Note: This is an excerpt translation of the “Yukashoken-Houkokusho” for the convenience of overseas stakeholders. In cases
where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail.
RIKEN TECHNOS CORPORATION assumes no responsibility for this translation or for direct, indirect or any other forms ofdamages arising from the translation.

Consolidated Financial Statements(Pursuant to Article 24, Paragraph 1 of theJapanese Financial Instruments and Exchange Act)
Business year:(93rd term)

From April 1, 2021
to March 31, 2022

RIKEN TECHNOS CORPORATION
2-101, Kanda-Awajicho, Chiyoda-ku, Tokyo, Japan

Consolidated Financial Statements and Others(1) Consolidated Financial Statementsa. Consolidated Balance Sheets(Thousands of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Notes receivable - trade
Accounts receivable - trade
Electronically recorded monetary claims operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

As of March 31, 2021

As of March 31, 2022

21,106,010
21,143,908−−

20,702,615−
1,785,477
21,413,866

*2

*2

1

2,162,815*2*2

3,145,045

6,227,760
692,289
5,372,437
948,638(83,920)
57,569,939

9,159,195
621,167
7,623,661
751,067(83,600)
65,118,496

24,919,675(15,002,480)
9,917,194
52,015,723(43,625,614)
8,390,108
6,282,764
143,909(84,611)59,298231,171
5,825,136(5,234,710)
590,426
25,470,963

26,001,105(16,085,506)
9,915,598
53,866,872(45,963,974)
7,902,898
6,331,829
145,713(105,394)
40,319364,622
5,876,517(5,294,914)
581,60225,136,870

542,063
2,919
1,808,885
2,353,868

7,275
588
2,098,602
2,106,466

7,736,267
14,269883,374
418,840
764,382(3,045)9,814,089
37,638,921
95,208,860

7,905,371
2,526
962,148
428,348
983,575(2,320)10,279,650
37,522,987
102,641,484

(Thousands of yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of long-term borrowings
Lease liabilities
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Provision for share awards for directors (andother officers)
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

*2
*1

2

15,601,093
538,404
6,976,725
448,983
20,560885,287
721,429

As of March 31, 2022

*2
*1

20,075,715
521,101
6,769,296
488,174
14,444
480,704
726,155

84,70997,7742,803,299
28,080,491

2,235,955
31,409,322

2,819,082
26,361
1,545,671

2,566,512
20,774
1,469,124

140,640

171,386

1,052,229
332,387
135,141
6,051,514
34,132,006

1,136,730
330,880
88,252
5,783,661
37,192,984

8,514,018
6,597,580
35,561,518(517,035)
50,156,082

8,514,018
6,597,580
38,200,822(466,193)
52,846,228

3,999,879

4,255,441(460,662)
46,021
3,585,238
7,335,533
61,076,854
95,208,860

563,069
97,331
4,915,842
7,686,429
65,448,500
102,641,484

b.

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Thousands of yen)
Fiscal year ended
March 31, 2021

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Subsidies for employment adjustment
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Impairment losses
Loss from money transfer scam at foreign subsidiary
Loss on sale of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent*1, *3*2, *3

3

88,224,442
71,409,689
16,814,752
11,501,088
5,313,663

Fiscal year ended
March 31, 2022

*1, *3*2, *3109,923,705
91,008,539
18,915,166
12,623,123
6,292,043

25,909167,971
123,420
96,680173,251
587,232

25,510196,656
344,491−
223,098
789,757

139,351
109,457
248,808
5,652,088

109,206
83,567
192,7736,889,026

*4

4,843
10,76815,611*4

1,102
106,010
107,113

*5
*6

1,418
35,590–––37,0085,630,691
1,667,856(294,962)
1,372,893
4,257,797
1,023,590
3,234,206

*5
*6
*7

894
9,394
319,144
187,259
3,409
520,1026,476,038
1,931,105(83,716)
1,847,389
4,628,648
687,230
3,941,418

Consolidated Statements of Comprehensive Income(Thousands of yen)
Fiscal year ended
March 31, 2021
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests*1

4

Fiscal year ended
March 31, 2022

4,257,797

4,628,648

1,829,022(1,144,140)
421,409
1,106,290
5,364,088

255,628
1,521,732
51,309*1

1,828,670
6,457,319

4,805,074

5,272,022

559,013

1,185,297

c. Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of period

Capital surplus

8,514,018

Retained earnings

7,373,812

Treasury shares

33,252,502

Total shareholders’equity(1,444,377)

Cumulative effects ofchanges in accounting
policies
Restated balance

47,695,956−

8,514,018

7,373,812

33,252,502(1,444,377)

47,695,956

Changes during period
Dividends of surplus(757,012)(757,012)

Profit attributable toowners of parent

3,234,206

3,234,206

Purchase of treasury shares(236,807)(236,807)

Disposal of treasury shares

2,210

229,748

231,959

Cancellation of treasury
shares(934,400)

934,400−

Other

155,957(168,178)−(776,232)

2,309,015

927,3412,460,125

8,514,018

6,597,580

35,561,518(517,035)

50,156,082

Non-controllinginterests

Total net assets

7,876,489

57,586,816(12,220)

Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income2,170,858

218,900(375,387)

2,014,371

Cumulative effects ofchanges in accounting
policies
Restated balance−
2,170,858

218,900(375,387)

2,014,371

7,876,489

57,586,816

Changes during period
Dividends of surplus(757,012)

Profit attributable toowners of parent

3,234,206

Purchase of treasury shares(236,807)

Disposal of treasury shares

231,959

Cancellation of treasury
shares−Other
Net changes in items otherthan shareholders’ equity(12,220)
1,829,020(679,562)

421,4091,570,867(540,955)

1,029,912

Total changes during period

1,829,020(679,562)

421,4091,570,867(540,955)

3,490,037

Balance at end of period

3,999,879(460,662)

46,021

3,585,238

7,335,533

61,076,854

5

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of period

Capital surplus

8,514,018

Retained earnings

6,597,580

35,561,518

Cumulative effects ofchanges in accounting
policies
Restated balance

Treasury shares

Total shareholders’equity(517,035)(11,984)
8,514,018

6,597,580

35,549,533

50,156,082(11,984)(517,035)

50,144,097

Changes during period
Dividends of surplus(1,282,275)(1,282,275)

Profit attributable toowners of parent

3,941,418

3,941,418

Purchase of treasury shares

(49)

(49)

Disposal of treasury shares

50,89050,890Other(7,853)(7,853)

Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period−−

2,651,289

50,841

2,702,131

8,514,018

6,597,580

38,200,822(466,193)

52,846,228

Non-controllinginterests

Total net assets

7,335,533

61,076,854

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of period

3,999,879

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income46,021

3,585,238(460,662)

Cumulative effects ofchanges in accounting
policies
Restated balance(11,984)
3,999,879(460,662)

46,021

3,585,238

7,335,533

61,064,869

Changes during period
Dividends of surplus(1,282,275)

Profit attributable toowners of parent

3,941,418

Purchase of treasury shares(49)

Disposal of treasury shares

50,890Other(7,853)

Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

255,562

1,023,732

51,3091,330,603

350,895

1,681,499

255,562

1,023,732

51,3091,330,603

350,895

4,383,630

4,255,441

563,069

97,331

4,915,842

7,686,429

65,448,500

6d.

Consolidated Statements of Cash Flows(Thousands of yen)
Fiscal year ended
March 31, 2021

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for share awards for
directors (and other officers)
Interest and dividend income
Interest expenses
Loss (gain) on sale of investment securities
Loss (gain) on sale of property, plant and equipment
Loss on retirement of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Loan advances
Proceeds from collection of loans receivable
Other, net
Net cash provided by (used in) investing activities

7

Fiscal year ended
March 31, 2022

5,630,691
3,713,004−
201,455
128,495

6,476,038
3,506,091
319,144
140,205(2,328)

12,632

13,065

(940)

(548)

143,320(28,458)(38,282)

30,745(193,880)
139,351(10,768)(3,425)35,590728,813(633,781)(58,792)
42,219762,024
10,597,726
196,087(140,174)(1,265,784)
9,387,855(222,166)
109,206(102,601)
(208)
9,394
(2,465,663)(4,575,823)
3,962,068(263,266)(57,954)
6,846,939
222,638(114,103)(2,382,668)
4,572,806(35,347)
540,239(2,581,833)
7,135(1,015,999)(704)
31,496(1,716)30,90922,854(3,002,966)(24,156)
24,155(2,280,827)
1,558(455,439)(716)
317,674−
12,741(33,197)(2,438,208)

(Thousands of yen)
Fiscal year ended
March 31, 2021
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Repayments of lease liabilities
Proceeds from sale of treasury shares
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period*18

Fiscal year ended
March 31, 2022

(241,579)(811,260)(14,987)
124,601(24)(755,286)(1,097,763)(2,796,299)(338,306)(474,724)(20,613)−(49)(1,281,289)(831,034)(2,946,018)(319,845)

407,952

3,268,743
17,812,026
21,080,770

21,080,770
20,677,303(403,466)*1

Notes to Consolidated Financial Statements
Significant Matters in Preparing Consolidated Financial Statements
1. Basis of presentation of consolidated financial statements
The accompanying consolidated financial statements of RIKEN TECHNOS CORPORATION (the“Company”) and its consolidated subsidiaries have been prepared in accordance with the provisions set
forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, andin accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are
different in certain respects as to the application and disclosure requirements of International Financial
Reporting Standards (“IFRS”).
In addition, amounts are rounded down to the nearest thousand yen.
2. Scope of consolidation(1) Number of consolidated subsidiaries: 19 as of March 31, 2021
18 as of March 31, 2022
All the subsidiaries have been included in the scope of consolidation.
From the fiscal year ended March 31, 2022, RIKEN FABRO CORPORATION, which was aconsolidated subsidiary in the fiscal year ended March 31, 2021, has been removed from the scope of
consolidation due to its dissolution as a result of a merger with the Company in which the Company
was the surviving company.
Names of principal consolidated subsidiaries are as follows:
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Company name
RIKEN CABLE TECHNOLOGY CO., LTD.
KYOEI PLASTIC MFG CO., LTD.
RIKEN TECHNOS INTERNATIONAL CORPORATIONRIKEN CHEMICAL PRODUCTS CORPORATIONRIKEN FABRO CORPORATION
I.M.I Co., Ltd.
RIKEN (THAILAND) CO., LTD.
RIKEN ELASTOMERS (THAILAND) CO., LTD.
PT. RIKEN INDONESIASHANGHAI RIKEN TECHNOS CORPORATIONRIKEN TECHNOS (JIANG SU) CORPORATIONRIKEN (SHANGHAI) CORPORATIONRIKEN TECHNOS INTERNATIONAL KOREA CORPORATIONRIKEN VIETNAM CO., LTD.
RIKEN TECHNOS INDIA PVT. LTD.
RIKEN U.S.A. CORPORATIONRIKEN AMERICAS CORPORATIONRIMTEC CORPORATIONRIKEN ELASTOMERS CORPORATION

