Disclaimer: This document is an English translation of the original Japanese document and has been preparedfor reference purposes only. In the event of any discrepancy between the English translation andthe original Japanese document, the latter shall prevail.

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2023
[Japanese GAAP]May 9, 2023
Company name: PACIFIC METALS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 5541
URL: https://www.pacific-metals.co.jp/en/
Representative: Masayuki Aoyama, President and Representative Director
Contact: Terunobu Matsusyama, Managing Executive Officer and Director
Phone: +81-3-3201-6681
Scheduled date of Annual General Shareholders Meeting: June 27, 2023
Scheduled date of filing securities report: June 27, 2023
Scheduled date of commencing dividend payments: –Availability of supplementary briefing materials on financial results: Not available
Schedule of financial results briefing session: Scheduled (for analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (April 1, 2022 - March 31, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Fiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
March 31, 2023
34,852 (39.0)(12,588)–(4,960)–(5,026)–
March 31, 2022
57,12977.3
4,806–
12,999288.6
11,368877.8(Note) Comprehensive income: Fiscal year ended March 31, 2023: ¥(5,095) million [–%]
Fiscal year ended March 31, 2022: ¥13,921 million [285.9%]
Basic earnings
per share

Diluted earnings
Ordinary profit to Operating profit to
Return on equity
per share
total assets
net sales

Fiscal year ended
Yen
Yen
%
March 31, 2023
(257.75)–(6.6)
March 31, 2022
582.93–
15.5(Reference) Share of profit of entities accounted for using equity method:
Fiscal year ended March 31, 2023: ¥7,066 million
Fiscal year ended March 31, 2022: ¥6,483 million(2) Consolidated Financial Position
Total assets

Net assets

Million yen

78,825
As of March 31, 2023
89,852As of March 31, 2022
(Reference) Equity: As of March 31, 2023: ¥71,746 million
As of March 31, 2022: ¥79,866 million

%

%

(5.9)
15.7

(36.1)
8.4

Equity ratio

Net assets per share

Million yen%

Yen

72,03480,15391.0
88.9

3,678.90
4,095.12

(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at endof period

Million yen

Million yen

Million yen

Million yen(7,516)
7,857

974(2,909)(3,006)(785)

17,24826,631

Fiscal year ended
March 31, 2023
March 31, 2022
2. Dividends
1stquarterend
Fiscal year ended
March 31, 2022
Fiscal year ending
March 31, 2023
Fiscal year ending
March 31, 2024
(Forecast)

Annual dividends
2nd
3rd
Yearquarterquarterend
end
end

Total

Total
dividends(annual)Payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

–

20.00

–

155.00175.00

3,412

30.0

4.7

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

0.00

0.00

–

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 March 31, 2024)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentFirst half
Full year

Million yen%

8,910 (49.5)
20,899 (40.0)

Million yen(4,198)(7,299)%––Million yen(2,937)(4,569)%––Million yen(2,961)(4,778)

%

–
–

Yen

(151.83)(245.00)

* Notes:(1) Changes in significant subsidiaries during the period under review(Changes in specified subsidiaries resulting in changes in scope of consolidation): None
Newly included: – (), Excluded: – ()(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Total number of shares issued and outstanding (common stock)1) Total number of shares issued and outstanding at the end of the period (including treasury shares):
March 31, 2023:
19,577,071 shares
March 31, 2022:
19,577,071 shares2) Total number of treasury shares at the end of the period:
March 31, 2023:
75,035 shares
March 31, 2022:
74,341 shares
3) Average number of shares during the period:
Fiscal year ended March 31, 2023:
Fiscal year ended March 31, 2022:

19,502,385 shares
19,503,002 shares(Reference) Outline of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (April 1, 2022 to March 31,2023)(1) Non-consolidated Operating Results(% indicates changes from the previous corresponding period.)
Operating profit
Net sales
Ordinary profit
Profit(loss)
Fiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
March 31, 2023
34,095 (39.7)(12,564)–(7,261)–(7,098)–March 31, 2022
56,52778.9
4,776–
12,783290.6
11,159948.7
Basic earnings
per share
Fiscal year ended
March 31, 2023
March 31, 2022

