18)

(2,247)

(496)

(23)

(3,722)For the fiscal years ended March 31, 2023 and March 31, 2022, there were no significant impairment losses.

- 45 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023

23. Exchange Differences
Exchange differences recognized in profit or loss for the fiscal years ended March 31, 2023 and March 31, 2022 were ¥3,787
million ($28,365 thousand) and ¥1,330 million, respectively and are included in “Other income” in the consolidated statement ofincome. In addition, each amount includes gains or losses arising from currency-related derivative transactions that were enteredinto for the purpose of hedging the foreign currency risk. Gains and losses arising from translating assets and liabilities
denominated in a currency other than the functional currency or from settling such items are included in profit or loss as they arise.

24. Finance Income and Finance Costs
The breakdown of finance income and finance costs is presented as follows:
JPY
2023

USD
2022

2023

Interest income
Financial assets measured at amortized cost

441

166

3,310

Total interest income

441

166

3,310

202

149

1,517

860

964

6,441

1,062

1,114

7,958

Other finance income

315

66

2,359

Total other finance income

315

66

2,359

Dividend income
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through othercomprehensive income
Total dividend income
Other finance income (Note)

1,819

1,348

13,627

Interest expenses
Financial liabilities measured at amortized cost
Derivatives

Total finance income(3,870)(15)(1,610)(80)(28,986)(115)

Total interest expenses(3,885)(1,690)(29,100)

Other finance costs(611)(1,691)(4,581)

Total other finance costs(611)(1,691)(4,581)Other finance costs (Note)

Total finance costs(4,497)(3,381)(33,681)(Note) The amounts of other finance income and other finance costs are those related to financial assets measured at fair value
through profit or loss and the details are presented in Note 30. Financial Instruments: (6) -3) - (ⅱ) Recurring fair value
measurements categorized within Level 3 of the fair value hierarchy.

- 46 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
25. Earnings Per Share Attributable to Owners of the Parent(1) Earnings per share
Yen
2023

U.S. dollars
2022

2023

Basic earnings per share

222.38191.42

1.67

Diluted earnings per share

221.89191.15

1.66

The amount of diluted earnings per share is calculated by deeming the shares authorized to be issued subject to conditions which
are expected to be provided under the performance-linked stock compensation plan as potential shares.

(2) Bases for calculation of earnings per share
JPY
2023
Profit attributable to owners of the Parent
Amount not attributable to common shareholders of the Parent
Profit used to calculate basic earnings per share
Profit used to calculate diluted earnings per share

USD
2022

2023

18,575

15,986

139,114－
18,575
18,575－
15,986
15,986－
139,114139,114

Thousand shares
2023
Weighted average number of common shares
Increase due to the performance-linked stock compensation
plan
Weighted average number of common shares adjusted for
dilution

2022
83,53383,514183

117

83,717

83,631(Note) In the calculation of earnings per share, the shares of the Company owned by the stock issuance trust for officers below are
included in the treasury stock which is deducted in the calculation of average number of shares during the fiscal year.
The current fiscal year:
678,007 shares
The previous fiscal year: 699,176 shares- 47 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
26. Other Comprehensive Income
The breakdown for the amounts of reclassification adjustments and deferred tax in other comprehensive income is presented asfollows:
JPY
2023
Financial assets measured at fair value through othercomprehensive income
Amount arising during the year
Amount before deferred tax
Deferred tax
Financial assets measured at fair value through othercomprehensive income
Remeasurements of defined benefit pension plans
Amount arising during the year

USD
2022

2023

3,038

572

22,758

3,038
(862)

572
(110)

22,758(6,456)

2,176

462

16,301

525

(11)

3,938

Amount before deferred tax

525

(11)

3,938

Deferred tax

(133)

4

(999)

Remeasurements of defined benefit pension plans

392

(7)

2,939

Exchange differences on translation of foreign operations
Amount arising during the year

3,212

4,071

24,058

(7)

0

(55)

3,205

4,071

24,003

1,032(1,679)

1,780
(853)

7,733
(12,574)

Deferred tax

(646)
201

926
(284)

(4,842)
1,508

Cash flow hedges

(445)

642

(3,334)

1,258

528

9,428

(4)

(10)

(37)

Share of other comprehensive income of investments
accounted for using the equity method

1,253

517

9,391

Total other comprehensive income

6,583

5,686

49,300Reclassification adjustments
Exchange differences on translation of foreign operations
Cash flow hedges
Amount arising during the year
Reclassification adjustments
Amount before deferred tax

Share of other comprehensive income of investments
accounted for using the equity method
Amount arising during the year
Reclassification adjustments- 48 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
27. Cash Flow Information(1) Cash and cash equivalents
The breakdown of cash and cash equivalents and its reconciliation to the amounts presented in the consolidated statement offinancial position are as follows:
JPY
2023
Cash and bank deposits except for time deposits with originalterm of more than three months
Cash and cash equivalentsin the consolidated statement of financial position
Cash and cash equivalentsin the consolidated statement of cash flows

USD
2022

2023

79,46291,420595,088

79,46291,420595,088

79,46291,420595,088(2) Net payment for acquisition of subsidiaries and acquisition of business
The breakdown of the main assets and liabilities of newly acquired subsidiaries or other businesses at the time control thereof
was acquired, and the reconciliation between consideration paid and net payment for the acquisition are presented as follows:
JPY
2023

USD
2022

2023

Breakdown of assets at the acquisition dateCurrent assets (including cash and cash equivalents)
Non-current assets

7,672
5,980

5,325
2,528

57,45944,786

Current liabilities
Non-current liabilities
Goodwill(2,564)(1,425)3,760(2,221)(655)(72)(19,206)(10,677)
28,162

Non-controlling interests(1,171)(8,770)54－
0(12,306)(4,903)(92,159)

Breakdown of liabilities at the acquisition date

Other
Fair value of consideration paid

406

Cash and cash equivalents of the acquiree

2,905

1,851

21,758Net proceeds from (payment for) acquisition of subsidiaries
Net payments for acquisition of businesses(9,205)(195)(2,362)(688)(68,938)(1,463)- 49 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(3) Net proceeds from sale of subsidiaries and transfer of business
The breakdown of the main assets and liabilities upon loss of control of the subsidiaries or other businesses which control was
lost as a result of the sale, and the calculation of the net proceeds from the sale are presented as follows:
JPY
2023

USD
2022

2023

Breakdown of assets upon loss of control
Current assets (including cash and cash equivalents)
Non-current assets

3
610

75
6

29
4,570

Breakdown of liabilities upon loss of control
Current liabilities

－

(58)

－

JPY
2023

USD
2022

2023

Consideration received

750

15

5,617

Cash and cash equivalents included in the assets at the time
control thereof was lost

－

(3)

－

Net proceeds from (payment for) sale of subsidiaries
Net proceeds from transfer of businesses

－
750

12

－
5,617

－

(4) Changes in liabilities for financing activities
Changes in liabilities for financing activities are as follows:
Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(JPN)
April 1,
2022
Borrowings
Bonds
Lease liabilities
Total

Cash flows

Lease

Non-cash movements
Increase andExchange decrease fromdifferences acquisition ofsubsidiaries

OthersMarch 31,2023
212,945
14,94820,677
248,572

123,511
19,941
16,83288,300(5,014)(8,707)－－
13,093

1,107

15

－
99

－
493

10
21
(1,134)160,285

74,57913,093

1,206

509(1,101)(USD)
April 1,
2022
Borrowings
Bonds

924,973
149,338

Lease liabilities
Total

Cash flows

661,279(37,551)

Lease

126,059(65,208)－－
98,0571,200,370

558,520

98,057- 50 -

Non-cash movements
Increase andExchange decrease fromdifferences acquisition ofsubsidiaries

OthersMarch 31,
2023

79
164

1,594,740
111,951

8,294

116

－
742

－
3,698

(8,494)

154,854

9,035

3,814

(8,251)

1,861,545

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(JPN)
April 1,
2021
Borrowings
Bonds
Lease liabilities
Total

Cash flows

Lease

Non-cash movements
Increase andExchange decrease fromdifferences acquisition ofsubsidiaries

OthersMarch 31,2022

112,045
10,112
17,328

10,243
9,815(8,229)

－
－
8,122

1,522

186

－
143

－
326

(485)
13
(859)

123,511
19,941
16,832

139,486

11,828

8,122

1,665

512

(1,330)160,285(5) Significant non-cash transactions
The leases increased right-of-use assets for the fiscal year ended March 31, 2023 and March 31, 2022. Please refer to Note 9.
Property, Plant and Equipment and Note 10 Goodwill and Intangible Assets for more information.

28. Employee Benefits(1) Post-employment benefits
1) Outline of retirement benefit plans adopted by the Consolidated GroupThe Company has a defined benefit pension plan and lump-sum retirement benefit plan covering substantially all employees
other than directors and executive officers. The benefit amounts for the defined benefit pension plan are determined based on
the period of employees’ enrollment in the plan, contribution granted to employees and other factors. The Company has a
responsibility to manage pension assets faithfully and has an obligation to make contributions for the employees enrolled in theplan in compliance with applicable laws and regulations.
The pension plan that the Company maintains is a contract-type defined benefit pension plan.
Matters such as asset management performance, status of the plan and accounting treatment are reported to the Management
Committee by the Finance Department and the Personnel & General Affairs Department, which are in charge of operation of
the pension plan. These departments hold a meeting on a timely manner to discuss the matters such as a revision to the plan anda change in the asset investment policy.
Most of the subsidiaries have unfunded retirement benefit plans and/or funded pension plans. Employees, other than directors,
are entitled to, under most circumstances, upon mandatory retirement at normal retirement age or earlier termination of
employment, a lump-sum retirement benefit based on compensation at the time of retirement, years of service and other factors.
Certain subsidiaries have adopted the defined contribution retirement benefit plan.

- 51 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
2) Defined benefit plan(ⅰ) Net defined benefit liability (asset)
Reconciliation of the beginning and ending balances of net defined benefit liability (asset) and the components for theyears ended March 31, 2023 and March 31, 2022 are presented as follows:(JPY)
Present value
Fair value of plan
Net defined benefitof the defined
assetsliability (asset)
benefit obligation
As of April 1, 2021

20,385(13,867)

6,517

Current service cost

1,462

－

1,462

66

(53)

13

(235)

247

11

Foreign currency translation difference

51

(26)

25

Employer contributions to the plan

－

(915)

(915)

(1,130)

710

(420)

Effect of business combinations anddisposals

116

－

116

Other

11

9

21

As of March 31, 2022

20,727(13,895)

6,831

Current service cost

1,366

－

1,366

75

(44)

31

(747)

221

(525)

Decrease by settlements of plans (Note 2)(2,647)

2,545

(102)

Foreign currency translation difference

40

(22)

18

Employer contributions to the plan

－

(768)

(768)

(1,402)

885

(517)

(126)

(12)

(139)

17,285(11,090)

6,195

Net interest
Remeasurements (Note 1)

Benefits paid

Net interest
Remeasurements (Note 1)

Benefits paid
Other
As of March 31, 2023

- 52 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(USD)
Present valueof the defined
benefit obligation

Fair value of plan
assetsNet defined benefit
liability (asset)

As of March 31, 2022

155,228(104,064)

51,164Current service cost

10,232－

10,232

567

(332)

235

Remeasurements (Note 1)(5,600)

1,662(3,938)Decrease by settlements of plans (Note 2)(19,828)

19,063(764)

Foreign currency translation difference

307

(171)

136

Employer contributions to the plan－

(5,754)(5,754)(10,503)

6,630(3,873)

(948)

(94)

(1,043)

129,454(83,059)

46,395

Net interest

Benefits paid
Other
As of March 31, 2023

(Notes) 1. Remeasurements of the defined benefit obligation for the fiscal years ended March 31, 2023 and March 31, 2022 are thedifferences arising primarily from changes in financial assumptions.
2. A domestic subsidiary shifted to the defined contribution retirement benefit plan from the defined benefit pension plan for
the fiscal year ended March 31, 2023.

- 53 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(ⅱ) Reconciliation of ending balances of defined benefit obligation/plan assets and net defined benefit liability/asset presented
on the consolidated statements of financial position
JPY
2023

USD
2022

2023

Defined benefit obligations of funded plan
Plan assets

12,392(11,090)

16,512(13,895)

92,810(83,059)

Net defined benefit liability of funded plan

1,302

2,616

9,751

Defined benefit obligations of unfunded plan

4,893

4,215

36,644

6,198
(3)

6,842
(10)

46,419
(24)

6,195

6,831

46,395

Balance on the consolidated statement of financial position
Retirement benefit liabilities
Retirement benefit assets
Net liability or asset presented on the consolidated statementsof financial position

The measurement date used to determine the main benefit obligations is March 31 of each year.
The Company’s funding policy is based on a number of factors including the tax deductibility of contributions, funded
status, and actuarial calculations. Contributions are intended to provide not only for benefits attributable to service to date,but also for those expected to be earned in the future. In addition, the Company may contribute cash to an employee
retirement benefit trust for any funding deficits in benefit obligations at the fiscal year end.
The Company’s investment policy is designed to increase the value of plan assets within acceptable risk levels to ensure
payments of pension benefits to eligible participants, including future participants. Taking into account the return and risk
on plan assets thereon, the Consolidated Group formulates a strategic asset mix which aims at an optimal portfolio on along-term basis and supervise asset management by selecting investment management companies and monitoring asset
allocations. The strategic asset mix is subject to review in response to changes in expected market conditions or funded
status. The strategic asset mix is not based on limitations but guidelines, and therefore, the actual allocation may
temporarily exceed or fall below the guidelines. The Company’s target allocation is 25% equity securities, 43% debt
securities, 22% life insurance company general accounts and 10% others.
The Company holds a meeting regularly with the asset management institutions and discusses important issues regarding
pension assets investment.
“Retirement benefit assets” are included in “Other non-current assets” in the consolidated statement of financial position.

- 54 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(ⅲ) Plan assets
The composition of the plan assets as of March 31, 2023.
Plan assets with a quoted market pricein an active market
JPY

Plan assets without a quoted market pricein an active market

USD

JPY

USD

Equity securities

2,240

16,776220

1,652

Debt securities

218

1,635

2,937

22,000Life insurance company general accounts

－

－

3,101

23,226

Other

－

－

2,372

17,7702,458

18,411

8,632

64,648Total

The composition of the plan assets as of March 31, 2022.
Plan assets with a quoted market pricein an active market

Plan assets without a quoted market pricein an active market

JPY

JPY

Equity securities

2,504

222

Debt securities

253

3,192

Life insurance company general accounts

－

4,331

Other

2

3,388

2,760

11,134

Total

Equity securities and debt securities above are jointly-managed trusts by trust banks. Plan assets with a quoted market
price in an active market are estimated by using the quoted price. Assets other than equity securities and debt securities are
categorized into the assets without a quoted market price in an active market, which are estimated by using the fair value
the trust banks calculated.
(ⅳ) Significant actuarial assumptions
2023
Discount rate

2022
1.1%

0.5%

The assumptions used for the actuarial calculation include the expected rate of salary increase, the mortality rate and theretirement rate other than the above.

- 55 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023(ⅴ) Sensitivity analysis of defined benefit obligations
JPY
2023
Increase in the defined benefit obligation with a 50-basis-point
decrease in the discount rate
Decrease in the defined benefit obligation with a 50-basis-point
increase in the discount rate

USD
2022

2023

734

835

5,500

(678)

(856)

(5,080)This analysis is based on the premise that the actuarial assumptions other than the discount rate do not fluctuate and that
only the discount rate fluctuates. This method of analysis is based on assumptions, and it is possible that the actual
calculation could be influenced by fluctuations in other variables. Even if the discount rate falls below 0%, the calculationis performed assuming the lower limit of the discount rate is 0%.
(ⅵ) Information on maturity profile of the defined benefit obligation
The weighted average duration of the defined benefit obligation for the years ended March 31, 2023 and March 31, 2022
were 9.9 year and 10.1 year, respectively.
(ⅶ) Expected contribution to the plan for the year ending March 31, 2024
The amount of contribution to be made by the Consolidated Group to plan for the year ending March 31, 2024 is estimatedto be ¥874 million ($6,547 thousand).
3) Defined contribution plan
Expenses recognized for the defined contribution plan for the years ended March 31, 2023 and March 31, 2022 were ¥4,642
million ($34,771 thousand) and ¥4,385 million, respectively.