9

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Company name
RIKEN CABLE TECHNOLOGY CO., LTD.
KYOEI PLASTIC MFG CO., LTD.
RIKEN TECHNOS INTERNATIONAL CORPORATIONRIKEN CHEMICAL PRODUCTS CORPORATION
I.M.I Co., Ltd.
RIKEN (THAILAND) CO., LTD.
RIKEN ELASTOMERS (THAILAND) CO., LTD.
PT. RIKEN INDONESIASHANGHAI RIKEN TECHNOS CORPORATIONRIKEN TECHNOS (JIANG SU) CORPORATIONRIKEN (SHANGHAI) CORPORATIONRIKEN TECHNOS INTERNATIONAL KOREA CORPORATIONRIKEN VIETNAM CO., LTD.
RIKEN TECHNOS INDIA PVT. LTD.
RIKEN U.S.A. CORPORATIONRIKEN AMERICAS CORPORATIONRIMTEC CORPORATIONRIKEN ELASTOMERS CORPORATION(2) The Company has no unconsolidated subsidiaries.
3. Application of equity method
The Company has no associates.
4. Fiscal year-end of consolidated subsidiaries
The consolidated subsidiaries whose balance sheet date is different from the consolidated balance sheet
date are as follows:
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Company name
Balance sheet date
RIKEN CABLE TECHNOLOGY CO., LTD.
December 31 *1
KYOEI PLASTIC MFG CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL CORPORATION
December 31 *1
RIKEN CHEMICAL PRODUCTS CORPORATION
December 31 *1
RIKEN FABRO CORPORATION
December 31 *1
I.M.I Co., Ltd.
December 31 *1
RIKEN (THAILAND) CO., LTD.
December 31 *1
RIKEN ELASTOMERS (THAILAND) CO., LTD.
December 31 *1
PT. RIKEN INDONESIA
December 31 *1
SHANGHAI RIKEN TECHNOS CORPORATION
December 31 *1
RIKEN TECHNOS (JIANG SU) CORPORATION
December 31 *1
RIKEN (SHANGHAI) CORPORATION
December 31 *1
RIKEN TECHNOS INTERNATIONAL KOREA CORPORATION
December 31 *1
RIKEN VIETNAM CO., LTD.
December 31 *1
RIKEN TECHNOS INDIA PVT. LTD.
December 31 *1
RIKEN U.S.A. CORPORATION
December 31 *1
RIKEN AMERICAS CORPORATION
December 31 *1
RIMTEC CORPORATION
December 31 *1
RIKEN ELASTOMERS CORPORATION
December 31 *1*1. The financial statements as of the balance sheet date of the consolidated subsidiaries are used. However, formajor transactions that occurred between that date and the consolidated balance sheet date, the necessary
adjustments are made in the consolidated financial statements.

10

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Company name
Balance sheet date
RIKEN CABLE TECHNOLOGY CO., LTD.
December 31 *1
KYOEI PLASTIC MFG CO., LTD.
December 31 *1
RIKEN TECHNOS INTERNATIONAL CORPORATION
December 31 *1
RIKEN CHEMICAL PRODUCTS CORPORATION
December 31 *1
I.M.I Co., Ltd.
December 31 *1
RIKEN (THAILAND) CO., LTD.
December 31 *1
RIKEN ELASTOMERS (THAILAND) CO., LTD.
December 31 *1
PT. RIKEN INDONESIA
December 31 *1
SHANGHAI RIKEN TECHNOS CORPORATION
December 31 *1
RIKEN TECHNOS (JIANG SU) CORPORATION
December 31 *1
RIKEN (SHANGHAI) CORPORATION
December 31 *1
RIKEN TECHNOS INTERNATIONAL KOREA CORPORATION
December 31 *1
RIKEN VIETNAM CO., LTD.
December 31 *1
RIKEN TECHNOS INDIA PVT. LTD.
December 31 *1
RIKEN U.S.A. CORPORATION
December 31 *1
RIKEN AMERICAS CORPORATION
December 31 *1
RIMTEC CORPORATION
December 31 *1
RIKEN ELASTOMERS CORPORATION
December 31 *1*1. The financial statements as of the balance sheet date of the consolidated subsidiaries are used. However, formajor transactions that occurred between that date and the consolidated balance sheet date, the necessary
adjustments are made in the consolidated financial statements.

5. Accounting policies(1) Valuation methods for significant assetsi) Securities
a. Held-to-maturity bonds
Stated at amortized cost (straight-line method).
b. Available-for-sale securities
Securities other than shares, etc. without market prices
Stated at fair value.
(Unrealized gains and losses, net of applicable taxes, are reported in a separate component of
net assets, and costs of securities sold are determined by the moving-average method.)
Shares, etc. without market prices
Stated at cost determined by the moving-average method.
ii) Inventories
Inventories of the Company and domestic consolidated subsidiaries are mainly stated at cost
determined by the moving-average method (the carrying amounts in the consolidated balance sheets
are written down due to a decline in profitability). Inventories of overseas consolidated subsidiaries
are mainly stated at the lower of cost or market, determined by the average method.
iii) Derivatives
Stated at fair value.
(2) Depreciation and amortization of significant assetsi) Property, plant and equipment (excluding leased assets)
The Company and domestic consolidated subsidiaries mainly apply the declining-balance method.
However, buildings acquired on or after April 1, 1998 (excluding facilities attached to buildings),
and facilities attached to buildings and structures acquired on or after April 1, 2016 are depreciatedby the straight-line method. Overseas consolidated subsidiaries apply the straight-line method.
The estimated useful lives of major items are as follows:
Buildings and structures

3 to 47 years

Machinery, equipment and vehicles

4 to 10 years

11ii) Intangible assets (excluding leased assets)
The Company and domestic consolidated subsidiaries apply the straight-line method.
Internal use software is amortized by the straight-line method over its estimated useful life asinternally determined (five years).
iii) Leased assets
The Company and domestic consolidated subsidiaries apply the straight-line method assuming thelease periods as useful lives with no residual value.
(3) Significant allowancesi) Allowance for doubtful accounts
To cover losses from bad debts for notes and accounts receivable - trade, loans receivable and others,
an allowance for doubtful accounts is provided based on historical experience of bad debts forgeneral receivables. For specific receivables, such as highly doubtful receivables, the collectibility is
individually considered and the estimated amount of uncollectible accounts is provided as theallowance.
ii) Provision for bonuses
To cover bonus payments to employees, a provision for bonuses is provided in the amount to be paid
for services rendered by employees during the fiscal year based mainly on the estimated amount of
future bonus payment.
iii) Provision for bonuses for directors (and other officers)
To cover bonus payments to Directors (excluding Directors who are Audit & Supervisory
Committee Members) and Executive Officers, the Company records a provision for bonuses for
directors (and other officers) in the amount of the portion applicable to the fiscal year, based on theestimated amount of future bonus payment.
iv) Provision for share awards for directors (and other officers)
To cover provision of shares in the Company to Directors and Executive Officers, the Company
records a provision for executive officer incentive plan trust based on the estimated amount of shareprovision obligations as of the end of the current fiscal year.
(4) Method of recognizing retirement benefitsi) Method of attributing estimated retirement benefits to periods
For the purpose of attributing estimated retirement benefits to periods up to the end of the current
fiscal year in the calculation of retirement benefit obligations, the benefit formula method is applied.
ii) Method of amortizing actuarial differences and past service cost
Past service cost is amortized by the straight-line method over a certain term within the averageremaining service period of the eligible employees (13 years).
With regard to actuarial differences, the amount is amortized by the straight-line method over acertain term within the average remaining service period of the eligible employees (13 years) for
each applicable fiscal year, and expensed from the year following the year in which the gain or loss
is recognized.
iii) Method of accounting for unrecognized actuarial differences and unrecognized past service cost
Unrecognized actuarial differences and unrecognized past service cost are recognized inremeasurements of defined benefit plans under accumulated other comprehensive income in net
assets after adjusting for tax effects.
iv) Application of simplified accounting method at small companies
Some consolidated subsidiaries apply a simplified accounting method in which the retirement
benefit liability and retirement benefit expenses are calculated by using a method in which theamount of retirement benefits to be paid in cases where all eligible employees retired at the fiscal
year-end date is regarded as retirement benefit obligations.

