type B1-E

CONSOLIDATEDFINANCIALSTATEMENTS
For the Fiscal Year Ended March 31, 2022

CONTENTS
01

Consolidated Financial Statements

01 Consolidated Statement of		 Financial Position
02 Consolidated Statement of Profit or Loss
02 Consolidated Statement of		 Comprehensive Income
03 Consolidated Statement of
		 Changes in Equity
04 Consolidated Statement of Cash Flows
This document has been extracted and translated from the Japanese originalreport (Yukashoken-Hokokusho) issued on June 20, 2022 for reference purposes

1-3-26 Koyama, Shinagawa-ku, Tokyo 142-0062, Japan
Tel: +81-3-5788-8512
https://www.nipponsanso-hd.co.jp/en/

05

Notes to Consolidated Financial
Statements

47

Independent Auditor’s Report

only. In the event of any discrepancy between this translated document andJapanese version, the Japanese version shall prevail.

Consolidated Financial Statements
Nippon Sanso Holdings and Consolidated Subsidiaries

Consolidated Statement of Financial Position(Millions of yen)

Notes

FYE2022(March 31, 2022)

AssetsCurrent assets
Cash and cash equivalents6¥   93,697¥   91,058

Trade receivables

7

218,480

182,077

Inventories

880,064

69,613

Other financial assets

13

7,310

6,710

Other current assets

14

Total current assets

Consolidated Statement of Profit or Loss

(Millions of yen)

FYE2021(March 31, 2021)

22,94019,441

422,493368,901

Non-current assets
Property, plant and equipment

9729,658

685,733

Goodwill

10485,190455,036
237,751

Intangible assets

10

241,320

Investments accounted for using the equity method

12

35,70032,295

Other financial assets

13

55,41049,739Retirement benefit asset

19

2,468

2,467

Other non-current assets

14

1,163

1,120

Deferred tax assets

29

3,619

3,249

Total non-current assets

1,554,532

1,467,393

Total assets¥1,977,026¥1,836,294

Liabilities and equity

Notes

Revenue
Cost of sales
Gross profit

4, 26

Selling, general and administrative expenses
Other operating income
Other operating expenses
Share of profit of investments accounted for using the equity method
Operating profit

27
27
12

Current liabilities
Trade payables15¥   115,123¥   96,093

Bonds and borrowings

16

110,595

131,721

Income taxes payable
Other financial liabilities

17

9,746

11,022

65,22858,428¥ 957,169(598,597)
358,572¥ 818,238(500,799)
317,439(259,204)
2,241(3,937)3,512
101,183(233,276)
3,949(4,867)
5,602
88,846

28
28

2,192
(11,765)
91,611

1,424(12,564)
77,706

Income taxes
Profit29(24,973)¥   66,637(20,842)¥  56,863¥   64,103
2,534¥  55,214
1,648

30

¥   148.13¥   127.59

Notes

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥ 66,637¥ 56,863

24
24

6,773
607

7,617
710

24

70
7,451

(31)
8,296

24
24

55,994299

53,841
56

24

1,979
58,27365,725¥132,363(133)
53,76462,060¥118,924¥129,325
3,038¥116,598
2,325

Profit attributable to:
Owners of parent
Non-controlling interests

See notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income

Provisions

20

1,068

469

Other current liabilities

21

29,83228,284

331,595

326,019

Profit779,749

780,895

Other comprehensive income
Items that will not be reclassified to profit or loss

Total current liabilities

FYE2021(From April 1, 2020
to March 31, 2021)

Finance income
Finance costs
Profit before income taxes

Earnings per share
Basic earnings per share (Yen)Liabilities

FYE2022(From April 1, 2021
to March 31, 2022)(Millions of yen)

Non-current liabilities
Bonds and borrowings

16

Other financial liabilities

17

31,231

29,453Retirement benefit liability

19

14,165

14,037

Provisions

20

5,107

3,870

Other non-current liabilities

21

20,91819,359Deferred tax liabilities

29

133,120

118,757

984,292

966,374

1,315,888

1,292,394

22

37,34437,344

Capital surplus

22

55,94555,901

Treasury shares

22

(281)

(273)

Retained earnings

22

476,589

422,838

Other components of equity

22

59,115(2,646)

628,714513,164

Total non-current liabilities
Total liabilities
EquityShare capital

Total equity attributable to owners of parent
Non-controlling interests

32,42330,736

Total equity

661,137

543,900¥1,977,026¥1,836,294

Total liabilities and equity

Share of other comprehensive income of investments
accounted for using the equity method
Total of items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Effective portion of net change in fair value of cash flow hedges
Share of other comprehensive income of investments
accounted for using the equity method
Total of items that may be reclassified subsequently to profit or loss
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
See notes to consolidated financial statements.

See notes to consolidated financial statements.

NIPPON SANSO HOLDINGS CORPORATION

Financial assets measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans

1

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION2INTEGRATED REPORT 2022

Consolidated Financial Statements
Nippon Sanso Holdings and Consolidated Subsidiaries

Consolidated Statement of Changes in Equity(Millions of yen)
Notes

Balance at April 1, 2021
ProfitOther comprehensive income
Comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Business combinations or business divestitures
Transfer from other components of equity to retained earnings
Change in scope of consolidation
Other changes
Total transactions with owners
Balance at March 31, 2022

24
22
22
23

FYE2022 (From April 1, 2021 to March 31, 2022)
Share capital

Capital surplus

Treasury shares

Retained earnings¥37,344
—
—
—
—
—
—
—
—
—
—
—
—
¥37,344¥55,901
—
—
—
—
0
—
43
—
—
—
—
43
¥55,945¥(273)
—
—
—
(7)
0
—
—
—
—
—
—
(7)
¥(281)¥422,838
64,103—64,103——(13,853)
—
—
3,459
41
—
(10,352)¥476,589

Total equity
attributable toowners of parent

Non-controllinginterests

Other components of equity
Notes

Balance at April 1, 2021
ProfitOther comprehensive income
Comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Business combinations or business divestitures
Transfer from other components of equity
to retained earnings
Change in scope of consolidation
Other changes
Total transactions with owners
Balance at March 31, 2022

Financial assets
Exchange
Effective portion of
measured at fair Remeasurements ofdifferences on
net change in fairvalue through other defined benefit
translation ofvalue of cash flow
comprehensive
plans
foreign operations
hedgesincome

24
22
22
23

Total

Total equity¥(18,029)—
57,45757,457
—
—
—
—
—

¥ 71
—
296
296
—
—
—
—
—

¥15,310
—
6,844
6,844
—
—
—
—
—

¥  —
—
623
623
—
—
—
—
—

¥  (2,646)—
65,222
65,222—————¥513,164
64,10365,222
129,325(7)
0(13,853)43—¥30,736
2,534
503
3,038
—
—
(991)
(379)
—

¥543,900
66,63765,725
132,363(7)
0(14,844)
(335)
—

—
—
—
—
¥ 39,428

—
—
—
—
¥368

(2,836)——(2,836)¥19,319

(623)
—
—
(623)
¥  —

(3,459)——(3,459)¥59,115—
41—(13,775)¥628,714—
5
14(1,350)¥32,423—46
14(15,126)¥661,137(Millions of yen)
Notes

Balance at April 1, 2020
ProfitOther comprehensive income
Comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Business combinations or business divestitures
Transfer from other components of equity to retained earnings
Change in scope of consolidation
Other changes
Total transactions with owners
Balance at March 31, 2021

24
22
22
23

FYE2021 (From April 1, 2020 to March 31, 2021)
Share capital

Capital surplus

Treasury shares

Retained earnings¥37,344
—
—
—
—
—
—
—
—
—
—
—
—
¥37,344¥56,387
—
—
—
—
0
—
(485)
—
—
—
—
(485)
¥55,901¥(268)
—
—
—
(5)
0
—
—
—
—
—
—
(5)
¥(273)¥379,322
55,214—55,214——(12,121)
—
—
588
(166)
—
(11,699)¥422,838

Total equity
attributable toowners of parent

Non-controllinginterests

Other components of equity
Notes

Balance at April 1, 2020
ProfitOther comprehensive income
Comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Changes in ownership interest in subsidiaries
Business combinations or business divestitures
Transfer from other components of equity
to retained earnings
Change in scope of consolidation
Other changes
Total transactions with owners
Balance at March 31, 2021

24
22
22
23

Financial assets
Exchange
Effective portion of
measured at fair Remeasurements ofdifferences on
net change in fairvalue through other defined benefit
translation ofvalue of cash flow
comprehensive
plans
foreign operations
hedgesincomeTotal

Total equity¥(71,170)—
53,14153,141
—
—
—
—
—

¥19
—
52
52
—
—
—
—
—

¥7,709
—
7,507
7,507
—
—
—
—
—

¥ —
—
682
682
—
—
—
—
—

¥(63,441)—
61,38361,383—————¥409,344
55,214
61,383
116,598(5)
0(12,121)(485)—¥31,349
1,648
677
2,325
—
—
(681)
(2,787)54¥440,693
56,86362,060118,924(5)
0(12,803)(3,273)54————¥(18,029)

—
—
—
—
¥71

93
—
—
93
¥15,310

(682)
—
—
(682)
¥  —

(588)
—
—
(588)
¥(2,646)—(166)—(12,778)¥513,164——476(2,939)¥30,736

—
(166)
476
(15,717)¥543,900

See notes to consolidated financial statements.

Consolidated Statement of Cash Flows(Millions of yen)

Notes

FYE2022(From April 1, 2021
to March 31, 2022)

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Impairment losses
Interest and dividend income
Interest expenses
Share of (profit) loss of investments accounted for using
the equity method
Loss (gain) on sales and retirement of property, plant and equipment
and intangible assets(Increase) decrease in trade receivables(Increase) decrease in inventories
Increase (decrease) in trade payables(Increase) decrease in retirement benefit asset
Increase (decrease) in retirement benefit liability
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investments
Proceeds from sales and redemption of investments
Payments for acquisition of subsidiaries
Proceeds from sales of subsidiaries
Payments for acquisition of businesses
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of bonds
Redemption of bonds
Repayments of lease liabilities
Purchase of investments in subsidiaries not resulting in change
in scope of consolidation
Dividends paid
Dividends paid to non-controlling interests
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Balance of cash and cash equivalents at beginning of the fiscal year

23

Increase (decrease) in cash and cash equivalents resulting from change
in scope of consolidation
Increase in cash and cash equivalents resulting from merger
Balance of cash and cash equivalents at end of the fiscal year

6

See notes to consolidated financial statements.

NIPPON SANSO HOLDINGS CORPORATION

3INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

4INTEGRATED REPORT 2022

FYE2021(From April 1, 2020
to March 31, 2021)¥ 91,611
92,435
1,216(965)
11,601¥  77,706
86,3802,022(821)
12,554(3,512)(5,602)

449(28,158)(6,764)
14,264
(580)
1,095
4,756
177,451201
3,720(10,842)(21,770)
148,760

(295)
2,248
(766)
(938)
(394)
764
(529)
172,328
195
6,117(11,548)(17,860)
149,231(74,478)
1,516(1,560)
6,083
(520)
0
—
(1,900)(70,858)(60,075)
1,434
(633)
252
(119)
—
(608)
64
(59,686)

8,016(10,000)
25,105(86,466)
25,000(15,000)(9,437)(22,924)(3,000)58,106(101,049)—(10,000)(8,688)(276)(13,853)(991)(43)(77,946)
2,416
2,371
91,058(2,834)(12,121)(681)
34(103,159)
4,543(9,070)100,005266—¥ 93,697

105
19¥  91,058

Notes to Consolidated Financial Statements

1.

3.

Reporting Entity

Nippon Sanso Holdings Corporation (the “Company”) is a company

Significant Accounting Policies

end of the fiscal year. The NSHD Group conducts gas businesses in(1) Basis of consolidation

the NSHD Group’s interests in such change are recognized in othercomprehensive income.

Japan and overseas, mainly for customers in the steel, chemical, and

1) Subsidiaries

Exchange. The registered address of the Company’s head office iselectronics industries. In addition, the NSHD Group manufactures andSubsidiaries refer to companies controlled by the NSHD Group. The

disclosed on its website (https://www.nipponsanso-hd.co.jp). The

sells housewares such as stainless steel vacuum bottles. Details are

NSHD Group judges that it controls a company if the NSHD Group has

to eliminate the NSHD Group’s interests in unrealized gains and losses

described in Note “4. Segment Information.”

the exposure or rights to variable returns arising from its involvement

arising from transactions between the NSHD Group and associates.

located in Japan and is listed on the Prime Market of the Tokyo Stockconsolidated financial statements of the Company and its subsidiaries(collectively, the “NSHD Group”) comprise interests in the NSHD

The Company’s parent is Mitsubishi Chemical Holdings Corporation.

Group, its associates, and joint arrangements, with March 31 as the

Adjustments are made to consolidated financial statements in orderin the investee and has the ability to influence such returns due toFinancial statements of associates are prepared for the same

power over the investee.

reporting period as the NSHD Group. Adjustments are made to

In preparing the consolidated financial statements, the financial

2.

make accounting policies of the associates consistent with thestatements of each Group company prepared at the same closing date

Basis of Preparation

NSHD Group’s accounting policies.

based on the unified accounting policies of the NSHD Group are used.

(1) Conformity with IFRS

Estimates and underlying assumptions are reviewed on an ongoing

The consolidated financial statements of the NSHD Group havebasis. The impacts of changes in accounting estimates are recognized

been prepared in compliance with International Financial Reportingin the accounting period in which the estimates are changed andStandards (IFRS) published by the International Accounting Standards

in future accounting periods affected. Regarding the impact of theBoard. Since the Company meets the requirements of a “Specified

COVID-19 pandemic, based on the information available at March 31,

Company Applying Designated IFRS” prescribed under Article 1-2

2022, the NSHD Group assumes that such impact would be insignifi-of the Japanese Ordinance on Terminology, Forms, and Preparationcant for the purpose of accounting estimates, while uncertainty

Methods of Consolidated Financial Statements, the Company hasremains due to the spread of new COVID-19 variants. The amounts

adopted the provisions of Article 93 of said ordinance.

determined based on accounting judgments and estimates may besubject to change if these assumptions and conditions change.

(2) Approval of financial statements

Major information on accounting judgments, estimates, and

The NSHD Group’s consolidated financial statements were approved

assumptions that may have significant impacts on theby Toshihiko Hamada, President CEO of the Company, and Alan DavidNSHD Group’s consolidated financial statements is as follows:

Draper, Chief Financial Officer, on June 17, 2022.

• Impairment of non-financial assets (Note “11. Impairment Losses”)• Recoverability of deferred tax assets (Note “29. Income Taxes”)(3) Basis of measurement• Measurement of defined benefit obligations

The NSHD Group’s consolidated financial statements were prepared(Note “19. Post-employment Benefits”)

on a historical cost basis, except for certain assets and liabilities• Fair value of financial instruments (Note “32. Financial Instruments”)

including financial instruments measured at fair value as described(6) New accounting standards appliedin Note “3. Significant Accounting Policies.”

The NSHD Group has applied the accounting standards and interpre(4) Presentation currency

tations that became mandatory from the fiscal year ended March 31,

The NSHD Group’s consolidated financial statements are presented in

2022. There is no material impact on the consolidated financial state-

Japanese yen, which is the functional currency of the Company, andments of the NSHD Group.

amounts are rounded down to the nearest million yen.
(7) New accounting standards and interpretations that are(5) Use of judgments, estimates, and assumptions

not yet applied

In preparing the NSHD Group’s consolidated financial statements in

Regarding major accounting standards and interpretations issued prioraccordance with IFRS, management is required to make judgments,

to the approval date of the consolidated financial statements as ofestimates, and assumptions that affect the application of accounting

and for the fiscal year ended March 31, 2022, the NSHD Group has

policies and reported amounts of assets, liabilities, income, and expenses.

applied all those accounting standards and interpretations, including

Actual results may differ from these estimates.

early application, that would have potential significant impacts on the
consolidated financial statements.