(2) Employee benefit expenses
Employee benefit expenses recognized for the years ended March 31, 2023 and March 31, 2022 were ¥5,956 million ($44,605
thousand) and ¥5,910 million, respectively. Employee benefit expenses are included in “Cost of sales” and “Selling, general andadministration expenses” in the consolidated statement of income.

- 56 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
29. Current and Deferred Income Tax(1) Deferred taxes
1) Breakdown of deferred tax assets and deferred tax liabilities
The breakdown of main deferred tax assets and deferred tax liabilities by component is as follows:
JPY
2023
Deferred tax assets
Retirement benefits liabilities
Bonuses allowance

USD
2022

2023

1,805
2,418

1,795
1,705

13,52018,114

987
613

966
620

7,397
4,596

Impairment loss
Other investments
Golf club memberships

245
1,524
122

40
1,272
123

1,842
11,415917

Tax losses carried forward

938

984

7,025

－
3,854

1
3,701

－
28,86912,511(10,289)

11,212(9,037)

93,695(77,058)

2,221

2,175

16,637(1,147)(1,038)(8,592)(5,496)(4,634)(41,163)

Loss allowance
Inventories

Goodwill
Other
Total deferred tax assets
Offset against deferred tax liabilities
Total deferred tax assets, net
Deferred tax liabilities
Retained earnings in subsidiaries
Financial assets measured at fair value through othercomprehensive income
Cash flow hedges
Intangible assets
Other

(329)

(532)

(2,466)(6,871)(6,662)(51,462)(2,420)(1,622)(18,125)

Total deferred tax liabilities
Offset against deferred tax assets(16,264)
10,289(14,490)
9,037(121,808)
77,058

Total deferred tax liabilities, net(5,975)(5,453)(44,749)

Net deferred tax assets (liabilities)(3,753)(3,277)(28,112)- 57 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
2) Details of changes in deferred tax assets and deferred tax liabilities
Details of changes in deferred tax assets and deferred tax liabilities are presented as follows:
JPY
2023

USD
2022

2023

Beginning balance of net deferred tax assets (liabilities)(3,277)(3,208)(24,549)

Deferred tax expense
Income tax on other comprehensive income

1,231
(794)

241
(383)

9,222
(5,947)

Acquisition through business combinations
Other

(874)
(38)

123
(51)

(6,552)(286)(3,753)(3,277)(28,112)Ending balance of net deferred tax assets (liabilities)3) Deductible temporary differences and unused tax losses carried forward for which deferred tax assets were not recognized
The breakdown of deductible temporary differences and unused tax losses carried forward (by expiry date), for which deferred
tax assets were not recognized in the consolidated statement of financial position are presented as follows:
JPY
2023
Deductible temporary differences
Tax losses carried forward
Within one year to expiry

USD
2022

2023

8,207

8,058

61,46426

10,928200

Over one year and within five years to expiry

3,051

2,684

22,856

Over five years and within ten years to expiry

9,761

9,873

73,105

Over ten years to expiry

1,691

97

12,666

Total tax losses carried forward

14,531

23,583

108,828

4) Temporary differences associated with investments in subsidiaries for which deferred tax liabilities were not recognized
The total amounts of temporary differences associated with investments in subsidiaries for which deferred tax liabilities were
not recognized as of March 31, 2023 and March 31, 2022 are ¥46,381 million ($347,352 thousand) and ¥41,345 million,
respectively. Because the Consolidated Group is able to control the timing of the reversal of such temporary differences, and it
is probable that such temporary differences will not be reversed within the foreseeable future, it did not recognize deferred tax
liabilities with respect to such temporary differences.

(2) Income taxes
1) Breakdown of income taxes
The breakdown of income taxes is presented as follows:
JPY
2023
Current tax expense (Note 1)

USD
2022

2023

(12,218)(8,447)(91,507)

863
367

(63)
304

6,466
2,755

1,231

241

9,222

Deferred tax expense (Note 2)
Origination and reversal of temporary differences
Reassessment of recoverability of deferred tax assets
Total deferred tax expense

Total income taxes(10,987)(8,206)(82,285)(Notes) 1. The amounts of the benefits arising from previously unrecognized tax losses or temporary differences of a prior periodthat were used to reduce current tax expenses for the years ended March 31, 2023 and March 31, 2022 were ¥5 million($41 thousand) and ¥－ million, respectively, and these benefits were included in the current tax expenses.
2. Major causes for deferred tax expense by type are accrued bonuses of ¥713 million ($5,341 thousand) and otherinvestment of ¥251 million ($1,882 thousand) for the fiscal year ended March 31, 2023, and other investment of ¥638
million and impairment loss of ¥(863) million for the fiscal year ended March 31, 2022.

- 58 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
2) Reconciliation of statutory effective income tax rate in Japan
Reconciliations between the statutory effective tax rate in Japan and the average effective tax rate of the Consolidated Group
were as follows:
2023
Statutory effective tax rate

2022
30.6%

30.6%

(Adjustments)
Permanent differences—additions
such as entertainment expenses
Effect of reassessment of recoverability of deferred tax assets
Effect of tax rate differences

0.7%

0.2%

(1.0%)(1.2%)(1.1%)(0.5%)

Share of profit (loss) of investments accounted for using the equity method

0.5%(1.4%)

Other

1.3%

0.6%

30.8%

28.5%

Average effective tax rate

The statutory effective tax rate for the fiscal years ended March 31, 2023 and March 31, 2022 are calculated to be 30.6% and30.6% based on the Corporation Tax, Inhabitant Tax and Business Tax in Japan.

- 59 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
30. Financial Instruments(1) Classification of financial instruments
The breakdown of financial instruments for each classification is presented as follows:
JPY
2023

USD
2022

2023

Financial assets
Cash and cash equivalents

79,46291,420595,088

247,496237,261

1,853,492

Financial assets measured at amortized cost
Trade and other receivables
Other financial assets

10,05011,06375,266

Total financial assets measured at amortized cost

257,546

248,325

1,928,758

Other investments

2,774

2,382

20,777

Other financial assets
Total financial assets measured at fair value through profit
or loss

2,239

8,043

16,774

5,014

10,42637,551

Financial assets measured at fair value through othercomprehensive income
Other investments
Total financial assets measured at fair value through othercomprehensive income

35,11433,614

262,968

35,11433,614

262,968

Total financial assets

377,137

383,7872,824,364

206,609
227,894

214,822
143,452

1,547,288
1,706,691

20,677

16,832

154,854

Financial assets measured at fair value through profit or loss

Financial liabilities
Financial liabilities measured at amortized cost
Trade and other payables
Bonds and borrowings
Lease liabilities
Other financial liabilities

25,807

5,631

193,271

Total financial liabilities measured at amortized cost

480,988

380,739

3,602,104

Financial liabilities measured at fair value through profit orloss
Other financial liabilities

1,644

3,544

12,312

Total financial liabilities measured at fair value throughprofit or loss

1,644

3,544

12,312

Total financial liabilities

482,632

384,284

3,614,415(2) Basic policies for risk management of financial instruments
The Consolidated Group is an integrated trading company engaged in a wide range of business activities on a global basis. Its
headquarters includes business sections that handle merchandising, trading, product manufacturing, services, project planningand management, investments and financing activities, both domestically and internationally. Such businesses are inherently
exposed to various risks. The Consolidated Group defines and classifies risks per risk item and manages each of them inaccordance with its nature.

- 60 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(3) Credit risk management
1) Credit risks of financial assets owned by the Consolidated Group (risk exposure and the occurrence of the relevant risk)
The Consolidated Group extends credit to a large number of customers in Japan and abroad in diverse business transactions,
resulting in a number of financial assets such as trade receivables, loans and other financial assets. These financial assets
provide credit accommodation to the various customers; therefore, the Consolidated Group is mainly exposed to the credit risks
related to those customers.
Each department manages credit exposure to each customer by assigning credit ratings on a customer-by-customer basis andsetting credit exposure limits within the framework of the Consolidated Group’s credit risk control.
2) Responses to the risk owned by the Consolidated Group (purpose, policy and procedure of the risk management and method
used to measure such risks)
The Consolidated Group manages its credit risk to the customers by defining risk management methods and management
systems for specific risks in accordance with the regulations on risk management. Based on such regulations, the Consolidated
Group mitigates credit risk through periodical monitoring of the customer’s credit status and undertaking the maturity control
and account balance control, while detecting promptly any doubtful accounts caused by deterioration in the financial conditionsof customers and other factors. Expected credit losses are recognized and measured through transactions and financial
information related to customers available in the course of such credit risk management, while taking macroeconomic
conditions such as the number of bankruptcies into consideration.
With regard to loans, the Consolidated Group evaluates whether there has been a significant increase in credit risk of thefinancial assets since initial recognition in cases where the cash collection of the financial assets was delayed (as well as thecase of request for a grace period) after the trade date. However, even when a late payment or request for grace period occurs,
the Consolidated Group does not determine that there has been a significant increase in credit risk if such late payment orrequest for grace period would be attributable to temporary cash shortage, the risk of default would be low and objective datasuch as external credit ratings would reveal their ability to fulfill the obligation of contractual cash flow in the near future.
The Consolidated Group determines that the credit of the financial assets are impaired, when the debtor has significant
financial difficulty and the recoverability of the modified financial assets is significantly doubtful.
The Consolidated Group determines there has been a significant increase in the credit risk of debt instruments since initialrecognition when an “investment grade” at the initial recognition deteriorates to the level below investment grade. For such
purpose, rating information provided by major rating agencies is used.
When guaranteeing the debts of its customers, the Consolidated Group establishes the guarantee limit amounts based upon thefinancial position and business condition of the customers. The guarantee limit amounts are periodically reviewed andmaintained at appropriate levels.
When entering into derivative transactions, the Consolidated Group selects only major financial institutions with high credit
ratings assigned by independent rating agencies so as to minimize the credit risks. In addition, the Consolidated Group
periodically reviews credit limits in accordance with the internal regulations.
The Consolidated Group considers trade receivables, loans receivable, and debt instruments as default when all or part of thosefinancial instruments are not recovered, or the recoverability of those financial instruments is determined to be extremely
difficult.
The Consolidated Group directly writes off the gross carrying amounts of the credit-impaired financial assets when all or partof the financial assets are evaluated to be uncollectible and determined that it is appropriate to be written off as a result of credit
check.

- 61 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(ⅰ) Measurement of expected credit losses on trade receivables
As trade receivables do not contain a significant financing component, the Consolidated Group measures loss allowance at
an amount equal to the lifetime expected credit losses until the trade receivables are recovered. With regard to past due
receivables, the Consolidated Group estimates the lifetime credit losses on the financial instruments individually andmeasures the amount of loss allowance based upon historical credit loss experience and future recoverable amount.
Moreover, as trade receivables comprise a number of customers, the Consolidated Group measures expected credit loss
collectively by grouping those receivables and considering historical credit loss experience. When those receivables areaffected by a material economic change, the provision rate calculated based upon the historical credit loss experience isadjusted to reflect current and future economic prospect.
Even when a late payment or request for grace period has occurred, the Consolidated Group does not regard them as past
due receivables if such late payment or request for grace period would be attributable to temporary cash shortage as therisk of default would be low, and the debtors are evaluated to have a strong ability to fulfill the obligation of contractual
cash flow in the near future.
(ⅱ) Measurement of expected credit losses on other receivables
When credit risk related to loans has not increased significantly since the initial recognition at the end of the reporting
period, the Consolidated Group calculates the amount of loss allowance of the financial instruments by estimating the 12months expected credit losses collectively based upon historical credit loss experience. When those receivables areaffected by a material economic change, the provision rate calculated based upon the historical credit loss experience isadjusted to reflect current and future economic prospect.
However, when there has been a significant increase in credit risk since initial recognition as of the end of the fiscal year,
the Consolidated Group estimates the lifetime credit losses on the financial instruments individually and measures theamount of loss allowance based upon historical credit loss experience and future recoverable amount.
(ⅲ) Measurement of the expected credit losses on the other investments (debt securities)
When credit risk related to debt securities has not increased significantly since initial recognition at the end of thereporting period, the Consolidated Group calculates the amount of loss allowance of the financial instruments by
estimating the 12-months expected credit losses. However, when there has been a significant increase in credit risk sinceinitial recognition as of the end of the fiscal year, the Consolidated Group estimates the lifetime credit losses on thefinancial instruments and measures the amount of loss allowance of the financial instruments. When estimating suchexpected credit losses, the Consolidated Group uses the default rate published by major rating agencies.

- 62 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
3) Quantitative and qualitative information on the amounts arising from expected credit losses(ⅰ) Trade and other receivables(JPY)
Loss allowance

Lifetime expected credit losses
Collective assessment

Credit-impaired financial assets

As of April 1, 2021

19

2,032

1. Reclassification to credit-impaired financial assets－

215

2. Initial recognition and recoveries

2131

3. Direct write-off

－

(145)

4. Changes due to foreign exchange－

6

5. Increase (decrease) resulting from changes in the provision
rate based on historical credit loss experience(3)－

As of March 31, 2022

18

2,241

1. Reclassification to credit-impaired financial assets－

251

2. Initial recognition and recoveries

0(8)

3. Direct write-off

－

(144)

4. Changes due to foreign exchange－

5

5. Increase (decrease) resulting from changes in the provision
rate based on historical credit loss experience(5)－

As of March 31, 2023

14

2,346
(JPY)

Gross carrying amount

Lifetime expected credit losses
Collective assessment

As of April 1, 2021
1. Financial assets reclassified to credit-impaired financial
assets
2. Initial recognition and recoveries

Credit-impaired financial assets

208,333

2,284

(392)

392

29,054(12)

3. Direct write-off

－

(145)

4. Changes due to foreign exchange－

6236,995

2,526

(251)

251

As of March 31, 2022
1. Financial assets reclassified to credit-impaired financial
assets
2. Initial recognition and recoveries

10,487(14)

3. Direct write-off

－

(144)

4. Changes due to foreign exchange－

5247,232

2,624

As of March 31, 2023

- 63 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(USD)
Lifetime expected credit losses

Loss allowance

Collective assessment

Credit-impaired financial assets

As of March 31, 2022

141

16,787

1. Reclassification to credit-impaired financial assets

－

1,882

2. Initial recognition and recoveries

4

(62)

3. Direct write-off－(1,079)4. Changes due to foreign exchange

－

43

(38)

－

107

17,571

5. Increase (decrease) resulting from changes in the provision
rate based on historical credit loss experience
As of March 31, 2023

(USD)
Lifetime expected credit losses

Gross carrying amountCollective assessment

As of March 31, 2022

Credit-impaired financial assets

1,774,852

18,919

1. Financial assets reclassified to credit-impaired financial
assets

(1,882)

1,882

2. Initial recognition and recoveries

78,542(108)

3. Direct write-off－(1,079)4. Changes due to foreign exchange－

43

1,851,513

19,657

As of March 31, 2023

(ⅱ) There is no contractual, uncollected balance for financial assets written off during the fiscal year ended March 31, 2023, forwhich collection efforts are still being made.
4) Credit risk exposure
Trade and other receivables
As of March 31, 2023
Balance of receivables (gross)Receivables
Past due receivables
Total

Provision rate based on historicalcredit loss experience

Lifetime expected credit losses

JPY

USD

JPY

USD

247,232

1,851,513

0.01%

14

107

2,624

19,65789.39%

2,346

17,571

249,857

1,871,169

－

2,360

17,677

Past due receivables include loans receivable of ¥1,694 million ($12,691 thousand), for which a loss allowance of ¥1,617
million ($12,110 thousand) has been already recognized.
As of March 31, 2022
Balance of receivables (gross)
JPY
Receivables
Past due receivables
Total

Provision rate based on historicalcredit loss experience

Lifetime expected credit losses
JPY

236,995

0.01%

18

2,526

88.73%

2,241

239,522－

2,260

Past due receivables include loans receivable of ¥1,700 million, for which a loss allowance of ¥1,617 million has been alreadyrecognized.