12(5) Significant standards for the recognition of revenue and expenses
Revenue from the sale of products and merchandise arises mainly from the manufacture and sale ofcompound products, film products and food wrapping film products, and the sale of merchandise. The
Company or its consolidated subsidiary assumes performance obligations to deliver these products ormerchandise in accordance with sales contracts with customers. The Company or its consolidated
subsidiary considers that these performance obligations are fulfilled at the time of delivery, when thecustomer gains control over the product or merchandise, and revenue is recognized at this time.
However, revenue from sales within Japan is recognized at the time of shipment. For export sales, theCompany considers that its performance obligations are fulfilled when the products arrive at the placeagreed upon with the customer, and revenue is recognized at that time.
Furthermore, with regard to transactions in which the Company or its consolidated subsidiary is
considered to act in the capacity of an agent, the net amount receivable in exchange for merchandiseprovided by the third-party supplier, after deducting the amount payable to the third-party supplier, isrecognized as revenue.
(6) Significant hedge accountingi) Hedge accounting
For foreign currency-denominated monetary receivables and payables and others that have been
hedged by forward exchange contracts, the allocation method is used. For interest rate swap
contracts, the Company and its domestic consolidated subsidiaries apply the method in which theamount paid or received under the swap contract is added to or deducted from the interest on thehedged assets and liabilities (the exceptional accrual method), in cases where the requirements forthe method are satisfied.
ii) Hedging instruments and hedged items
 Hedging instruments
Forward exchange contracts and interest rate swap contracts
 Hedged items
Foreign currency-denominated accounts receivable - trade and accounts payable - trade related toexports and imports of merchandise and finished goods, and interest on borrowingsiii) Hedging policy
Forward exchange contracts are only used within the scope of actual need in order to hedge the riskof fluctuations in foreign exchange rates. Interest rate swap contracts are used to hedge the interest
rate fluctuation risk. Entering into derivative transactions for trading or speculative purposes is
prohibited.
iv) Assessment of hedge effectivenessAn assessment of hedge effectiveness is omitted for forward exchange contracts to which theallocation method is applied and interest rate swap contracts that satisfy the requirements for the
exceptional accrual method.
(7) Method and period for amortization of goodwill
Goodwill is amortized evenly over the period, not exceeding 20 years, during which the goodwill has
an effect. However, when the amount of goodwill is insignificant, it is charged to income at the date ofoccurrence.
(8) Scope of cash and cash equivalents in consolidated statements of cash flows
Funds (cash and cash equivalents) in the consolidated statements of cash flows consist of cash on hand,readily available deposits, and highly liquid short-term investments with original maturities of threemonths or less that are subject to an insignificant risk of changes in value.

13

Significant Accounting Estimates
Impairment loss on non-current assets (the asset group at Gunma Factory included in the Electronics segmentof the Company)(1) Amounts recorded on the consolidated financial statements for the fiscal year ended March 31, 2022
As of March 31, 2021
Impairment loss

(Thousands of yen)
As of March 31, 2022−

319,144

Land (55,903.8m2)
Buildings and structures
Other property, plant and equipment
Intangible assets

1,273,100
641,859
104,611534,622

1,273,100
598,523
0−

Total non-current assets

2,554,193

1,871,623(2) Details of significant accounting estimates concerning identified itemsi) Calculation method
In the current fiscal year, the Company judged that indications of impairment existed due to a decline
in profitability as a result of changes in the operating environment. As the total of undiscounted future
cash flows arising from the asset group was less than the book value, the Company compared thevalue in use with net realizable value and, taking net realizable value as the recoverable amount,reduced book value to the recoverable amount and recognized the associated impairment loss.
Future cash flows are based on the business plan for the asset group and are subject to review by
taking into account product life cycles and other variable factors in the industry to which the businessbelongs. Some of the assets contained estimated values based on real estate appraisal values.
ii) Major assumptions
Major assumptions used in the calculation of future cash flows are continuous orders expected fromexisting customers, which serve as a basis of the business plan for the asset group, and the forecast of
potential orders from new customers.
iii) Impact on the consolidated financial statements for the next fiscal year
The forecast of potential orders from new customers, one of the major assumptions, is a highly
uncertain estimate. In the case where profitability of the target asset group declines and indications of
impairment exist and where the total of undiscounted future cash flows arising from the asset groupfalls below the book value, the consolidated financial statements for the next fiscal year will beaffected.

14

Changes in Accounting Policies(Application of the Accounting Standard for Revenue Recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition” (Accounting Standards Boardof Japan (ASBJ) Statement No. 29, March 31, 2020; hereinafter the “Revenue Recognition AccountingStandard”), etc. effective from the beginning of the current fiscal year, and recognizes revenue in the amount
expected to be received in exchange for promised goods or services at the time when the control of thesegoods or services is transferred to the customer. Accordingly, with regard to charged supplying to customers,
the Company has shifted to the method by which it does not recognize extinguishment of the supplied goods,
in cases where it assumes the obligation to repurchase the supplied goods. Additionally, in terms of exporttransactions, the Company has changed its method of revenue recognition by which revenue is recognized at
the time of arrival at the place that the Company and customers had agreed upon, deeming our performanceobligations to have been fulfilled at that time. Furthermore, with regard to certain transactions in which theGroup acts as an agent in providing the goods or services to a customer, the Company has changed its method
and recognizes revenue in the net amount.
The application of the Revenue Recognition Accounting Standard, etc. is subject to the transitional treatment
provided for in the proviso to Paragraph 84 of the Revenue Recognition Accounting Standard. Accordingly,
the cumulative effect of the retrospective application of the new accounting policy, assuming it has been
applied to periods prior to the beginning of the current fiscal year, is added to or subtracted from retained
earnings at the beginning of the current fiscal year, and the new accounting policy is applied from the said
beginning balance.
Moreover, on the consolidated balance sheets, the amounts previously presented under current assets as notes
and accounts receivable - trade have been included in notes receivable - trade and accounts receivable - tradefrom the current fiscal year. However, in accordance with the transitional treatment provided for in Paragraph89-2 of the Revenue Recognition Accounting Standard, items for the previous fiscal year have not been
reclassified on the basis of the new presentation method.
As a result, on the consolidated balance sheets for the current fiscal year, accounts receivable - tradedecreased by 84,072 thousand yen and inventories increased by 59,159 thousand yen compared with before
the Revenue Recognition Accounting Standard application. On the consolidated statements of income for thecurrent fiscal year, net sales decreased by 1,008,522 thousand yen, cost of sales decreased by 1,004,206
thousand yen, and operating profit, ordinary profit, and profit before income taxes decreased by 4,316
thousand yen, respectively.
On the consolidated statements of changes in net assets for the current fiscal year, the beginning balance ofretained earnings at the beginning of the period decreased by 11,984 thousand yen, reflecting the cumulative
impact of application on net assets at the beginning of the current fiscal year.
The impact on per-share information is presented in the relevant section.
In accordance with the transitional treatment stipulated in Paragraph 89-3 of the Revenue Recognition
Accounting Standard, the Company has not provided notes on revenue recognition for the previous fiscal year.
(Application of the Accounting Standard for Fair Value Measurement, etc.)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30,
July 4, 2019; hereinafter the “Fair Value Measurement Accounting Standard”), etc. effective from the
beginning of the current fiscal year. In accordance with the transitional treatment provided for in Paragraph 19of the Fair Value Measurement Accounting Standard and Paragraph 44-2 of the “Accounting Standard for
Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), the Company will apply the new accounting
policy prescribed by the Fair Value Measurement Accounting Standard, etc. into the future. This application
has no impact on the consolidated financial statements.
In the notes on financial instruments, the Company now presents information including a breakdown offinancial instruments based on the level of fair value. However, in accordance with the transitional treatment
provided for in Paragraph 7-4 of the “Implementation Guidance on Disclosures about Fair Value of Financial
Instruments” (ASBJ Guidance No. 19, July 4, 2019), the Company has not provided these notes for theprevious fiscal year.

15Changes in Presentation(Consolidated Balance Sheets)“Electronically recorded obligations - operating,” which was included in “Notes and accounts payable trade” in the previous fiscal year, has been presented separately from the current fiscal year due to its
increased monetary importance. To reflect this change in presentation, the consolidated financial
statements for the previous fiscal year have been reclassified.
As a result, 16,139,497 thousand yen, which was presented as “Notes and accounts payable - trade” in the
consolidated balance sheets for the previous fiscal year, has been reclassified as “Notes and accounts
payable - trade” of 15,601,093 thousand yen and “Electronically recorded obligations - operating” of538,404 thousand yen.

16

Additional Information(Transactions of delivering the Company’s own stock to employees etc. through trusts)(1) Board Benefit Trust (BBT)In accordance with the resolution at the 87th Ordinary General Meeting of Shareholders held on June 24,
2016, the Company introduced a new stock-based compensation plan “Board Benefit Trust (BBT)” on
September 14, 2016, for the purpose of raising awareness of Directors who execute business (excluding
Directors who are Audit & Supervisory Committee Members) and Executive Officers toward theircontributions to improving the mid- to long-term corporate performance and increasing the corporate
value as well as making Directors who do not execute business (excluding Directors who are Audit &Supervisory Committee Members) and Directors who are Audit & Supervisory Committee Members
contribute to increasing the mid- to long-term corporate value through supervision or audit.
i)

Overview of transactions
Based on the officers’ stock benefit plan which was established in advance, the Company and its
group companies (the “Group”) grant points to Directors etc. (Directors and Executive Officers). At
the time of their retirement, the Group provides shares in the Company to the Directors etc. who
satisfy requirements for beneficiaries in proportion to the points which the Group has granted to them.
With regard to the shares which will be provided to Directors etc. in the future, a trust bank acquires
the Company’s treasury shares through third-party allotment by using the money contributed by theCompany. Such shares are managed as trust assets separately.

ii) Shares in the Company remaining at the trust
The shares in the Company remaining at the trust are recorded as the treasury shares in net assets withthe book value (excluding associated costs) at the trust. The book value and number of these treasury
shares as of the end of the previous fiscal year were 282,476 thousand yen and 614 thousand shares,
respectively, while those as of the end of the current fiscal year were 276,412 thousand yen and 601
thousand shares, respectively.
iii) Book value of borrowings recorded due to the application of the gross method
Not applicable.
(2) Stock Benefit Trust (Employee Stockholding Association Purchase-type)
For the purpose of promoting welfare benefits for employees and giving incentives pertaining to theimprovement of corporate value of the Company, the Company introduced “Stock Benefit Trust(Employee Stockholding Association Purchase-type)” (hereinafter referred to as the “Plan”), pursuant to
the resolution at the Board of Directors meeting held on February 22, 2021.
i)

Overview of transactions
The Plan is an incentive plan under which the benefits of a rise in the Company’s stock price arepassed along to all the employees who are members of the “RIKEN TECHNOS Employee
Stockholding Association” (hereinafter referred to as the “Stockholding Association”).
A trust bank as the trustee of the Plan acquires shares in the Company that are expected to beacquired by the Stockholding Association over the five years after the establishment of the trust, en
bloc in advance, and sells those shares in the Company to the Stockholding Association as needed
when it acquires the shares. If the amount equivalent to gain on sales of shares by the trust bank was
accumulated in trust assets by the termination of this trust through the sale of shares to the
Stockholding Association, the accumulated amount is distributed as residual assets to the members of
the Company’s employee Stockholding Association who satisfy eligibility requirements forbeneficiaries. The Company has guaranteed loans that the trust bank received to acquire shares in the
Company. Therefore, if there is remaining loan amount that is equivalent to loss on sales of shares in
the Company due to a decline in the Company’s stock price at the time of termination of the trust, theCompany is required to pay the remaining loan amount under the guarantee agreement.