In the event of loss of significant influence over associates, theIf accounting policies applied by a subsidiary are different from the

NSHD Group measures and recognizes the remaining investment at

accounting policies applied by the NSHD Group, adjustments arefair value on the date when significant influence is lost. Gains andmade to the financial statements of such subsidiary as necessary.

losses arising from the loss of significant influence are recognized in

Consolidation of subsidiaries begins on the date when the NSHD

profit or loss.

Group acquires control over the subsidiaries until the date when the3) Joint arrangements

control over the subsidiaries is lost.
Transactions between consolidated companies, as well as the

Joint arrangements refer to arrangements that require the unanimous

balance of receivables and payables and unrealized gains and losses

consent of the parties sharing control over decision-making on

arising from such transactions, are eliminated in preparing the consoli-

relevant activities.

dated financial statements.

A joint venture (jointly controlled entity) refers to a joint agreement

If there is a change in interests in consolidated subsidiaries notwhere parties with joint control over the arrangement have the right

involving a loss of control, it is accounted for as an equity transaction.

to the net assets of such arrangement.

The difference between the adjustment amount of the non-controlling

If the NSHD Group has a share in a joint venture, the NSHD Group

interests and the fair value of the consideration is recognized directly

accounts for such share using the equity method.

in equity as equity attributable to owners of parent.

A joint operation (jointly controlled business) refers to a business inIn the event of a loss of control, the NSHD Group measures andwhich parties with joint control substantially have the right to assets

recognizes the remaining investment at fair value on the date when

and the obligation to liabilities related to joint arrangements.

the control has been lost. Gains and losses arising from the loss of

If the NSHD Group has a share in a joint operation, the NSHD

control are recognized in profit or loss.

Group recognizes the investment concerning such joint operation

Non-controlling interests in consolidated subsidiaries’ net assets are

only at the equivalent amount of the NSHD Group’s interests in theidentified separately from the NSHD Group’s interests. Comprehensive

assets, liabilities, income, and expenses arising from jointly controlled

income of consolidated subsidiaries is attributable to owners of parent

operating activities. Transactions between the NSHD Group compa-

and non-controlling interests, even if this results in the non-controllingnies, as well as the balance of receivables and payables and unrealizedinterests having a deficit balance.

gains and losses arising from such transactions, are eliminated.
The NSHD Group has more than 50% of the voting rights of2) Associates

Sakai Gas Center, Inc. The NSHD Group judges that said company

Associates refer to companies over which the NSHD Group has aqualifies as a joint operation.

significant influence on their financial and operating policies but does(2) Business combinations

not have control or joint control.
The NSHD Group accounts for investments in associates using theBusiness combinations are accounted for using the acquisition method.

equity method.

If the initial accounting for business combinations has not been

Investments in associates under the equity method are recognizedcompleted by the end of the period in which the business combina-

at cost at the time of acquisition and recorded in the consolidated

tions occurred, they are accounted for at a provisional amount for thestatement of financial position after adjusting the NSHD Group’s

items for which the accounting is incomplete. The provisional amountinterests in changes in net assets of the associates after acquisition.

is adjusted during the measurement period, which is within one year

The consolidated statement of profit or loss reflects the NSHDNIPPON SANSO HOLDINGS CORPORATION

5INTEGRATED REPORT 2022

from the acquisition date.

Group’s interests in the performance of associates. If there is a change

The consideration transferred in a business combination is calcu-

in the amount recognized in other comprehensive income of associates,

lated as the sum of acquisition-date fair value of assets transferred by

NIPPON SANSO HOLDINGS CORPORATION

6INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

the acquirer, liabilities incurred by the acquirer to former owners of(ii) Subsequent measurement

2) Financial liabilities (excluding derivatives)

Japanese yen at the spot exchange rate at the end of the reporting

After initial recognition, financial assets are measured according to(i) Initial recognition and measurement

their classification as follows:

The NSHD Group classifies its financial liabilities into (a) financial liabilities

The assets and liabilities of foreign operations are translated into

the acquiree, and equity interests issued by the acquirer.
Non-controlling interests in the acquiree are measured for eachperiod, and the income and expenses of foreign operations are trans-business combination either at fair value or at the amount equivalent

lated into Japanese yen at the spot exchange rate at the transaction

to the non-controlling interests in proportion to the fair value ofdate or at a rate similar thereto. The translation differences are

identifiable net assets of the acquiree.

recognized in other comprehensive income.

Acquisition-related costs incurred in connection with business

If a foreign operation is disposed of, the cumulative translation

combinations are recognized as expenses for the period in which suchdifferences related to such operation are recognized in profit or loss

costs were incurred.

for the period in which the disposal occurs.

When the NSHD Group acquires a business, it classifies and desig-(a) Financial assets measured at amortized costmeasured at amortized cost and (b) financial liabilities measured at fair		Financial assets measured at amortized cost are measured

value through profit or loss. The classification is determined at initialat amortized cost using the effective interest method.

recognition of the financial liabilities. All financial liabilities are initially(b)	Financial assets measured at fair value through othermeasured at fair value. However, financial liabilities measured atcomprehensive income

amortized cost are measured at fair value less transaction costs directly		Financial assets other than financial assets measured at

attributable to such financial liabilities.

amortized cost are measured at fair value.

nates assets to be acquired and liabilities to be assumed based on(4) Financial instruments

contract terms, economic conditions, and related conditions at the1) Financial assets (excluding derivatives)

comprehensive income, changes in fair value are recognized

After initial recognition, financial liabilities are measured according toacquisition date. In addition, identifiable assets acquired and liabilities(i) Initial recognition and measurementin other comprehensive income. If they are derecognized or

their classification as follows:

assumed are in principle measured at fair value on the acquisition date.

The NSHD Group initially recognizes trade receivables at a point intheir fair value significantly declines, they are transferred toretained earnings.

(ii) Subsequent measurement			 For financial assets measured at fair value through other(a) Financial liabilities measured at amortized cost

If a business combination is achieved in stages, the interest heldtime when a performance obligation is satisfied and an unconditional

before acquiring the control of the acquiree is revalued at fair value atright to consideration is acquired in accordance with IFRS 15. All otherthe acquisition date, and the difference is recognized in profit or loss.

financial assets are initially recognized at the transaction date when(iii) Derecognition

initial recognition. Amortization by the effective interest method

The amount of the interest in the acquiree that was recorded in other

the NSHD Group becomes a contractual party to such financial assets.

The NSHD Group derecognizes financial assets only if contractualand gains and losses from derecognition are recognized in		Financial liabilities measured at amortized cost are measured
at amortized cost using the effective interest method after

comprehensive income before the acquisition date is accounted for in the

The NSHD Group classifies its financial assets into (a) financial

rights to cash flows arising from the financial assets cease to exist, orsame manner as in the case where the acquirer disposed of its interests.

assets measured at amortized cost and (b) financial assets measured

if the financial assets are transferred and substantially all the risks andGoodwill is measured as the amount of the aggregate amountat fair value through other comprehensive income. The classification

rewards have been transferred.

of the consideration transferred and the amount recognized as

is determined at the time of initial recognition of the financial assets.

non-controlling interests exceeding the net of identifiable assets(a) Financial assets measured at amortized costacquired and liabilities assumed.

		For financial liabilities measured at fair value through profit or

If the NSHD Group does not transfer or retain substantially all theloss, the portion related to changes in the NSHD Group’s credit

risks or rewards but continues to control the financial assets trans-risk from changes in fair value is recognized in other compre-

		Debt financial assets are classified as financial assets measured

ferred, recognition of such financial assets is continued to the extent

hensive income after initial recognition, and the remaining

at amortized cost if both of the following criteria are met:

to which the NSHD Group has a continuing involvement, and in thatamount is recognized in profit or loss.

• Financial assets are held based on a business model with ancase, related liabilities are also recognized.

If the aggregate amount recognized as the consideration transferred and non-controlling interests is less than the net of identifiable

profit or loss.
(b) Financial liabilities measured at fair value through profit or loss		

assets acquired and liabilities assumed, the difference is recognized in

objective of holding financial assets to recover contractual

profit or loss.

cash flows.

(iii) Derecognition(iv) Impairment

The NSHD Group derecognizes financial liabilities in cases of the• Contractual terms of financial assets give rise to cash flows

The NSHD Group recognizes impairment of financial assets based on

performance, exemption, or expiration of the obligation of financial

that are solely payments of principal and interest on thewhether there is a significant increase in credit risk from the time ofliabilities, and when the exchange occurs under substantially different

recognized less the accumulated impairment loss. In addition,

principal amount outstanding on a specified date.

initial recognition in financial assets or financial asset groups measured

terms, or when there has been a substantial modification of the terms.

impairment tests are performed each year and whenever there			 Financial assets measured at amortized cost are measured

After initial recognition, goodwill acquired through a business		

combination is not amortized but is recorded at the amount initiallyis an indication of impairment.

at fair value plus transaction costs directly attributable to theacquisition of such financial assets.

(3) Foreign currency translation(b)	Financial assets measured at fair value through other

The consolidated financial statements of the NSHD Group arecomprehensive incomepresented in Japanese yen, the functional currency of the Company.

		Debt financial assets are classified as financial assets measured

In addition, each company within the NSHD Group designates its own

at fair value through other comprehensive income if both of thefunctional currency, and transactions of each company are measured
in its functional currency.

		Transactions denominated in a foreign currency are translated into
or at a rate similar thereto.

		

Monetary assets and liabilities denominated in a foreign currency

Financial assets and financial liabilities are offset only if there is afor doubtful accounts if credit risk has not significantly increased fromcurrent enforceable legal right to offset the recognized amounts,

the time of initial recognition. However, for trade receivables, expected

and if there is an intention to settle at a net amount or realize thecredit losses over the remaining period are recognized.

assets and settle the liabilities simultaneously. They are then recorded

If there is a significant increase in credit risk from the time of initialrecognition, expected credit losses over the remaining period are• Financial assets are held based on a business model withrecognized as allowance for doubtful accounts.

financial assets.
• Contractual terms of financial assets give rise to cash flowsthat are solely payments of principal and interest on theare translated into functional currencies at the spot exchange rate

principal amount outstanding on a specified date.

at the end of the reporting period. Translation differences arising			 Equity financial assets are designated as financial assets

3) Offset of financial instruments

For financial assets or financial asset groups measured at amortized
cost, expected credit losses for 12 months are recognized as allowance

following criteria are met:
an objective of collecting contractual cash flows and selling

functional currencies at the spot exchange rate at the transaction date

at amortized cost at the end of each reporting period.

at a net amount in the consolidated statement of financial position.
4) Derivatives and hedge accounting

Whether or not the credit risk has significantly increased is judged

The NSHD Group uses derivatives such as forward exchange contracts,

based on a change in the default risk. In judging whether there isinterest rate swap contracts, and currency swap contracts to hedge

any change in the default risk, overdue status (past-due information)

currency risks and interest rate risks. These derivatives are initiallyis mostly considered.

measured at fair value at the time when the contracts were entered

In addition, expected credit losses are measured based on theand remeasured at fair value thereafter.

discounted present value of the difference between the amount

Fair value changes of derivatives are recognized in profit or loss.

from such translation and settlement are recognized in profit or loss.

measured at fair value through other comprehensive income,receivable on a contract basis and the amount expected to be received

However, the effective portion of cash flow hedges and hedges ofHowever, financial instruments designated as hedging instruments ofand such designation is applied on an ongoing basis.

based on past credit losses, etc.

net investments in foreign operations is recognized in othernet investments in foreign operations, financial assets measured through			 Financial assets measured at fair value through other

other comprehensive income, and translation differences arising fromcomprehensive income are measured at fair value plus

cash flow hedges are recognized in other comprehensive income.

transaction costs directly attributable to the acquisition­comprehensive income.
At inception of the hedge, the NSHD Group formally designates anddocuments the hedging relationships to which hedge accounting isof such financial assets.
NIPPON SANSO HOLDINGS CORPORATION

7INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

8INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

applied and the risk management objective and strategy for undertaking

5) Fair value of financial instruments

generated intangible assets, except for development costs that qualify

The recoverable amount of the asset is the higher of an asset’s fairthe hedge. Such documentation includes specific hedging instruments,

The fair value of financial instruments traded in active financial

for capitalization, all expenditures are recognized as expenses for thevalue less costs of disposal and its value in use. If the recoverable

hedged items or transactions, the nature of the risk being hedged,

markets as of the end of the reporting period refers to quoted prices

periods when they are incurred.

amount of each asset cannot be estimated, the recoverable amount ofand how the NSHD Group will assess effectiveness of the hedging

in markets or dealer prices.

instruments in fair value changes when offsetting the exposure to

Intangible assets with finite useful lives are amortized over theira cash-generating unit or a group of cash-generating units to which

The fair value of financial instruments for which active markets do

estimated useful lives using the straight-line method. Impairment

the asset belongs is estimated. If the carrying amount of a cash-gener-changes in fair value or cash flows of the hedged items attributable to

not exist is calculated by referring to appropriate valuation techniques

tests are performed whenever there is an indication of impairment.

ating unit or a group of cash-generating units exceeds the recoverable

the hedged risks. The NSHD Group evaluates whether or not derivatives

or prices provided by counterparty financial institutions.

Estimated useful lives and method of amortization of intangible assets

amount, impairment loss of the asset is recognized and write-downs

with finite useful lives are reviewed at the end of each reportingof the asset are recorded up to the recoverable amount. In measuring

used for hedging transactions are effective for offsetting changes infair value or cash flows of the hedged items at inception of the hedge(5) Cash and cash equivalents

period, and if there is any change, it is applied prospectively as a

the value in use, the discounted present value of expected future cash

and on an ongoing basis. Specifically, the NSHD Group determines that

Cash and cash equivalents consist of cash on hand, deposits that can bechange in accounting estimates.

flows is calculated using the pre-tax discount rate that reflects current

a hedge is effective in the case where the economic relationship between

withdrawn at any time, and short-term investments with a maturity of

Estimated useful lives of major intangible assets are as follows:market assessments of the time value of money and the risks specificthe hedged item and the hedging instruments results in an offset.

three months or less from the acquisition date that are readily convertible

Customer-related intangible assets:

to the asset. The business plan used to estimate future cash flows is in

into cash and subject to an insignificant risk of changes in value.

Intangible assets with indefinite useful lives and intangible

Hedges that meet strict criteria for hedge accounting are classified
and accounted for under IFRS 9 as follows.

5 to 30 years

principle limited to five years. Future cash flows beyond the projectedassets not available for use are not amortized. Impairment tests are

period of the business plan are(6) Inventories

performed separately or by a cash-generating unit whenever there

calculated based on the long-term average growth rate according(i) Fair value hedges

The cost of inventories includes costs of purchase, costs of conversion,is an indication of impairment.

to individual circumstances.

Fair value changes in derivatives are recognized in profit or loss. For

and all other costs incurred in bringing the inventories to their present

fair value changes in the hedged items attributable to the risks to belocation and condition.