- 64 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
5) Maximum exposure to credit risks
The Consolidated Group’s maximum exposure to credit risks is as follows:
The Consolidated Group’s maximum credit risk exposure (gross) represents the amount of the maximum exposure with respect
to credit risks without taking into account any collateral held or other credit enhancement. The Consolidated Group’s maximum
credit risk exposure (net) represents the amount of the maximum exposure with respect to credit risks reflecting the mitigation
effect of the collateral held or other credit enhancement.
As of March 31, 2023
Gross
carrying amount
JPY

USD

79,462595,088－

Trade andother receivables

249,857

1,871,169

Other financial
assets

10,050

Total

339,369

Cash andcash equivalents

Maximum
credit risk exposure(gross)Lossallowance
JPY

USD

Maximum
credit risk
exposure (net)Total collateral pledged
and credit enhancements

JPY

USD

JPY

USD

JPY

USD

－

79,462595,088－－

79,462595,088(2,360)(17,677)

247,496

1,853,492(154)(1,157)247,342

1,852,335

75,266－－

10,05075,266－－

10,05075,2662,541,523(2,360)(17,677)

337,0092,523,845(154)(1,157)

336,8542,522,689

Financial assets
measured
at amortized cost

The amount of loss allowance for credit-impaired financial assets is reduced by ¥154 million ($1,157 thousand) throughcollateral pledged and credit enhancements.
As of March 31, 2022

Cash and cash equivalents

Grosscarrying amountLossallowance

JPY

JPY

Maximum
Total collaterals
credit risk exposure pledged and credit(gross)enhancements
JPY

JPY

Maximum
credit risk
exposure (net)
JPY

91,420－91,420－91,420Trade and other receivables

239,522(2,260)237,261(179)

237,082

Other financial assets

11,063－

11,063－

11,063342,006(2,260)339,746(179)

339,567

Financial assets measured atamortized cost

Total

The amount of loss allowance for credit-impaired financial assets is reduced by ¥179 million through collateral pledged andcredit enhancements.

- 65 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(4) Liquidity risk management
The Consolidated Group raises funds through borrowings from financial institutions or issuance of bonds. Accordingly, in theevent of a disruption to the financial system or financial/capital markets, or a major downgrade of the Consolidated Group’s
credit rating by a rating agency, the Consolidated Group’s fundraising becomes constrained and consequently there is apossibility that the Consolidated Group will not be able to carry out the payment on the date of payment.
The Consolidated Group has sufficient levels of cash and cash equivalents and maintains a long-term (unused) commitment line
agreement with a major financial institution in the amount of ¥10.0 billion ($74,890 thousand) to ensure liquidity and stabilityof funds. The Consolidated Group makes efforts to maintain good relationships with each financial institution. The
Consolidated Group is required to comply with certain financial covenants to maintain these facilities.
1) Non-derivative financial liabilities
The breakdown of non-derivative financial liabilities by due date is presented as follows:
As of March 31, 2023

Trade and other payables

Within one year

Over one year andwithin five years

JPY

JPY

USD

USD

Over
five years
JPY

Total

USD

JPY

USD

206,6091,547,288

－

－

－

－

206,6091,547,288

97

727

10,211

76,474

5,029

37,66915,338114,869

163,023

1,220,877

51,160383,136

224

1,684

214,408

1,605,697

Lease liabilities

7,719

57,81010,641

79,6952,384

17,86020,745

155,366

Deposits received

4,335

32,466

－

－

0

5

4,335

32,471

Guarantee deposits received

1,064

7,970

111

832

1,475

11,0502,650

19,852

Other

16,895

126,531

1,925

14,417－－

18,820140,948399,7442,993,668

74,049554,554

9,115

68,269482,9093,616,491

Bonds
Borrowings

Total
As of March 31, 2022

Trade and other payables

Within one year

Over one year andwithin five years

Overfive years

Total

JPY

JPY

JPY

JPY

214,822－－214,822

Bonds

5,111

10,276

5,062

20,449Borrowings

69,192

55,170484

124,847

Lease liabilities

6,683

7,701

2,467

16,852

Deposits received

3,030

－

0

3,031

Guarantee deposits received

900

111

1,497

2,509

Other

91

－

－

91

299,831

73,2609,511

382,603Total

The Consolidated Group has guarantee obligations of ¥1,292 million ($9,677 thousand) and ¥1,276 million as of March 31,
2023 and March 31, 2022 respectively.

- 66 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
2) Derivative liabilities
The breakdown of derivative liabilities by due date is presented as follows:
As of March 31, 2023
Within one year

Over one year andwithin five years

JPY

USD

JPY

Cash inflows

45,303

339,273

968

7,249

－

Cash outflows

46,841

350,791

1,012

7,581

－

Sub total

1,538

11,51844332

Commodity-related derivatives

58

435

3

Total

1,596

11,953

47

USD

Over
five years
JPY

Total

USD

JPY

USD

－

46,271

346,522－47,853358,372

－

－

1,582

11,850

27

－

－

61

462

358

－

－

1,644

12,312Currency-related derivatives

As of March 31, 2022
Within one year

Over one year andwithin five years

Overfive years

Total

JPY

JPY

JPY

JPY

Currency-related derivatives
Cash inflows

39,198

978－40,177

Cash outflows

41,9101,046－

42,956

Sub total

2,711

67

－

2,779

Interest rate-related derivatives

15

－

－

15

Commodity-related derivatives

749

－

－

749

Total

3,476

67

－

3,544

- 67 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(5) Market risk management
In many cases, the foreign currency risk, interest rate risk and risk of price fluctuations associated with goods traded incidental
to business transactions are hedged in with the transaction terms with trade partners, etc. In addition, the Consolidated Grouphas established a system under which a position limit and a loss limit are set for foreign exchange, interest rates (funds),
products and their derivatives, taking into account the scale of the risk and the income of each internal unit and company, so thatit can quickly reduce its position when the predetermined limit is exceeded. Also, the price fluctuation risks of these positions
are mitigated by using derivatives as a hedge. The positions are reported to management meeting regularly. When thepredetermined limit is exceeded, the Consolidated Group mitigates these positions after the analysis of the reason without delay.
1) Foreign currency risk(ⅰ) Nature of foreign currency risk and its management policy
The Consolidated Group is engaged in foreign currency transactions in various currencies and terms incidental to its
export and import trading. The Consolidated Group participates in derivatives transactions such as forward contracts to
reduce the risk of currency fluctuation.
The Consolidated Group also has local subsidiaries and business corporations overseas. Account balances at thesecompanies are converted into yen at the exchange rates prevailing at the end of the reporting period, for the purposes ofpreparing consolidated financial statements. As a result, equity attributable to owners of the Parent may change throughexchange difference of foreign operations associated with exchange rate fluctuations.
In principle, the Consolidated Group enters into forward exchange contracts to hedge against the exchange rate currency
fluctuation risk of foreign currency-denominated receivables and payables that are controlled by currency and by contract
month. The Consolidated Group also enters into forward exchange contracts to hedge against foreign currencydenominated receivables and payables that are highly probable to arise from export/import-related forecast transactions.
(ⅱ) Sensitivity analysis of foreign currency risk
In regards to financial instruments held by the Consolidated Group as of the end of the reporting period, the following
chart shows the amounts affecting profit before tax and other comprehensive income (before tax effect adjustments), as
reported in the consolidated financial statements, that would result from 1% appreciation of Japanese Yen against U.S.
dollars.
The analysis is performed based on the assumption that all the other variables are held constant.
In addition, such analysis does not include the affected amounts based on translations (into Japanese yen) of financial
instruments denominated in functional currency, income and expenses denominated in foreign currency and assets andliabilities of foreign operations.
JPY
2023

USD
2023

2022

Profit before tax
U.S. dollar

(10)

(18)

(80)

Other comprehensive income
U.S. dollar

(360)

(409)

(2,700)- 68 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
2) Interest rate risk(ⅰ) Nature of interest rate risk and its management policy
The Consolidated Group raises most funds needed for operating and financing activities in the form of borrowings fromfinancial institutions at variable interest rates, with the exception of certain loans. Since these borrowings and fundmanagement are exposed to an interest rate risk, interest expenses for the Consolidated Group may increase with a rise ininterest rates.
(ⅱ) Sensitivity analysis of interest rate risk
In regards to financial instruments held by the Consolidated Group at the end of the reporting period, the following tableshows the amounts affecting profit before tax assuming that the interest rate increases by 1%.
Under the analysis, the amounts affecting profit before tax are calculated by multiplying the net balance of floating ratefinancial instruments as of March 31, 2023 and 2022 by 1%, without considering future changes in the net balance,
currency exchange fluctuations and dispersing effects for floating rate borrowings derived from the difference in timing ofrefinancing and resetting of the interest rate, and based on the assumption that all the other variables are held constant.
JPY
USD
2023
2022
2023
Profit before tax(1,925)(980)(14,419)3) Commodity price risk(ⅰ) Nature of commodity price risk and its management policy
In its mainstay commodity trading business in Japan and overseas, the Consolidated Group deals with grains, meatproducts and petroleum products which are influenced by market conditions. When the positions in these commodities
increase, the Consolidated Group will be exposed to the commodity price fluctuation risk stemming from rapid
movements in commodities prices or a decline in demand.
The Consolidated Group strives to reduce our exposure to price volatility by hedge-selling commodities, matching thequantity and timing of buying and selling, and utilizing commodity-related derivatives for hedging purposes.
(ⅱ) Sensitivity analysis of commodity price risk
In regards to commodity-related derivatives held by the Consolidated Group at the end of the reporting period, thefollowing table shows the amounts affecting profit before tax and other comprehensive income (before the tax effect)assuming that the commodity price decreases by 1%.
The analysis is performed based on the assumption that all the other variables are held constant.
JPY
2023
2022
Profit before tax
(60)
(139)
Foods
(29)
(110)
Fuels
(31)
(29)
Other comprehensive income
Foods
Fuels

- 69 -

USD
2023
(451)
(219)
(232)

(2)
(2)

7
7

(21)
(21)

－

－

－

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
4) Share price risk(ⅰ) Nature of share price risk and its management policy
The Consolidated Group holds marketable securities, which are exposed to the market price fluctuation risk.
The Consolidated Group attempts to reduce share price risk by periodically reviewing its shares held by the Consolidated
Group and selling those shares that it holds without strong rationale.
(ⅱ) Sensitivity analysis of share price risk
In regards to listed shares held by the Consolidated Group at the end of the reporting period, the following table shows theamounts affecting other comprehensive income (before the tax effect) assuming that the share price decreases by 10%.
The analysis is performed based on the assumption that all the other variables are held constant.
JPY
2023
2022
Other comprehensive income(2,244)(2,036)

USD
2023(16,807)(6) Fair value of financial instruments
1) Fair value measurement
Fair values of financial instruments are presented as follows:
Fair values are categorized into three levels of the fair value hierarchy depending on inputs to valuation techniques; details aredescribed in Note 2. Basis of Preparing Consolidated Financial Statements: (4) Use of estimates and judgments.
2) Financial instruments measured at amortized cost
2023
Type

2022

Carrying amount
JPY

Carrying
amountFair value

USD

JPY

USD

Fair value
JPY

Financial assets
Trade and other receivables

1,606

12,031

1,606

12,031

807

807

Guarantee deposits

6,036

45,204

6,036

45,204

6,470

6,470

Other financial assets

620

4,646

620

4,646

631

631

Total

8,262

61,881

8,262

61,881

7,909

7,909

65,704492,061

65,598491,261

69,74569,776

0

5

0

5

0

0

Long-term guarantee deposits received

1,586

11,882

1,586

11,882

1,608

1,608

Put option liabilities granted to noncontrolling interests

1,925

14,417

1,925

14,417

－

－

Total

69,217518,366

69,110517,566

71,354

71,385

Financial liabilities
Bonds and borrowings
Long-term deposits received

The carrying amounts of trade and other receivables, other financial assets, trade and other payables, bonds and borrowings andother financial liabilities, all of which are categorized into current assets or current liabilities of financial instruments measured
at amortized cost, approximate their fair values; therefore, those amounts are not included in the table above.
The fair values stated above are calculated as follows:(ⅰ) Trade and other receivables
The fair value of trade and other receivables is the present value of future cash flows discounted by an interest rate thatreflects time to maturity and credit risk.
(ⅱ) Guarantee deposits
The fair value of guarantee deposits is the present value of future cash flows discounted by an interest rate that reflects
time to maturity and credit risk.
(ⅲ) Other financial assets
The fair value of other financial assets is the present value of future cash flows discounted by an interest rate that reflects
time to maturity and credit risk.

- 70 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(ⅳ) Bonds and borrowings
The fair value of bonds is determined based on their market price.
The fair value of borrowings is the present value of the sum of principal and interest payments discounted using anassumed interest rate on equivalent incremental borrowings.
(ⅴ) Long-term deposits received
The fair value of the long-term deposits received is the present value of future cash flows discounted by an interest ratethat reflects time to maturity and credit risk.
(ⅵ) Long-term guarantee deposits received
The fair value of long-term guarantee deposits received is the present value of future cash flows discounted by an interest
rate that reflects time to maturity and credit risk.
(ⅶ) Put option liabilities granted to non-controlling interests
The fair value of the put option liabilities granted by the Consolidated Group to non-controlling interests is the present
value of future cash flows discounted by an interest rate that reflects time to exercise and credit risk.
Put option liabilities granted to non-controlling interests are categorized within Level 3 of the fair value hierarchy. All otherfinancial assets and liabilities measured at amortized cost are categorized within Level 2 of the fair value hierarchy.
3) Financial instruments measured at fair value(ⅰ) Analysis of fair value by hierarchy level
The following tables provide the breakdown by hierarchy level of financial assets and liabilities that are measured at fairvalue on a recurring basis. No financial assets and liabilities are measured at fair value on a non-recurring basis. There
were no material transfers between Level 1 and Level 2 for the fiscal years ended March 31, 2023 and March 31, 2022.
As of March 31, 2023
Level 1JPY

Level 2USD

JPY

Level 3

USD

Total

JPY

USD

JPY

USD

AssetsOther investments
FVPL
Stock

－

－

－

－

2,774

20,7772,774

20,77722,435

168,0217

53

12,671

94,894

35,114

262,968

Foreign exchange

－

－

2,074

15,539

－

－

2,074

15,539Commodity

164

1,234

－

－

－

－

164

1,234

FVOCI
Stock
Other financial assets
Derivative transactions:

Liabilities
Other financial liabilities
Derivative transactions:
Foreign exchange－－(1,582)(11,850)－－(1,582)(11,850)

Commodity

(53)

(402)

(7)

(60)

－

－

(61)

(462)

Total

22,546

168,853

491

3,683

15,445

115,671

38,484

288,207

FVPL: Financial assets measured at fair value through profit or loss.
FVOCI: Financial assets measured at fair value through other comprehensive income.