Diluted earnings
per share
Yen

Yen(364.01)
572.17––(2) Non-consolidated Financial Position
Total assets
Million yen

Net assets

Equity ratio

Net assets per share

Million yen%

Yen

61,68955,411
As of March 31, 2023
75,797
66,325
As of March 31, 2022
(Reference) Equity: As of March 31, 2023: ¥55,411 million
As of March 31, 2022: ¥66,325 million

89.8
87.5

2,841.32
3,400.85(Reasons for differences between non-consolidated business results and actual results for the previous fiscal year)
In the stainless steel industry, the primary source of demand for the nickel business, capacity utilization rates of
production facilities started to vary. The Company’s ferronickel sales volume was planned modestly due to theimpact of production decrease caused by the electric furnace molten material leakage incident that occurred in oneof the three furnaces in the ferronickel manufacturing facilities just before the end of the previous fiscal year. In

addition, the Company changed its policy with the objective of strategically controlling volume to a certain levelso as not to impair profitability because overseas producers of stainless steel are shifting some of their procurement
to nickel pig iron, which has a price advantage, even including with respect to production costs, and the price ofnickel pig iron is also affecting the selling price of the Company’s products. As a result, net sales decreased.
Ordinary loss was recorded due mainly to the decrease in net sales, despite recording of dividend income fromequity-method affiliates, and net loss was also recorded.

* These financial results are outside the scope of audit by certified public accountants or an audit firm.
* Explanation on the proper use of financial results forecast and other notes(Cautionary statement regarding forward-looking statements)
The forward-looking statements including the financial results forecast contained herein are based on information
currently available to the Company, as well as certain assumptions deemed reasonable by the Company. As such,
the Company does not intend to guarantee the achievement of these forecasts. In addition, actual results may differ
significantly from these forecasts due to various factors. For preconditions for the financial results forecast andprecautions when using the financial results forecast, please see “(4) Future Outlook” under “1. Overview ofOperating Results, etc.” on page 7.

Table of Contents – Attachments
1. Overview of Operating Results, etc. ..................................................................................................... 2(1) Overview of Operating Results for the Fiscal Year under Review ..................................................... 2(2) Overview of Financial Position for the Fiscal Year under Review ..................................................... 5(3) Overview of Cash Flows for the Fiscal Year under Review ............................................................... 6(4) Future Outlook................................................................................................................................. 7
2. Management Policy ............................................................................................................................. 8(1) Medium- to Long-term Management Strategy of the Company ........................................................ 8
3. Basic Policy on Selection of Accounting Standards .............................................................................. 8
4. Consolidated Financial Statements and Key Notes ............................................................................... 9(1) Consolidated Balance Sheets ............................................................................................................ 9(2) Consolidated Statements of Income and Comprehensive Income .................................................... 11(3) Consolidated Statements of Changes in Equity ............................................................................... 13(4) Consolidated Statements of Cash Flows ......................................................................................... 15(5) Notes to Consolidated Financial Statements ................................................................................... 16(Notes on going concern assumption) ........................................................................................ 16(Segment information, etc.) ....................................................................................................... 16(Per share information) .............................................................................................................. 21(Significant subsequent events) ................................................................................................. 21