(9) Leases

uses an appropriate valuation model that is supported by indices offair value available.

hedged, the carrying amount of the hedged items is adjusted andIn calculating fair value less costs of disposal, the NSHD Group

Inventories are measured at the lower of cost and net realizable

A contract is, or contains, a lease when the right to control the use ofvalue. The weighted average method is principally used to calculate

an identified asset is transferred for a period of time in the exchange

the cost. In addition, the net realizable value is calculated at thefor consideration, and the NSHD Group recognizes a right-of-use assetof cash-generating units that are expected to benefit from the(ii) Cash flow hedges

estimated selling price in the ordinary course of business less theand a lease liability at the commencement date of the lease. The

synergies of a business combination after the acquisition date.

The effective portion of gain or loss on the hedging instruments

estimated costs of completion and the estimated costs necessary

NSHD Group determines whether a contract is, or contains, a lease

Goodwill or intangible assets with indefinite useful lives, andis recognized in other comprehensive income, and the ineffective

to make the sale.

based on the substance of the contract, even if the contract does notintangible assets not available for use, are tested for impairment

take the legal form of a lease.

annually or whenever there is an indication of impairment.

recognized in profit or loss.

portion in immediately recognized in profit or loss.
(7) Property, plant and equipment

The amount related to the hedging instruments recorded in other

Goodwill is allocated to individual cash-generating units or groups

The lease liability is measured at the present value of the total lease

comprehensive income is transferred to profit or loss when hedged

The NSHD Group adopts the cost model for measurement of property,

payments payable at the commencement date of the lease. The right-

2) Reversal of an impairment losstransactions affect profit or loss. If the hedged item results in theplant and equipment.

of-use asset is initially measured at the amount of the lease liability,

For assets other than goodwill, impairment losses recognized in theadjusted for any initial direct costs and other costs such as prepaid

previous fiscal years are assessed at the end of the reporting period aslease payments as well as costs such as restoration obligations as

to whether or not there is any indication of the possibility of a decrease

required by the lease contract.

or extinguishment of loss due to factors such as a change in therecognition of non-financial assets or non-financial liabilities, theProperty, plant and equipment are presented at cost less accumulated

amount recognized in other comprehensive income is treated as andepreciation and accumulated impairment losses.

adjustment of the initial carrying amount of the non-financial assets

The cost includes the costs directly attributable to the acquisition ofor non-financial liabilities.

the assets, the costs of their dismantlement, removal or restoration,

If forecasted transactions are no longer expected to occur, theand the borrowing costs that meet the recognition criteria.

cumulative gain or loss previously recognized as equity through otherAll property, plant and equipment other than land are depreciatedcomprehensive income is transferred to profit or loss.

so that the depreciable amount, which is cost less the residual value atIf the hedging instrument is terminated or exercised without expira-the end of the fiscal year, is allocated on a systematic basis using thetion, sale, or exchange or renewal to another hedging instrument, or

straight-line method.

if it no longer qualifies for hedge accounting due to events such as

Estimated useful lives of major property, plant and equipment area change in risk management objective, the cumulative gain or loss

as follows:

The lease payments are allocated between repayments of the leasetion exists, the recoverable amount of such assets, cash-generatingon the outstanding balance of the lease liability, and the finance

units, or groups of cash-generating units is estimated. If such recoverable

charges are recognized in profit or loss.

amount exceeds the carrying amount of such assets, cash-generating

A right-of-use asset is depreciated over its useful life on a systematic

reversed up to the lower of the recoverable amount calculated andby the end of the lease term or if the cost of the right-of-use asset

the carrying amount less the accumulated depreciation if the impair-reflects the exercise of a purchase option, otherwise it is depreciatedment loss was not recognized in previous fiscal years. The reversal ofover the shorter of its useful life or the term of the lease.

impairment loss is recognized in profit or loss.

Buildings and structures:

3 to 50 years

is continuously recorded in equity until the forecasted transaction

Machinery and vehicles:

3 to 20 years

In addition, for leases with a lease term of 12 months or less andoccurs, or is no longer expected to occur.

Tools, furniture and fixtures:

2 to 25 years

leases for which the underlying asset is of low value, lease payments(8) Intangible assets

As to hedges of net investments in foreign operations, the NSHDThe NSHD Group adopts the cost model for measurement ofGroup applies the same accounting treatment as to cash flow hedges.

intangible assets.

The effective portion of gain or loss on the hedging instruments is

Intangible assets are presented at cost less accumulated

recognized in other comprehensive income, and the ineffective portion

amortization and accumulated impairment losses.

units, or groups of cash-generating units, the impairment loss isbasis if ownership of the underlying asset is transferred to the lessee

previously recognized in equity through other comprehensive income(iii) Hedges of net investments in foreign operations

assumption used in calculating the recoverable amount. If such indica-

liability and finance charges so as to achieve a constant rate of interest

For goodwill, impairment loss is not reversed.

associated with such leases are recognized as an expense on a regular(11) Assets held for sale and discontinued operations

basis over the lease term.

Non-current assets (or disposal groups) are classified as “assets held
for sale” if their carrying amount is expected to be recovered princi-(10) Impairment of assets

pally through a sale transaction rather than through continuing use.

1) Impairment of non-financial assets

The above requirements only apply if the sale is highly probable

The NSHD Group assesses at the end of each reporting period

within one year and such assets (or disposal groups) are available foris immediately recognized in profit or loss. When a foreign operation

Intangible assets acquired separately are initially measured at cost.

whether there is any indication that an asset may be impaired. If any

immediate sale in their present condition. Non-current assets (oris disposed, cumulative gain or loss previously recognized in equity

The cost of intangible assets acquired through business combinations

such indication exists, and if assets need to be annually tested for impair-disposal groups) classified as assets held for sale are measured atthrough other comprehensive income is reclassified to profit or loss.

is measured at fair value as of the acquisition date. For internallyment, the NSHD Group estimates the recoverable amount of the asset.

the lower of their carrying amount and fair value less costs to sell.

NIPPON SANSO HOLDINGS CORPORATION9INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

10INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

Property, plant and equipment and intangible assets classified asassets held for sale are not depreciated or amortized.
Discontinued operations include a component of an entity that has
already been disposed of or classified as assets held for sale, and they2) Treasury shares(18) Income taxes

When the NSHD Group purchases treasury shares, the consideration

Current taxes for the current and prior periods are calculated at theunrecognized deferred tax assets) is reviewed at the end of eachpaid is recognized as a deduction from equity.

amount expected to be paid to (or recovered from) taxation authori-

reporting period. Deferred tax assets and liabilities are calculated atties. The rates and laws used to calculate the tax amount are those

the tax rates that are expected to apply to the period when the assets

When the NSHD Group disposes of treasury shares, the difference

The carrying amount of deferred tax assets and liabilities (including

are recognized if they constitute one operation of the NSHD Groupbetween the carrying amount and the consideration at the time ofthat have been enacted or substantively enacted at the end of theare realized or liabilities are settled, based on tax rates and laws

and if there is a plan to dispose of one of the operations.

disposal is recognized in capital surplus.

reporting period.

that have been enacted or substantively enacted at the end of the(12) Borrowing costs(16) Revenue

bases and the carrying amounts of assets and liabilities at the end

For assets that necessarily take a substantial period of time to prepare

The NSHD Group recognizes revenue in an amount that reflects theof the reporting period (temporary difference) using the asset and(19) Earnings per sharefor intended use or sale, borrowing costs directly attributable to acqui-compensation to which the entities expect to be entitled in exchange

liability method.

The amount of basic earnings per share is calculated by dividing profit

sition, construction, or production of such assets are capitalized as

for goods and services transferred to customers based on thepart of the cost of such assets. Other borrowing costs are recognizedfollowing five-step model.

Deferred taxes are recorded as the difference between the tax

reporting period.

Deferred tax liabilities are in principle recognized for all taxable

attributable to ordinary shareholders of the Company by the weighted

temporary differences. Deferred tax assets are recognized for deduct-

average number of ordinary shares outstanding after adjusting for

Step 1: Identify the contract with the customer

ible temporary differences, unused tax losses, and unused tax credits

treasury shares during the period. The amount of diluted earnings per

Step 2: Identify performance obligations in the contract

to the extent that it is probable that taxable profit will be available

share is calculated by adjusting the effects of all dilutive potential(13) Retirement benefits

Step 3: Determine the transaction priceagainst which the deductible temporary differences can be utilized.

ordinary shares with dilutive effects.

The NSHD Group provides defined benefit plans and defined

Step 4: A llocate the transaction price to the performanceas an expense for the period when they are incurred.

contribution plans as retirement benefit plans for employees.

obligations in the contract

The NSHD Group separately calculates the present value of theStep 5: R ecognize revenue when (or as) the performance

defined benefit obligations, related current service costs, and pastobligations are satisfied

service costs for each plan using the projected unit credit method.

However, there are exceptions in which deferred tax assets andliabilities are not recorded for the following temporary differences:• Arising from initial recognition of goodwill• Arising from initial recognition of an asset or liability in a transaction other than a business combination which does not affect

The discount rate is calculated based on market yields at the end

The NSHD Group conducts gas businesses in Japan and overseas,of the reporting period on high-quality corporate bonds.

mainly for customers in the steel, chemical, and electronics industries,

Liabilities or assets related to the defined benefit plans are calcu-

and has built production and sales structures for its main products

either the accounting income or the taxable profit (or loss) at thetime of the transaction• For deductible temporary differences associated with investments

lated by deducting the fair value of plan assets from the present value

in Japan, the United States, Europe, and Asia and Oceania. In addition,in subsidiaries and associates, and interests in joint arrangements,

of defined benefit obligations.

the NSHD Group manufactures and sells housewares such as stainlesswhen it is probable that the reversal will not occur in the foreseeable

steel vacuum bottles.

future, or it is less probable that taxable profit will be available against

Remeasurements of liabilities or assets relating to the defined
benefit plans are all recognized in other comprehensive income for the

Regarding product sales in these businesses, because a customer

which the deductible temporary differences can be utilized, andperiod when they are incurred, and immediately reflected in retained

acquires control over a product at the time the product is delivered,• For taxable temporary differences associated with investments inearnings. In addition, past service costs are expensed for the period

the NSHD Group judges that its performance obligations have been

subsidiaries and associates, and interests in joint arrangements,

when they are incurred.

satisfied and recognizes revenue at the time the product is delivered.

when the NSHD Group is able to control the timing of the

Revenue is measured at the price promised in the contract withreversal of the temporary differences and it is probable thatExpenses related to defined contribution plans are recognized as
expenses for the period when they are incurred.

the customer, after deducting such amounts as discounts, rebates,

the reversal will not occur in the foreseeable future.

and returns.
(14) Provisions

The amount of the price in the sales contract of a product is generally

A provision is recognized when the NSHD Group has a present obligationcollected within one year from the time when control over the product(legal or constructive) as a result of a past event, when it is probableis transferred to a customer, and does not include a significant

that an outflow of resources embodying economic benefits will befinancing component.

required to settle the obligation, and when a reliable estimate can be(17) Government grants

made of the amount of the obligation.
The NSHD Group measures the provisions at the present value ofA government grant is recognized at fair value when there is reason-

expenditures expected to be required to settle the obligation, whenable assurance that the NSHD Group will comply with any conditions

the effect of the time value of money is material. In calculating theattached to the grant and the grant will be received.

present value, the NSHD Group uses a pre-tax discount rate that

Government grants are recognized in profit or loss on a systematicreflects current market assessments of the time value of money andbasis over the periods in which the NSHD Group recognizes expenses

those risks specific to the liability.

for the related costs for which the grants are intended to compensate.
Government grants related to assets are recorded by deducting the(15) Equity

amount of such grants from the cost of the assets.

1) Ordinary shares

Segment Information(1) Overview of reportable segments(Changes in reportable segments)

The reportable segments of the NSHD Group are those for which

With the transition to a holding company structure, the NSHD Groupdiscrete financial information is available and whose operating results

has changed reportable segments and reconciliation items of theare regularly reviewed by the Board of Directors to make decisions

Company and some consolidated subsidiaries from the fiscal year

about resource allocation and to assess performance.

ended March 31, 2022, in order to more appropriately evaluate each

The NSHD Group conducts gas businesses in Japan and overseas,

segment’s operating results. Segment information for the previous

mainly for customers in the steel, chemical, and electronics industries,

fiscal year (FYE2021) has been restated to conform to the current

and has built production and sales structures for its main products infiscal year’s presentation.

Japan, the United States, Europe, and Asia and Oceania. In addition,
the NSHD Group manufactures and sells housewares such as stainlesssteel vacuum bottles. Therefore, the Company has established thefollowing five reportable segments: Gas Business in Japan, Gas
Business in the United States, Gas Business in Europe, Gas Business

The issue price of ordinary shares is recorded in share capital andin Asia and Oceania, and Thermos Business.

capital surplus.

NIPPON SANSO HOLDINGS CORPORATION

4.

11

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION12INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

The major products and services included in the five segments are shown in the table below.
Reportable segments

Reconciliation of segment profit with profit before income taxes is as follows:(Millions of yen)

Major products and services

Gas Business in Japan

Oxygen, nitrogen, argon, carbon dioxide, helium, hydrogen, acetylene, gas-related equipment,

Gas Business in the United States

specialty gases (electronic materials gases, pure gases, etc.), electronics-related equipment andGas Business in Europe

installation, semiconductor manufacturing equipment, cutting and welding equipment, welding

Gas Business in Asia and Oceania

materials, plants and machinery, liquefied petroleum gas (LPG) and related equipment, medical-use
gases (oxygen, nitrous oxide, etc.), medical equipment, stable isotopes

Thermos Business

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥102,710¥ 87,251

Segment profit
Share of profit (loss) of investments accounted for using the equity method
Impairment losses
Operating profit

The accounting methods adopted for the reportable operating segments are the same as the accounting policies adopted for the preparation of
the consolidated financial statements.

(2) Revenue and profit (loss) amounts by reportable segment(1,100)

(278)

(64)
88,846

Finance income

2,192

1,424

Finance costs(11,765)(12,564)¥  91,611¥ 77,706

Profit before income taxes

Revenue from intersegment transactions and transfers is based primarily on prevailing market prices.

2,759(1,075)
101,183

Other

Housewares(172)(3) Information about geographical areas
A breakdown of revenues from external customers and non-current assets by geographical area are as follows:

FYE2022 (From April 1, 2021 to March 31, 2022)(Millions of yen)
Reportable segment

Revenue
Revenues from external customers
Intersegment revenues andtransfers
Total
Segment profit (Note 2)
Other items
Depreciation and amortization
Impairment losses
Share of profit (loss) ofinvestments accounted forusing the equity method

Amounts on the
consolidated
statement of
profit or loss

Gas Businessin JapanGas Businessin theUnited States

Gas Business
in Europe

Gas Businessin Asia andOceania

Thermos
Business

Total

Reconciling
items(Note 1)

¥372,033¥224,801¥209,778¥123,533¥26,849¥956,996¥    173¥957,169

10,929382,963
30,93917,020241,822
27,314

148
209,926
26,303

3,314
126,848
12,83718
26,867
6,441

31,432
988,428
103,837(31,432)(31,258)(1,127)—957,169
102,710

19,351
4

31,987—31,736
—

7,935
136

1,315
—

92,326140108—92,435
140

Revenues from external customers(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Japan¥384,388¥352,162

The United States

214,087

180,484

Europe213,886

164,078

Asia, Oceania and others

144,806

121,512

Total¥957,169¥818,238

Note: Revenue is classified by country or region based on the customers’ location.

Non-current assets(Millions of yen)

298

—

41

184

3,159

3,683

0

FYE2022(March 31, 2022)

3,684

Notes: 1.	The reconciling item for segment profit, in the amount of ¥(1,127) million, is comprised of ¥102 million of intersegment eliminations and companywide expenses of ¥(1,229) million
that were not allocated to any particular reportable segment. These companywide expenses related principally to the Company’s group administrative expenses that were not allocatedto a particular reportable segment.
2.	Segment profit represents core operating profit, which is calculated as operating profit excluding certain gains or losses attributable to non-recurring factors (losses incurred by businesswithdrawals, streamlining, and others).