17ii) Shares in the Company remaining at the trust
The shares in the Company remaining at the trust are recorded as the treasury shares in net assets withthe book value (excluding associated costs) at the trust. The book value and number of these treasury
shares as of the end of the current fiscal year were 189,711 thousand yen and 372 thousand shares,
respectively.
iii) Book value of borrowings recorded due to the application of the gross method
190,018 thousand yen as of the end of the current fiscal year

18

Notes to Consolidated Balance Sheets*1. Overdraft agreements and unused overdraft facility balanceTo efficiently secure equipment funds, the Company and its domestic consolidated subsidiaries haveentered into overdraft agreements with banks with which they do business. The unused balance of theseprescribed limit agreements at the fiscal year-end is as follows:
As of March 31, 2021

(Thousands of yen)
As of March 31, 2022

Total overdraft facility limit
Outstanding borrowings within the limit

12,180,000
4,965,000

9,230,000
3,665,000

Unused balance

7,215,000

5,565,000*2. The notes maturing on the balance sheet date are accounted for as if they were settled on the maturity date.
As the balance sheet date fell on a holiday of financial institutions, the following notes matured on thebalance sheet date were accounted for as if they were settled on the maturity date.
As of March 31, 2021
Notes receivable - trade
Electronically recorded monetary claims - operating
Notes payable - trade43,20959,104
8,148

19(Thousands of yen)
As of March 31, 2022
37,13813,7608,571

Notes to Consolidated Statements of Income*1. The inventory balance at the fiscal year-end is presented after book values were written down due to a
decline in profitability of assets and the following losses (gains) on valuation of inventories are included
in cost of sales.
(Thousands of yen)
Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2021
109,636

184,213*2. Main components of selling, general and administrative expenses are as follows:
Fiscal year ended
March 31, 2021
2,991,139
1,016,077
2,609,801
198,429
199,723
78,619(886)
1,110,256

Freightage expenses
Commission fees
Salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Provision for bonuses for directors (and other officers)
Provision of allowance for doubtful accounts
Research and development expenses(Thousands of yen)
Fiscal year ended
March 31, 2022
3,868,121
1,139,141
2,724,557
207,391
209,178
90,296(1,048)1,237,196*3. Research and development expenses included in selling, general and administrative expenses and cost of
sales are as follows:(Thousands of yen)
Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2021
1,442,415

1,566,063*4. The breakdown of gain on sale of non-current assets is as follows:
Fiscal year ended
March 31, 2021
4,781
61

Machinery, equipment and vehicles
Other
Total

4,843

(Thousands of yen)
Fiscal year ended
March 31, 2022
1,099
2
1,102

*5. The breakdown of loss on sale of non-current assets is as follows:
Fiscal year ended
March 31, 2021
1,074
343

Machinery, equipment and vehicles
Other
Total

1,418

(Thousands of yen)
Fiscal year ended
March 31, 2022
574
319
894

*6. The breakdown of loss on retirement of non-current assets is as follows:
Fiscal year ended
March 31, 2021
6,947
27,679964

Buildings and structures
Machinery, equipment and vehicles
Other
Total

35,59020(Thousands of yen)
Fiscal year ended
March 31, 2022
2,673
4,960
1,761
9,394

*7. Impairment loss
In the fiscal year ended March 31, 2022, the Group recorded an impairment loss in the following asset
group:
Location

Use

Type

Gunma Factory(Ota City, Gunma Prefecture)

Business use assets

Goodwill, machinery, equipment, etc.

(Thousands of yen)
Impairment loss
319,144

The Group groups assets into the smallest units that generate cash flows that are generally independent
from the cash flow of other assets or asset groups. (Idle assets are grouped individually.)
Regarding the Gunma Factory (in the EL segment), one of such asset groups, the Company judged thatindications of impairment existed due to a decline in profitability as a result of changes in the operating
environment. As the total of undiscounted future cash flows arising from the asset group was less thanthe book value, the Company reduced the book value to the recoverable amount and recognized theassociated impairment loss.
The impairment loss included 231,250 thousand yen of goodwill, 76,135 thousand yen of machinery,equipment and vehicles, and 11,759 thousand yen of other.
The recoverable amount is measured with the net realizable value. The measurement is based on realestate appraisal values and other reasonably calculated valuations for buildings and land. For other assets,taking into account the possibility of disposal, the net realizable value is considered to be zero for assets
deemed to have no effective value.

21

Notes to Consolidated Statements of Comprehensive Income*1. Reclassification adjustments and tax effects related to other comprehensive income
Fiscal year ended
March 31, 2021
Valuation difference on available-for-sale securities:
Amount arising during the period
Reclassification adjustments(Thousands of yen)
Fiscal year ended
March 31, 2022

2,593,066(10,768)

460,837(87,252)

Before tax effect adjustments
Tax effect amount

2,582,298(753,276)

373,585(117,956)

Valuation difference on available-for-sale securities

1,829,022

255,628

Foreign currency translation adjustment:
Amount arising during the period
Reclassification adjustments(1,152,254)
8,114

1,521,732–

Before tax effect adjustments
Tax effect amount(1,144,140)–

1,521,732–

Foreign currency translation adjustment(1,144,140)

1,521,732

Remeasurements of defined benefit plans, net of tax:
Amount arising during the period
Reclassification adjustments

455,461
151,932

2,185
71,492

Before tax effect adjustments
Tax effect amount

607,393(185,983)

73,677(22,368)

Remeasurements of defined benefit plans, net of tax

421,40951,3091,106,290

1,828,670

Total other comprehensive income

22Notes to Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
1. Type and total number of issued shares and type and number of treasury shares
Number of sharesat the beginning of
the fiscal year

Increase

Decrease(Thousands of shares)
Number of sharesat the end of
the fiscal year

Issued shares
Common stock

66,113–2,000

64,113

Total

66,113–2,000

64,113

Common stock (Notes)

3,091

464

2,480

1,074

Total

3,091

464

2,480

1,074

Treasury shares(Notes) 1. The decrease of 2,000 thousand shares of issued shares of common stock is due to the cancellation of treasury
shares pursuant to the resolution at the Board of Directors meeting held on July 31, 2020.
2. The Company resolved at the Board of Directors meeting held on August 29, 2016 to introduce the “Board Benefit
Trust (BBT)” and transferred 476 thousand shares of treasury shares to Trust Account E as of September 14, 2016,
and 329 thousand shares of treasury shares as of March 12, 2020. The number of treasury shares at the beginningand the end of the current fiscal year includes 752 thousand shares and 614 thousand shares in the Company,
respectively, held by Trust Account E.
3. The Company introduced the “Stock Benefit Trust (Employee Stockholding Association Purchase-type)” pursuant
to the resolution at the Board of Directors meeting held on May 24, 2017. However, the said trust was abolished in
the current fiscal year, and the Company resolved at the Board of Directors meeting held on February 22, 2021 tointroduce again a similar plan, and transferred 266 thousand shares of treasury shares to Trust Account E as ofMarch 11, 2021. The number of treasury shares at the beginning and the end of the current fiscal year includes 72
thousand shares and 459 thousand shares in the Company, respectively, held by Trust Account E.
4. The increase of 464 thousand shares of treasury shares of common stock is due to the purchase of treasury shares of
464 thousand shares by Trust Account E, and the purchase of shares less than one unit of 0 thousand shares.
5. The decrease of 2,480 thousand shares of treasury shares of common stock is due to the cancellation of treasury
shares of 2,000 thousand shares, the transfer of 266 thousand shares from the Company to Trust Account E, the saleof 76 thousand shares from Trust Account E to the Company’s employee stockholding association, the payment of
113 thousand shares from Trust Account E in conjunction with the retirement of Directors and other officers, andthe sale of 24 thousand shares from Trust Account E in conjunction with the retirement of Directors and otherofficers.

2. Subscription rights to shares and treasury subscription rights to shares
Not applicable.
3. Dividends(1) Dividends paid
(Resolution)

Type of shares

Dividends per share
Total dividends(Thousands of yen)
(Yen)

Cut-off date

Effective dateOrdinary General
Meeting ofCommon stock
510,777
8
March 31, 2020
June 22, 2020
Shareholders held on
June 19, 2020
(Note) Total dividends include 6,597 thousand yen of dividends to the Company’s own shares held in Trust Account E.
(Resolution)

Type of shares

Board of Directors
meeting held on
October 30, 2020

Common stock(Note)

Total dividends
Dividends per share(Thousands of yen)
(Yen)
255,388

4

Cut-off date

Effective date

September 30, 2020

December 2, 2020

Total dividends include 2,555 thousand yen of dividends to the Company’s own shares held in Trust Account E.

23

(2) Dividends whose cut-off date is in the current fiscal year and whose effective date is in the following
fiscal year
(Resolution)

Type of shares

Total dividends(Thousands ofyen)

Ordinary General
Meeting ofCommon stock
Shareholders heldon June 18, 2021
(Note)

Dividends per
share
(Yen)

Source ofdividends

769,365 Retained earnings

12

Cut-off date

Effective date

March 31, 2021

June 21, 2021

Total dividends include 12,897 thousand yen of dividends to the Company’s own shares held in Trust Account E.

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
1. Type and total number of issued shares and type and number of treasury shares
Number of sharesat the beginning of
the fiscal year

Increase(Thousands of shares)
Number of sharesat the end of
the fiscal year

Decrease

Issued shares
Common stock

64,113––64,113

Total

64,113––64,113

Common stock (Notes)

1,074

0

101

973

Total

1,074

0

101

973

Treasury shares(Notes) 1. The Company resolved at the Board of Directors meeting held on August 29, 2016 to introduce the “Board Benefit
Trust (BBT)” and transferred 476 thousand shares of treasury shares to Trust Account E as of September 14, 2016,
and 329 thousand shares of treasury shares as of March 12, 2020. The number of treasury shares at the beginningand the end of the current fiscal year includes 614 thousand shares and 601 thousand shares in the Company,
respectively, held by Trust Account E.
2. The Company introduced the “Stock Benefit Trust (Employee Stockholding Association Purchase-type)” pursuant
to the resolution at the Board of Directors meeting held on May 24, 2017. However, the said trust was abolished in
the current fiscal year, and the Company resolved at the Board of Directors meeting held on February 22, 2021 tointroduce again a similar plan, and transferred 266 thousand shares of treasury shares to Trust Account E as ofMarch 11, 2021. The number of treasury shares at the beginning and the end of the current fiscal year includes 459
thousand shares and 372 thousand shares in the Company, respectively, held by Trust Account E.
3. The increase of 0 thousand shares of treasury shares of common stock is due to the purchase of treasury shares of 0
thousand shares by Trust Account E, and the purchase of shares less than one unit of 0 thousand shares.
4. The decrease of 101 thousand shares of treasury shares of common stock is due to the sale of 87 thousand sharesfrom Trust Account E to the Company’s employee stockholding association and the payment of 13 thousand sharesfrom Trust Account E in conjunction with the retirement of Directors and other officers.