1

1. Overview of Operating Results, etc.
(1) Overview of Operating Results for the Fiscal Year under Review
During the fiscal year ended March 31, 2023, the Japanese economy saw a pickup in corporate earnings,
personal consumption, and other factors, though it was influenced by the trend in COVID-19. There was arecovery trend with weakness seen in the Japanese economy, as the simultaneous occurrence of the highresource prices and the appreciation of the U.S. dollar affected business activities etc.
As for overseas economies, although there was steady performance in the employment and income
environment in general, certain areas of the economic recovery appear to have come to something of astandstill due primarily to the impact of concerns about financial and capital market fluctuations, the prolonged
situation in Ukraine, and concerns about economic slowdown driven by accelerating inflation.
Under these circumstances, in the stainless steel industry, the primary source of demand for the nickel
business that accounts for the majority of the Group’s sales and profit and loss, demand trended to recover inline with trends towards the normalization of economic activities. In China, although there is an expectation fora recovery in demand for stainless steel, the signs of such a recovery have not yet manifested. This, along with
the impact of China’s COVID policy, the sluggish real estate market in China, concerns about the prolonged
situation in Ukraine, and other factors meant that there was increasing uncertainty in the market condition, withcapacity utilization rates of production facilities starting to vary.
As a result, the demand for ferronickel showed slowdown.
On the procurement front, prices of nickel ore, the primary raw material for ferronickel products, haveremained high against the backdrop primarily of the impact of Indonesia’s unprocessed ore export ban and arobust demand for nickel ore. Moreover, prices of raw materials and fuel as well as of electricity rose sharply
due to the steep rise in resource prices globally, resulting in acceleration of the rate of the increase inproduction costs.
Nickel prices on the London Metal Exchange (LME) were at a relatively high level. However, in addition
to the impact of financial and capital market fluctuations, complex factors related to the situation in Ukraine,and unstable prices of crude oil and other commodities, there were also concerns about an economic slowdown
due to accelerating inflation, and prices remained directionless.
In this situation, the Company’s ferronickel sales volume was planned modestly due to the impact of
production decrease caused by the electric furnace molten material leakage incident that occurred in one of thethree furnaces in the ferronickel manufacturing facilities just before the end of the previous fiscal year. In
addition, the Company changed its policy with the objective of strategically controlling volume to a certain
level so as not to impair profitability, in view of the easing of the nickel supply-demand balance and because
overseas producers of stainless steel are shifting some of their procurement to nickel pig iron, which has a priceadvantage, even including with respect to production costs, and the price of nickel pig iron is also affecting theselling price of the Company’s products. As a result, the ferronickel sales volume decreased by 54.2% year on
year as a whole due to a decrease in both domestic and overseas sales.
The ferronickel production volume decreased year on year due to the impact of the electric furnace moltenmaterial leakage incident. Regarding the affected unit of the production facilities, its restoration and planned
resumption of operations is expected to be in the next fiscal year; however, the Company will resume operationof the said electric furnace only once the volume control policy is lifted while also keeping a close eye on thebusiness environment
The selling price of ferronickel products increased compared to the previous fiscal year as the LME nickel
price applicable to the Company increased by 32.2% year on year and the average exchange rate of Japanese
yen against U.S. dollar applicable to the Company was 21.1% weaker year on year. On the other hand, as
mentioned previously, the Company also refers to the price of nickel pig iron in addition to the applicable LME
nickel price and the applicable exchange rate when setting the selling price of the Company’s products, andthus the selling environment has rapidly changed into a difficult one with stagnant revenue growth.
Despite the rapidly evolving business environment and expectations that the COVID-19 pandemic and thesituation in Ukraine will continue on as mentioned above, the Company continues to implement measures in2

response to the highly uncertain business environment. To further strengthen its earnings base, the Company isstriving to thoroughly focus on the profitability of orders, thereby building a flexible production and sales
system. Furthermore, the Company continues its efforts to improve business performance and stabilize
earnings through measures such as the early realization of overseas business development and new minedevelopment as well as reinforcement of operational efficiency improvement measures to pursue cost
minimization.
As a result, consolidated net sales for the fiscal year under review decreased by 39.0% year on year to¥34,852 million. On the profit front, the Company posted operating loss of ¥12,588 million (compared with
operating profit of ¥4,806 million for the previous fiscal year), owing to an increase in cost of sales due to an
inventory write down following a downturn in profitability, on top of the decrease in net sales, and ordinary
loss was ¥4,960 million (compared with ordinary profit of ¥12,999 million for the previous fiscal year),reflecting the recording of ¥7,066 million in share of profit of entities accounted for using equity method under
non-operating income. Loss attributable to owners of parent was ¥5,026 million (compared with profit
attributable owners of parent of ¥11,368 million for the previous fiscal year) following the recording of a bonus
incentive reward for reducing power consumption through participation in a winter-time power-saving
campaign of our power supplier under extraordinary income and the costs for restoration after the electric
furnace molten material leakage incident under extraordinary loss.
Operating results by business segment are as follows.
(i) Nickel business
The operating results of the nickel business are described in “(1) Overview of Operating Results.”
As a result, net sales in this segment decreased by 39.4% year on year to ¥34,135 million with operating
loss of ¥12,441 million (compared with operating profit of ¥4,950 million for the previous fiscal year).
(ii) Gas businessIn the gas business, despite the recording of costs associated with facility repair, the Company maintained
a stable operation, with this segment recording a profit.
As a result, net sales in this segment increased by 34.4% year on year to ¥774 million with operating
profit of ¥4 million (compared with operating loss of ¥10 million for the previous fiscal year).
(iii) Other
The segment of other businesses recorded a loss. The real estate business had few sales, and the waste
recycling business’s order-taking was sluggish.
As a result, net sales in this segment decreased by 88.0% year on year to ¥38 million with operating lossof ¥160 million (compared with operating loss of ¥142 million for the previous fiscal year).
Further, we have withdrawn from the waste recycling business as we did not expect that it would become
profitable in future. Moving forward, we will consider a business in which new recycled resources are used as
raw materials through use of the manufacturing equipment from said waste recycling business.