Japan

FYE2021 (From April 1, 2020 to March 31, 2021)

Total(Millions of yen)
Reportable segment

Revenue
Revenues from external customers
Intersegment revenues andtransfers
Total
Segment profit (Note 2)
Other items
Depreciation and amortization
Impairment losses
Share of profit (loss) ofinvestments accounted forusing the equity method

Gas Businessin Asia andOceania

Thermos
Business¥160,035¥102,036¥23,964¥818,021¥    217¥818,238

18,182
208,177
23,12942
160,077
21,0152,179
104,215
8,921

25
23,9895,168

34,105852,126
88,124(34,105)(33,887)(872)—
818,238
87,251

29,106—28,962
—

7,379
765

1,328
—

86,310921

69—

86,380921

Gas Businessin theUnited States

Gas Business
in Europe¥341,990¥189,994

13,675355,665
29,88919,534155

Gas Businessin Japan

Reconciling
items(Note 1)

Amounts on the
consolidated
statement of
profit or loss

Total¥   170,709¥  172,046

The United States

408,944374,113

Europe734,718

704,519

Asia, Oceania and others

142,959

128,962¥1,457,333¥1,379,642

Note: Non-current assets are classified by their location, and they do not include financial assets, deferred tax assets, or retirement benefit asset.

(4) Information about major customers
Information about major customers is not disclosed since there is no single external customer that accounts for 10% or more of revenue.

5.

Business Combinations

FYE2022 (From April 1, 2021 to March 31, 2022)
There were no significant business combinations.
FYE2021 (From April 1, 2020 to March 31, 2021)

193

348

(11)

(49)

2,360

2,842

0

2,842

There were no significant business combinations.

Notes: 1.	The reconciling item for segment profit, in the amount of ¥(872) million, is comprised of ¥(49) million of intersegment eliminations and companywide expenses of ¥(823) million thatwere not allocated to any particular reportable segment. These companywide expenses related principally to the Company’s group administrative expenses that were not allocated to aparticular reportable segment.
2.	Segment profit represents core operating profit, which is calculated as operating profit excluding certain gains or losses attributable to non-recurring factors (losses incurred by businesswithdrawals, streamlining, and others).

NIPPON SANSO HOLDINGS CORPORATION

13

FYE2021(March 31, 2021)

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION14INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

6.

9.

Cash and Cash Equivalents

Property, Plant and Equipment(1) Table of changes

A breakdown of cash and cash equivalents is as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Cash and deposits¥93,697¥91,058

Total¥93,697¥91,058

Changes in costs, accumulated depreciation and accumulated impairment losses, and the carrying amounts of property, plant and equipment are
as follows:
FYE2022 (From April 1, 2021 to March 31, 2022)
Costs(Millions of yen)

7.

Trade Receivables

A breakdown of trade receivables is as follows:(Millions of yen)

FYE2022(March 31, 2022)¥226,588

Notes and accounts receivable–trade
Allowance for doubtful accounts
Total

FYE2021(March 31, 2021)¥190,343(8,107)(8,266)¥218,480¥182,077

Buildings andstructuresLand¥   945,348
55,923—
13(8,761)(1,117)51,953¥1,043,359¥194,928
10,596—
10(3,793)59
8,758¥210,560¥60,768
1,972
—
—
(129)
(165)
1,817
¥64,263

Constructionin progress¥47,374(1,717)
(1)
—
(27)
(105)
3,123
¥48,645

Tools, furnitureand fixtures

Total¥170,379 ¥1,418,798
13,39080,165
—
(1)
216
240
(4,160)(16,872)(279)(1,608)13,43979,091¥192,985 ¥1,559,814

Note: Individual acquisition in the construction in progress column represents the net amount of an increase due to new acquisitions after reclassifying to respective accounts of property,
plant and equipment.

Trade receivables are classified as financial assets measured at amortized cost.

8.

Balance at April 1, 2021
Individual acquisition (Note)
Impairment losses
Business combinations, business divestitures, etc.
Sale and disposal
Transfer
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2022

Machinery andvehiclesAccumulated depreciation and accumulated impairment losses

Inventories(Millions of yen)
Machinery andvehiclesA breakdown of inventories is as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Merchandise and finished goods¥49,696¥44,112Work in process

14,836

12,638Raw materials and supplies

15,53012,862

Total¥80,064¥69,613

Balance at April 1, 2021
Depreciation
Impairment losses
Business divestitures, etc.
Sale and disposal
Transfer
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2022

Buildings andstructures¥(539,061) ¥ (97,887)(57,091)(9,299)
(493)
(584)
—
—
7,768
2,312
923
510
(22,978)(3,401)¥(610,932) ¥(108,349)

Land¥(3,650)
(586)
—
—
15
0
(53)
¥(4,274)

Constructionin progress

¥—
—
—
—
—
—
—
¥—

Tools, furnitureand fixtures

Total¥ (92,465) ¥(733,065)(10,416)(77,392)(4)(1,082)——
3,448
13,543158
1,592(7,319)(33,752)¥(106,599) ¥(830,156)

Amounts of inventories measured based on net realizable value at March 31, 2022 and 2021 were ¥3,874 million and ¥3,317 million, respectively.
Amounts of write-downs of inventories recognized as expenses for FYE2022 and FYE2021 were ¥163 million and ¥148 million, respectively.

Carrying amounts(Millions of yen)

Balance at April 1, 2021
Balance at March 31, 2022

NIPPON SANSO HOLDINGS CORPORATION

15INTEGRATED REPORT 2022

Machinery andvehiclesBuildings andstructures

Land¥406,286¥432,427¥ 97,041¥102,210¥57,118¥59,989

NIPPON SANSO HOLDINGS CORPORATION16

INTEGRATED REPORT 2022

Constructionin progress

Tools, furnitureand fixtures¥47,374¥48,645¥77,913¥86,386

Total¥685,733¥729,658

Notes to Consolidated Financial Statements

FYE2021 (From April 1, 2020 to March 31, 2021)

10.

Costs
(Millions of yen)

Balance at April 1, 2020
Individual acquisition (Note)
Impairment losses
Business combinations, business divestitures, etc.
Sale and disposal
Transfer
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2021

Constructionin progress

Machinery andvehiclesBuildings andstructures

Land¥877,627
47,917—187(9,880)(262)
29,758¥945,348¥183,322
11,146—75(5,149)304
5,228¥194,928¥57,413
1,411
—
18
(42)
179
1,788
¥60,768¥45,196
2,691(1,008)—(22)(1,143)
1,660¥47,374

Tools, furnitureand fixtures

Total¥153,887 ¥1,317,447
10,59973,766—(1,008)0282(2,366)(17,461)
166
(756)
8,092
46,528¥170,379 ¥1,418,798

Note: Individual acquisition in the construction in progress column represents the net amount of an increase due to new acquisitions after reclassifying to respective accounts of property,
plant and equipment.

Accumulated depreciation and accumulated impairment losses(Millions of yen)

Balance at April 1, 2020
Depreciation
Impairment losses
Business divestitures, etc.
Sale and disposal
Transfer
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2021

Machinery andvehiclesBuildings andstructures¥(484,973)(53,385)
(403)
—
8,949
593
(9,840)¥(539,061)¥(91,670)(8,979)
(232)
—
3,926
153
(1,085)¥(97,887)

Machinery andvehiclesBuildings andstructures¥392,653¥406,286¥91,652¥97,041Land¥(3,093)
(506)
—
—
—
(6)
(44)
¥(3,650)

Constructionin progress

Tools, furnitureand fixtures

¥—
—
—
—
—
—
—
¥—

¥(82,515)(9,393)
(0)
—
1,995
93
(2,645)¥(92,465)

Constructionin progress

Tools, furnitureand fixtures¥45,196¥47,374¥71,372¥77,913

Total¥(662,252)(72,264)(636)—
14,870834(13,616)¥(733,065)

Carrying amounts(Millions of yen)

Balance at April 1, 2020
Balance at March 31, 2021

Land

¥54,320¥57,118

Total¥655,195¥685,733

Goodwill and Intangible Assets(1) Table of changes
Changes in costs, accumulated amortization and accumulated impairment losses, and the carrying amounts of goodwill and intangible assets are
as follows:
FYE2022 (From April 1, 2021 to March 31, 2022)
Costs(Millions of yen)
Intangible assets
Goodwill

Balance at April 1, 2021
Individual acquisition
Business combinations, business divestitures, etc.
Sale and disposal
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2022

¥456,775—
1,403—
28,934¥487,113

Customer-related
intangible assets¥279,868—201(23)
20,830¥300,876

Other

Total

¥21,194
1,214
610
(438)
2,727
¥25,309¥301,063
1,214
811
(462)
23,558¥326,185

Accumulated amortization and accumulated impairment losses(Millions of yen)
Intangible assets
Goodwill¥(1,739)
—
—
—
—
(183)
¥(1,922)

Balance at April 1, 2021
Amortization
Impairment losses
Business divestitures, etc.
Sale and disposal
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2022

Customer-related
intangible assets¥(50,315)(13,295)——
23(4,940)¥(68,528)

Other

Total

¥(12,995)(1,746)——416(2,010)¥(16,336)¥(63,311)(15,042)——440(6,951)¥(84,865)

Carrying amounts(Millions of yen)

The right-of-use assets (capital expenditure amount) increased by ¥8,450 million and ¥7,132 million for FYE2022 and FYE2021, respectively.
Intangible assets

Depreciation of property, plant and equipment is included in “Cost of sales” and “Selling, general and administrative expenses” in the

Goodwill

consolidated statement of profit or loss.
Balance at April 1, 2021
Balance at March 31, 2022

(2) Right-of-use assets¥455,036¥485,190

Customer-related
intangible assets¥229,553¥232,348

Carrying amounts of right-of-use assets included in property, plant and equipment are as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Machinery and vehicles¥ 9,881¥9,283

Buildings and structures

22,142

21,303

Land

1,776

1,899

Tools, furniture and fixtures

2,768

2,166

¥36,568¥34,653

Total

NIPPON SANSO HOLDINGS CORPORATION

17

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION18

INTEGRATED REPORT 2022

Other

¥8,198¥8,972

Total¥237,751¥241,320

Notes to Consolidated Financial Statements

FYE2021 (From April 1, 2020 to March 31, 2021)

11.

Costs
(Millions of yen)
Intangible assets
Goodwill

Balance at April 1, 2020
Individual acquisition
Business combinations, business divestitures, etc.
Sale and disposal
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2021

Customer-related
intangible assets¥420,881
152
561—
35,180¥456,775¥259,543—
100—
20,225¥279,868

Other

Total

¥19,321
931
6
(184)
1,119
¥21,194¥278,864
931
107
(184)
21,344¥301,063

Impairment Losses

The NSHD Group groups assets into the smallest cash-generating units that generate cash flows largely independently. For idle assets, recognitionof impairment loss is determined by individual assets.
Impairment losses for FYE2022 and FYE2021 were ¥1,216 million and ¥2,022 million, respectively. Impairment losses were included in “Other
operating expenses” in the consolidated statement of profit or loss.
Major assets for which impairment losses were recognized are as follows:
FYE2022 (From April 1, 2021 to March 31, 2022)
There were no individually significant impairment losses.

Accumulated amortization and accumulated impairment losses(Millions of yen)

FYE2021 (From April 1, 2020 to March 31, 2021)(Millions of yen)

Intangible assets
Goodwill

Balance at April 1, 2020
Amortization
Impairment losses
Business divestitures, etc.
Sale and disposal
Exchange differences on translation of foreign operations, etc.
Balance at March 31, 2021

Customer-related
intangible assets¥(1,591)
—
(107)
—
—
(40)
¥(1,739)¥(35,476)(12,571)———(2,267)¥(50,315)

Other

Total

¥(11,310)(1,544)
(26)
—
173
(289)
¥(12,995)¥(46,786)(14,115)(26)—
173(2,556)¥(63,311)

Usage

Location

Type

Reportable segment

Impairment losses

Natural gas liquefierIndonesia

Construction in progress

Gas Business in Asia and Oceania¥993

Breakdown of impairment losses• Natural gas liquefier ¥993 million
For the natural gas liquefaction business in Indonesia, the carrying amount of the facility under construction in progress was reduced to therecoverable amount, since it is scheduled to be disposed of due to changes in the business environment. The recoverable amount is measured atfair value less costs of disposal. The fair value is measured on the basis of sales price based on third-party appraisals and is categorized as Level 3of the fair value hierarchy based on inputs used to develop those measurements.
Carrying amounts of goodwill and intangible assets with indefinite useful lives allocated to a cash-generating units (a group of cash-generating

Carrying amounts(Millions of yen)units) are as follows:

Total

Cash-generating unit
(a group of cash-generating units)

Intangible assets
Goodwill

Balance at April 1, 2020
Balance at March 31, 2021

Customer-related
intangible assets¥419,290¥455,036

There were no significant internally generated intangible assets for¥224,067¥229,553(Millions of yen)Other

¥8,010¥8,198¥232,077¥237,751

The carrying amount of assets with indefinite useful lives in the

FYE2022 or FYE2021.

intangible assets above was ¥1,251 million and ¥1,147 million at

Amortization of intangible assets is included in “Cost of sales” andMarch 31, 2022 and 2021, respectively. Principally, the assets were“Selling, general and administrative expenses” in the consolidated

trademarks acquired at the time of a business combination, and thestatement of profit or loss.

NSHD Group determined that their useful lives cannot be estimatedResearch and development costs recognized as expenses for FYE2022

FYE2022(March 31, 2022)

Nippon Gases Euro-Holding S.L.U.

¥334,278¥315,302

Matheson Tri-Gas, Inc.

111,142

100,545

NSC (Australia) Pty Ltd

27,67225,374

Other

13,347

14,961

Total¥486,441¥456,183

because the assets will exist for as long as the business continues.

and FYE2021 were ¥3,569 million and ¥3,315 million, respectively.
(2) Significant intangible assets
Significant intangible assets recorded in the consolidated statement of financial position are customer-related intangible assets held by
Nippon Gases Euro-Holding S.L.U. and Matheson Tri-Gas, Inc., which are consolidated subsidiaries. Their carrying amounts and the remaining
period of amortization are as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Remaining period ofamortization

Nippon Gases Euro-Holding S.L.U.

¥188,326¥187,385

Mainly 26 years

Matheson Tri-Gas, Inc.

¥ 36,093¥ 36,183

Mainly 14 years

NIPPON SANSO HOLDINGS CORPORATION19

INTEGRATED REPORT 2022

FYE2021(March 31, 2021)

NIPPON SANSO HOLDINGS CORPORATION

20INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

The carrying amounts of intangible assets with indefinite usefulfor the value in use. Cash flows exceeding the business plan period

lives at March 31, 2022 and 2021 were ¥1,251 million and ¥1,147

are determined by referring to the long-term average growth rate ofmillion, respectively, and were included in NSC (Australia) Pty Ltd.

a market or a country to which the cash-generating unit (a group of
cash-generating units) belongs.
The business plan prepared and approved by the management, thethe NSHD Group performs impairment tests every year and each time

long-term growth rates, and the discount rates are the major assump-when there is an indicator of impairment. The recoverable amounttions used for impairment tests of goodwill. The business plan mayof a cash-generating unit (a group of cash-generating units) is

be affected mainly by the growth rate of revenue, and these major

measured as the higher of an asset’s fair value less costs of disposal

assumptions may be affected by the results of changes in futureand its value in use.

uncertain conditions of the economy. Thus, when the assumed circumstances were changed, the result of calculation of the recoverable

calculated by discounting estimated future cash flows projected based

amount may differ.

on the business plan, which is prepared by reflecting past experiences

Regarding the impact of the COVID-19 pandemic, based on theand external information and approved by the management. The

information available at March 31, 2022, the NSHD Group assumes

discount rate used is a pre-tax rate reflecting current market assess-that such impact would be insignificant, while uncertainty remains

ments of the time value of money and the risks specific to the asset.

due to the spread of new COVID-19 variants.