2. Subscription rights to shares and treasury subscription rights to shares
Not applicable.
3. Dividends(1) Dividends paid
(Resolution)

Type of shares

Dividends per share
Total dividends(Thousands of yen)
(Yen)

Cut-off date

Effective dateOrdinary General
Meeting ofCommon stock
769,365
12
March 31, 2021
June 21, 2021
Shareholders held on
June 18, 2021
(Note) Total dividends include 12,897 thousand yen of dividends to the Company’s own shares held in Trust Account E.

24

(Resolution)

Type of shares

Board of Directors
meeting held on
October 29, 2021

Common stock(Note)

Dividends per share
Total dividends(Thousands of yen)
(Yen)
512,909

8

Cut-off date

Effective date

September 30, 2021 November 29, 2021

Total dividends include 8,160 thousand yen of dividends to the Company’s own shares held in Trust Account E.

(2) Dividends whose cut-off date is in the current fiscal year and whose effective date is in the following
fiscal year
(Resolution)

Type of shares

Ordinary General
Meeting ofCommon stock
Shareholders heldon June 17, 2022
(Note)

Total dividends(Thousands ofyen)

Source ofdividends

Dividends per
share
(Yen)

705,250 Retained earnings

11

Cut-off date

Effective date

March 31, 2022

June 20, 2022

Total dividends include 10,710 thousand yen of dividends to the Company’s own shares held in Trust Account E.

Notes to Consolidated Statements of Cash Flows*1. Reconciliation between “Cash and cash equivalents at end of period” in the consolidated statements ofcash flows and “Cash and deposits” in the consolidated balance sheets
Fiscal year ended
March 31, 2021
Cash and deposits
Time deposits with maturities over 3 months
Cash and cash equivalents(Thousands of yen)
Fiscal year ended
March 31, 2022

21,106,010

20,702,615(25,240)(25,312)21,080,770

20,677,303

Lease Transactions(As Lessee)
1. Finance lease transactions
Finance lease transactions that do not transfer ownership(1) Details of leased assetsi) Property, plant and equipment
Mainly, production equipment and others in the compound businessii) Intangible assets
Software(2) Depreciation method for leased assets
The depreciation method for leased assets is as stated in “5. Accounting policies (2) Depreciation
and amortization of significant assets” under “Significant Matters in Preparing Consolidated
Financial Statements.”
2. Operating lease transactions
Future lease payments under non-cancelable operating leases(Thousands of yen)
As of March 31, 2022

As of March 31, 2021
Within 1 year
Over 1 year
Total

29,97055,003
84,97325

40,15563,710103,866

Financial Instruments
1. Overview(1) Policy for financial instruments
The Company and its group companies (the “Group”) procure necessary funds primarily through bankloans in light of its capital expenditure plan. The Group invests its excess funds in financial instrumentswith low risks, giving the highest priority to safety by reference to external ratings and others whileconsidering liquidity. In addition, certain short-term operating funds are procured through bank loans.
The Group, by policy, limits derivative transactions to hedging risks associated with substantial
transactions and does not enter into them for speculative purposes.
(2) Description of financial instruments and related risks
Notes and accounts receivable - trade, etc., which are operating receivables, involve credit risk of eachcustomer. Operating receivables denominated in foreign currencies are exposed to exchange rate
fluctuation risk.
Investment securities are exposed to market price fluctuation risk.
Notes and accounts payable - trade, which are operating payables, are primarily due within three to fivemonths. Borrowings and finance lease liabilities are primarily intended for raising funds for capital
investment, and certain borrowings are for operating funds. These borrowings are exposed to interest
rate fluctuation risk.
As for derivative transactions, the Group uses interest rate swap contracts to hedge interest rate
fluctuation risk associated with borrowings. For hedging instruments and hedged items, hedging policy,
assessment of hedge effectiveness and others related to hedge accounting, please refer to “5.
Accounting policies, (6) Significant hedge accounting” under “Significant Matters in Preparing
Consolidated Financial Statements” described above.
(3) Risk management system related to financial instrumentsi) Management of credit risk (default risk of business partners)
The Group reduces customer credit risk associated with notes and accounts receivable - trade, which
are operating receivables, by monitoring customer credit in conformity with standards such as credit
control regulations and by periodic review.
As for credit risk associated with issues involving transactions with repurchase/resale agreements,
the Company invests in low-risk issues in conformity with its asset management regulations byreference to external ratings and others. The consolidated subsidiaries establish management systems
pursuant to the system of the Company.
ii) Management of market risk (exchange rate and interest rate fluctuation risks)
The Group enters into derivative transactions to control interest rate fluctuation risk associated withborrowings.
As for investment securities, the Group holds listed stocks mainly for the purpose of holding themfor the long term, and evaluates them on a fair value basis each quarterly period and obtains thefinancial information of the issuers (business partners). For those other than held-to-maturity bonds,
the Group consistently reviews the holding status taking into account the market conditions andrelationships with business partners.
iii) Management of liquidity risk associated with funds procurement (risk of failure to pay on due dates)
The departments in charge appropriately distribute funds by periodically collecting information
about their account activity in an integrated manner and understanding the situation while holding
some as funds on hand taking into account the necessary liquidity.
(4) Supplemental remarks on fair values of financial instruments
As the calculation of those values includes variable factors, the values may vary if different
assumptions and others are applied. The contract amount related to derivative transactions in“Derivative Transactions” under “Notes to Consolidated Financial Statements” does not represent
market risk associated with the derivative transactions.

26

2. Fair values of financial instruments
The carrying amounts in the consolidated balance sheets and the fair values, and difference between them
are shown below.
As of March 31, 2021
(Thousands of yen)
Carrying amount inconsolidated balance sheets(1) Investment securities
Available-for-sale securities(2) Long-term loans receivable
Total assets(1) Short-term borrowings(2) Current portion of long-termborrowings(3) Lease liabilities (Current liabilities)(4) Long-term borrowings(5) Lease liabilities (Non-current
liabilities)
Total liabilities
Derivative transactions (*3)

Fair value

Difference

7,609,965
14,2697,624,234
6,976,725

7,609,965
14,2697,624,234
6,976,725–
000448,983

491,222

42,23820,5602,819,082

20,5602,824,576

0
5,494

26,361

26,361

0

10,291,712–

10,339,445–

47,733–(*1) Cash and deposits, notes and accounts receivable - trade, electronically recorded monetary claims - operating, notes
and accounts payable - trade, and income taxes payable are omitted from the table above as they are cash-based, they
are settled in a short period of time and their fair values therefore approximate their book values.
(*2) Carrying amount of financial instruments for which it is considered extremely difficult to determine fair values(Thousands of yen)
As of March 31, 2021
Unlisted stocks

126,302

As unlisted stocks have no market prices and it is considered to be extremely difficult to determine their fair values,
they are not included in “(1) Investment securities.”(*3) Please refer to “Derivative Transactions” under “Notes to Consolidated Financial Statements.”27

As of March 31, 2022
(Thousands of yen)
Carrying amount inconsolidated balance sheets(1) Investment securities
Available-for-sale securities(2) Long-term loans receivable
Total assets(1) Short-term borrowings(2) Current portion of long-termborrowings(3) Lease liabilities (Current liabilities)(4) Long-term borrowings(5) Lease liabilities (Non-current
liabilities)
Total liabilities
Derivative transactions (*3)

Fair value

Difference

7,785,037
2,526
7,787,563
6,769,296

7,785,037
2,526
7,787,563
6,769,296–000488,174

520,546

32,371

14,4442,566,512

14,4442,543,4460(23,065)

20,774

20,77409,859,201–

9,868,508
–

9,306
–

(*1) Cash and deposits, notes receivable - trade, accounts receivable - trade, electronically recorded monetary claims operating, notes and accounts payable - trade, electronically recorded obligations - operating, and income taxes
payable are omitted from the table above as they are cash-based, they are settled in a short period of time and theirfair values therefore approximate their book values.
(*2) Shares, etc. without market prices are not included in “(1) Investment securities.” The carrying amount of thesefinancial instruments on the consolidated balance sheets is shown below.
(Thousands of yen)
Category
As of March 31, 2022
Unlisted stocks

120,334(*3) Please refer to “Derivative Transactions” under “Notes to Consolidated Financial Statements.”