- 71 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
As of March 31, 2022
Level 1

Level 2

Level 3

Total

JPY

JPY

JPY

JPY

AssetsOther investments
FVPL
Stock

－

－

2,382

2,382

20,3607

13,246

33,614Foreign exchange

－

7,603

－

7,603

Commodity

439

0

－

440

Foreign exchange－(2,779)－(2,779)Interest rate

－

(16)

－

(16)

Commodity

(746)

(3)

－

(749)

Total

20,053

4,813

15,62940,496FVOCI
Stock
Other financial assets
Derivative transactions:

Liabilities
Other financial liabilities
Derivative transactions:

The methods of determining the fair value of the above instruments are described as follows:(a) Other investments
The fair value of listed shares is the quoted price in an active market and is categorized within fair value hierarchy Level
1. The fair value of the listed shares which are not traded frequently in the public market and not considered to havequoted prices in active markets are categorized within fair value hierarchy Level 2.
The fair value of unlisted shares is calculated using valuation methods including discounted future cash flows, market
prices of comparable companies, net asset value, and other valuation methods, and is categorized within fair value
hierarchy Level 3. Measuring the fair value of unlisted shares involves the use of unobservable inputs such as discountrate and valuation multiples, as well as any necessary adjustments including discounts for a lack of liquidity.
The Company determines the policies and procedures for measuring the fair value of unlisted shares, and reviews theapproach to measuring fair value on a recurring basis including the valuation model, by obtaining the information on
business operations and business plans associated with each equity issuer and confirming the data from comparable
public companies.
(b) Derivative financial assets and liabilities
Currency-related derivatives
The fair value of forward exchange transactions is calculated based on the forward exchange rate at the end of the fiscal
year.
Interest rate-related derivatives
The fair value of interest-rate swaps is the present value of future cash flows discounted by an interest rate that reflects
time to settlement, as well as market conditions.
Commodity-related derivatives
The fair value of commodity futures transactions is calculated using final prices on commodities exchanges as of the
fiscal year-end. The fair value of commodity swap transactions is calculated based on the index prices publicly
announced at the end of the fiscal year.
Commodity futures transactions are categorized within Level 1 of fair value hierarchy. All other derivative financial
assets and liabilities are categorized within Level 2 of the fair value hierarchy.

- 72 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(ⅱ) Recurring fair value measurements categorized within Level 3 of the fair value hierarchy
The changes in financial assets and liabilities that are measured at fair value on a recurring basis and are categorized
within Level 3 of the fair value hierarchy are presented as follows.
2023

2022

Other investments

Other investments
Total

FVPL

Total

FVOCI

FVPL

FVOCI

JPY

USD

JPY

USD

JPY

USD

JPY

JPY

JPY

2,382

17,846

13,24699,201

15,629117,047

3,712

13,60017,312(296)(2,222)

－

－

(296)

(2,222)(1,624)－(1,624)

－

－

894

6,701

894

6,701

－

(932)

(932)

Purchase

647

4,845

522

3,916

1,169

8,761

237

951

1,188

Sale

－

－

(1,992)(14,921)(1,992)(14,921)

－

(80)

(80)

73

548

－

－

73

548

57

(2)

55

－

－

－

－

－

－

－

(174)

(174)

(32)

(241)

(0)

(4)

(32)

(245)

－

(116)

(116)

2,774

20,777

12,671

94,894

15,445

115,671

2,382

13,246

15,629Balance at the beginning of theyear
Total gains or losses
Profit or loss (Note 1)
Other comprehensive income(Note 2)Foreign currency translationdifference
Transfer out of Level 3(Note 3)
Other
Balance at the end of the year

(Notes) 1. The gains or losses are included in “Other finance income” or “Other finance costs” in the consolidated statement ofincome. Of those gains or losses recognized in profit or loss, the amounts arising from financial instruments that were
held at the period end are ¥(296) million ($(2,222) thousand) for the fiscal year ended March 31, 2023 and ¥(1,624)
million for the fiscal year ended March 31, 2022.
2. The gains or losses are included in “Financial assets measured at fair value through other comprehensive income” in the
consolidated statement of comprehensive income.
3. Transfer out of Level 3 recognized in the previous fiscal year is due to the investee’s listing on an exchange.

- 73 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(ⅲ) Quantitative Information about the financial instruments categorized within fair value hierarchy Level 3
The following tables present quantitative information on the material assets categorized within Level 3 of the fair value
hierarchy, which were measured at fair value on a recurring basis.
As of March 31, 2023
Category

Fair value
JPY

USD

Valuation technique

FVPL

982

7,356

Discounted cash flow method

FVPL

1,792

13,421

FVOCI

12,647

FVOCI

24

Significant
unobservable inputs

Weighted averageof input values

Discount rate

3.4%

Net asset value method－－

94,713Market multiple method

P/B ratio
Illiquidity discount181

Net asset value method－

1.1times
30.0%－

As of March 31, 2022
Category

Fair value

Valuation technique

JPY

FVPL

1,488

Discounted cash flow method

FVPL

894

Net asset value method

FVOCI

12,125Market multiple method

FVOCI

1,120

Net asset value method

Significant
unobservable
inputs

Weighted
averageof input values

Discount rate

3.3%

－

－
1.1times

P/B ratio
Illiquidity discount
－

30.0%
－

The significant unobservable inputs used in measuring the fair value of unlisted shares are the discount rate, illiquidity
discount and P/B ratio (price-to-book ratio). A substantial increase (or decrease) in the discount rate or illiquidity discountcauses the fair value to substantially fall (or rise), while a substantial increase (or decrease) in the P/B ratio causes the fairvalue to substantially rise (or fall).

- 74 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(7) Financial assets measured at fair value through other comprehensive income
With respect to investments in equity instruments held for the purpose of maintaining and strengthening relationships withbusiness partners, the Consolidated Group has designated such investments as financial assets to be measured at fair value
through other comprehensive income in view of the holding purpose.
1) Fair value of major items of investment
The following tables present the fair value of major items of investment in equity instruments designated as financial assets
measured at fair value through other comprehensive income.
As of March 31, 2023
AmountName of issuer

JPY

USD

PT Cisarua Mountain Dairy Tbk

4,602

34,471

Tokio Marine Holdings, Inc.

4,573

34,249SOTSU CORPORATION

2,130

15,955MARUDAI FOOD CO., LTD.

1,748

13,092The Monogatari Corporation

1,615

12,101

Nisshin Seifun Group Inc.

1,411

10,570SHIN KURUSHIMA DOCKYARD CO., LTD.

1,069

8,008

Hitachi Astemo Chassis Systems (Guangzhou) Ltd.

871

6,529

Alpha Group Inc.

608

4,555

Nabesho Co., Ltd.

550

4,123

15,932

119,314

Other
As of March 31, 2022

AmountName of issuer

JPY

Tokio Marine Holdings, Inc.

4,266

PT Cisarua Mountain Dairy Tbk

3,369

MARUDAI FOOD CO., LTD.

1,779

Nisshin Seifun Group Inc.

1,552

GLOBAL SECURITY EXPERTS Inc.

1,548

SOTSU CORPORATION

1,452

The Norinchukin Bank

1,095

SHIN KURUSHIMA DOCKYARD CO., LTD.

1,066

Hitachi Astemo Chassis Systems (Guangzhou) Ltd.

867

BOT Lease Co., Ltd.

781

Other

15,833- 75 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
2) Dividend income
JPY
2023

USD
2022

2023

Investments derecognized during the year

39

14

292

Investments held at the end of the year

821

949

6,149

860

964

6,441

Total

3) Financial assets measured at fair value through other comprehensive income that were derecognized during the fiscal year
The Consolidated Group periodically reviews its held shares and sells those shares that it holds without a strong rationale withgains or losses on sale recognized in other comprehensive income. The following table presents the fair value on the date ofsale and cumulative gains or losses on sale.
JPY
USD
2023
Fair value on the date of sale
Cumulative gains (losses) on sale

2022
2,004
498

2023
1,287
431

15,0093,7334) Reclassification to retained earnings
The Consolidated Group reclassifies to retained earnings cumulative gains or losses arising from changes in the fair value offinancial assets measured at fair value through other comprehensive income in either of the following cases: when an
investment is disposed of, or when there is a significant decline in the fair value. Such cumulative gains or losses in othercomprehensive income that were reclassified to retained earnings for the years ended March 31, 2023 and March 31, 2022 were¥365 million ($2,735 thousand) and ¥210 million, respectively.

(8) Hedge Accounting(Cash Flow Hedge)
A cash flow hedge is a hedge of the exposure to variability in future cash flows arising from a forecast transaction orrecognized assets or liabilities. While a hedge is designated as cash flow hedge as long as the hedge is effective, the changes in
the fair value of qualifying hedging instrument should be recorded as other comprehensive income in the Consolidated
Statement of Comprehensive Income. The Consolidated Group continues such accounting treatment until variability in future
cash flows arising from unrecognized forecast transactions or recognized assets or liabilities designated as hedged items arerecorded in profit or loss. Moreover, portions determined to be ineffective for hedging accounting are recognized in profit orloss.
The Consolidated Group designates the following instruments as cash flow hedges: forward exchange contracts to fix cash
flows from foreign currency denominated receivables and payables, foreign currency denominated firm commitments andforeign currency denominated forecast transactions, interest rate swaps to fix variable interest rate on floating rate financial
liabilities, and commodity futures to fix cash flows from forecast transactions of commodity trade.
When applying hedge accounting, the Consolidated Group confirms that there are economic relationships between the hedged
items and hedging instruments through qualitative assessments, which show whether the critical terms of the hedging
instruments and the hedged items match exactly or are closely aligned, and quantitative assessments, which show fluctuationsof the value of hedged items and hedging instruments by the same risk offset each other, in order to confirm there are economic
relationships that variability in fair value or cash flows of the hedged items that are attributable to the hedged risk shall be
offset by the changes in fair value or cash flows of the hedging instruments. The Consolidated Group also establishes
appropriate hedge ratios considering an economic relationship between hedging instruments and hedged items as well as risk
management strategy.
The amounts recognized in profit or loss for the ineffective portion of the hedge are not material both for the fiscal years ended
March 31, 2023 and March 31, 2022. In addition, the amounts reclassified from valuation differences on cash flow hedges toprofit or loss are immaterial because the forecast transactions are no longer expected to occur.
Following are the carrying amounts of the hedging instruments as of March 31, 2023 and March 31, 2022. The fair value offinancial assets related to hedging instruments is included in “Other financial assets” while the fair value of financial liabilities
related to hedging instruments is included in “Other financial liabilities” in the consolidated statements of financial position.

- 76 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
As of March 31, 2023
Notional amount

Carrying amount
Derivative assets
Derivative liabilities
JPY
USD
JPY
USD

JPY

USD

Forward exchange contracts
Commodity price risk

52,345392,015

1,129

8,461

461

3,453

Commodity futures contracts

2,755

20,639

81

609

24

181

Foreign currency risk

As of March 31, 2022
Notional amount
JPY
Foreign currency risk
Forward exchange contracts
Interest rate risk
Interest rate swap contracts
Commodity price risk
Commodity futures contracts

Carrying amount
Derivative assets
Derivative liabilities
JPY
JPY

64,587

3,156

1,037

4,724

－

16

1,189

93

87

The following tables present the notional amount and average rates of main hedging instruments.
Exchange contracts

Forward exchange in
USD

Type
ExportImportNotional amountand average rates

JPY
2023

USD
2022

2023

Notional amount

5,881

9,626

44,047

Average rate（Yen/U.S. dollers）

133.91113.67－

Notional amount

41,23647,856308,822

Average rate（Yen/U.S. dollers）

126.53113.60－The longest terms of hedging cash flow fluctuation risks by “Forward exchange contracts” and “Commodity price risk” areabout 2 years 1 month and 1 year 10 months, respectively.
The following tables present the carrying amount of cash flow hedge reserve as of March 31, 2023 and March 31, 2022.
As of March 31, 2023
Cash flow hedge reservefor continuing hedges(before tax)
JPY
USD
Foreign currency risk
Forward exchange contracts

Cash flow hedge reservefor discontinuing hedge accounting(before tax)
JPY
USD

668

5,008

－

－

57

428

349

2,618

Commodity price risk
Commodity futures contracts- 77 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
As of March 31, 2022
Cash flow hedge reservefor discontinuing hedge
accounting(before tax)
JPY

Cash flow hedge reservefor continuing hedges(before tax)
JPY
Foreign currency risk
Forward exchange contracts
Interest rate risk

2,119

(123)

(16)

－

6

(263)

Interest rate swap contracts
Commodity price risk
Commodity futures contracts

The following tables present the carrying amounts of transactions that affected the consolidated statements of comprehensive
income as a result of applying hedge accounting for the fiscal years ended March 31, 2023 and March 31, 2022.
Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
Change in value of hedging
instruments recognized inother comprehensive income
JPY

USD

Reclassification from cash
flow hedge reserve to profit
or loss
JPY

USDLine item for which profit
or loss was affected byreclassification

Foreign currency risk
Forward exchange contracts

624

4,681

(1,951)(14,618) Other income

0

6

15

115

406

3,047

257

1,929

Interest rate risk
Interest rate swap contracts

Interest expenses

Commodity price risk
Commodity futures contracts

Cost of sales

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Change in value of hedging
instruments recognized inother comprehensive income

Reclassification from cash
flow hedge reserve to profit
or loss

JPY

JPYLine item for which profit orloss was affected byreclassification

Foreign currency risk
Forward exchange contracts

2,031(1,004) Other income

Interest rate risk
Interest rate swap contracts

580Interest expenses

(257)

70

Cost of sales

Commodity price risk
Commodity futures contracts- 78 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(9) Transfer of financial assets
The Consolidated Group liquidates certain trade receivables by discounting notes or the like. However, with respect to someliquidated receivables, the Consolidated Group may be obligated to make payments as recourse for non-payment by the debtor.
The Consolidated Group continues to recognize such liquidated receivables as they do not meet the criteria for derecognition offinancial assets.
The Consolidated Group recognized such liquidated assets as “Trade and other receivables” in the amount of ¥1,901 million($14,240 thousand) and ¥1,784 million as of March 31, 2023 and March 31, 2022, respectively. In addition, liabilities relating to
the deposit amounts which arose upon the transfer of such assets were accounted for as “Bonds and borrowings” in the amountof ¥1,901 million ($14,240 thousand) and ¥1,784 million as of March 31, 2023 and March 31, 2022, respectively. Suchliabilities are settled when payments for such liquidated assets are made, and the Consolidated Group may not use suchliquidated assets until such settlement occurs.

(10) Offsetting financial assets and financial liabilities
The following tables present the financial assets and financial liabilities recognized for the same counterparties including
financial instruments that were not offset even though they were covered by an enforceable master netting arrangement orsimilar agreement because they did not meet some or all of the offsetting criteria as of March 31, 2023 and March 31, 2022.
JPY
2023
Amounts of financial assets presented in the consolidated
statement of financial position
Foreign exchangeInterest rate
Commodity
Amounts that were not offset even though they were coveredby an enforceable master netting arrangement or similar
agreement because they did not meet some or all of the

USD
2022

2023

2,239

8,043

16,774

2,074

7,603

15,539

－
164

－
440

－
1,234

(1,251)(1,005)(9,370)

988

7,038

7,404

offsetting criteria
Net amounts

JPY
2023
Amounts of financial liabilities presented in the consolidated
statements of financial position
Foreign exchangeInterest rate
Commodity
Amounts that were not offset even though they were coveredby an enforceable master netting arrangement or similar
agreement because they did not meet some or all of theoffsetting criteria
Financial collateral pledged
Net amounts

USD
2022

2023

1,644

3,544

12,312

1,582

11,850

－
61

2,779
16
749

(1,251)(1,005)(9,370)

－
462

－

(506)

－

392

2,033

2,942

Certain financial assets and financial liabilities have not been offset because they do not meet some or all of the criteria for
offsetting financial assets and financial liabilities. The rights to offset such financial assets and financial liabilities become
enforceable only under particular circumstances, such as when the other party fails to discharge an obligation due to its
bankruptcy or other such reasons.