The estimated period of future cash flows is approximately 10 years

based on inputs used to develop those measurements.

¥25,690

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Share of profit¥3,358¥2,388

Share of other comprehensive income

1,847

(166)

Total share of comprehensive income¥5,206¥2,221

Share of comprehensive income of associates accounted for using the equity method is as follows:(Millions of yen)

Other Financial Assets

A breakdown of other financial assets is as follows:(Millions of yen)

FYE2022(March 31, 2022)

Cash-generating units(a group of cash-generating units)

Long-term growth rate

¥44,086¥40,256

Other

19,65917,385

Allowance for doubtful accounts(1,024)(1,192)

Total¥62,721¥56,449

Nippon Gases Euro-Holding S.L.U.

6.9%

Current assets¥ 7,310¥ 6,710

9.3%

Non-current assets

55,4101.9%

49,739

8.8%

Total

¥62,721¥56,449

Discount rate

1.8%

8.5%

2.5%

NSC (Australia) Pty Ltd

Long-term growth rate

6.0%

3.5%

Matheson Tri-Gas, Inc.

FYE2021(March 31, 2021)

Discount rate

3.5%

8.5%

2.8%

FYE2021(March 31, 2021)

Equity securities and investments in capital

Long-term growth rates and discount rates used in the measurement of the recoverable amount are as follows:
FYE2022(March 31, 2022)

FYE2021(March 31, 2021)¥28,029

13.

The fair value is categorized as Level 3 of the fair value hierarchy

for fair value less costs of disposal and generally limited to five years(Millions of yen)

FYE2022(March 31, 2022)

Carrying amount of investments in associates

As to goodwill and intangible assets with indefinite useful lives,

An asset’s fair value less costs of disposal and its value in use are

The carrying amount of investments in associates accounted for using the equity method that are insignificant is as follows:

Equity securities and investments in capital are classified as equity financial assets measured at fair value through other comprehensive income.
Other is classified mainly as financial assets measured at amortized cost.

The recoverable amount measured by value in use of Nippon Gases Euro-Holding S.L.U. at March 31, 2022 exceeded its carrying amount by¥270,543 million; it is estimated that if the discount rate rises by 1.7% these amounts would be approximately the same.

Equity securities are designated as equity financial assets measured at fair value through other comprehensive income because they are held

12.

mainly for the purpose of maintaining and strengthening business and collaborative relationships and financial transaction relationships, etc.

Investments Accounted for Using the Equity Method

Names of issuers and fair value of principal equity financial assets measured at fair value through other comprehensive income are as follows:

The carrying amount of investments in joint ventures accounted for using the equity method that are individually insignificant is as follows:(Millions of yen)

FYE2022(March 31, 2022)¥7,671

Carrying amount of investments in joint ventures

FYE2021(March 31, 2021)¥6,604(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Share of profit¥153¥3,213

Share of other comprehensive income

2021

Total share of comprehensive income¥356¥3,21521

INTEGRATED REPORT 2022

FYE2021 (March 31, 2021)(Millions of yen)

(Millions of yen)AmountName

Share of comprehensive income of joint ventures accounted for using the equity method is as follows:

NIPPON SANSO HOLDINGS CORPORATIONFYE2022 (March 31, 2022)

Name

AmountIBIDEN CO., LTD.

¥8,012IBIDEN CO., LTD.

¥6,740Tosoh Corporation

4,048

Tosoh Corporation

4,724

Velo3D, Inc.

3,741

JFE Holdings, Inc.

3,507

JiLin OLED Material Tech Co., Ltd.

3,567

Koatsu Gas Kogyo Co., Ltd.

2,478

Koatsu Gas Kogyo Co., Ltd.

2,237

DAIKIN INDUSTRIES, LTD.

1,229

NIPPON SANSO HOLDINGS CORPORATION

22

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

In order to improve the efficiency and effective utilization of assets held, the NSHD Group conducts sales (derecognition) of equity financial
assets measured at fair value through other comprehensive income. The fair value at the time of sales and cumulative gains or losses on sales are
as follows. Cumulative gains or losses (after tax) recognized in other comprehensive income in equity were transferred to retained earnings at thetime of sales.

16.

Bonds and Borrowings

A breakdown of bonds and borrowings is as follows:(Millions of yen)

(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Fair value¥6,052¥247

Cumulative gains or losses

3,741

126

FYE2022(March 31, 2022)¥ 26,632¥ 16,421

Current portion of long-term borrowings

76,963

83,299Commercial papers

7,000

17,000

Short-term borrowings

Current portion of bonds
Long-term borrowings

For equity financial assets measured at fair value through other comprehensive income, dividends received were recognized as follows:(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Financial assets that were derecognized

¥ 73

¥ 16

Financial assets held at end of the fiscal year

686

621

FYE2021(March 31, 2021)—

15,000582,309608,678

Bonds

197,440

172,217

Total¥890,344¥912,616

Current liabilities¥110,595¥131,721

Non-current liabilities

779,749

780,895

Total¥890,344¥912,616

Bonds and borrowings are classified as financial liabilities measured at amortized cost.
The average interest rates applicable to short-term borrowings and long-term borrowings at March 31, 2022 were 1.66% and 1.24%, respectively.

14.

The average interest rates applicable to short-term borrowings and long-term borrowings at March 31, 2021 were 2.10% and 1.25%, respectively.

Other Assets

The repayment term of long-term borrowings at March 31, 2022 is from 2022 to 2059.

A breakdown of other assets is as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Prepaid expenses¥ 8,112¥ 6,993

Other

15,992

13,569Total¥24,104¥20,562

Current assets¥22,940¥19,441

Non-current assets
Total

15.

1,163

1,120

¥24,104¥20,562A breakdown of bonds is as follows:(Millions of yen)Company
name(Millions of yen)

Notes and accounts payable–trade¥115,123¥96,093

Total¥115,123¥96,093

Trade payables are classified as financial liabilities measured at amortized cost.

Collateral

Maturity date

The 13th Domestic Unsecured Straight
Corporate Bonds

December 15,
2016¥      —

¥ 15,000

0.14

None

December 15,
2021

*1

The 14th Domestic Unsecured Straight
Corporate Bonds

December 15,
2016

15,00015,0000.39

None

December 15,
2026

*1

The 1st Series Deferrable Interest andCallable Unsecured Subordinated Bonds

January 29,
201999,671

99,495

1.41 (*2)

NoneJanuary 29,
2054

*1

The 2nd Series Deferrable Interest andCallable Unsecured Subordinated Bonds

January 29,
2019

7,937

7,928

1.87 (*3)

NoneJanuary 29,
2059

*1

The 15th Domestic Unsecured Straight
Corporate Bonds

October 16,
2019

19,94819,9270.13

None

October 16,
2024

*1

The 16th Domestic Unsecured Straight
Corporate Bonds

October 16,
2019

9,963

9,955

0.19

None

October 16,
2026

*1

The 17th Domestic Unsecured Straight
Corporate Bonds

October 16,
2019

19,92019,9090.30

None

October 16,
2029

*1

The 1st Domestic Unsecured Straight
Corporate Bonds

October 14,
2021

15,000

—

0.11

None

October 14,
2026

*1

The 2nd Domestic Unsecured Straight
Corporate Bonds

October 14,
2021

10,000

—

0.28

None

October 14,
2031¥197,440¥187,217

A breakdown of trade payables is as follows:
FYE2021(March 31, 2021)

Issuance date

Interest rate(%)

*1

Trade Payables

FYE2022(March 31, 2022)

Name

FYE2022
FYE2021(March 31, 2022) (March 31, 2021)

Total*1 The bonds were issued by the Company.
*2 A fixed interest rate is applied to the period between the day following January 29, 2019 and January 29, 2024, while a variable interest rate is to be applied from the day following January
29, 2024 (step-up in interest rate occurring on January 30, 2024).
*3 A fixed interest rate is applied to the period between the day following January 29, 2019 and January 29, 2029, while a variable interest rate is to be applied from the day following January
29, 2029 (step-up in interest rate occurring on January 30, 2029).

NIPPON SANSO HOLDINGS CORPORATION

23

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION24

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements(2) Additional information related to lease transactions

Assets pledged as collateral and secured obligations are as follows:

The majority of the NSHD Group’s lease transactions involve property leases, primarily leasing land and buildings as office and factory sites. Someof these leases are covered by options to extend or terminate the leases to ensure business flexibility. The NSHD Group determines the term of theAssets pledged as collateral(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Property, plant and equipment¥1,249¥1,191

Total¥1,249¥1,191

options to terminate the leases.
The NSHD Group’s leasing activities do not include significant sales and lease-back transactions and restrictions or covenants imposed by leases.

19.

Secured obligations(Millions of yen)

FYE2022(March 31, 2022)¥616

Bonds and borrowings
Other financial liabilities (current)
Total

17.

leases after evaluating whether it is reasonably certain that the NSHD Group will exercise the options to extend the leases or will not exercise the

FYE2021(March 31, 2021)

¥621

28

25

¥645

¥646

Other Financial Liabilities

Post-employment Benefits

Certain consolidated subsidiaries of the Company have funded anddetermined taking into consideration the yield on government bonds.

unfunded retirement defined benefit plans and defined contribution

In accordance with laws and regulations, the pension plans areplans for employees’ retirement benefits, and the plans cover substan-

managed by the Company’s consolidated subsidiaries or a pension

tially all the employees.

fund that is legally separate from the Company’s consolidated subsidiaries. The Company’s consolidated subsidiaries, or the Board of(1) Defined benefit plans

Directors of the pension fund and the trustees of pension fund

Major defined benefit plans of the Company’s consolidated subsidiaries

management, are required by laws and regulations to act in the best

are cash balance plans. Benefits under the cash balance plans are set

interest of policyholders, and are responsible for operating plan assets

based on various conditions such as years of service, points based on

based on the prescribed policies.

achievements during the service period, etc. The investment yield is

A breakdown of other financial liabilities is as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Lease liabilities¥38,872¥36,625

Accrued expenses

45,89538,565

Accounts payable—other

10,138

11,217

Other

1,553

1,473

Total

¥96,460¥87,881

Current liabilities¥65,228¥58,428

Non-current liabilities

31,231

29,453

Total¥96,460¥87,881

Other financial liabilities are mainly classified as financial liabilities measured at amortized cost.

Amounts related to defined benefit plans in the consolidated statement of financial position are as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)

Present value of defined benefit obligations¥ 43,506

Fair value of plan assets(31,809)(32,982)¥ 11,697¥ 11,569¥ 14,165¥ 14,037

Net amount of defined benefit obligations and assets
Retirement benefit liability
Retirement benefit asset
Net amount of defined benefit obligations and assets¥ 44,552(2,468)(2,467)¥ 11,697¥ 11,569

For defined benefit plans, amounts recognized as expenses in the consolidated statement of profit or loss are as follows:(Millions of yen)

18.

Lease Transactions

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥2,056(1) Gain or loss and cash outflows related to lease transactions

Current service cost

¥1,877

Gain or loss and cash outflows related to lease transactions are as follows:

Interest expenses

335

355

Interest income

(219)

(222)

¥1,993¥2,189(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥ 3,289¥ 3,886

Total

Depreciation charges for right-of-use assets
Land, buildings and structures as underlying assets

996

894

3,070

3,569

Total depreciation charges

7,355

8,350

Expenses relating to leases of low-value assets

1,822

1,394

¥11,260¥10,082

Tools, furniture and fixtures as underlying assets
Machinery and vehicles as underlying assets

Total cash outflows for leases
Please see Note “9. Property, Plant and Equipment” for information on increases in right-of-use assets.
Please see Note “32. Financial Instruments” for information on balances of lease liabilities by due date.

NIPPON SANSO HOLDINGS CORPORATION

25

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION

26

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

The fair value of plan assets at March 31, 2022 is as follows:

Changes related to the present value of defined benefit obligations are as follows:(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥44,552¥43,192

Current service cost

1,877

2,056

Interest expenses

335

355

Balance at beginning of the fiscal year

Remeasurements—

Actuarial gains and losses arising from changes in demographic assumptions
Actuarial gains and losses arising from changes in financial assumptions
Retirement benefits paid
Other
Balance at end of the fiscal year30

(1,057)(49)(2,291)(2,268)90

1,236¥43,506¥44,552(Millions of yen)

Plan assets for which
there are quoted
market prices inan active market

Plan assets for which
there are no quoted
market prices inan active market¥2,386¥    —¥ 2,386

—

1,450

1,450

—

1,450

1,450

—

16,723

16,723—

16,723

16,723

Life insurance general accounts—

11,208

11,208

Other

—

41

41

Total

¥2,386¥29,422¥31,809

Cash and cash equivalents

Total

Equity financial instruments
Jointly managed trusts
Total equity financial instruments
Debt financial instruments
Jointly managed trusts
Total debt financial instruments

Changes related to the fair value of plan assets are as follows:(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥32,982¥31,598219

222

Balance at beginning of the fiscal year
Interest income
Remeasurements

(196)

1,072

Contributions from companies

1,117

1,318

Retirement benefits paid

(1,993)(1,879)Return on plan assets

Other
Balance at end of the fiscal year

(319)

650

¥31,809¥32,982

The key actuarial assumption used to calculate the present value of defined benefit obligations is as follows:
FYE2022(March 31, 2022)

0.70%

Discount rate

FYE2021(March 31, 2021)

0.57%

The fair value of plan assets at March 31, 2021 is as follows:(Millions of yen)

Plan assets for which there Plan assets for which there
are quoted market prices are no quoted market prices
in an active market
in an active market

Cash and cash equivalents

Total

¥949

¥    —¥   949

—

5,465

5,465

—

5,465

5,465

—

14,372

14,372—

14,372

14,372

Life insurance general accounts—

11,893

11,893

Other

—

301

301

Total

¥949

¥32,033¥32,982

Equity financial instruments
Jointly managed trusts
Total equity financial instruments
Debt financial instruments
Jointly managed trusts
Total debt financial instruments

Under the NSHD Group’s plan asset management policy, theand actual management results of each asset. The NSHD Grouppurpose of management is to secure the required combined returns

reviews asset allocation according to the situation as necessary, such

2021 changes as follows. This sensitivity analysis is based on the assumption that all actuarial assumptions, other than actuarial assumptions

over the medium and long term to the extent of allowable risks

as when there is a significant change in the market environment.

subject to the analysis, remain constant.

in order to ensure payments of the benefits of the defined benefit

If the discount rate, which is the key actuarial assumption, fluctuates, the present value of defined benefit obligations at March 31, 2022 and(Millions of yen)

FYE2022(March 31, 2022)¥(2,011)

Increase by 0.5%

2,281

Decrease by 0.5%

FYE2021(March 31, 2021)

Contributions to the defined benefit plans are readjusted based on

obligations in the future.

periodic actuarial reviews, in order to ensure balanced pension financeFor plan assets, the NSHD Group seeks to reduce risks by diversi-in the future. In such actuarial reviews, the adequacy of the contribution¥(2,191)

fying investments widely in domestic and foreign equity securities,

is verified by reviewing the basic rates for determining contributions

2,431

debt securities, and life insurance general accounts based on asset(such as expected rate of interest, expected mortality, and expected

allocation objectives of a policy asset mix that is formulated to achieverate of withdrawal).

management objectives.