28

(Notes) 1. Expected redemption amounts of monetary receivables and securities with maturity dates subsequent to theconsolidated balance sheet date
As of March 31, 2021
(Thousands of yen)
Within 1 year

Over 1 year
to 5 years

Over 5 years
to 10 years

Over 10 years(1) Cash and deposits(2) Notes and accounts
receivable - trade(3) Electronically recordedmonetary claims - operating(4) Long-term loans receivable

21,101,331

–

–

–

21,143,908

–

–

–

2,162,815

–

–

–

–

13,325

590

352

Total

44,408,055

13,325590

352

Within 1 year

Over 1 year
to 5 years

Over 5 years
to 10 years

Over 10 years(1) Cash and deposits

20,696,005

–

–

–

(2) Notes receivable - trade

1,785,477–––(3) Accounts receivable - trade(4) Electronically recordedmonetary claims - operating(5) Long-term loans receivable

21,413,866

–

–

–

3,145,045

–

–

–

–

1,693

608

223

Total

47,040,395

1,693

608

223

As of March 31, 2022
(Thousands of yen)

2. Projected repayment amounts of borrowings, bonds payable and lease liabilities subsequent to the consolidatedbalance sheet date
As of March 31, 2021
Within 1
year(Thousands of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Over 5 years
to 2 years
to 3 years
to 4 years
to 5 years(1) Short-term borrowings

6,976,725

–

–

–

–

–

(2) Long-term borrowings

448,983

500,733

493,233

481,771

256,384

1,086,960(3) Lease liabilities

20,56012,180

6,533

4,804

2,594

248

Total

7,446,268

512,913499,766

486,575

258,979

1,087,208

As of March 31, 2022
Within 1
year(Thousands of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Over 5 years
to 2 years
to 3 years
to 4 years
to 5 years(1) Short-term borrowings

6,769,296

–

–

–

–

–

(2) Long-term borrowings

488,174544,014532,414282,373–

1,207,710(3) Lease liabilities

14,444

9,825

7,072

3,420

455

–

Total

7,271,915

553,840

539,487285,793455

1,207,710

29

3. Breakdown of financial instruments by level of fair value
The fair value of financial instruments is classified into the following three levels on the basis of theobservability and significance of the inputs used to calculate fair value:
Level 1 fair value: Fair value calculated using observable inputs that are market prices formed in active
markets for the assets or liabilities for which fair value is to be calculated
Level 2 fair value: Fair value calculated using observable inputs other than those used to calculate Level 1
fair value
Level 3 fair value: Fair value calculated using unobservable inputs
When multiple inputs that may have a material impact on the calculation of fair value are used, thecalculated fair value is classified at the lowest level of the inputs used.
(1) Financial instruments carried on the consolidated balance sheets at fair value
As of March 31, 2022
(Thousands of yen)
Category
Investment securities
Available-for-sale securities
SharesTotal assets

Fair value
Level 1

Level 2

Level 3

Total

7,785,037––

7,785,037

7,785,037––

7,785,037(2) Financial instruments other than those carried on the consolidated balance sheets at fair value
As of March 31, 2022
(Thousands of yen)
Category

Fair value

Long-term loans receivable

Level 1–

Level 2
2,526

Total assets
Short-term borrowings
Current portion of long-termborrowings
Lease liabilities (Current liabilities)
Long-term borrowings
Lease liabilities (Non-current
liabilities)
Total liabilities––

Level 3

Total
–

2,526

2,526
6,769,296

–
–

2,526
6,769,296–

520,546–

520,546––

14,4442,543,446––

14,4442,543,446–

20,774–

20,774–

9,868,508–

9,868,508(Note) Explanation of the valuation techniques and inputs used to calculate fair value
Investment securities
Listed shares are valued with quoted prices. Because listed shares are traded in active markets, theirfair value is classified as Level 1 fair value.
Long-term loans receivable
The fair value of long-term loans receivable is calculated as the present value of the sum of principal
and interest amounts, discounted using the estimated rates applicable for new loans, and is classified
as Level 2 fair value.
Short-term borrowings and lease liabilities
Fair value is calculated as the present value of the sum of principal and interest amounts, discounted
using the estimated rates applicable for similar new borrowings or lease transactions, and is classified
as Level 2 fair value.
Long-term borrowings
The fair value of long-term borrowings is calculated as the present value of the sum of principal and30

interest amounts, discounted using an interest rate that reflects the remaining term of the liability andcredit risk, and is classified as Level 2 fair value. Long-term borrowings using floating interest rates
are subject to the special accounting treatment for interest rate swaps. Fair value is calculated as thepresent value of the sum of principal and interest amounts treated as a single item together with therelevant interest rate swap, discounted using an interest rate that reflects the remaining term of theliability and credit risk, and is classified as Level 2 fair value.

31Securities
1. Available-for-sale securities
As of March 31, 2021
(Thousands of yen)

Securities whose carrying amount on the
consolidated balance sheets exceeds theiracquisition cost
StocksSubtotal
Securities whose carrying amount on the
consolidated balance sheets does not exceed theiracquisition cost
StocksSubtotal
Total(Note)

Carrying amounton the consolidatedbalance sheets

Acquisition cost

7,270,717
7,270,717

1,711,912
1,711,912

5,558,805
5,558,805

339,248
339,248
7,609,965

362,689362,689
2,074,601(23,440)(23,440)
5,535,364

Unrealized gain (loss)

As unlisted stocks (126,302 thousand yen reported on the consolidated balance sheets) have no market prices and it isconsidered to be extremely difficult to determine their fair values, they are not included in the table above.

As of March 31, 2022
(Thousands of yen)

Securities whose carrying amount on the
consolidated balance sheets exceeds theiracquisition cost
StocksSubtotal
Securities whose carrying amount on the
consolidated balance sheets does not exceed theiracquisition cost
StocksSubtotal
Total(Note)

Carrying amounton the consolidatedbalance sheets

Acquisition cost

7,562,409
7,562,409

1,594,730
1,594,730

5,967,678
5,967,678

222,627
222,627
7,785,037

276,183
276,183
1,870,914(53,555)(53,555)
5,914,122

Unrealized gain (loss)

As unlisted stocks (120,334 thousand yen reported on the consolidated balance sheets) have no market prices, they are
not included in the table above.

32

2. Available-for-sale securities that were sold during the fiscal year
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(Thousands of yen)Type
StocksProceeds from sales

Total gain on sales

31,496

Total loss on sales

10,768–

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Thousands of yen)Type
StocksProceeds from sales

Total gain on sales

317,674

3. Impairment loss on securities
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Not applicable.
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Not applicable.

Derivative Transactions
1. Derivative transactions to which hedge accounting is not applied
Not applicable.
2. Derivative transactions to which hedge accounting is applied(1) Currency-related transactions
As of March 31, 2021
Not applicable.
As of March 31, 2022
Not applicable.

33

106,010

Total loss on sales
3,409

(2) Interest rate-related transactions
As of March 31, 2021
(Thousands of yen)
Hedge accounting
methodType of derivativetransaction

Exceptional
accrual method
for interest rate
swaps

Interest rate swap
contracts(Note)

Receive floating/ Pay fixed

Principal hedged item

Contract amountLong-term borrowings

1,173,370

Contract amountdue after 1 year

911,770

Fair value(Note)

Since items subject to the exceptional accrual method for interest rate swaps are accounted for together with the longterm borrowings that are the hedged items, the fair values thereof are included in the fair values of the corresponding
long-term borrowings.

As of March 31, 2022

(Thousands of yen)
Hedge accounting
methodType of derivativetransaction

Exceptional
accrual method
for interest rate
swaps

Interest rate swap
contracts(Note)

Receive floating/ Pay fixed

Principal hedged item

Contract amountLong-term borrowings

1,008,801

Contract amountdue after 1 year

728,826

Fair value(Note)

Since items subject to the exceptional accrual method for interest rate swaps are accounted for together with the longterm borrowings that are the hedged items, the fair values thereof are included in the fair values of the corresponding
long-term borrowings.

Retirement Benefits
1. Summary of retirement benefit plans adopted
To cover retirement benefits to employees, the Company and its consolidated subsidiaries have adopted
funded and unfunded defined-benefit plans.
Under the defined-benefit corporate pension plans, all of which are funded plans, lump-sum benefits or
pensions are paid based on salary and service period.
Under the retirement lump-sum payment plans, all of which are unfunded plans, lump-sum benefits arepaid as retirement benefits based on salary and service period. A retirement benefit trust has been
established for the retirement lump-sum payment plans, all of which are unfunded plans, since May
2015.
For defined-benefit corporate pension plans and retirement lump-sum payment plans held by someconsolidated subsidiaries, retirement benefit liability and retirement benefit expenses are calculated bya simplified method.

34

2. Defined-benefit plans(1) Reconciliation between balance of retirement benefit obligations at the beginning of period and thatat the end of period(Thousands of yen)
Fiscal year ended Fiscal year ended
March 31, 2021
March 31, 2022
5,973,089

5,891,642

Service cost

346,416

396,831

Interest cost

24,25435,778Retirement benefit obligations at the beginning of period

Actuarial differences(89,762)(2,272)Retirement benefits paid

(285,857)(292,624)

Other(76,498)(8,776)

5,891,642

6,020,580

Retirement benefit obligations at the end of period(2) Reconciliation between balance of plan assets at the beginning of period and that at the end of period
Fiscal year ended
March 31, 2021

(Thousands of yen)
Fiscal year ended
March 31, 2022

Plan assets at the beginning of period

5,350,938

5,722,787

Expected return on plan assets

58,686108,359

Actuarial differences

346,139

23,962Contribution by employer

109,869

103,615Retirement benefits paid

(109,750)(112,726)

Other(33,096)−

5,722,787

5,845,998

Plan assets at the end of period(3) Reconciliation between balance of retirement benefit obligations and plan assets at the end of period
and that of retirement benefit liability and retirement benefit asset recorded in the consolidatedbalance sheets(Thousands of yen)
As of
As of
March 31, 2022
March 31, 2021
Retirement benefit obligations from funded plans

2,866,595

2,861,980

Plan assets(3,640,485)(3,760,494)(773,890)(898,514)

Retirement benefit obligations on unfunded plans

942,745

1,073,095

Net amount of liability and asset recorded in consolidated balance sheets

168,854

174,581Retirement benefit asset(883,374)(962,148)

Retirement benefit liability

1,052,229

1,136,730

168,854

174,581

Net amount of liability and asset recorded in consolidated balance sheets35

(4) Retirement benefit expenses
Fiscal year ended
March 31, 2021

(Thousands of yen)
Fiscal year ended
March 31, 2022

Service cost

346,416

396,831

Interest cost

24,25435,778

Expected return on plan assets(58,686)(108,359)

Amortization of actuarial differences

171,490

47,442Other(4,426)(13,457)

Retirement benefit expenses on defined-benefit plans

479,048358,235(5) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans (before deducting tax effect) are as
follows:

Actuarial differences

Fiscal year ended
March 31, 2021

(Thousands of yen)
Fiscal year ended
March 31, 2022

(607,393)(73,677)(6) Remeasurements of defined benefit plans (Accumulated other comprehensive income)The components of remeasurements of defined benefit plans (before deducting tax effect) are as
follows:

Unrecognized actuarial differences

As ofMarch 31, 2021

(Thousands of yen)
As ofMarch 31, 2022

(66,333)(140,010)(7) Plan assetsi) Main components of plan assets
The ratios of components to total plan assets by major category are as follows:
As ofMarch 31, 2021

As ofMarch 31, 2022

Bonds

10.1%

10.4%

Stocks

18.1%

18.7%

Cash and deposits

5.2%

5.3%

Insurance assets (general accounts)

7.3%

7.3%

Investment trust

36.4%

35.7%

Shared operating assets

22.9%

22.7%

Total

100.0%

100.0%(Note) Total plan assets includes the retirement benefit trust established for the retirement lump-sum payment
plans, which accounts for 36.4% and 35.7% of the total amount as of March 31, 2021 and March 31, 2022,
respectively.

ii) Method for establishing long-term expected rate of return on plan assets
To establish the long-term expected rate of return on plan assets, the current and forecasted
allocation of plan assets and the current and expected future long-term rate of return from thevarious assets constituting the plan assets are taken into consideration.