- 79 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
31. Leases(1) Lessee
The Consolidated Group leases office building, computer-related equipment for the enterprise system (tools, furniture andfixtures) and other assets.
The profit or loss amounts recognized as lessee are presented as follows:
JPY
2023
Depreciation of right-of-use assets
Buildings and structures
Machinery, vehicles, tools, furniture and fixtures
Others

USD
2022

2023

8,188
765

7,506
704

61,320
5,733

115

94

861

Total

9,068

8,306

67,914

Interest expense on lease liabilities
Short-term lease expenses

80
394

37
397

606
2,952

Sublease income

59

49

449

The cash outflow related to lease payments are presented as follows:
JPY
2023
Cash outflow for leases

USD
2022

9,182

2023
8,664

68,766The information on the balance and increase or decrease of the right-of-use assets are provided in Note 9. Property, Plant andEquipment and Note 10. Goodwill and Intangible Assets.
And the information on the breakdown of lease liabilities by due date is presented in Note 30. Financial Instruments: (4)Liquidity risk management.

- 80 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(2) Lessor
The Consolidated Group engages in leasing of machinery, plumping equipment of LPG, aircraft parts and other assets.
The profit or loss amounts recognized as lessor are presented as follows:
JPY

USD

2023

2022

2023

Profit or loss from finance leases

6

5

47

Lease income from operating leases

109

121

821

The breakdown of lease receivables of finance lease and lease payments to be received of operating lease are presented asfollows:
JPY
USD
2023

2022

2023

Lease
payments
to be received

Lease
receivables

Lease
payments
to be received

Lease
receivables

Lease
payments
to be received

8

161

13

100

63

1,209

8

62

6

66

65

468

8

11

5

55

64

88

7

11

5

8

53

84

6

9

4

8

47

73

Over five years

4

7

7

7

32

58

Total

43

264

41

245

323

1,979

Lease
receivables
Within one year
Over one year andwithin two years
Over two years andwithin three years
Over three years andwithin four years
Over four years andwithin five years- 81 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
32. Pledged Assets(1) Pledged assets and associated secured liabilities
Details of pledged assets and associated secured liabilities are as follows:
JPY
2023

USD
2022

2023

Pledged assets:
Other financial assets (non-current)
Property, plant and equipment

46
517

46
541

348
3,876

563

587

4,223

Associated secured liabilities:
Borrowings (current)

1,121

1,054

8,396

Borrowings (non-current)

389

542

2,918

1,510

1,597

11,314

Total

Total

Trust receipts issued under customary import financing arrangements give banks a security interest in the goods imported orsales proceeds resulting from the sales of the goods. However, due to the large volume of transactions, it is impracticable todetermine the aggregate amounts of assets covered by outstanding trust receipts and those transactions were not included in theabove amounts.

(2) Assets pledged in lieu of guarantee money
The breakdown of assets pledged in lieu of guarantee money or the like is as follows:
JPY
2023

USD
2022

2023

Assets pledged in lieu of guarantee money or guarantee funds
Other investments
Total- 82 -

4,355

4,167

32,617

4,355

4,167

32,617

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
33. Contingent Liabilities(1) Liabilities for guarantees
The Consolidated Group is contingently liable for guarantees on bank borrowings and trade payables owed by entities that do
not belong to the Consolidated Group.
The Group may become responsible for the amounts that are unpayable by the borrower and for losses attached to the unpayableamounts.
JPY
USD
2023
Liabilities for guarantees for equity method investees
Liabilities for guarantees for third parties

2022

2023

63

82

476

1,228

1,194

9,201

Total
1,292
1,276
9,677
(Notes) 1. The above amounts include those for quasi-guarantee acts.
2. Liabilities for guarantees for third parties include the liabilities for guarantees covered by the insurance agreements that islimited to ¥1,225 million ($9,174 thousand) for the fiscal year ended March 31, 2023 and ¥1,189 million for the fiscal
year ended March 31, 2022, respectively.

(2) Legal proceedings1）Legal proceeding
The Company’s subsidiary, Kanematsu Communications Ltd., was subject to a claim brought by its business partner to theTokyo District Court in April 2021 for damages and other items caused by its default in connection with the transactions ofcommunication services (the business partner claimed damages in the suit of ¥14,664 million ($109,820 thousand)).
However, it is difficult to make an estimation of the loss at present.
2) Arbitration
In May 2022, the Company was subject to a petition for arbitration (in the amount of US$25 million), in which theCompany is the respondent, with the American Arbitration Association from the seller’s representative of a business
investment project that was considered and abandoned in the United States of America, in connection with a claim fordamages for breach of a nondisclosure agreement. However, it is difficult to make an estimation of the loss at present.

- 83 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
34. Significant Subsidiaries(1) Significant subsidiaries of the Company are as follows:
Trade name[Electronics and Devices]
Kanematsu Electronics Ltd.
(Notes) 1
Nippon Office Systems Ltd.

Location

Details of major operations

System integration of ICT andcommunications equipment

Chuo-ku, Tokyo, Japan

Development, sales, and maintenance ofsoftware for computers and computer

Koto-ku, Tokyo, Japan

peripherals, etc.
Kanematsu Communications
Ltd.

Shibuya-ku, Tokyo, Japan

Sales of mobile communications devices;
Mobile internet systems and services

Kanematsu Granks, Corp.

Shinjuku-ku, Tokyo, Japan

Website planning, building, and operation;
Content planning, production, and sales

Kanematsu Sustech Corp.

Chuo-ku, Tokyo, Japan

Manufacture and sales of preservation
treated wood; Ground inspection services
and improvement work; Installation andPercentage of voting
rights (%)
2023

2022

100.0058.39(0.40)

100.00(100.00)

100.00(100.00)

100.00100.00100.00100.00(100.00)(100.00)

89.98

52.97

100.00100.00100.00100.00100.00100.00100.00100.00

70.00

70.00

100.00(100.00)

100.00(100.00)

100.00(100.00)

100.00(100.00)

sales of security cameras
Kanematsu Advanced Materials
Corp.

Chuo-ku, Tokyo, Japan

Import, export, storage, sales, andprocessing of materials and components
for vehicle equipment, industrial
electronics, and communication devices

G-Printec, Inc.

Kanematsu Futuretech Solutions
Corporation

Saiwai-ku, Kawasaki-shi,
Kanagawa, Japan

Chuo-ku, Tokyo, Japan

Design, development, manufacture, sales
and maintenance services (OEM) for card
printers and related equipment
Import, export, processing, development,
design, manufacture, sales ofsemiconductors, electronic components,and module products; EMS business

NS Technologies Inc.

Okaya-shi, Nagano, Japan

Kanekoh Electronics (Shanghai)Co., Ltd.

Shanghai, China

Kanematsu Industrial andTrading (Dalian F.T.Z.) Co., Ltd.

Dalian, China

Kanematsu Advanced Materials
USA, Inc.

Design, development, and manufacture of
IC test handlers
Design, development, manufacture, andsales of control modules for lithium-ion
batteries
Manufacture of materials for electronic
precision parts and import, export andsales of electronic components

Texas, U.S.A.

Import, export, sales and processing ofmaterials and components for vehicle
equipment, industrial electronics, andcommunication devices[Foods, Meat and Grain]
Kanematsu Foods Corp.

Chuo-ku, Tokyo, Japan

Food wholesaling and cold storage

100.00100.00Kanematsu Agritec Co., Ltd.

Koshigaya-shi, Saitama,Japan

Manufacture and sales of feed andfertilizer

100.00100.00- 84 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023

Trade nameLocation

Details of major operations

Percentage of voting
rights (%)
2023

2022

100.00100.00100.00100.00

Sales of soybeans, pulses & peas, andKanematsu Soytech Corp.

Chuo-ku, Osaka, Japangrain; Development and marketing of tofu
and other ingredients for processed foods

KG Agri Products, Inc.

Ohio, U.S.A.

Seed development; Contract farming;
Sorting, processing, and sales of foodsoybeans

Kai Enterprises, Inc.

Washington, U.S.A.

Sales of hay and roughage

100.00(15.00)100.00(15.00)P.T. Kanemory Food Service

Serang, Indonesia

Manufacture of processed foods;
Management of central kitchen

59.90(10.00)59.90(10.00)[Steel, Materials and Plants]
Kanematsu Trading Corp.

Chuo-ku, Tokyo, Japan

Sales of steel and construction materials

100.00100.00

Kyowa Steel Co., Ltd.

Kasai-shi, Hyogo, Japan

Cutting and processing of steel sheet;
Sales of construction materials

100.00100.00(100.00)(100.00)

100.00100.00100.00(100.00)

100.00(100.00)

Kanematsu Chemicals Corp.

Domestic sales, import, and export ofchemical products, pharmaceuticals,
pharmaceutical ingredients, and functional

Chuo-ku, Tokyo, Japanfood materials
Kanematsu Wellness Corp.

Chuo-ku, Tokyo, Japan

Sales of health foods and provision of
medical information

Kanematsu Petroleum Corp.

Chiyoda-ku, Tokyo, Japan

Sales of petroleum products and LPG

100.00100.00Kanematsu Yuso Co., Ltd.

Chiyoda-ku, Tokyo, Japan

Delivery and storage of petroleum
products

100.00100.00Kanematsu KGK Corp.

Chuo-ku, Tokyo, Japan

Sales of machine tools and industrial
machinery

100.00100.00

Benoit Holding Company

Illinois, U.S.A.

Holding company

85.18(85.18)85.18(85.18)

Benoit Premium Threading, LLC

Louisiana, U.S.A.

Steel tubing fabrication; Manufacture andsales of steel tubing-related parts

54.00

54.00

(54.00)(54.00)

Steel Service
Oilfield Tubular, Inc.

Oklahoma, U.S.A.

Sales of steel materials for natural
resource excavation

51.00

51.00

(51.00)(51.00)KGK International Corp.

Illinois, U.S.A.

Sales of machine tools and industrial
machinery

100.00(100.00)

100.00(100.00)

Kanematsu Aerospace Corp.

Minato-ku, Tokyo, Japan

Sales of aircraft, defense, and aerospacerelated products as well as 3D laser
scanners and XR solution equipment

100.00100.00

KANEYO Co., Ltd.

Chuo-ku, Osaka, Japan

100.00100.00

90.01

90.01

[Motor Vehicles and Aerospace]

Sales of bedding, fiber raw materials forindustrial materials, and synthetic fiber
raw materials
Development and sales of network

Datatec Co., Ltd.

Ota-ku, Tokyo, Japan

services for vehicle operation
management, driving safety analysis, etc.;
Development and sales of vehicle
measuring instruments- 85 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023

Trade nameLocation

Details of major operations

Percentage of voting
rights (%)
2023

2022

Aries Motor Ltd.

Warsaw, Poland

Sales and maintenance of automobiles

93.59

93.59

Aries Power Equipment Ltd.

Warsaw, Poland

Sales of engines, generators, lawnmowers,
and other general-purpose machinery

60.00

60.00

KG Aircraft Rotables Co., Ltd.

Dublin, Ireland

Replacement and maintenance of aircraft
rotable components; Leasing; Sales

96.97

96.67

100.00100.00[Others]

Shintoa Corp.

Chiyoda-ku, Tokyo, Japan

Import, export, and sales of pet supplies,
soft drinks for vending machines, aeroengines, feed materials, and metal
products

Chuo-ku, Tokyo, Japan

Insurance agency and forwarding
business; Consigned freight forwarding
business

100.00100.00[Overseas local subsidiaries]
Kanematsu USA Inc.

Illinois, U.S.A.

Export, import and sales of merchandise

100.00100.00Kanematsu (China) Co., Ltd.

Shanghai, China

Export, import and sales of merchandise

100.00100.00Kanematsu (Thailand) Ltd.

Bangkok, Thailand

Export, import and sales of merchandise

100.00100.00Watana Inter-Trade Co., Ltd.
(Notes) 2

Bangkok, Thailand

Export, import and sales of merchandise

49.00(24.00)49.00(24.00)Kanematsu (Singapore) Pte. Ltd.

Singapore, Singapore

Export, import and sales of merchandise

100.00100.00Kanematsu Taiwan Corp.

Taipei, Taiwan

Export, import and sales of merchandise

100.00100.00Kanematsu Europe Plc

London, U.K.

Export, import and sales of merchandise

100.00(100.00)

100.00(100.00)

Kanematsu Logistics &Insurance Ltd.

Kanematsu GmbH

Duesseldorf, Germany

Export, import and sales of merchandise

100.00100.00Kanematsu Australia Ltd.

Sydney, Australia

Export, import and sales of merchandise

100.00100.00Kanematsu New Zealand Ltd.

Auckland, New Zealand

Export, import and sales of merchandise

100.00100.00Kanematsu Korea Corporation.

Seoul, Korea

Export, import and sales of merchandise

100.00100.00Kanematsu Trading (Hong
Hong Kong, China
Export, import and sales of merchandise
100.00100.00Kong) Ltd. (Notes) 3(Notes) 1. As described in (3) Transaction with non-controlling interests 1) Additional acquisition of shares of Kanematsu
Electronics Ltd., the Company reported in its accounting records that it owned a 100% equity in Kanematsu Electronics
Ltd. as of the end of the current fiscal year.
2. It is treated as a subsidiary because the Consolidated Group has a substantial control of the finance and management
policy over the company through the dispatch of the majority of board members.
3. Kanematsu (Hong Kong) Ltd. was excluded from significant subsidiaries because its business was transferred toKanematsu Trading (Hong Kong) Ltd., and its business activities ceased in the previous fiscal year.
4. The figures in the parentheses in “Percentage of voting rights” indicate the indirect ownership ratio included in the total.

- 86 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(2) Non-controlling interests
The subsidiary with non-controlling interests that is significant for the Consolidated Group is Kanematsu Electronics Ltd. forthe fiscal year ended March 31, 2022. Its condensed financial information is presented as follows. The amounts presented below
are before the elimination of intra-company transactions.
As a result of additional acquisition of shares of Kanematsu Electronics Ltd., there has been no subsidiaries with non-controllinginterests that is significant for the Consolidated Group for the fiscal year ended March 31, 2023.
[Condensed statement of financial position]
JPY
2022
Current assets
Current liabilities

75,012
18,975Current assets (net)Non-current assets
Non-current liabilities

56,037
9,120
3,360

Non-current assets (net)

5,759

Equity61,796

Cumulative amounts of non-controlling interests

25,837[Condensed statements of income and comprehensive income]
JPY
2022
Revenue

71,257

Profit for the year

8,651

Other comprehensive income

881

Total comprehensive income

9,533

Profit for the year attributable to non-controlling interests

3,604

Dividends paid to non-controlling interests

1,731[Condensed statement of cash flows]
JPY
2022
Cash flows from operating activities

9,216

Cash flows from investing activities
Cash flows from financing activities(1,073)(5,367)

Increase (decrease) in cash and cash equivalents, net

2,774- 87 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(3) Transaction with non-controlling interests
1) Additional acquisition of shares of Kanematsu Electronics Ltd.
In the current fiscal year, the Company conducted a tender offer based on the Financial Instruments and Exchange Act for thecommon shares of its consolidated subsidiary Kanematsu Electronics Ltd., and acquired 90.71% of its shares as of March 20,2023.
On March 31, 2023, the Company requested non-controlling interests of Kanematsu Electronics Ltd., based on Article 179,
Paragraph 1 of the Companies Act, to sell all the shares they owned (9.29%) to the Company, which was approved on the same
day by the Board of Directors of Kanematsu Electronics Ltd. As a result of the transaction, the Company became the owner of
100% of the shares of Kanematsu Electronics Ltd. as of the end of the current fiscal year.
Outline of the transactions with non-controlling interests following the aforementioned is as follows.
JPY

USD

2023

2023

Consideration paid

74,088554,847

Decrease in non-controlling interest(27,519)(206,095)

Decrease in capital surplus(46,568)(348,752)(Notes) 1. Consideration paid does not include transaction costs. ¥16,482 million ($123,435 thousand)) of the consideration paid isoutstanding as at the end of the current fiscal year, which is recorded in “other financial liabilities” in the consolidated
statement of financial position.
2. The negative capital surplus resulting from the aforementioned transaction is replenished by a transfer from retained
earnings.
As a demand to cash out became effective, the Company acquired all shares of Kanematsu Electronics Ltd. as of May 9, 2023,
and Kanematsu Electronics Ltd. became a wholly owned subsidiary of the Company.
2) Additional acquisition of shares of Kanematsu Sustech Corporation
In the current fiscal year, the Company conducted a tender offer based on the Financial Instruments and Exchange Act for thecommon shares of its consolidated subsidiary Kanematsu Sustech Corporation, and acquired 89.86% of its shares as of March
20, 2023.
As a result of the equity transaction with non-controlling interests following the aforementioned tender offer, non-controllinginterests and capital surplus decreased, which, however, is not financially material.
Based on the results of the aforementioned tender offer, the Company requested Kanematsu Sustech Corporation to conduct a
consolidation of its shares based on Article 180 of the Companies Act, in order to acquire all shares of Kanematsu Sustech
Corporation, and is scheduled, upon completion of the procedure, to became the owner of 100% of the shares of Kanematsu
Sustech Corporation.