3

Operating profit(loss)

Ordinary profit(loss)

Profit (loss)
attributable toowners of parent

57,1294,806

12,99911,36834,852(12,588)(4,960)(5,026)(39.0)–––Net sales
Fiscal year ended March 31, 2022
(Million yen)
Fiscal year ended March 31, 2023
(Million yen)
Change (%)

Sales volume (t)1st half

Production volume (t)2nd half

Full year

1st half

2nd half

Full year

Fiscal year ended March 31, 2022

12,957

14,10327,06011,874

14,37526,249Fiscal year ended March 31, 2023

5,668

6,725

12,393

8,079

5,301

13,380Applicable LME nickel price ($/lb)

Applicable exchange rate (¥/$)

1st half

1st half

2nd half

Full year

2nd half

Full year

Fiscal year ended March 31, 2022

8.12

9.33

8.75

109.16113.97111.67

Fiscal year ended March 31, 2023

12.12

11.11

11.57

131.49138.44135.264

(2) Overview of Financial Position for the Fiscal Year under Review
Assets, liabilities, and net assets of the Group as of March 31, 2023 are as follows.
Total assets decreased by ¥11,027 million from the end of the previous fiscal year to ¥78,825 million.
Current assets decreased by ¥13,634 million from the end of the previous fiscal year mainly due to adecrease in cash and deposits resulting from the settlement of merchandise and finished goods, despite anincrease in merchandise and finished goods and other items impacted by the maintenance of planned inventory
quantity and an increase in raw material and fuel prices.
Non-current assets increased by ¥2,607 million from the end of the previous fiscal year mainly due to anincrease in property, plant and equipment resulting from investment in maintenance/replacement and anincrease in investment securities resulting from an increase in share of profit of entities accounted for using
equity method. Investment securities held by the Company amounting to ¥25,518 million consisted mainly of¥16,249 million in the amount reflected in the consolidated balance sheet of shares of entities accounted forusing equity method, ¥2,378 million in shares of subsidiaries and associates, and ¥6,324 million in shares of
Nickel Asia Corporation, a holding company of the Company’s equity-method affiliates listed on thePhilippine Stock Exchange.
Total liabilities decreased by ¥2,907 million from the end of the previous fiscal year to ¥6,791 million.
Current liabilities decreased by ¥2,969 million from the end of the previous fiscal year primarily owing to
a decrease in income taxes payable in line with the payment of income taxes and other factors.
Non-current liabilities increased by ¥62 million from the end of the previous fiscal year mainly due to anincrease in provision for costs of restoration, which is an estimated amount allocated for restoration works for
those production facilities which had been suspended following the electric furnace molten material leakage
incident.
Total net assets decreased by ¥8,119 million from the end of the previous fiscal year to ¥72,034 million.
Shareholders’ equity decreased by ¥8,501 million resulting from the recording of loss, the payment ofdividends, and other factors. Accumulated other comprehensive income decreased by ¥68 million resulting
from a decrease in valuation difference on available-for-sale securities. Non-controlling interests increased by¥0 million.