36

(8) Calculation basis for actuarial assumptions
The main calculation basis for actuarial assumptions are as follows:
Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Discount rate

0.07%

0.19%

Long-term expected rate of return

1.70%

2.60%

Expected rate of salary increase

7.20%

7.20%

Income Taxes
1. Significant components of deferred tax assets and liabilities(Thousands of yen)
As of March 31, 2022

As of March 31, 2021
Deferred tax assets
Allowance for doubtful accounts
Retirement benefit liability
Impairment loss
Provision for bonuses
Loss on valuation of investment securities
Asset retirement obligations
Net operating losses carryforward (Note)
Other
Subtotal of deferred tax assets
Valuation allowance related to net operating losses
carryforward (Note)
Valuation allowance related to total deductible temporary
difference, etc.
Subtotal of valuation allowance
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Retirement benefit asset
Reserve for advanced depreciation of non-current assets
Property, plant and equipment (asset retirement
obligations)
Reserved profit of overseas consolidated subsidiaries
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)

26,642
974,616
275,453
203,510
175,663
52,773
185,189
611,585
2,505,434

26,346857,368
407,849
198,324
173,607
98,743
142,443
660,770
2,565,454(171,910)(140,874)(466,417)(451,254)(638,327)
1,867,107(592,129)
1,973,325(1,550,636)(405,472)(22,790)(1,677,344)(275,124)−(24,960)(38,989)(467,231)(522,847)(2,993,938)(1,126,831)(495,856)(526,784)(3,014,101)(1,040,775)(Note) Amounts of tax loss carryforward and related deferred tax assets by carryforward period
As of March 31, 2021
Within 1
year(Thousands of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Over 5 years
Total
to 2 years
to 3 years
to 4 years
to 5 years

Tax loss carryforward (a)16,07237,892

29,871

11,208

7,952

82,191

185,189

Valuation allowance(16,072)(37,892)(29,871)(11,208)(7,952)(68,912)(171,910)

Deferred tax assets

–

–

–

–

–

13,279(b) 13,279(a) Figures for tax loss carryforward are the amounts multiplied by effective statutory tax rate.
(b) For the tax loss carryforward of 185,189 thousand yen (amount multiplied by effective statutory tax rate), deferred tax assetsof 13,279 thousand yen have been recorded. The deferred tax assets of 13,279 thousand yen have been recognized primarily
for a portion of the balance of tax loss carryforward in the amount of 40,846 thousand yen (amount multiplied by effective
statutory tax rate) of RIKEN AMERICAS CORPORATION and RIKEN ELASTOMERS CORPORATION, consolidated
subsidiaries. For the said tax loss carryforward that was determined to be recoverable as future taxable income wasanticipated, valuation allowance has not been recognized.

37

As of March 31, 2022
Within 1
year(Thousands of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Over 5 years
Total
to 4 years
to 5 years
to 3 years
to 2 years

Tax loss carryforward (a)42,101

23,727

12,454

8,836

4,221

51,103

142,443

Valuation allowance(42,101)(23,727)(12,454)(8,836)(4,221)(49,534)(140,874)

Deferred tax assets

–

–

–

–

–

1,568

(b) 1,568(a) Figures for tax loss carryforward are the amounts multiplied by effective statutory tax rate.
(b) For the tax loss carryforward of 142,443 thousand yen (amount multiplied by effective statutory tax rate), deferred tax assetsof 1,568 thousand yen have been recorded. The deferred tax assets of 1,568 thousand yen have been recognized primarily fora portion of the balance of tax loss carryforward in the amount of 1,129 thousand yen (amount multiplied by effective
statutory tax rate) of RIMTEC CORPORATION, a consolidated subsidiary. For the said tax loss carryforward that wasdetermined to be recoverable as future taxable income was anticipated, valuation allowance has not been recognized.

2. Reconciliation between the effective statutory tax rate and the effective tax rate
As ofMarch 31, 2021
30.6%

Effective statutory tax rate
Adjustments
Expenses not deductible permanently such as entertainment
expenses
Income not taxable permanently such as dividends income
Foreign withholding taxes
Change in valuation allowance
Tax rate differences from overseas consolidated
subsidiaries
Other
Effective tax rate

38

As of
March 31, 2022
30.6%

0.5

0.5

(0.9)
0.4
(3.2)

(0.9)
0.3
(0.7)

(3.6)

(2.5)

0.5
24.4

1.3
28.5

Business Combinations
Transaction under common control(1) Overview of transactioni) Name and description of the relevant business
Name of business:
Food wrapping film manufacture and sale business
Description of business:
Manufacture and sale of food wrapping filmii) Date of business combination
January 1, 2022iii) Legal form of business combination
Absorption-type merger of the Company and RIKEN FABRO CORPORATION (a consolidated
subsidiary of the Company), with the Company as the surviving company and RIKEN FABROCORPORATION as the non-surviving company.
iv) Company name after the business combination
RIKEN TECHNOS CORPORATION (the Company)v) Other matters concerning the overview of the transaction
Through this merger of the Company, responsible for development/manufacturing in the foodwrapping film business, and RIKEN FABRO CORPORATION, responsible for sales, theCompany aims to achieve even more efficient Group management by consolidating management
resources, and further deepen coordination between development/manufacturing and sales toenhance both development and sales capabilities in the food wrapping film business.
(2) Overview of accounting treatment applied
The transaction was treated as a transaction under common control, in accordance with “AccountingStandard for Business Combinations” and “Implementation Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures.”
Asset retirement obligations
This information has been omitted due to its insignificance.
Rental properties and other real estateThis information has been omitted due to its insignificance.
Revenue recognition
1.

Information on the breakdown of revenue generated from contracts with customers
Information on the breakdown of revenue generated from contracts with customers is as stated in“Segment Information and Others.”

2.

Information fundamental to an understanding of revenue generated from contracts with customers
Information fundamental to an understanding of revenue generated from contracts with customers is as
stated in “5. Accounting policies (5) Significant standards for the recognition of revenue and expenses”
under “Significant Matters in Preparing Consolidated Financial Statements.”

39

Segment Information and Others
Segment Information
1. Summary of reportable segments(1) Method of determining reportable segments
The Group’s reportable segments are components of the Group for which separate financial information isavailable and that are evaluated regularly by the Board of Directors to determine allocation ofmanagement resources and assess performance.
The Company has business units by market at the head office. Each business unit supervises and plans its
own domestic and overseas strategies by market and conducts global business activities.
Accordingly, the Group has classified the reportable segments based on markets and has four reportablesegments, “transportation,” “daily life & healthcare,” “electronics,” and “building & construction.”(2) The name, abbreviation, and main markets of each respective reportable segment
The name, abbreviation, and main markets of each respective reportable segment are as follows:
Transportation (TR): automobile, railroad, and shipping markets, etc.
Daily Life & Healthcare (DH): healthcare, materials for daily life, and food wrapping film markets, etc.
Electronics (EL): energy, communications, and IT equipment markets, etc.
Building & Construction (BC): housing, buildings, construction materials, and civil engineering markets(Note) The terms in parentheses are abbreviations for the reportable segments.

2. Method for calculating net sales, profit or loss, assets, liabilities and other items by reportable segment
Accounting policies of reported business segments are mostly consistent with those disclosed in“Significant Matters in Preparing Consolidated Financial Statements.”
Segment profit is calculated on an operating profit basis.
Intersegment sales and transfers are based on actual market prices.
In addition, the Company has applied the Revenue Recognition Accounting Standard, etc., effective fromthe beginning of the current fiscal year, as stated in “Changes in Accounting Policies,” and changed theaccounting method for revenue recognition, so it has similarly changed the method for calculating the
profit (loss) of business segments.
As a result of this change, for the current fiscal year, in the Transportation (TR) segment, net sales
decreased by 6,932 thousand yen and segment profit decreased by 8,243 thousand yen, compared to theamounts calculated using the previous method. In the Daily Life & Healthcare (DH) segment, net sales
decreased by 10,622 thousand yen and segment profit decreased by 3,442 thousand yen. In the Electronics(EL) segment, net sales decreased by 2,807 thousand yen and segment profit increased by 6,365 thousand
yen. In the Building & Construction (BC) segment, net sales decreased by 472,875 thousand yen andsegment profit increased by 1,004 thousand yen.

40

3. Information about net sales, profit or loss, assets, liabilities and other items by reportable segment, andrevenue breakdown
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(Thousands of yen)
Reportable segment

Net sales(1) Sales to externalcustomers(2) Intersegment
sales or transfers
Total
Segment profit (loss)
Segment assets
OthersDepreciation
Amortization of
goodwill
Increase in property,
plant and equipment
and intangible assets

Total

Other
(Note 1)

Total

Amountrecorded ontheAdjustment
consolidated(Note 2)statements
of income(Note 3)

21,033,635

87,812,224

412,217

88,224,442−

88,224,442

−

−

130

208,703

208,834(208,834)−

25,037,537

17,430,259

21,033,635

87,812,355

620,92188,433,276(208,834)

88,224,442

2,740,934

379,442(33,580)

5,233,402

2,251

5,235,653

78,0105,313,663

6,831,749

9,859,907

10,152,914

6,290,898

33,135,469

247,607

33,383,077 61,825,783

95,208,860

1,401,519

544,514877,948

888,682

3,712,665

339

3,713,004−

3,713,004−−

200,000

1,455

201,455−

201,455−

201,455−

264,095

42,761−

306,856−

306,856

3,372,929

3,679,785

TR

DH

EL

BC

24,310,922

25,037,406

17,430,259−

130

24,310,922
2,146,604(Notes) 1. The “Other” category is the business segment that is not included in the reportable segments, and represents thepurchase and sales of raw materials, etc.
2. The adjustment to segment profit (loss) represents 78,010 thousand yen in inter-segment eliminations.
The adjustment to segment assets represents – thousand yen in inter-segment eliminations and 61,825,783 thousand
yen in corporate assets. The corporate assets mainly include funds to manage surplus assets (cash and deposits),
long-term investment funds (investment securities) and assets related to the administration division.
3. Segment profit (loss) is adjusted to operating profit in the consolidated statements of income.