For FYE2023, the NSHD Group plans to contribute ¥1,589 million

For asset allocation, the NSHD Group sets the allocation to be

to plan assets.

maintained for the medium and long term, based on the correlation

The weighted average durations of the defined benefit obligation at

between expected risks and returns for the medium and long term

March 31, 2022 and 2021 were 11.9 years and 11.8 years, respectively.

(2) Defined contribution plans and public pension systems
Amounts recognized as expenses under defined contribution plans and public pension systems are as follows:(Millions of yen)

NIPPON SANSO HOLDINGS CORPORATION

27

INTEGRATED REPORT 2022

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Expenses under defined contribution plans¥3,808¥2,211

Expenses under public pension systems

4,819

4,344

NIPPON SANSO HOLDINGS CORPORATION

28

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

20.

21.

Provisions

A breakdown of changes in provisions is as follows:

Other Liabilities

A breakdown of other liabilities is as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2022 (From April 1, 2021 to March 31, 2022)(Millions of yen)

Provision for
construction warranties

Asset retirement
obligations¥ 355

Balance at April 1, 2021

¥3,87037

Increase during the fiscal year

Other provisions

1,610

Advances received¥ 4,977¥ 4,713

Deferred income

5,681

5,716

¥4,340

Employees’ bonuses

6,203

5,668

1,856

Employees’ paid absence

4,049

3,798

29,83927,747

Total

¥ 114
208

FYE2021(March 31, 2021)

Decrease during the fiscal year (Intended use)

(138)

(243)

(114)

(496)

Other

Decrease during the fiscal year (Reversal)

(73)

(0)

—

(73)

Total

¥50,750¥47,644

548

Current liabilities¥29,832¥28,284¥6,175

Non-current liabilities

20,91819,359

¥1,068

Total¥50,750¥47,644

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

1,600,000

1,600,000

433,092

433,092

3

Other

545

¥ 183

Balance at March 31, 2022
Current liabilities¥5,782

¥ 208

¥ 183

¥675

¥ 208

—

5,107

—

5,107

¥ 183

¥5,782¥ 208¥6,175

Non-current liabilities
Total

—

FYE2021 (From April 1, 2020 to March 31, 2021)(Millions of yen)

Provision for
construction warranties

Balance at April 1, 2020

Asset retirement
obligations

Other provisions

Total

¥ 375

¥3,281

¥  —

198

276

114

589

Decrease during the fiscal year (Intended use)

(174)

(26)

—

(201)

Decrease during the fiscal year (Reversal)

(48)

(0)

—

(48)

3

340

—

343

¥ 355

¥3,870¥114¥4,340Current liabilities

¥ 355

¥    
—

¥114

¥   469

Total

—

3,870

—

3,870

¥ 355

¥3,870¥114¥4,340

Provision for construction warranties

Asset retirement obligations

In order to prepare for construction-related compensation expenses forIf the NSHD Group has legal obligations required by laws and regulations

machinery and device products, provision for construction warranties isor contracts concerning retirement of fixed assets that are used for therecorded based on the latest actual amount of compensation arising fromordinary course of business, such as obligations to restore the original

shipment amounts of machinery and device products in the previous

condition accompanying lease contracts of factory facilities and properties

fiscal year. Of these, amounts expected to be paid within one year areused by the NSHD Group, asset retirement obligations are recognizedrecorded. However, the occurrence of construction-related compensation
expenses is subject to uncertainty.

Number of shares authorized
Number of shares issued
Beginning of the fiscal year——

433,092

433,092

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

342

339

Changes during the fiscal year
End of the fiscal year
All shares are ordinary shares with no par value. Shares issued are fully paid.
Changes in the number of treasury shares during the fiscal year are as follows:(Thousands of shares)

Beginning of the fiscal year2

3

based on the estimated amount of future expenditures calculated based

Decrease(0)(0)

on historical results, etc.

End of the fiscal year

344

342

or more, they will be affected by future business plans, etc.

29

Numbers of shares authorized and shares issued are as follows:

Increase

Although these expenses are expected to be paid mainly after one year

NIPPON SANSO HOLDINGS CORPORATION(1) Share capital and treasury shares¥3,656

Balance at March 31, 2021
Non-current liabilities

Equity(Thousands of shares)

Increase during the fiscal year

Other

22.

INTEGRATED REPORT 2022

Major factors of changes during the fiscal year were due to the purchase or requests for sales of shares less than one unit.

NIPPON SANSO HOLDINGS CORPORATION30INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements(2) Capital surplus and retained earnings(Effective portion of net change in fair value of cash flow hedges)

Capital surplus consists of amounts not included in share capital as

The effective portion of net change in fair value of cash flow hedges

part of the amounts arising from capital transactions, and the mainis the cumulative amount of the effective portion of hedges as part ofcomponent is capital reserve. Retained earnings consist of legal

gains or losses arising from changes in fair value of the hedging instru-

retained earnings and other reserves.

ment related to cash flow hedges.

Dividends whose effective date falls in the following fiscal year are as follows:
FYE2022 (From April 1, 2021 to March 31, 2022)
Type of stock

Resolution

The Companies Act of Japan (the “Act”) stipulates that more than
one-half of payments or delivery in relation to the issuance of shares(Financial assets measured at fair value through othershall be included in share capital, and the remaining shall be included

comprehensive income)in capital reserve. Capital reserve may be incorporated into share

Other components of equity include valuation differences in fair value ofcapital by resolutions of the shareholders’ meeting.

financial assets measured at fair value through other comprehensive income.

Ordinary General Meeting of Shareholders
held on June 17, 2022

Ordinarysharespaid as cash dividends from surplus shall be appropriated as capital(Remeasurements of defined benefit plans)

reserve or legal retained earnings until the total amount of capital

Remeasurements of defined benefit plans are the effect of differences

reserve and legal retained earnings equals one-fourth of share capital.

between actuarial assumptions at the beginning of the fiscal year and

The accumulated legal retained earnings may be used to eliminate

the actual results and the effect of changes in actuarial assumptions.

or reduce a deficit, and the legal retained earnings may be reversed by

These are recognized in other comprehensive income when incurred

resolution of the shareholders’ meeting.

and immediately transferred from other components of equity toretained earnings.

Dividends per share(Yen)¥7,792¥18

Record date

March 31, 2022

Effective dateJune 20, 2022

FYE2021 (From April 1, 2020 to March 31, 2021)
Type of stock

Resolution

In addition, the Act stipulates that one-tenth of the amount to be

Total cash dividends(Millions of yen)

Ordinary General Meeting of Shareholders
held on June 18, 2021

24.

Total cash dividends(Millions of yen)

OrdinarysharesDividends per share(Yen)¥6,926¥16

Record date

March 31, 2021

Effective dateJune 21, 2021

Other Comprehensive Income

Changes in each item in other comprehensive income during the fiscal year are as follows:(Millions of yen)

(3) Other components of equity
Other components of equity are as follows:

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥ 9,244¥11,275(2,471)(3,658)

6,773

7,617

Financial assets measured at fair value through other comprehensive income(Exchange differences on translation of foreign operations)

Amount arising during the fiscal year

Exchange differences on translation of foreign operations are transla-

Tax effects

tion differences arising when consolidating the financial statements

Net amountof foreign operations prepared in foreign currencies and cumulative

Remeasurements of defined benefit plansamounts of effective portion of gain or loss on hedging instruments

Amount arising during the fiscal year

861

1,091

designated as hedges of net investments in foreign operations.

Tax effects

(254)

(381)

607

710

55,99453,841

55,99453,841

Net amount
Exchange differences on translation of foreign operations

23.

Amount arising during the fiscal year

Dividends

Net amount
Effective portion of net change in fair value of cash flow hedges

Payments of dividends are as follows:
FYE2022 (From April 1, 2021 to March 31, 2022)
Type of stock

Resolution

Ordinary General Meeting of Shareholders
held on June 18, 2021
Board of Directors’ meeting
held on November 1, 2021

Total cash dividends(Millions of yen)

Dividends per share(Yen)

Record dateOrdinary General Meeting of Shareholders
held on June 19, 2020
Board of Directors’ meeting
held on October 30, 2020

¥6,926
6,926

Total cash dividends(Millions of yen)

OrdinarysharesOrdinarysharesNIPPON SANSO HOLDINGS CORPORATION

441
(354)

Tax effects

(120)

(30)

299

56

2,050

(165)

Net amount

Effective date¥16
16

March 31, 2021
September 30,
2021

June 21, 2021
December 1,
2021

FYE2021 (From April 1, 2020 to March 31, 2021)
Resolution

586
(166)

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

OrdinarysharesOrdinarysharesType of stock

Amount arising during the fiscal year
Reclassification adjustments

31

Dividends per share(Yen)¥6,060

¥14

6,060

14

INTEGRATED REPORT 2022

Amount arising during the fiscal year

2,050

(165)

¥65,725¥62,060

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Wages and salaries¥130,487¥121,779

Total¥130,487¥121,779

Net amount
Total other comprehensive income

25.
Record date

Employee Benefit Expenses

Effective date

Employee benefit expenses other than post-employment benefits are as follows:
March 31, 2020
September 30,
2020(Millions of yen)

June 22, 2020
December 1,
2020

NIPPON SANSO HOLDINGS CORPORATION32

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

26.

27.

Revenue(1) Disaggregation of Revenue

Other Operating Income and Other Operating Expenses

A breakdown of other operating income is as follows:(Millions of yen)

FYE2022 (From April 1, 2021 to March 31, 2022)(Millions of yen)
Reportable segment
Gas Businessin Japan

Revenue
Gas
Equipment and otherHousewares
Total¥245,103
126,930—¥372,033

Gas Business in
the United States¥176,555
48,245—¥224,801

Gas Business
in Europe

Gas Business in
Asia and Oceania¥194,807
14,970—¥209,778¥ 96,039
27,494—¥123,533

Thermos
Business

Total

Reconcilingitems¥    ——
26,849¥26,849

¥ —
173
—
¥173

¥712,505
217,814
26,849¥957,169

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥   45¥    3Grant income

197

769

Other

1,998

3,176

Total

¥2,241¥3,949FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Gain on sales of property, plant and equipment

A breakdown of other operating expenses is as follows:(Millions of yen)

FYE2021 (From April 1, 2020 to March 31, 2021)(Millions of yen)
Reportable segment
Gas Businessin Japan

Revenue
Gas
Equipment and otherHousewares
Total¥220,934
121,055—¥341,990

Gas Business in
the United States¥151,768
38,226—¥189,994

Gas Business
in Europe¥146,695
13,339—¥160,035

Gas Business in
Asia and Oceania¥ 78,933
23,102—¥102,036

Thermos
Business

Total

Reconcilingitems¥    ——
23,964¥23,964

¥ —
217
—
¥217

¥598,331
195,941
23,964¥818,238

Determination of the timing of the fulfillment of performance obligations in contracts with customers, and the method for calculating thetransaction price and its allocation to performance obligations, are as described in Note “3. Significant Accounting Policies.” The amount ofrevenue recognized arising from other revenue sources is insignificant.

¥1,216¥2,022

Loss on sales and retirement of property, plant and equipment

647

474

Loss on reduction of property, plant and equipment

45

3

Other

2,028

2,368

Total

¥3,937¥4,867FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥   204¥   183

760

637

1,169

599

Impairment losses

28.

Finance Income and Finance Costs

A breakdown of finance income is as follows:

The NSHD Group has changed reportable segments from the fiscal year ended March 31, 2022. The disaggregation of revenue for the previous(Millions of yen)fiscal year (FYE2021) shown above has been restated to conform to the current fiscal year’s presentation. Please see Note “4. Segment Information.”(2) Contract balancesInterest income

Contract assets mainly comprise consideration for construction in progress. Contract liabilities mainly comprise consideration received from
customers prior to the delivery of products. Receivables, contract assets, and contract liabilities derived from contracts with customers are as follows:(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)¥226,588
5,204
13,030Receivables arising from contracts with customers
Contract assets
Contract liabilities¥190,343
3,936
12,239At the beginning of
FYE2021(April 1, 2020)¥185,784
1,515
10,741

Financial assets measured at amortized cost
Dividend income
Financial assets measured at fair value through other comprehensive income
Foreign exchange gains
Other

58

3

Total

¥2,192¥1,424FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥11,601¥12,554

A breakdown of finance costs is as follows:

Of the outstanding amounts of contract liabilities, as of the beginning of the fiscal years ended March 31, 2022 and 2021, the amounts(Millions of yen)recognized as revenue for the fiscal years are insignificant. For FYE2022 and FYE2021, the amounts of revenue recognized based on the performanceobligations that were fulfilled in prior periods are also insignificant. Balances of contract assets and contract liabilities have not undergone any
significant changes.

Interest expenses(3) Transaction price allocated to remaining performance obligations

Foreign exchange losses

The following is a breakdown of the total transaction price allocated to remaining performance obligations and the period for which revenue

Total

Financial liabilities measured at amortized cost

is expected to be recognized. These amounts do not include any transaction whose expected contractual term is within one year. In addition,
all significant considerations are included in the transaction price arising from contracts with customers.
(Millions of yen)

FYE2022(March 31, 2022)¥ 8,025
6,204¥14,230

One year or lessMore than one year
Total

NIPPON SANSO HOLDINGS CORPORATION

33

INTEGRATED REPORT 2022

FYE2021(March 31, 2021)¥ 8,296
4,555¥12,851NIPPON SANSO HOLDINGS CORPORATION

34

INTEGRATED REPORT 2022

163

9

¥11,765¥12,564

Notes to Consolidated Financial Statements

29.