5(3) Overview of Cash Flows for the Fiscal Year under Review
Net cash used in operating activities amounted to ¥7,516 million, a ¥15,374 million increase in cash
outflow compared with the previous fiscal year. Main items for cash inflow were decrease (increase) in tradereceivables amounting to ¥7,400 million and interest and dividends received amounting to ¥5,229 million.
Main items for cash outflow were loss before income taxes amounting to ¥4,287 million and share of profit ofentities accounted for using equity method amounting to ¥7,066 million.
Net cash provided by investing activities amounted to ¥974 million, an increase of ¥3,884 million
compared with the previous fiscal year. The main items for cash inflow were proceeds from redemption of
securities amounting to ¥1,600 million and proceeds from sale of investment securities amounting to ¥527
million. The main item for cash outflow was purchase of property, plant and equipment amounting to ¥942
million.
Net cash used in financing activities amounted to ¥3,006 million, mainly due to dividends paid, a ¥2,220
million increase in cash outflow compared with the previous fiscal year.
Net increase (decrease) in cash and cash equivalents decreased by ¥13,728 million compared with thefigure for the previous fiscal year.
As a result, cash and cash equivalents at end of period amounted to ¥17,248 million, a decrease of ¥9,383
million compared with the previous fiscal year.
The table below shows trends in cash flow indicators on a consolidated basis.
Fiscal year
Fiscal year
Fiscal year
Fiscal year
ended March ended March ended March ended March
31, 2019
31, 2020
31, 2021
31, 2022
Equity ratio (%)
Equity ratio at market value(%)
Ratio of interest-bearing debt
to cash flows (year)
Interest coverage ratio (times)

Fiscal year
ended March
31, 2023

89.3

90.4

88.4

88.9

91.0

73.0

43.8

55.4

89.6

47.7

0.0

–

0.0

0.0

–

571.9

–

13,702.1

33,918.9–

Equity ratio: Shareholders’ equity / Total assets
Equity ratio at market value: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flows: Interest-bearing debt / Cash flows
Interest coverage ratio: Cash flows / Interest expenses(Notes) 1. The consolidated financial figures constitute the basis for calculating these indicators.
2. Market capitalization is calculated based on the number of shares issued and outstanding
excluding treasury shares.
3. The cash flows used for calculation are operating cash flows.
4. Interest-bearing debt includes all debts recorded on the consolidated balance sheets on whichinterest is paid.
5. Figures of the ratio of interest-bearing debt to cash flows and the interest coverage ratio for the
fiscal year ended March 31, 2010 and for the fiscal year ended March 31, 2023 are not indicatedbecause operating cash flows were negative.

6

(4) Future Outlook
With regard to the consolidated financial forecast, the economic outlook remains highly uncertain as
global inflation, the situation regarding the financial and capital market, COVID-19 and the situation in
Ukraine continue to affect the domestic and overseas economies.
On the volume front, in view of the easing of the nickel supply-demand balance and with producers of
stainless steel shifting some of their procurement to nickel pig iron, which has a price advantage, even
including with respect to production costs, and with the price of nickel pig iron also affecting the selling priceof the Company’s products, our forecast is for a harsh environment. Continuing on from the previous year, we
expect to implement a strategic volume control policy, with which achieving a certain degree of profitability
should not be hampered.
In terms of losses on the selling price front and as described earlier, the Company refers to the price ofnickel pig iron in addition to the applicable LME nickel price and the applicable exchange rate when setting
the selling price of the Company’s products. On the procurement price front, the prices of raw materials andfuel as well as of electricity are at high levels owing to the high price of nickel ore, the primary raw material
for ferronickel products, and the steep rise in resource prices globally. Accordingly, a significant impact on theprice front is expected.
Although the impacts of COVID-19 and the situation in Ukraine are expected to continue in the next
fiscal year, response measures to address such business environment are consistent with activities to beundertaken under the basic policies set forth in the Group’s Medium-term Management Plan, and the Company
will continue to strongly push forward with these measures.
The Group’s financial results forecast is follows.
Operating profit

Ordinary profit

Profit attributable toowners of parent

20,899(7,299)(4,569)(4,778)34,852(12,588)(4,960)(5,026)(40.0)–––Net sales
Forecast for the fiscal year ending
March 31, 2024 (Million yen)
Results for the fiscal year ended
March 31, 2023 (Million yen)
Change (%)[Reference] Results for the fiscal year ended March 31, 2023 and underlying assumptions for the forecast for the
fiscal year ending March 31, 2024 are as follows.
Sales volume (T/Y)
Production volume (T/Y)
1st half
2nd half
Full year
1st half
2nd half
Full year
Forecast for the fiscal year ending
3,450
4,750
8,200
3,543
3,540
7,083
March 31, 2024
Results for the fiscal year ended
5,668
6,725
12,393
8,079
5,301
13,380March 31, 2023