- 88 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
35. Related Parties(1) Related party transactions
Fiscal year ended March 31, 2023
Type
AssociateTransaction amount

Detail of related party
relationship

Name

JPY

Sales of merchandise(including subsidiaries of
the associate)
Associate
Associate
Associate

AJUSTEEL Co., Ltd.

Loans of funds

Outstanding amount

USD

JPY

USD

251

1,885

4,463

33,427

1,068

8,000

1,068

8,000

44

330

3,068

22,982ATAD Steel
Structure Corp.

Sales of merchandise

Sage Hill

Purchase of merchandise

2,956

22,143439

3,289

Northwest, Inc.

Loans of funds

1,068

8,000

1,068

8,000

Hokushin Co., Ltd.

Sales of merchandise

117

879

1,732

12,971(Notes) 1. The related party transaction amounts are determined through negotiation with consideration given to the prevailingmarket prices.
2. As described in Note 33 Contingent Liabilities: (1) Liabilities for Guarantees, debt guarantees are provided to the equity
method investees.
3. As the Consolidated Group conducts a transaction as a party involved, transaction amount of AJUSTEEL Co., Ltd.,ATAD Steel Structure Corp. and Hokushin Co., Ltd. are presented in the net amount of the commission.
4. Loans of funds are under general terms and conditions that are the same as those of transactions with a third party.
5. There is no allowance for doubtful accounts on the outstanding amounts.
Fiscal year ended March 31, 2022
Type

Detail of related party
relationship

Name

Associate(including subsidiaries of
the associate)

AJUSTEEL Co., Ltd.

Sales of merchandise

Associate

Sage Hill
Northwest, Inc.

Purchase of merchandise

Associate

Hokushin Co., Ltd.

Sales of merchandise

Transaction amount

Outstanding amount

JPY

JPY
279

5,839

1,975

326

93

1,376

(Notes) 1. The related party transaction amounts are determined through negotiation with consideration given to the prevailingmarket prices.
2. As described in Note 33 Contingent Liabilities: (1) Liabilities for Guarantees, debt guarantees are provided to the equity
method investees.
3. As the Consolidated Group conducts a transaction as a party involved, transaction amount of AJUSTEEL Co., Ltd. andHokushin Co., Ltd. are presented in the net amount of the commission.

(2) Remuneration to management executives
The remuneration to the Company’s directors and auditors consists of base compensation, performance-linked compensationand performance-linked stock compensation.
The amount of remuneration to the Company’s directors and audit and supervisory board members are as follows:
JPY
USD
2023

2022

2023

Base compensation and performance-linked compensation

295

287

2,214

Performance-linked stock compensation

49

43

367

Total
344
2,582
331
(Note) The amount of performance-linked stock compensation for the fiscal years ended March 31, 2023 and March 31, 2022 are
expenses of performance-linked stock compensation during the fiscal years ended March 31, 2023 and March 31, 2022.

- 89 -

KANEMATSU CORPORATION AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
36. Share-based Payments(1) Performance-Linked Stock Compensation Plan
The Company and certain subsidiaries implemented a Performance-Linked Stock Compensation Plan for Directors andExecutive Officers. The aim of adoption of the Plan is to further clarify the linkage between compensation of Directors andExecutive Officers and the corporate performance and stock value of the Company and certain subsidiaries, and to encouragethem to contribute to mid- to long-term improvement in the corporate performance and expansion of corporate value because
they will share the benefits and risks of stock price fluctuations with the shareholders.
Expenses related to the Performance-Linked Stock Compensation Plan for certain subsidiaries are not presented because they
are not significant.
The vesting condition for the Performance-Linked Stock Compensation Plan for Directors and Executive Officers of theCompany is that after granted date they will work continuously until achieving certain performance goals and vesting. The
stocks will be granted to Directors and Executive Officers in the final year of the medium-term vision (from April 1, 2018 toMarch 31, 2024), or the fiscal year that achieved the medium-term vision.

(2) Granted stocks and granted prices of shares
The fair value of the granted date was estimated using the Black-Scholes model considering expected dividends based on past
dividend payments. The number of shares granted during the fiscal years ended March 31, 2023 and March 31, 2022 and theweighted average share price are as follows.
2023
Number of shares
Share

2022

Weighted average
share priceYen

U.S.dollar

Number of shares

Weighted average
share price

Share

Yen

As of the beginning of theyear

179,4321,464

11

102,036

1,490

Granted92,8381,416

1182,564

1,439

Exercised (Note)(30,113)

1,583

12

(5,168)

1,583

－

－

－

－

－

As of the end of the year

242,157

1,431

11

179,432

1,464

Exercisable balance
as of the end of the year

－

－

－

－

－

Forfeited(Note) The number of shares exercised during the fiscal year ended March 31, 2023 are the shares granted to a Director and an
Executive Officer who resigned in the period. The number of shares exercised during the fiscal year ended March 31, 2022
are the shares granted to an Executive Officer who resigned in the period.

(3) Stock compensation expenses
The performance-Linked Stock Compensation Plan is an equity-settled share-based payment transaction. The stockcompensation expenses for the fiscal years ended March 31, 2023 and March 31, 2022 are ¥131 million ($984 thousand) and¥118 million, respectively.

37. Subsequent Events
Not applicable.

- 90 -

Independent Auditor’s Report
To the Board of Directors of Kanematsu Corporation
OpinionWe have audited the non-consolidated financial statements of Kanematsu Corporation (the Company),
which comprise the non-consolidated balance sheet as at March 31, 2023, and the non-consolidated
statement of income and non-consolidated statement of changes in net assets for the year then ended,and notes to the non-consolidated financial statements.
In our opinion, the accompanying non-consolidated financial statements present fairly, in all material
respects, the financial position of the Company as at March 31, 2023, and its financial performance forthe year then ended in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Non-Consolidated Financial Statements section of our report. We are independent of theCompany in accordance with the ethical requirements that are relevant to our audit of the nonconsolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities inaccordance with these requirements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the non-consolidated financial statements of the current period. These matters wereaddressed in the context of our audit of the non-consolidated financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers Aarata LLC
Otemachi Park Building, 1-1-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
T: +81 (3) 6212 6800, F: +81 (3) 6212 6801, www.pwc.com/jp/assuranceAssessment of the recoverability of deferred tax assets(Notes to non-consolidated financial statements “Significant Accounting Estimates” “Deferred tax
assets and tax liabilities”)
Key Audit Matter Description
How Our Audit Addressed the Key Audit Matter
The Company recognizes deferred tax assets,
We performed mainly the following audit
those amounts of significant tax loss
procedures in relation to the recoverability ofcarryforwards and deductible temporarydeferred tax assets.
● We evaluated the design and implementation,differences that are expected to be recovered inand tested the operating effectiveness ofthe future. The balance of deferred tax assetsinternal controls over the deferred tax assets
before valuation allowances was ¥6,848 million,
recoverability assessment process.
and valuation allowances were ¥5,228 million as● We examined whether the classification of theof the end of March 2023. The balance ofcompany is appropriate in accordance withdeferred tax assets net of valuation allowances
criteria of the Implementation Guidance on
was ¥1,620 million (0.4% of total assets). The net
Recoverability of Deferred Tax Assets
deferred tax assets (liabilities) balance in the non(Accounting Standards Board of Japan
consolidated statement of financial position after
Guidance No. 26) and Practical Solution on
netting deferred tax liabilities is deferred tax
the Accounting and Disclosure Under theliabilities of ¥1,303 million.
The Company applies the Group Tax Sharing
Group Tax Sharing System (Accounting
System and assesses the recoverability of deferredStandards Board of Japan Practical Solution
tax assets in accordance with the Implementation
No.42).
Guidance on Recoverability of Deferred Tax● We inspected the management meeting
Assets (Accounting Standards Board of Japan
minutes and compared the schedule ofGuidance No. 26) and Practical Solution on thereversals of deductible and taxable temporary
Accounting and Disclosure Under the Group Tax
differences expected in respective financial
Sharing System (Accounting Standards Board ofyears with the schedule approved by
Japan Practical Solution No.42).
management.
Gross profit included in the future business plan
● We examined the reasonableness of estimatesused as an assumption of future taxable income
made in the previous year by comparing theestimation is affected by fluctuations in various
scheduling of expected reversals made in themarket trends and conditions in various countries
previous year with the actual reversals in thearound the world. Therefore, there is a relatively
current year. We also examined whether thehigh degree of estimation uncertainty present inchanges of the timing of reversals of
the assessment of the recoverability of deferred
temporary differences reflect reasonable facts.
tax assets.
● We inspected the management meeting
In addition, the timing and related availability ofminutes and compared the estimated futuretaxable and deductible temporary differences
taxable income including subsidiaries in thewhich can be used to offset taxable income could
tax sharing group with the forecasts approved
be affected by changes in the external
by management.
environment and also management decisions● With regard to the Company's businessbased on changes in internal circumstances.
segment forecasts including gross profit for
These factors could result in an increase or athe current and following year, which is thedecrease in deferred tax assets. The balance ofbasis for estimating future taxable income, wedeferred tax assets is quantitatively material andcompared the actual results of previous years
there is a relatively high degree of estimationand current year, and also compared those
uncertainty and subjective judgment by
forecasts to information obtained, such as
management in estimating future taxable incomechanges in market trends for each businessas well as the timing and related availability ofsegment, to determine whether the forecast is
taxable and deductible temporary differences.
consistent.
As such, we concluded that the recoverability of● We compared the estimate of taxable income
deferred tax assets is a key audit matter.
for the current year of each group subsidiaries

2 of 5

in the tax sharing group with the current
year’s actual taxable income.
● We assessed the reasonableness of theforecasted taxable income of major groupsubsidiaries in the tax sharing group bycomparing their forecasted taxable incomeswith the past and actual results for the current
year and with relevant internal and external
information obtained in the audit.
● We examined the calculation of taxable
income by using tax specialists.
Other Information
Other information comprises information included in a document containing audited nonconsolidated financial statements, but does not include the non-consolidated financial statements andour auditor’s report thereon. We have determined that there is no other information and thus have not
performed any work on other information.
Responsibilities of Management, Audit & Supervisory Board and each Audit &Supervisory Board Member for the Non-Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the non-consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of non-consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements, management is responsible for assessing theCompany’s ability to continue as a going concern and disclosing, as applicable, matters related to going
concern.
The audit & supervisory board and each audit & supervisory board member are responsible foroverseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Non-Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the non-consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with auditing standards generally accepted inJapan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these non-consolidated
financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the non-consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting from

3 of 5

error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the non-consolidated
financial statement audit is not to express an opinion on the effectiveness of the Company’s internal
control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the non-consolidated financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
Evaluate whether the presentation and disclosures of the non-consolidated financial statements arein accordance with accounting principles generally accepted in Japan, the overall presentation,
structure and content of the non-consolidated financial statements, including the disclosures, andwhether the non-consolidated financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

We communicate with the audit & supervisory board and each audit & supervisory board member
regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the audit & supervisory board and each audit & supervisory board member with astatement that we have complied with relevant ethical requirements regarding independence, and tocommunicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with the audit & supervisory board and each audit & supervisoryboard member, we determine those matters that were of most significance in the audit of the nonconsolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Convenience translation
The U.S. dollar amounts in the accompanying non-consolidated financial statements with respect tothe year ended March 31, 2023 are presented solely for convenience. Our audit also included thetranslation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made on the basis described in Note 3 to the non-consolidated financial statements.

4 of 5

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Takayoshi Yano
Designated Engagement Partner
Certified Public Accountant
Masaki Nitta
Designated Engagement Partner
Certified Public Accountant
Shinya Hiraoka
Designated Engagement Partner
Certified Public Accountant
PricewaterhouseCoopers Aarata LLC
July 25, 2023

Notes to the Reader of Independent Auditor's Report:
This is a copy of the Independent Auditor's Report and the original report is kept separately by theCompany.

5 of 5

KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023

~NON-CONSOLIDATED FINANCIAL STATEMENTS~

PAGES

Non-consolidated Balance Sheet ……………………………………………………………………………………………

1

Non-consolidated Statement of Income ………………………………………………………………………………………

5

Non-consolidated Statement of Changes in Net Assets ………………………………………………………………………

6~NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS~
1. Basis of Preparing Non-consolidated Financial Statements ……………………………………………………………

9

2. Summary of Significant Accounting Policies ……………………………………………………………………………

9

3. United States Dollar Amounts …………………………………………………………………………………………

12

4. Significant Accounting Estimates ………………………………………………………………………………………

12

5. Changes in Accounting Policies ………………………………………………………………………………………

12

6. Notes to Non-Consolidated Balance Sheet ………………………………………………………………………………

13

7. Notes to Non-Consolidated Statement of Income ………………………………………………………………………

14

8. Short-term Investments and Investments in Securities …………………………………………………………………

14

9. Deferred Taxes …………………………………………………………………………………………………………

15

10. Revenue Recognition ……………………………………………………………………………………………………

15

11. Subsequent Events ………………………………………………………………………………………………………

16

12. Supplemental Schedules ………………………………………………………………………………………………

16

KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Non-consolidated Balance Sheet
JPY
2023

USD (Note 3)
2022

2023

(Assets)
Ⅰ. Current assets
1. Cash and bank deposits

9,833

14,79273,641

2. Notes receivable (Note 6-6)

1,384

1,338

10,372

3. Accounts receivable (Note 6-6)

76,01373,235569,265

4. Short-term investments

1

1

12

5. Inventories (Note 6-1)

61,812

51,346462,913

6. Advance payments to suppliers

2,625

8,537

19,661

7. Prepaid expenses

1,095

791

8,203

8. Short-term loans receivable

4

2

32

9. Short-term loans to affiliates

34,59625,854

259,090

10. Other accounts receivable (Note 6-6)

4,625

5,632

34,641

11. Derivatives

2,014

7,776

15,089

12. Other (Note 6-6)

5,329

4,146

39,911

(21)

(29)

(161)

199,316

193,427

1,492,669

1) Buildings

1,435

130

10,7532) Structures

－

0

－

3) Machinery and equipment

207

50

1,553

0

0

0

483

129

3,620

5

5

41

7) Lease assets

351

314

2,636

8) Construction in progress

－

98

－

Total tangible fixed assets

2,484

729

18,603

13. Allowance for doubtful accounts
Total current assets
Ⅱ. Long-term assets
1. Tangible fixed assets

4) Vehicles
5) Tools and fixtures
6) Land(Notes) Presentation of fiscal year and amount (Japanese Yen and U.S. dollars)
1. “2023” refers to the Company’s non-consolidated fiscal year ended March 31, 2023 and the other fiscal year is referred toin the corresponding manner.
2. “JPY” means millions of Japanese Yen and “USD” means thousands of U.S. dollars.