Income Taxes(1) Deferred tax assets and deferred tax liabilities
Major factors giving rise to deferred tax assets and deferred tax liabilities and their changes are as follows:
FYE2022 (From April 1, 2021 to March 31, 2022)(Millions of yen)
April 1, 2021

Deferred tax assets
Employees’ bonuses
Accrued expenses
Property, plant and equipment andintangible assets
Retirement benefit liability
Unused tax losses
Unrealized gains (inventories and property,
plant and equipment)
Other
Total
Deferred tax liabilities
Securities and other investments
Property, plant and equipment andintangible assets
Undistributed earnings of overseas
consolidated subsidiaries, etc.
Other
Total
Net deferred tax liabilities

Recognized in
profit or loss

Recognized in othercomprehensive income

Other (Note)benefits will be realized based on historical taxable income levels andthe possibility that some or all deductible temporary differences andthe projection of future taxable income during periods when deductible

unused tax losses will be available for future taxable income. For the

temporary differences and unused tax losses may be used.

assessment of the recoverability of deferred tax assets, the NSHD

Deductible temporary differences for which deferred tax assets

Group considers the planned reversal of deferred tax liabilities,

have not been recognized at March 31, 2022 and 2021 were ¥21,738

projected future taxable income, and tax planning. For deferred tax

million and ¥22,411 million, respectively.

assets recognized, the NSHD Group believes that it is probable the tax

March 31, 2022

(2) Income taxes¥   2,364
4,020¥    98(640)¥    ——¥    —
275¥   2,462
3,655

3,065
3,657
6,483

(106)
(55)
(2,025)

—
(209)
—

0
90
486

2,959
3,482
4,944

A breakdown of income taxes is as follows:(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Current income taxes¥21,770¥17,505

Deferred income taxes

3,202

3,336

¥24,973¥20,842

Total
2,309
7,144
¥   29,044

95
12¥(2,621)—(829)¥(1,039)—450¥ 1,303

2,404
6,777
¥  26,685¥  (6,999)¥     —¥(1,619)¥  178¥  (8,440)(128,462)

318—(9,398)(137,541)(6,092)(2,997)¥(144,552)¥(115,507)(1,510)610¥  (580)¥(3,202)—(186)¥(1,806)¥(2,845)—(28)¥(9,247)¥(7,944)(7,602)(2,601)¥(156,187)¥(129,501)(3) Table of reconciliation of effective tax rates
The Company is mainly subject to corporate income tax, inhabitant tax, and enterprise tax. The statutory tax rate based on these taxes for FYE2022

FYE2021 (From April 1, 2020 to March 31, 2021)(Millions of yen)
April 1, 2020

Deferred tax assets
Employees’ bonuses
Accrued expenses
Property, plant and equipment andintangible assets
Retirement benefit liability
Unused tax losses
Unrealized gains (inventories and property,
plant and equipment)
Other
Total
Deferred tax liabilities
Securities and other investments
Property, plant and equipment andintangible assets
Undistributed earnings of overseas
consolidated subsidiaries, etc.
Other
Total
Net deferred tax liabilities

For recognition of deferred tax assets, the NSHD Group considers

Recognized in
profit or loss

Recognized in othercomprehensive income

Other (Note)

March 31, 2021¥   2,275
2,701¥    881,235¥    ——¥    —
83¥   2,364
4,020

3,648
3,005
9,507

(585)
662
(3,046)

—
(135)
—

2
124
22

3,065
3,657
6,483

2,346
6,931
¥  30,415(37)
515¥(1,166)—(598)¥  (733)—295¥  5282,309
7,144¥  29,044¥  (3,764)¥    —¥(3,308)¥   73¥  (6,999)(118,452)(2,811)—(7,198)(128,462)(7,071)(2,324)¥(131,613)¥(101,198)

979
(338)
¥(2,170)¥(3,336)—(27)¥(3,336)¥(4,070)—(306)¥(7,431)¥(6,903)(6,092)(2,997)¥(144,552)¥(115,507)

and FYE2021 was 30.62%. Overseas consolidated subsidiaries are subject to the corporate income tax, etc., of their location.
A breakdown of major items that caused differences between the statutory tax rate and the effective tax rate is as follows:
FYE2022(From April 1, 2021
to March 31, 2022)

30.62%

30.62%

Permanently non-deductible or non-taxable items

0.80

0.58

Unrecognized deferred tax assets

0.18

1.42

Differences in tax rates for overseas consolidated subsidiaries(4.10)(3.74)Tax effects on undistributed earnings

1.65(1.26)

Share of profit of investments accounted for using the equity method(1.17)(2.21)

Other(0.72)

1.41

27.26%

26.82%

Statutory tax rate

Effective tax rate

30.

Earnings per Share

Basic earnings per share and the basis of calculation are as follows:
FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Profit attributable to owners of parent (Millions of yen)

¥ 64,103¥ 55,214

Average number of shares during the fiscal year (Thousands of shares)

432,749

432,752

Basic earnings per share (Yen)¥ 148.13¥ 127.59

Note: Diluted earnings per share are not presented as there are no dilutive potential shares.

Note: Other includes exchange differences on translation of foreign operations and changes from business combinations, etc.

NIPPON SANSO HOLDINGS CORPORATION

35

INTEGRATED REPORT 2022

FYE2021(From April 1, 2020
to March 31, 2021)

NIPPON SANSO HOLDINGS CORPORATION36

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

31.

32.

Cash Flow Information

Financial Instruments

Changes in liabilities arising from financing activities(1) Equity management

Changes in liabilities arising from financing activities are as follows:

The NSHD Group manages equity aiming at maximizing corporate value through sustainable growth. The major indices used by the Company inequity management are return on capital employed (ROCE) and adjusted net debt-to-equity (D/E) ratio.

FYE2022 (From April 1, 2021 to March 31, 2022)

FYE2022(March 31, 2022)(Millions of yen)
Non-cash changes

Short-term borrowings
Commercial papers
Long-term borrowings (Note)
Bonds (Note)
Lease liabilities (Note)

Balanceat April 1, 2021

Changes fromcash flows¥ 16,421
17,000691,978
187,217
36,625¥  8,016(10,000)(61,360)
10,000(9,437)

New lease
Changes fromtransactions andbusinesschanges in leasecombinations, etc.
contracts, etc.

¥150
—
221
—
—

¥   —
—
—
—
8,662

Exchangedifferences ontranslationof foreign
operations, etc.

Balance
at March 31,
2022¥ 2,045—
28,432
222
3,022¥ 26,632
7,000
659,272
197,440
38,872

Note: Balances include the current portion.

FYE2021 (From April 1, 2020 to March 31, 2021)(Millions of yen)
Non-cash changes

Short-term borrowings
Commercial papers
Long-term borrowings (Note)
Bonds (Note)
Lease liabilities (Note)

Balanceat April 1, 2020

Changes fromcash flows¥ 38,777
20,000706,816
196,997
35,797¥(22,924)(3,000)(42,943)(10,000)(8,688)New lease
Changes fromtransactions andbusinesschanges in leasecombinations, etc.
contracts, etc.

¥ —
—
166
—
—

Note: Balances include the current portion.

¥   —
—
—
—
7,179

FYE2021(March 31, 2021)

ROCE (Note 1)

6.8%

6.1%

Adjusted net D/E ratio (Note 2)

0.94

1.15

Note 1: Core operating profit / invested capital (average of the beginning and the end of the fiscal year)
Invested capital refers to the total of interest-bearing liabilities and equity attributable to owners of parent.
Note 2:	It is an indicator of financial stability and calculated using the following formula: (Net interest-bearing liabilities – equity-type liabilities) / (equity attributable to owners ofparent + equity-type liabilities).
	The “Equity-type liabilities” is the Company’s internal terminology, referring to the 50% portion of the ¥250 billion in funds obtained through hybrid financing, which are certified as“equity” portion by credit rating agencies.

(2) Matters related to risk management

In accordance with internal policies of each Group company, such

The NSHD Group is exposed to financial risks in the course ofas credit management regulations, the NSHD Group monitors due

conducting business activities in various countries and regions

dates and outstanding balances of individual customers and estab-throughout a wide range of fields. In order to reduce or avoid such

lishes a system to periodically assess credit status. The NSHD Grouprisks, the NSHD Group manages risks based on certain policies, etc.

thereby aims to identify and alleviate collection concerns due to

In addition, derivative transactions are used to hedge currency

a deteriorating financial situation at an early stage. In addition,

fluctuation risk, interest rate fluctuation risk, or price fluctuation risk.

derivative transactions are limited to financial institutions with highExchangedifferences ontranslationof foreign
operations, etc.

Balance
at March 31,
2021

In principle, derivative transactions are only conducted based on actual

creditworthiness in order to minimize counterparties’ credit risk related

demand and not used for speculative purposes.

to contract default.

¥   567—
27,939219
2,336¥ 16,421
17,000691,978
187,217
36,625(3) Credit risk

unrecoverable amount for individually significant financial assets, andTrade receivables, etc., which are receivables arising from the NSHD

at an amount based on historical experience, etc., for individuallyGroup’s business activities, are exposed to the credit risk of customers.

insignificant financial assets, at the end of each fiscal year. Allowance

In addition, derivative transactions that the NSHD Group uses tofor doubtful accounts related to such financial assets is included inhedge financial risks are exposed to the credit risk of financial institu-“Trade receivables” and “Other financial assets” in the consolidated

tions that are counterparties to the transactions.

statement of financial position.

The NSHD Group records allowance for doubtful accounts at an

Allowance for doubtful accounts is as follows. Since the amount of expected credit losses for 12 months is not material, it is included in theamount of the expected credit losses for the entire period.
(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)¥ 9,458¥ 7,692

Balance at beginning of the fiscal year
Increase during the fiscal year
Decrease during the fiscal year (Intended use)

895

1,734

(1,445)(1,087)

Decrease during the fiscal year (Reversal)

(367)

(287)

Other

590

1,406

¥ 9,132¥ 9,458

Balance at end of the fiscal year

The maximum exposure to credit risk of financial assets is the carrying amount after impairment that is presented in the consolidated
financial statements.

NIPPON SANSO HOLDINGS CORPORATION37

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION38

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements(4) Liquidity risk

(5) Currency risk

The NSHD Group’s trade payables and borrowings, etc., are exposed to liquidity risk. The NSHD Group manages the risk by preparing cash

Receivables and payables denominated in foreign currencies arising from the NSHD Group’s global business development are exposed to the risk ofmanagement plans and secures liquidity by establishing commitment lines with several financial institutions.

exchange rate fluctuations. The NSHD Group hedges trade receivables and payables denominated in foreign currencies, borrowings, and loans byusing forward exchange contracts and currency swaps as necessary.

Balances of financial liabilities (including derivative instruments) by due date are as follows:

The NSHD Group’s net investments in foreign operations are exposed to the risk of exchange rate fluctuations. The NSHD Group hedges the risk
by using borrowings denominated in foreign currencies as necessary.

FYE2022 (March 31, 2022)

Non-derivative financial liabilities
Trade payables
Accounts payable—other
Short-term borrowings
Long-term borrowings
Commercial papers
Bonds
Lease liabilities
Accrued expenses
Other
Derivative liabilities
Forward exchange contracts
Currency swaps
Interest rate swaps(Millions of yen)
Undiscounted
contractual
cash flows

One yearor lessMore than one
year but within
two years

More than two
years but within
three years

More than three
years but withinfour years

More than four
years but within
five years

Currency sensitivity analysis

Carrying
amountMore than
five years

The following is the impact on profit before income taxes on the consolidated statement of profit or loss from the foreign currency financial¥115,123
10,13826,632659,272
7,000
197,440
38,87245,895
1,469¥115,123
10,13826,632
662,3817,000
198,000
41,26345,895
1,469¥115,123
10,13826,632
76,963
7,000
—
8,870
45,895720¥     ———
78,712
—
—
7,697
—
21

¥     ———
90,190—20,0006,130—1¥     ———
47,475
—
—
4,780
—
1

¥     ———
46,429—40,0003,765—1¥      ——
—322,611—138,000
10,019
—
722

83
0
0

83
0
0

50
0
—

33
—
—

—
—
0

—
—
—

—
—
—

—
—
—

FYE2021 (March 31, 2021)(Millions of yen)
Carrying
amountNon-derivative financial liabilities
Trade payables
Accounts payable—other
Short-term borrowings
Long-term borrowings
Commercial papers
Bonds
Lease liabilities
Accrued expenses
Other
Derivative liabilities
Forward exchange contracts
Currency swaps
Interest rate swaps¥ 96,093
11,217
16,421
691,978
17,000187,217
36,62538,565
1,327
95
2
48

Undiscounted
contractual
cash flows¥ 96,093
11,217
16,421
695,677
17,000188,000
39,662
38,565
1,327

More than one
year but within
two years

One yearor less¥96,093
11,217
16,421
83,29917,00015,0007,895
38,565
732

95
2
48

95
1
10

¥     ———
71,942
—
—
6,422
—
14
—
1
10

More than two
years but within
three years¥     ———
71,268
—
—
5,333
—
1
—
—
10

More than three
years but withinfour years¥     ———
82,904—20,000
4,033
—
1
—
—
10

More than four
years but within
five years¥     ———
35,622
—
—
7,909
—
1
—
—
5

More than
five years

instruments held by the NSHD Group at the end of the fiscal year, if the yen appreciates by 1% against the U.S. dollar and euro, respectively,
at the end of the fiscal year.
This analysis is calculated by multiplying each exposure of currency risk by 1%. It is assumed that there is no impact of the fluctuation of eachexchange rate on other variables (foreign exchange rates of other currencies, interest rates, etc.).
(Millions of yen)

FYE2022(March 31, 2022)

U.S. dollar (1% appreciation of the yen)

FYE2021(March 31, 2021)

¥(28)

¥(41)

0

0

Euro (1% appreciation of the yen)(6) Interest rate risk
The NSHD Group’s interest rate risk arises from interest-bearing liabilities, net of cash equivalents, etc. Borrowings and corporate bonds that are
based on floating interest rates are exposed to interest rate fluctuation risk.
The NSHD Group hedges such risks by using derivative transactions (interest rate swaps) as necessary.
Interest rate sensitivity analysis
The following is the impact on profit before income taxes on the consolidated statement of profit or loss if the interest rate rises by 1% for financial
instruments held by the NSHD Group at the end of the fiscal year.
This analysis is intended for financial instruments impacted by fluctuations in interest rates, and it is assumed that other factors, such as the¥      ——
—350,638—
153,000
8,067
—
574
—
—
—

impact of exchange rate fluctuations, remain constant.
(Millions of yen)

FYE2022(March 31, 2022)

FYE2021(March 31, 2021)¥(2,806)

Profit before income taxes¥(2,890)(7) Risk of market price fluctuations
Securities, etc., held by the NSHD Group are exposed to the risk of market price fluctuations.
The NSHD Group periodically evaluates the fair value and the financial status of issuers (business partners) for securities, etc., and each supervising
department reviews the holding status taking into consideration the relationship with the business partners on an ongoing basis.
(8) Fair value of financial instruments
For fair value hierarchy of financial instruments, Level 1 to Level 3 is categorized as follows:
Level 1: Fair value measured by the unadjusted quoted prices in active markets of identical assets or liabilities
Level 2: Fair value calculated using observable prices directly or indirectly, other than Level 1
Level 3: Fair value calculated by valuation techniques including inputs not based on significant observable market data
Transfers between levels of financial instruments are determined at the end of each reporting period. In FYE2022, certain equity securities werereclassified from Level 3 to Level 1 since the issuers went public and are listed on regulated markets. There were no financial instruments withsignificant transfers between levels for FYE2021.

NIPPON SANSO HOLDINGS CORPORATION

39

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION40

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

1) Financial instruments measured at fair value on a recurring basis

2) Financial instruments measured at amortized cost

Financial instruments measured at fair value are as follows:

The carrying amount and fair value of financial instruments measured at amortized cost are as follows:

FYE2022 (March 31, 2022)

FYE2022 (March 31, 2022)(Millions of yen)

Level 1

Level 2

Level 3

(Millions of yen)

Total

Carrying amount

AssetsEquity securities and investments in capital¥35,038¥9,048¥44,086

—

672

—

672

¥35,038¥672¥9,048¥44,759

Derivative assets
Total

¥  —

Liabilities
Derivative liabilities¥     
—

¥ 84

¥    
—

¥    84¥     
—

¥ 84

¥    
—

¥    84

Level 1

Level 2

Level 3

Total

Liabilities
Long-term borrowings¥659,272¥—¥662,868

¥—

Bonds

197,440—

198,236—

198,236¥856,712¥—¥861,105¥—¥861,105

Total

Total

Fair value¥662,868

FYE2021 (March 31, 2021)(Millions of yen)

FYE2021 (March 31, 2021)

Carrying amount(Millions of yen)

Level 1

Level 2

Level 3

Total

¥31,504¥  —¥8,751¥40,256

—

255

—

255

¥31,504¥255¥8,751¥40,511¥     
—

¥146

¥    
—

¥   146¥     
—

¥146

¥    
—

¥   146

Derivative assets
Total
Liabilities
Derivative liabilities
Total

Level 1

Level 2

Level 3

Total

Liabilities

AssetsEquity securities and investments in capital

Fair value

Long-term borrowings¥691,978¥—¥703,285

¥—

Bonds

187,217—

189,126—

189,126¥879,195¥—¥892,411¥—¥892,411

Total¥703,285

For financial instruments measured at amortized cost other than long-term borrowings and bonds, their fair value reasonably approximates the
carrying amount.
Long-term borrowings
The fair value of long-term borrowings is calculated based on the present value calculated by discounting the total amount of principal and interest

Equity securities and investments in capitalby the interest rate assumed when similar borrowings are newly made.