41

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Thousands of yen)
Reportable segment

Net sales
Revenue generated
from contracts withcustomers
Sales to externalcustomers
Intersegment sales ortransfers
Total
Segment profit
Segment assets
OthersDepreciation
Amortization of
goodwill
Impairment loss
Increase in property,
plant and equipment
and intangible assets

BC

Total

Other
(Note 1)

Total

Amountrecorded ontheAdjustment
consolidated(Note 2)statements
of income(Note 3)

TR

DH

EL

32,457,128

30,688,631

21,493,631

25,154,398 109,793,790

129,915 109,923,705− 109,923,705

32,457,128

30,688,631

21,493,631

25,154,398 109,793,790

129,915 109,923,705− 109,923,705

−

117

−

32,457,128

30,688,748

21,493,631

25,155,914 109,795,423

425,328 110,220,751(297,045) 109,923,705

2,737,512

1,856,535

439,229

1,131,128

6,164,406

23,776

6,188,183

103,859

8,862,537

11,283,041

10,932,274

7,394,848

38,472,701

266,176

38,738,877 63,902,606 102,641,484

1,332,080

583,736

833,104

756,956

3,505,876

215

3,506,091−

3,506,091−−

138,750

1,455

140,205−

140,205−

140,205−−

319,144−

319,144−

319,144−

319,144−271,653

19,250−290,904−

290,904

2,209,079

2,499,984

1,515

1,632

295,412

297,045(297,045)−

6,292,043(Notes) 1. The “Other” category is the business segment that is not included in the reportable segments, and represents thepurchase and sales of raw materials, etc.
2. The adjustment to segment profit represents 103,859 thousand yen in inter-segment eliminations.
The adjustment to segment assets represents – thousand yen in inter-segment eliminations and 64,750,958 thousand
yen in corporate assets. The corporate assets mainly include funds to manage surplus assets (cash and deposits),
long-term investment funds (investment securities) and assets related to the administration division.
3. Segment profit is adjusted to operating profit in the consolidated statements of income.

42

Related Information
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
1. Information by product and service(Thousands of yen)

Sales to external customers

TR

DH

EL

24,310,922

25,037,406

BC

17,430,259

Other

21,033,635

Total

412,217

88,224,442

2. Information by geographical area
(1) Net sales(Thousands of yen)Japan

Thailand

U.S.

China

50,560,955

9,753,790

9,138,584

6,558,981(Note)

EuropeOther regions

Total

12,100,598

88,224,442

111,531

Net sales are segmented by country or region based on customer location.

(2) Property, plant and equipment(Thousands of yen)Japan

Thailand

U.S.

China

Europe13,466,164

3,124,483

4,624,529

1,336,072

Total

Other regions–

2,919,715

25,470,963

3. Information by major customer
This information has been omitted as there is no major external customer that accounts for 10% or more of the
net sales recorded on the consolidated statements of income.
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
1. Information by product and service(Thousands of yen)

Sales to external customers

TR

DH

EL

32,457,128

30,688,631

BC

21,493,631

Other

25,154,398

Total

129,915

109,923,705

2. Information by geographical area
(1) Net sales(Thousands of yen)Japan

ThailandU.S.

57,425,206

12,719,592

14,377,497(Note)

China
8,861,802

Europe144,451

Other regions

Total

16,395,155

109,923,705

Net sales are segmented by country or region based on customer location.

(2) Property, plant and equipment(Thousands of yen)Japan

Thailand

U.S.

China

13,241,665

2,839,504

4,904,541

1,404,03543EuropeOther regions–

2,747,123

Total
25,136,870

3. Information by major customer
This information has been omitted as there is no major external customer that accounts for 10% or more of the
net sales recorded on the consolidated statements of income.
Information about Impairment Loss on Non-current Assets by Reportable Segment
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Not applicable.
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
This information has been omitted as identical information is disclosed in segment information.
Information about Amortization of Goodwill and Balance of Unamortized Goodwill by Reportable
Segment
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(Thousands of yen)
Reportable segment
TR
Balance as of March 31,
2021(Note)

DH

–

EL

–

BC

Total

8,730

542,063

533,333

Other

Total

–

542,063

Amountrecorded ontheAdjustment
consolidated
financialstatements–

542,063

Amortization of goodwill has been omitted, as identical information is disclosed in segment information.

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Thousands of yen)
Reportable segment
TR
Balance as of March 31,
2022

DH

–

EL

–

–

BC

Total

7,275

7,275

Other

Total

–

7,275

Amountrecorded ontheAdjustment
consolidated
financialstatements–(Notes) 1. Amortization of goodwill has been omitted, as identical information is disclosed in segment information.
2. Impairment loss on goodwill of 231,250 thousand yen was recorded in the EL segment.

Information about Gain on Bargain Purchase by Reportable Segment
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Not applicable.
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Not applicable.
Information on Related Parties
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Not applicable.
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Not applicable.

44

7,275

Per Share Information(Yen)
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2021
Net assets per share

852.51914.83

Basic earnings per share

51.22

62.47

(Notes) 1. Diluted earnings per share is not presented because there are no potential shares.
2. The basis used for calculating basic earnings per share is as follows.
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2021
Profit attributable to owners of parent (Thousands of yen)Amount not attributable to common shareholders(Thousands of yen)
Profit attributable to owners of parent regarding
common stock (Thousands of yen)
Average number of shares of common stock outstanding
during the period (Shares)(Note)

3,234,206

3,941,418––

3,234,206

3,941,418

63,146,542

63,090,216

Shares in the Company remaining at the trust that were recorded as treasury shares under shareholders' equity havebeen included in the treasury shares that should be deducted in calculating the average number of shares outstanding
during the period for the purpose of calculating basic earnings per share.
The average number of treasury shares during the period that were deducted for the purpose of calculating basic
earnings per share was 721 thousand shares for the fiscal year ended March 31, 2021 and 1,023 thousand shares for the
fiscal year ended March 31, 2022.
3. The basis used for calculating net assets per share is as follows.
As of March 31, 2021

As of March 31, 2022

Total net assets (Thousands of yen)

61,076,854

65,448,500

Deduction from total net assets (Thousands of yen)

7,335,533

7,686,429[7,335,533][7,686,429]

Net assets related to common stock (Thousands of yen)

53,741,320

57,762,070

Number of treasury shares of common stock (Shares)

1,074,844

973,846

Number of shares of common stock outstanding used for
calculation of net assets per share (Shares)

63,038,975

63,139,973[Of the above, non-controlling interests (Thousands ofyen)](Note)

Shares in the Company remaining at the trust that were recorded as treasury shares under shareholders' equity havebeen included in the treasury shares that should be deducted from the total number of shares outstanding at the fiscal
year-end for the purpose of calculating net assets per share.
The number of treasury shares at the fiscal year-end that were deducted for the purpose of calculating net assets per
share was 1,074 thousand shares for the fiscal year ended March 31, 2021, and 973 thousand shares for the fiscal year
ended March 31, 2022.
4. As stated in the “Changes in Accounting Policies,” the Company has applied the “Accounting Standard for
Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020;
hereinafter the “Revenue Recognition Accounting Standard”), etc. effective from the beginning of the current
fiscal year. As a result, net assets per share and basic earnings per share each decreased by 0.04 yen compared tothe amounts calculated using the previous method.

Significant Subsequent Events
Not applicable.

45

e. Consolidated Supporting Schedules
Detailed Statement of Bonds
Not applicable.
Detailed Statement of Borrowings
Category

Balance as of
Balance as ofMarch 31, 2021
March 31, 2022
(Thousands of yen) (Thousands of yen)

Short-term borrowings

Averageinterest rate(%)

Repayment period

6,976,725

6,769,296

0.8–

Current portion of long-termborrowings

448,983

488,174

2.7–

Current portion of lease liabilities

20,56014,444––

2,819,082

2,566,512

1.42023 – 2033

26,361

20,774–2023 – 2026

–

–

–

–

10,291,712

9,859,201––

Long-term borrowings(excluding current portion)
Lease liabillitiess(excluding current portion)
Other interest-bearing debt
Total

(Notes) 1. Method of calculating average interest rates
Average interest rates are calculated using the average outstanding balance during the period.
2. The amount of lease liabilities in the consolidated balance sheets includes the interest equivalent.
3. Repayment of long-term borrowings and lease liabilities scheduled within five years after the balance sheet date areas follows:(Thousands of yen)Over 1 year
Over 2 years
Over 3 years
Over 4 years
Categoryto 2 years
to 3 years
to 4 years
to 5 years
Long-term borrowings
Lease liabilities

544,014532,414282,373

–

9,825

7,072

3,420

455

Detailed Statement of Asset Retirement Obligations
As the amount of asset retirement obligations as of April 1, 2021 and March 31, 2022 is not more than 1% of
the total amount of liabilities and net assets as of the same dates, this information is omitted pursuant to theprovisions of Article 92-2 of the Ordinance on Consolidated Financial Statements.
(2) Others
Quarterly information for the fiscal year ended March 31, 2022
(Year-to-date period)
Net sales (Thousands of yen)
Profit before income taxes(Thousands of yen)
Profit attributable to owners ofparent (Thousands of yen)
Basic earnings per share (Yen)(Three-month period)
Basic earnings per share (Yen)

1st quarter2nd quarter3rd quarter

Fiscal year ended
March 31, 2022

24,870,043

50,965,196

78,376,008

109,923,705

1,799,668

3,368,867

5,095,056

6,476,038

1,145,703

2,137,821

3,328,310

3,941,418

18.17

33.90

52.77

62.47

1st quarter2nd quarter

18.17

15.73

46

3rd quarter
18.87

4th quarter
9.71