- 1 -KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
JPY
2023
2. Intangible assets
1) Software
2) Telephone subscription rights

USD (Note 3)
2022

2023

652

731

4,886

－

7

－

3) Other

45

69

339

Total intangible assets

697

808

5,225

1) Investments in securities (Note 6-2)

23,24521,030174,0822) Shares of affiliates

143,890

84,051

1,077,586

3) Equity investments

1,578

2,195

11,8204) Equity investments in affiliates

6,141

6,141

45,9965) Long-term loans receivable

1,257

1,257

9,414

7

23

53

3. Investments and other assets

6) Long-term loans to employees
7) Long-term loans to subsidiaries and affiliates

2,521

1,716

18,8808) Doubtful accounts (Note 6-3)

265

252

1,985

9) Long-term prepaid expenses

133

15

1,001

10) Prepaid Pension Cost
11) Other

279

37

2,093

1,642

2,259

12,302

12) Allowance for doubtful accounts(2,807)(2,779)(21,029)

Total investments and other assets

178,153

116,2021,334,184

181,335

117,740

1,358,012

65

87

494

Total long-term assets
Ⅲ. Deferred assets
1. Bond issuance costs
Total deferred assets
Total assets

- 2 -

65

87

494

380,717311,255

2,851,176

KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
JPY
2023

USD (Note 3)
2022

2023

(Liabilities)
Ⅰ. Current liabilities
1. Notes payable

119

127

895

2. Import bills payable (Note 6-6)

57,90765,182433,663

3. Accounts payable (Note 6-6)

24,24523,977

181,570

4. Current portion of bonds

－

5,000

－

108,119

22,390809,700

228

176

1,709

7. Other accounts payable (Note 6-6)

9,099

7,673

68,147

8. Accrued expenses (Note 6-6)

2,682

604

20,0895. Short-term borrowings
6. Lease obligations (Note 6-6)

9. Accrued income taxes

393

598

2,943

10. Advances received from customers

2,173

8,402

16,277

11. Deposits received (Note 6-6)

32,280

4,310

2,640

12. Deferred revenue

39

23

296

13. Asset Retirement Obligations

280

263

2,097

1,310

3,141

9,817

19

192

144

14. Derivatibes liabilities
15. Other provisions
16. Other (Note 6-6)

17

18

131

210,945

140,413

1,579,758

1. Bonds

15,00015,000112,334

2. Long-term borrowings

46,23450,579346,247

3. Lease obligations (Note 6-6)
4. Provision for employees’ retirement and severance
benefits
5. Provision for loss on affiliated business

169

190

1,266

18

17

138

－

13

－

6. Provision for stock benefits

383

284

2,871

7. Asset retirement obligations

356

27

2,668

1,303

1,894

9,760

Total current liabilities
Ⅱ. Non-current liabilities

8. Deferred tax liabilities
9. Other (Note 6-6)
Total non-current liabilities
Total liabilities

- 3 -

134

188

1,011

63,59968,195476,295

274,544

208,608

2,056,053

KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
JPY
2023

USD (Note 3)
2022

2023

(Net assets)
Ⅰ. Shareholders’ equity
1. Common stock

27,781

27,781

208,052

26,887

26,887201,356

2. Capital surplus
1) Legal capital surplus2) Other capital surplus
Total capital surplus

0

0

4

26,887

26,887201,361

131

131

988

3. Retained earnings
1) Legal retained earnings
2) Other retained earnings
Voluntary reserve

1,836

1,836

13,750Retained earnings brought forward

44,73342,093335,004
349,742

Total retained earnings

46,70144,061

4. Treasury stock(1,248)(1,294)(9,353)

Total shareholders’ equity

100,120

97,435

749,801

5,237

4,025

39,220Ⅱ. Valuation and translation adjustments
1. Net unrealized gains (losses) on securities, net of tax
2. Net gains (losses) on deferred hedges, net of tax

814

1,186

6,101

6,051

5,211

45,321

Total net assets

106,172

102,646

795,123

Total liabilities and net assets

380,717311,255

2,851,176

Total valuation and translation adjustments- 4 -KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Non-consolidated Statement of Income
JPY
2023

USD (Note 3)
2022

2023

Ⅰ. Revenue (Note 7-1)
Ⅱ. Cost of sales (Notes 7-1, 7-2)

393,934
375,563

336,492
323,272

2,950,155
2,812,576

Gross profit

18,37018,416

13,22014,068

137,579
137,918

(45)

(848)

(338)

Ⅲ. Selling, general and administrative expenses (Note 7-3)
Operating loss
Ⅳ. Non-operating income
1. Interest income (Note 7-1)

885

447

6,630

2. Dividend income (Note 7-1)

9,757

10,05773,073

3. Foreign exchange gains

4,157

1,274

31,134

465

463

3,488

15,266

12,242

114,326

2,634

1,019

19,7294. Other (Note 7-1)
Total
Ⅴ. Non-operating expenses
1. Interest expenses (Note 7-1)
2. Other (Note 7-1)
Total
Ordinary income

374

207

2,806

3,009

1,227

22,534

12,211

10,16691,45490

Ⅵ. Extraordinary gains
1. Gain on sale of tangible fixed assets

1226

2. Gain on sale of intangible fixed assets

1

－

15

3. Gain on sale of investments in securities

413

618

3,098

Total

427

645

3,203

1. Loss on disposal of fixed assets

36

2

271

2. Loss on sale of investments in securities

2

2

15

1,504

1,598

11,2672,278

3

17,061

3

207

22

3,823

1,813

28,636

Income taxes-current

8,815
1,030

8,998
1

66,021
7,720

Income taxes-deferred

(962)

414

(7,207)

Ⅶ. Extraordinary losses

3. Loss on valuation of investment securities
4. Loss on refunding due to capital reduction of subsidiaries
and affiliates
5. Provision of allowance for doubtful accounts for
subsidiaries and affiliates and loss on affiliated business
Total
Income before income taxes

Total

68

416

513

Net income

8,747

8,582

65,508- 5 -KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Non-consolidated Statement of Changes in Net Assets
Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(JPY)
Shareholders’ equity
Retained earnings

Capital surplus

Other retained earnings
Commonstock

Balance at the beginning of
the fiscal year
Changes during the fiscal
year

27,781Legalcapitalsurplus

Othercapitalsurplus26,8870

Total
capitalsurplusLegalretainedearnings

26,887131

Total
retainedearnings

Voluntary
reserve

Retainedearnings
brought
forward

1,836

42,09344,061

Treasury
stock

Total
shareholders’equity(1,294)97,435

Dividends－(6,107)(6,107)(6,107)

Net income

－

8,747

8,747

8,747

Acquisition of treasury
stock

－

－

(2)

(2)

Disposition of treasury
stock

－

－

47

47

Net changes of items otherthan shareholders’ equity
during the fiscal year

－

－

－

Total changes during the
fiscal year

－

－

－

－

－

－

2,640

2,640

45

2,685

Balance at the end of the
fiscal year

27,781

26,887026,887131

1,836

44,73346,701(1,248)100,120

Valuation and translation adjustments
Net unrealized gains (losses) on Net gains (losses) on deferred Total valuation and translation
securities, net of tax
hedges, net of tax
adjustments
Balance at the beginning of
the fiscal year
Changes during the fiscal
year

4,025

1,186

Total net assets

5,211

102,646

Dividends－(6,107)

Net income

－

8,747

Acquisition of treasury
stock

－

(2)

Disposition of treasury
stock

－

47

Net changes of items otherthan shareholders’ equity
during the fiscal year

1,211

(371)

840

840

Total changes during the
fiscal year

1,211

(371)

840

3,525

Balance at the end of the
fiscal year

5,237

814

6,051

106,172- 6 -KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(JPY)
Shareholders’ equity
Retained earnings

Capital surplus

Other retained earnings
Commonstock

Balance at the beginning of
the fiscal year
Changes during the fiscal
year

27,781Legalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

26,887026,887131

Total
retainedearnings

Voluntary
reserve

Retainedearnings
brought
forward

1,836

38,56540,533

Treasury
stock

Total
shareholders’equity(1,300)93,901Dividends－(5,054)(5,054)(5,054)

Net income

－

8,582

8,582

8,582

Acquisition of treasury
stock

－

－

(2)

(2)

0

－

8

8

－

－

Disposition of treasury
stock

0

Net changes of items otherthan shareholders’ equity
during the fiscal year－

Total changes during the
fiscal year

－

－

0

0

－

－

3,527

3,527

5

3,533

Balance at the end of the
fiscal year

27,781

26,887026,887131

1,836

42,09344,061(1,294)97,435

Valuation and translation adjustments
Net unrealized gains (losses) on Net gains (losses) on deferred Total valuation and translation
securities, net of tax
hedges, net of tax
adjustments
Balance at the beginning of
the fiscal year
Changes during the fiscal
year

3,631

611

Total net assets

4,243

98,144

Dividends－(5,054)

Net income

－

8,582

Acquisition of treasury
stock

－

(2)

Disposition of treasury
stock

－

8

Net changes of items otherthan shareholders’ equity
during the fiscal year

394

574

968

968

Total changes during the
fiscal year

394

574

968

4,502

Balance at the end of the
fiscal year

4,025

1,186

5,211

102,646- 7 -KANEMATSU CORPORATIONNON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
USD (Note 3)
Shareholders’ equity
Retained earnings

Capital surplus

Other retained earnings
Commonstock

Balance at the beginning of
the fiscal year
Changes during the fiscal
year

208,052

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

201,3564

201,361988

Total
retainedearnings

Voluntary
reserve

Retainedearnings
brought
forward13,750315,233

329,971

Treasury
stock

Total
shareholders’equity(9,695)

729,688

Dividends－(45,737)(45,737)(45,737)

Net income－

65,50865,50865,508Acquisition of treasury
stock

－

－

(16)

(16)

Disposition of treasury
stock

－

－

358

358

Net changes of items otherthan shareholders’ equity
during the fiscal year

－

－

－

Total changes during the
fiscal year

－

－

－

－

－

－

19,771

19,771

342

20,113

Balance at the end of the
fiscal year

208,052

201,3564

201,361988

13,750335,004

349,742(9,353)749,801

Valuation and translation adjustments
Net unrealized gains (losses) on Net gains (losses) on deferred Total valuation and translation
securities, net of tax
hedges, net of tax
adjustments
Balance at the beginning of
the fiscal year
Changes during the fiscal
year

39,030768,718

Dividends－(45,737)

Net income－

65,508Acquisition of treasury
stock

－

(16)

Disposition of treasury
stock

－

358

Net changes of items otherthan shareholders’ equity
during the fiscal year

30,147

8,883

Total net assets

9,073(2,782)

6,291

6,291

Total changes during the
fiscal year

9,073

(2,782)

6,291

26,404

Balance at the end of the
fiscal year

39,2206,101

45,321

795,123- 8 -KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
1. Basis of Preparing Non-consolidated Financial Statements(1) The Method of Producing the Non-consolidated Financial Statements
The non-consolidated financial statements of Kanematsu Corporation (the “Company”) are prepared in accordance with theOrdinance on Terminology, Forms, and Preparation Methods of Financial Statements (Ministry of Finance Ordinance No.59,
1963; hereinafter, the “Regulations”).
The non-consolidated financial statements are prepared in accordance with Article 127 of the Regulations.
The Company maintains its accounts and records in accordance with the provisions set forth in the Companies Act of Japan andthe Financial Instruments and Exchange Act of Japan, and in conformity with accounting principles generally accepted in Japan,
which are different in certain respects as to application and disclosure requirements of International Financial ReportingStandards.

(2) Japanese Yen AmountAmounts less than one million yen have been omitted, since the Regulations require such amounts to be rounded down forpresentation. As a result, the totals shown in the non-consolidated financial statements and notes thereto do not necessarily agreewith the sum of the individual account balances or breakdowns.

2. Summary of Significant Accounting Policies(1) Bases and Methods of Valuation of Assets
1) Short-term Investments and Investments in Securities(ⅰ) Held-to-maturity bonds
Debt securities are stated at cost less the amortization of any premium or discounts, which are amortized over the period tomaturities.
(ⅱ) Equity securities in subsidiaries and affiliates
Cost method based on the moving average method.
(ⅲ) Other securities (Non-trading purpose)
・Securities other than shares, etc. in the absence of market prices
Marketable securities are stated at fair value based on the market price at the end of the fiscal year.
Net unrealized gains or losses on securities are recorded in the equity. The cost of sales for marketable securities are
determined by the moving average method.
・Shares, etc. in the absence of market prices
Non-marketable securities are stated at cost determined by the moving average method.
2) Derivatives
Derivatives are stated at fair value.
3) Inventories
Inventories are principally stated at cost determined by the moving average method (carried at the lower of cost or market valueon the balance sheet).

(2) Tangible Fixed Assets and Intangible Assets
1) Tangible fixed assets (excluding lease assets)
The straight-line method is used.
2) Intangible assets
The straight-line method is used.
Additionally, software for internal use is amortized using the straight-line method over the estimated useful life of five years.
3) Lease assets
Depreciation on lease assets relating to finance lease transactions that do not transfer ownership is recorded using the straightline method over the lease term, assuming a residual value of zero.
Finance lease transactions that commenced on or before March 31, 2008 are accounted for as operating leases.

- 9 -KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(3) Provisions
1) Allowance for Doubtful Accounts
The Company provides an allowance for doubtful accounts to cover credit losses, based on estimates of collectability of
individual accounts and past bad debt loss experiences.
2) Provision for Employees’ Retirement and Severance Benefits (Prepaid Pension Costs)
The Company provides for retirement provision based on the present value of projected benefit obligations and the fair value ofthe plan assets at the end of the fiscal year.
In calculating retirement benefit obligation, the benefit formula basis is used to attribute projected benefits to the period up to
the end of the fiscal year.
Prior service costs are amortized as expenses using the straight-line method over five years, a period selected by the Company
within the average expected remaining service period of the employees.
Actuarial gains and losses are amortized using the straight-line method over five years, a period selected by the Company
within the average expected remaining service period of the employees, from the following fiscal years after the actuarial gains
or losses are recognized.
At the end of the current fiscal year, since plan assets exceeded retirement benefit obligations less unrecognized actuarial
differences, the excess amount is recorded as prepaid pension cost.
3) Provision for Directors' and Executive Officers' stock benefits
The Company provides a provision for stock benefits of shares of the Company in accordance with the stock delivery rules
based on the projected amount of payment for stock benefits at the end of the current fiscal year.
4) Provision for Loss on Affiliated Business
The Company provides a provision for potential losses considering affiliated companies’ financial conditions to be prepared for
future finance.