The fair value of marketable equity securities categorized as Level 1 is based on unadjusted quoted prices in active markets of identical assets
or liabilities.
The fair value of unlisted stocks categorized as Level 3, for which quoted prices are not available in active markets, is calculated using the similar
company comparison method or other appropriate valuation techniques based on reasonably available inputs. In addition, certain illiquidity
discounts, etc., are considered as necessary.

Bonds
The fair value of bonds is calculated based on market price.
(9) Transfer of financial assets
At March 31, 2022 and 2021, for trade receivables transferred without meeting the requirements for derecognition of financial assets, ¥1,032

Derivative assets and liabilities
The fair value of derivative assets and derivative liabilities categorized as Level 2 is calculated based on observable inputs such as prices provided
by counterparty financial institutions or exchange rates and interest rates.

million and ¥1,771 million were included in “Trade receivables,” respectively, and the amounts received due to the transfer of ¥733 million and¥1,413 million were included in “Bonds and borrowings,” respectively. Of these trade receivables, it is determined that the NSHD Group holds
almost all of the risks and rewards related to ownership of the transferred assets, because it will assume the payment obligations if the issuer ofFor financial instruments categorized as Level 3, the evaluator determines the valuation techniques to measure each financial instrument
covered in accordance with valuation policies and procedures including valuation techniques to measure fair value approved by the appropriate

the notes or the debtor fails to make payment.

authorized person, and the fair value is calculated. The results are reviewed and approved by the appropriate authorized person.
Changes in financial instruments classified as Level 3 are as follows:(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Balance at beginning of the fiscal year

¥ 8,751¥8,202Other comprehensive income (Note)

7,635

597

Purchase

590

525

Sale

(14)

(32)

Change in scope of consolidation

(243)

(558)

Reclassification from Level 3
Other changes
Balance at end of the fiscal year

(7,675)—4

17¥ 9,048¥8,751

Note: This is included in “Financial assets measured at fair value through other comprehensive income” in the consolidated statement of comprehensive income.

NIPPON SANSO HOLDINGS CORPORATION

41

INTEGRATED REPORT 2022

NIPPON SANSO HOLDINGS CORPORATION42

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements(10) Derivative transactions

Amounts related to items designated as hedging instruments are as follows:

1) Derivative transactions for which hedge accounting is applied
FYE2022 (March 31, 2022)

Analysis of contract amounts, etc., of the hedging instruments by due date is as follows:(Millions of yen)

FYE2022 (March 31, 2022)

Contract
amounts, etc.

(Millions of yen)Contract
amounts, etc.

Cash flow hedges
Price risk
Commodity swaps
Currency risk
Forward exchange contracts
Hedges of net investments
Currency risk
Borrowings denominated inforeign currencies¥1,7052,125

More than one
year but within
two years

One yearor less¥1,705
1,389

85,437

—

¥ —
736

—

More than two
years but within
three years

¥—
—

—

More than three
years but withinfour years

More than four
years but within
five years

¥—

¥—

—

—

—

—

More than
five years—

85,437(Millions of yen)

Cash flow hedges
Price risk
Commodity swaps
Currency risk
Forward exchange contracts
Hedges of net investments
Currency risk
Borrowings denominated inforeign currencies

More than one
year but within
two years

One yearor lessMore than two
years but within
three years

More than three
years but withinfour years

More than four
years but within
five years¥   481

¥—

¥—

¥—

¥—

¥     —

3,639

3,639

—

—

—

—

—

—

—

—

—

—

81,125Major forward rates of foreign exchange contracts and major interest rates of interest rate swaps are as follows:
FYE2022(March 31, 2022)

Forward exchange contracts
Interest rate risk
Interest rate swaps
Hedges of net investments
Currency risk
Borrowings denominated inforeign currencies

Liabilities

FYE2021(March 31, 2021)

Cash flow hedges

Changes in fair value
Items on the consolidated
used to calculatestatement of financial position
ineffective portion ofhedges for the fiscal year

¥ 1,705¥630¥    —

Other financial assets¥   397

2,125

9

81

—

—

—

—

—

85,437—85,437

Bonds and borrowings(4,312)Other financial assets
Other financial liabilities

23

FYE2021 (March 31, 2021)(Millions of yen)More than
five years¥   481

81,125

Cash flow hedges
Price risk
Commodity swaps
Currency risk

Assets¥     —

FYE2021 (March 31, 2021)
Contract
amounts, etc.

Carrying amount

Carrying amountContract
amounts, etc.

Cash flow hedges
Price risk
Commodity swaps
Currency risk
Forward exchange contracts
Interest rate risk
Interest rate swaps
Hedges of net investments
Currency risk
Borrowings denominated inforeign currencies

AssetsLiabilities

Changes in fair value
Items on the consolidated
used to calculatestatement of financial position
ineffective portion ofhedges for the fiscal year¥   481¥232¥    —

Other financial assets¥   232

3,639

0

94

Other financial assets
Other financial liabilities

(121)

—

—

—

—

67

81,125—

81,125

Bonds and borrowings(6,406)

Amounts related to items designated as hedged items are as follows:

Currency risk

(Millions of yen)

Forward exchange contracts
U.S. dollar¥110.25–¥120.56¥103.77–¥109.70

Euro¥133.03–¥133.03¥127.12–¥129.15

FYE2022(March 31, 2022)

Cash flow hedges
Price risk
Planned purchase
Currency risk
Planned purchase
Interest rate risk
Interest on borrowings
Hedges of net investments
Currency risk
Effect of exchange ratechanges on net investments

NIPPON SANSO HOLDINGS CORPORATION43

INTEGRATED REPORT 2022

FYE2021(March 31, 2021)

Changes in fairvalue used to
calculate ineffective
portion of hedges
for the fiscal year

Cash flow hedge
reserves

Foreign currencytranslation
reserve

Changes in fairvalue used to
calculate ineffective
portion of hedges
for the fiscal year

Cash flow hedge
reserves

Foreign currencytranslation
reserve¥ (397)¥434¥    —¥ (232)¥158¥    —

(23)

(65)

—

121

(86)

—

—

—

—

(67)

—

—

4,312

—

(9,781)

6,406—(5,468)NIPPON SANSO HOLDINGS CORPORATION44

INTEGRATED REPORT 2022

Notes to Consolidated Financial Statements

Details of cash flow hedges are as follows:

34.

FYE2022 (From April 1, 2021 to March 31, 2022)(Millions of yen)

Changes in fair value
Items on theof hedging
consolidated
Ineffective portion of
instruments
statement of profit orhedges recognized inrecognized in otherloss that include
profit or loss
comprehensive
ineffective portion ofincomegain or loss on hedges

Cash flow hedges
Price risk
Commodity swaps
Currency risk
Forward exchange contracts
Interest rate risk
Interest rate swaps
Hedges of net investments
Currency risk
Borrowings denominated inforeign currencies

Reclassification
adjustments fromcash flow hedge
reserves to profit
or loss

Items on the
consolidated
statement of profit orloss that include gainor loss due toreclassification
adjustments¥   397¥—¥—¥(124)

Finance costs

23

—

—

7

Finance costs

—

—

—

—

—

Remuneration for major executives
Remuneration for the NSHD Group’s major executives is as follows:(Millions of yen)

FYE2022(From April 1, 2021
to March 31, 2022)

FYE2021(From April 1, 2020
to March 31, 2021)

Remuneration and bonuses

¥337

¥391

Total

¥337

¥391

35.

Commitments

Commitments on acquisition of property, plant and equipment and intangible assets are as follows:(Millions of yen)

FYE2022(March 31, 2022)(4,312)

—

—

—

—

FYE2021 (From April 1, 2020 to March 31, 2021)(Millions of yen)

Changes in fair value
Items on theof hedging
consolidated
Ineffective portion of
instruments
statement of profit orhedges recognized inrecognized in otherloss that include
profit or loss
comprehensive
ineffective portion ofincomegain or loss on hedges

Cash flow hedges
Price risk
Commodity swaps
Currency risk
Forward exchange contracts
Interest rate risk
Interest rate swaps
Hedges of net investments
Currency risk
Borrowings denominated inforeign currencies

Related Parties

Reclassification
adjustments fromcash flow hedge
reserves to profit
or loss

Items on the
consolidated
statement of profit orloss that include gainor loss due toreclassification
adjustments¥3,049Acquisition of property, plant and equipment and intangible assets

36.

¥—

¥—

¥(242)

Finance costs

(121)

—

—

(5)

Finance costs

67

—

—

—

—

Guaranteed obligations
Guarantees and quasi-guarantees for borrowings from financial institutions are as follows:(Millions of yen)

FYE2022(March 31, 2022)

—

—

—

—

FYE2021(March 31, 2021)¥   68¥   16

Associates

180

228

Other (Note)

788

947

¥1,037¥1,191

Total
Note: Other mainly consists of guarantees for employees’ bank loans based on the employees’ house ownership support system.

37.
(6,406)¥6,989Contingent Liabilities

Joint ventures¥   232

FYE2021(March 31, 2021)

Subsequent Events

Not applicable.

2) Derivative transactions for which hedge accounting is not applied
Amounts related to items not designated as hedging instruments are as follows:(Millions of yen)

FYE2022(March 31, 2022)
Contract amount, etc.

Forward exchange
contracts
Interest rate swaps
Currency swaps

33.

More than one year

FYE2021(March 31, 2021)
Fair value

Contract amount, etc.

More than one year

Fair value(2) Other
Quarterly information for FYE2022 (From April 1, 2021 to March 31, 2022)
First quarter of
FYE2022(Cumulative period)

¥   —
1,014
272

¥ 4
0
24

¥   767
1,274
364

¥ —
990
293

¥  0
(48)
20

¥447,374¥691,535

22,20245,026

68,991

91,611

Profit attributable to owners of parent (Millions of yen)

16,062

34,29150,136

64,103

Basic earnings per share (Yen)

37.12

79.24

115.85148.13First quarter¥37.12

Basic earnings per share (Yen)

Second quarter¥42.12For FYE2022 or FYE2021, there were no subsidiaries with individually significant non-controlling interests.

NIPPON SANSO HOLDINGS CORPORATION45

INTEGRATED REPORT 2022

FYE2022¥218,303(Quarterly period)

Subsidiaries

First three quarters of
FYE2022

Profit before income taxes (Millions of yen)

Revenue (Millions of yen)¥   6681,014
284First half of
FYE2022NIPPON SANSO HOLDINGS CORPORATION46

INTEGRATED REPORT 2022

Third quarter¥36.61¥957,169

Fourth quarter¥32.27

Independent Auditor’s Report

English Translation
Independent Auditor’s Report

Valuation of goodwill recorded at Nippon Gases Euro-Holding S.L.U.

June 17, 2022

The Board of Directors
Nippon Sanso Holdings Corporation
Ernst & Young ShinNihon LLC
Tokyo, Japan
Takao Maruyama
Designated Engagement Partner
Certified Public Accountant
Tetsuya Kawawaki
Designated Engagement Partner
Certified Public Accountant

OpinionWe have audited the accompanying consolidated financial statements of Nippon Sanso Holdings
Corporation (the Company) and its subsidiaries (collectively, the Group), which comprise theconsolidated statement of financial position as at March 31, 2022, and the consolidated statements
of profit or loss, comprehensive income, changes in equity, and cash flows for the year then ended,and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2022, and its
consolidated financial performance and its consolidated cash flows for the year then ended inaccordance with International Financial Reporting Standards (IFRSs).
Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on these matters.

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Description of Key Audit Matter

Auditor’s Response

The Company records goodwill andintangible assets with indefinite useful lives
at ¥486,441 million in its consolidated
statements of financial position as of March
31, 2022. Among which, goodwill at Nippon
Gases Euro-Holding S.L.U., a consolidated
subsidiary in Europe, is recorded at ¥334,278
million, approximately 16.9% of theCompany’s total assets. The assumptions
used in impairment tests of goodwill are
disclosed in Note 11 to the consolidated
financial statements.
In the impairment test, the Company
measures the recoverable amount of the
cash-generating unit including goodwill
based on value in use. The value in use ismeasured using discounted future cash
flows. The future cash flows are based on thefive-year
projections
approvedbymanagement. The cash flows after the fifth
year are estimated using a long-term growthrate (the “LTGR”) which considers future
uncertainties. The Company uses the pre-tax
discount rate that reflects current market
assessments of the time value of money andrisks specific to the asset.
The significant assumptions in estimating
the value in use are the growth rate used for
future cash flows for the five-year period, the
LTGR and the discount rate.
The impairment test of goodwill is complex
and the growth rate used for future cash
flows for the five-year period, the LTGR andthe discount rate involve uncertainty andthus determination of these assumptions
requires management to apply judgment.

We involved the component auditor andperformed the following procedures to assess
impairment test of goodwill, among others:-Valuation methodology
・ With the involvement of valuation specialistsof our network firm, we assessed theconsistency of the valuation methodology
with valuation methodologies that are
generally accepted in practice and that areused in similar circumstances.
- The future cash flows based on the five-year
projections
・ We assessed the future cash flows for the
five-year period by evaluating consistencyof the five-year projections approved bymanagement.
・ With the involvement of valuation
specialists of our network firm, we
compared the growth rate for the five-year
period with the forecasts of similar
companies by analysts and evaluated thereasonableness of the assumption.
・ In order to evaluate the effectiveness ofmanagement’s projection process, we
compared the actual results with theestimated future cash flows the Company
applied in its impairment test of goodwill
in prior year.
- LTGR and discount rate
・ With the involvement of valuation
specialists of our network firm, we assessed
the consistency of the input data of the
LTGR and the discount rate with publicly
available data.
Further, as the audit of the goodwill ・ We independently performed sensitivity
impairment test required us to apply
analyses for the LTGR and the discount rateand compared them with the analyses
professional judgment, we determined it toperformed by management.
be a key audit matter.
Other Information
The other information comprises the information included in the annual report (Yukashoken
Hokokusho) that contains audited consolidated financial statements but does not include theconsolidated financial statements and our auditor’s report thereon. Management is responsible forpreparation and disclosure of the other information. The Corporate Auditor and the Audit &Supervisory Board are responsible for overseeing the Group’s reporting process of the otherinformation.

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Independent Auditor’s Report

Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to readthe other information and, in doing so, consider whether the other information is materiallyinconsistent with the consolidated financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management, the Corporate Auditor and the Audit & Supervisory
Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with IFRSs, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as required by IFRSs, mattersrelated to going concern.
The Corporate Auditor and the Audit & Supervisory Board are responsible for overseeing theGroup’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and toissue an auditor’s report that includes our opinion. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the consolidated financial statements is not expressing an opinion on the effectiveness of theGroup’s internal control.

・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation inaccordance with IFRSs.
・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the groupaudit. We remain solely responsible for our audit opinion.
We communicate with the Corporate Auditor and the Audit & Supervisory Board regarding,among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide the Corporate Auditor and the Audit & Supervisory Board with a statement that
we have complied with the ethical requirements regarding independence that are relevant to our
audit of the consolidated financial statements in Japan, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.
From the matters communicated with the Corporate Auditor and the Audit & Supervisory Board,
we determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not be communicatedin our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.

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

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NIPPON SANSO HOLDINGS CORPORATION

50INTEGRATED REPORT 2022