(4) Revenue and Expense Recognition
1) Revenue recognition policies
The Company recognizes revenue from contracts with customers based on the following five-step approach.
Step 1: Identifying contracts with customers
Step 2: Identifying performance obligations in contracts
Step 3: Determining the transaction price
Step 4: Allocating the transaction price to performance obligations in contracts
Step 5: Recognizing revenue when (or as) the Company satisfies the performance obligations
When a single contract consists of multiple performance obligations, the Company divides the transaction into separate
performance obligations and recognizes revenue for each performance obligation. When multiple contracts must be combined
and considered a single contract because of the economic substance of those contracts the Company recognizes revenue fromthe combined contracts.
In identifying a performance obligation, the Company reviews whether it is a principal or an agent, and if the nature of theCompany’s promise is a performance obligation to provide the identified goods or services itself, the Company recognizes
revenue at the total amount of consideration received from the customer as a principal. On the other hand, if the performanceobligation is to arrange for the identified goods or services to be provided by another party, the Company recognizes revenue atthe net amount of the commission, and other contract-related costs, as an agent.
In reviewing to identify whether a principal or an agent, the Company makes a comprehensive judgement based on thefollowing indicators.
- Whether the Company is primarily responsible for fulfilling the contract.
- Whether the Company has the inventory risk both when goods are shipped and when goods are returned before and after thecustomer places an order for the goods.
- Whether the Company has discretion in establishing the price for the goods or services of the other party.
The Company measures revenues based on the consideration promised under contracts with customers, but there is no
significant variable consideration.
Consideration for transactions does not include material financial elements, since it is received usually within one year after
performance obligations are fulfilled.
2) Timing of revenue recognition
The Company mainly sells goods such as semiconductor manufacturing equipment, electronic components and materials, grain,meat products & seafoods, steel products, petroleum products, vehicles parts, aerospace-related products in the four segmentsof Electronics & Devices, Foods, Meat & Grain, Steel, Materials & Plant, and Motor Vehicles & Aerospace. It recognizes
revenue at the time when performance obligations are delivered because customers obtain control of the goods and theperformance obligations are generally satisfied at the time of delivery.

- 10 -

KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(5) Other Significant Matters
1) Translation of Foreign Currencies
All monetary assets and liabilities denominated in foreign currencies are translated into yen at spot exchange rates prevailing at
the balance sheet date. Resulting translation gains and losses are included in determination of net income for the period.
2) Hedge Accounting(ⅰ) Hedge accounting method
The Company applies hedge accounting whereby gains and losses on hedged transactions are deferred and recognized overfuture periods. For certain interest rate swaps designated as hedging instruments that meet specific matching criteria, theamounts received or paid under such interest rate swap agreements are added to or deducted from the interest on thehedged assets or liabilities when paid.
(ⅱ) Hedging instruments and hedged items(Hedging instruments)
・Commodity-related: Commodity futures contracts / Commodity forward contracts
・Foreign exchange-related: Forward exchange contracts / Foreign currency swaps / Foreign currency options
・Interest rate-related: Interest rate swaps / Interest rate options(Hedged items)
・Commodity-related: Forecasted transactions on commodity trading
・Foreign exchange-related: Foreign currency-denominated monetary assets and liabilities / Forecasted foreign currencytransactions
・Interest-related: Borrowings(ⅲ) Hedging policy
The Company has internal policies to utilize the hedging instruments for the purpose of reducing exposures to the risk offluctuations in commodity prices, foreign currencies and interest rates for its operating and financing activities.
(ⅳ) Method of evaluating the effectiveness of hedging activities
The Company evaluates the effectiveness of its hedging activities by comparing accumulated fluctuations in prices or cash
flows of the hedged items with those of the hedging instruments and examining the degree of their correlation.
(ⅴ) Others
Risk management is performed by the management division, which is independent of the trading section. Also, reportingto management is performed in accordance with the internal rules of the Company on a regular basis.
3) Deferred Assets
Bond issuance costs are amortized based on the interest method over the redemption period.
4) Application of the Group Tax Sharing System
The Group Tax Sharing System is applied.

- 11 -

KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
3. United States Dollar Amounts
The U.S. dollar amounts appearing in the non-consolidated financial statements and the notes thereto represent the arithmeticalresults of translating yen to dollars at the rate of ¥133.53 to U.S.$1.00, the exchange rate prevailing on March 31, 2023. The
translation of such dollar amounts is solely for convenience of the readers outside Japan and does not imply those yen amounts havebeen or could be readily converted, realized or settled in dollars at the above, or any other rate.

4. Significant Accounting Estimates(Deferred tax assets and deferred tax liabilities)
1) Amount reported on the financial statements for the current fiscal year (before offsetting)
JPY
2023

2022
1,620
2,923

Deferred tax assets
Deferred tax liabilities

USD
2023
592
2,487

12,13521,8952) Information on significant accounting estimates for the items identifiedDeferred tax assets and liabilities are recognized for temporary differences that are the differences between the carrying
amounts of assets and liabilities and their tax bases, and tax loss carryforwards. They are measured at the tax rates applicable tothe period in which the asset or the liability is expected to be recovered or settled, in accordance with tax laws that have beenenacted at the Diet on or before the current fiscal year-end and based on tax rates specified in the tax laws.
The Company recognizes deferred tax assets to the extent that it believes that these assets will reduce taxable profits, when
deductible temporary differences and tax loss carryforwards will reverse, and will reduce future tax payments. The
recoverability of deferred tax assets is reviewed each period. In cases where it is considered that part or all of the deferred tax
assets for deductible temporary differences and tax loss carryforwards no longer has the effect of reducing future tax payments,
the unrecoverable amount of the deferred tax assets recognized is reversed. The amount deducted from deferred tax assets inprior years is also reviewed each period, and in cases where it is considered that the amount now has the effect of reducing
future tax payments, the amount expected to be recovered is recognized as deferred tax assets. Future taxable profit is estimatedusing the performance forecasts based on reasonable assumptions that are approved by the Company’s management.
Future taxable income including gross profit estimated is affected by fluctuations in various market trends and conditions invarious countries around the world. Therefore, there is an uncertainty present in the assessment of the recoverability of deferred
tax assets.
In addition, the timing and related availability of taxable and deductible temporary differences which can be used to offset
taxable income could be affected by changes in the external environment and also management decisions based on changes ininternal circumstances. These factors could result in an increase or a decrease in deferred tax assets.

5. Changes in Accounting Policies(Application of “Implementation Guidance on Accounting Standard for Fair Value Measurement”)
The Company has applied the "Implementation Guidance on Accounting Standard for Fair Value Measurement" (ASBJ Guidance
No. 31, June 17, 2021 hereinafter the "Fair Value Measurement Guidance") from the beginning of the fiscal year, thereby
prospectively applying the new accounting policies set out under the Fair Value Measurement Guidance in accordance with thetransitional treatment set out under Paragraph 27-2 of the Fair Value Measurement Guidance.
The application of the Fair Value Measurement Guidance has no impact on the financial statements.

- 12 -

KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
6. Notes to Non-Consolidated Balance Sheet*1. Details of Inventories are as follows:
JPY

USD

2023

2022

2023

Merchandise
Goods in transit

51,256
10,481

39,167
12,037

383,861
78,493Work in progress

74

142

559

*2. Pledged assets and associated secured liabilities
There is no balance for pledged assets and associated secured liabilities for the fiscal years ended March 31, 2023 and March 31,
2022, but the following items are tendered as security deposit or substitution for trading.
JPY
USD
2023
Investments in securities

2022
4,355

2023
4,167

32,617*3. Doubtful accounts
Those are receivables set out in Article 32, Paragraph 1, Item 10 of the Regulations.
*4. Contingent liabilities(1) Liabilities for guarantees
The Company guarantees payments relating to financial institutions loans and business transactions of the following companies.
2023
JPY

2022
USD

JPY

Kanematsu (China)

6,189

46,355

Kanematsu (China)

5,798

Kanematsu USA

5,341

40,000Kanematsu Korea

5,136

Kanematsu Korea
Kanematsu GmbHKG Agri Products

4,120
1,565
1,128

30,855
11,7238,450

Kanematsu USA
Kanematsu (Singapore)
KG Agri Products

3,671
2,302
840

3,610

27,035

Other

21,954

164,418

Other
Total

3,080
Total

20,830(2) Legal proceedings
The details of legal proceedings are provided in Notes to CONSOLIDATED FINANCIAL STATEMENTS: 33. Contingent
Liabilities: (2) Legal proceedings: 2) Arbitration.
*5. Discounted notes receivable
JPY
2023
Discounted notes receivable

USD
2022

5,384

2023
3,370

40,328*6. Monetary receivables from and payables to subsidiaries and affiliates except for the balances presented separately in the nonconsolidated balance sheet
JPY
2023

USD
2022

2023

Short-term monetary receivables

29,01831,099217,321

Short-term monetary payables
Long-term monetary payables

29,940159

37,806232

224,222
1,198- 13 -

KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
7. Notes to Non-Consolidated Statement of Income*1. Transactions with subsidiaries and affiliates
JPY

USD

2023

2022

2023

Revenue
Purchases

75,204
120,685

76,649100,701

563,207903,808

Non-operating transactions

10,307

10,471

77,191*2. Cost of sales
Cost of sales includes direct costs such as storage charges, packing charges and freight charges.
*3. The percentage of selling expenses to total expenses is approximately 52％ in the previous fiscal year and 52％ in the current
fiscal year.The percentage of general and administrative expenses to total expenses is approximately 48％ in the previous fiscal
year and 48％ in the current fiscal year.
Details of selling, general and administrative expenses are as follows:
JPY

USD

2023
Employees’ salaries and allowances
Employees’ bonuses
Outsourcing service charges

2022

2023

4,983
3,210
2,925

4,789
1,553
2,142

37,32024,041
21,908Depreciation and amortization

715

529

5,361

Provision of allowance for doubtful accounts

19

24

143

8. Short-term Investments and Investments in Securities
Investments in securities
Equity securities in subsidiaries and affiliates with fair value
Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
Balance sheet amount

Fair value

Difference

JPY

USD

JPY

USD

JPY

USD

Shares in subsidiaries

78,586

588,530

169,062

1,266,099

90,475677,569

Shares in affiliates

5,279

39,5396,425

48,117

1,145

8,579

83,866

628,069

175,487

1,314,217

91,621

686,147

Total

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Balance sheet amount

Fair value

Difference

JPY

JPY

JPY

Shares in subsidiaries

16,272

67,32351,050Shares in affiliates

5,279

10,732

5,452

21,552

78,05556,503

Total(Note) Balance sheet amount of equity securities without a market price not included in the table above
JPY
2023

2022

USD
2023

Shares in subsidiaries

55,09657,226412,613

Shares in affiliates

4,927

5,272

36,904- 14 -

KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
9. Deferred Taxes
1. Major components of deferred tax assets and deferred tax liabilities are as follows:
JPY
2023
Deferred tax assets
Allowance for doubtful accounts in excess of the limit forincome tax deduction
Inventories
Investments in securities
Provision for bonuses
Tax losses carried forward
Other
Deferred tax assets subtotal
Valuation allowance related to tax losses carried forward
Valuation allowance related to total deductible temporary
difference, etc.
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Net gains (losses) on deferred hedges
Net unrealized gains on securities
Other
Total deferred tax liabilities

USD
2022

2023

866

860

6,488

291
3,214
620
1,033
822

297
2,755
90
1,684
635

2,186
24,074
4,644
7,738
6,161

6,848
(865)

6,323
(1,521)

51,291(6,483)(4,362)(4,209)(32,673)(5,228)(5,730)(39,156)

1,620

592

12,135

(359)

(523)

(2,693)(2,311)(252)(1,776)(187)(17,309)(1,893)(2,923)(2,487)(21,895)

Net deferred tax assets(1,303)(1,894)(9,760)(Note) “Provision for bonuses” which was included in “Other” in the previous fiscal year is presented separately in the current fiscal
year because the amount has increased in significance.
2. Major reconciliation items between the statutory effective tax rate and the effective income tax rate after the application ofdeferred tax accounting.
2023

2022

Statutory effective tax rate
(Reconciliation)
Permanent difference additions such as entertainment expenses

30.6%
0.4%

0.2%

Permanent difference deductions such as dividend income
Change in valuation allowance
Other(30.7%)
1.3%(0.8%)(30.9%)
2.9%
1.9%

0.8%

4.6%

Effective income tax rate

30.6%

3. The accounting treatment of income taxes, local income taxes, and tax effect accounting.
From the beginning of the fiscal year ending March 31, 2023, the Group Tax Sharing System is applied. The Practical Solution
on the Accounting and Disclosure Under the Group Tax Sharing System (ASBJ Guidance No.42 August 12, 2021), which
defines the accounting and disclosure treatment of income taxes, local income taxes, and tax effect accounting, is also applied.

10. Revenue Recognition
The useful information for understanding revenue is provided in Note 2. Summary of Significant Accounting Policies: (4) Revenue
and Expense Recognition.

- 15 -

KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
11. Subsequent Events
In the current fiscal year, the Company conducted a tender offer based on the Financial Instruments and Exchange Act for thecommon shares of its consolidated subsidiary Kanematsu Electronics Ltd., and acquired 90.71% of its shares as of March 20, 2023.
In addition, as of March 31, 2023, the Company requested non-controlling interests of Kanematsu Electronics Ltd., based on Article
179, Paragraph 1 of the Companies Act, to sell all the shares they owned (9.29%) at ¥16,482 million ($123,436 thousand) as total
amount, which was approved on the same day by the Board of Directors of Kanematsu Electronics Ltd.
As a demand for sale became effective, the Company acquired all shares of Kanematsu Electronics Ltd. as of May 9, 2023, andKanematsu Electronics Ltd. became a wholly owned subsidiary of the Company.

12. Supplemental Schedules(a) Schedules of Fixed Assets

Type of assets

Category

130
0

－

0

－

－

－

Machinery and equipment

50

192

12

23

207

130

Tools and fixtures
Lease assets
Construction in progress
Total
Software

－

0

－

0

42

442

20

68

483

172

5

－

－

－

5

－

314

229

0

191

351

454

98

－

98

－

－

－

729

2,371

131

485

2,484

1,003

731

159

8

230

652

－

7

－

7

－

－

－

Other

69

39

56

7

45

－

808

199

71

238

697

－

(USD)
Balance ofAmounts ofaccumulated
Balance at theAmounts of depreciation anddepreciation andend of the fiscal
decreases
amortization foramortization atyear
the fiscal year
the end of the
fiscal year
11
1,508
10,753
1,524

Balance at the
beginning of the
fiscal year

Amounts ofincreases

Buildings

976

11,296Structures

0

－

0

－

－

－

381

1,440

90

178

1,553

978

Type of assets

Category

Machinery and equipment
VehiclesTools and fixtures
Land
Lease assets
Construction in progress
Total
SoftwareIntangible assets

0129

Telephone subscription rights
Total

Tangible fixed assets

1,508

Buildings

Land

Intangible assets

Amounts ofincreases

Structures
VehiclesTangible fixed assets

Balance at the
beginning of the
fiscal year

(JPY)
Balance ofAmounts ofaccumulated
Balance at theAmounts of depreciation anddepreciation andend of the fiscal
decreases
amortization foramortization atyear
the fiscal year
the end of the
fiscal year
1
201
1,435
203

0

－

0

－

0

318

969

3,311

150

510

3,620

1,291

41

－

－

－

41

－

2,357

1,715

1

1,437

2,636

3,401

735

－

735

－

－

－

5,461

17,763987

3,633

18,603

7,512

5,481

1,195

60

1,730

4,886

－

Telephone subscription rights

53

－

53

－

－

－

Other

520

299

421

60

339

－

6,055

1,494

534

1,789

5,225

－

Total

- 16 -

KANEMATSU CORPORATIONNOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
For the fiscal year ended March 31, 2023
(b) Schedules of Allowances / Provisions and Reserves(JPY)
Account
Allowance for doubtful accounts

Balance at the
beginning of the
fiscal year

Amounts of increases Amounts of decreases

Balance at the end of
the fiscal year

2,809

40

20

2,829

284

146

47

383

Provision for loss on affiliated business

13

－

13

－

Other provisions

192

－

173

19

Provision for stock benefits(USD)
Account

Balance at the
beginning of the
fiscal year

Amounts of increases Amounts of decreases

Balance at the end of
the fiscal year

Allowance for doubtful accounts

21,040303

15321,190

Provision for stock benefits

2,127

1,101

357

2,871

97

－

97

－

1,440

－

1,296

144

Provision for loss on affiliated business
Other provisions- 17 -