Forecast for the fiscal year ending
March 31, 2024
Results for the fiscal year ended
March 31, 2023

Applicable LME nickel price ($/lb)

Applicable exchange rate (¥/$)

1st half

1st half

2nd half

Full year

10.68

10.00

10.29

12.12

11.11

11.57

7

2nd half

Full year

134.06134.10134.08131.49138.44135.26

2. Management Policy(1) Medium- to Long-term Management Strategy of the Company
In order to establish a management platform capable of responding to changes in the businessenvironment and to achieve continuous growth, we established the long-term vision, “Become a world-classferronickel manufacturer with comprehensive power,” and endeavored to achieve this long-term vision.
However, the business environment surrounding the Company has become increasingly severe due to thematerialization of resource nationalism in the nickel ore-producing countries, changes in the market structureof mainstay products, and other factors. The situation is unpredictable due to soaring resource and energy
prices, etc., caused by the tense situation in Ukraine.
In this business environment, having positioned further strengthening of the platform, contributing to theSDGs, and becoming carbon neutral as important issues for the Company, we aim to evolve as a sustainable
company by building and developing a business structure based on problem-solving.
Based on the above, we have set forth a new long-term vision, “A comprehensive materials company thatco-creates a sustainable, recycling-oriented society,” and have formulated a medium-term business plan
covering the period from FY2022 to FY2024 (hereinafter, PAMCO-2024) to realize this vision.
(1) Long-term vision: “A comprehensive materials company that co-creates a sustainable, recyclingoriented society”(2) Theme of PAMCO-2024: “Further strengthen the platform and promote the sustainability strategy”(3) Materiality and Priority Measures (1) to 9))—Contribute to the achievement of the SDGs through the resolution of material issues—
Restructuring of ferronickel production and sales systems with emphasis on profitability
1) Establishment of optimal production system by reviewing production strategy
2) Strengthening of cost competitiveness by reviewing procurement strategy
Acceleration of consideration of expansion into overseas smelting business3) Promotion of overseas smelting projects and start-up of production
Creation of new businesses that contribute to society4) Promotion of production and sales of raw materials for LIB materials
Diversification of business in Japan to contribute to a recycling-oriented society5) Restructuring of recycling business
Enhancement of corporate value by addressing sustainability issues6) Sustainability Promotion Council—Promotion of medium- and long-term initiatives related to material sustainability issues—7) Reduction of GHG emissions
8) Promotion of symbiosis by contributing to the development of regions and resource-richcountries
9) Promotion of constructive dialogue with stakeholders

3. Basic Policy on Selection of Accounting Standards
The Group intends to prepare consolidated financial statements in conformity with the generally accepted
accounting principles in Japan (Japanese GAAP) for the time being, taking into consideration comparability ofconsolidated financial statements over time and comparability among companies.
With regard to adoption of the International Financial Reporting Standards (IFRS), the Group intends tomake an appropriate response, taking into consideration situations in Japan and abroad.

8

4. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheets(Million yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

9

As of March 31, 2023

26,332
13,994
2,999
5,649
453
5,587
2,867
(2)
57,882

16,848
6,593
1,500
8,204
361
5,836
4,904
(1)
44,247

16,420(13,827)
2,592
55,930(55,814)
115
4,777
723
(474)
248
7,734
1

16,452(14,028)
2,424
56,527(55,674)
852
4,777
806
(477)
329
8,383
239

23,903–336(5)24,234
31,97089,85225,518198
243(5)25,95434,57778,825

(Million yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Accrued expenses
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Retirement benefit liability
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for environmental measures
Provision for loss on litigation
Provision for loss contract
Provision of restoration cost
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

10

As of March 31, 2023

1,341
1,761
1,026
444
935
5,508

760
1,018
7
95
657
2,539

122
2,077
631
5
34
1,306
–
11
4,190
9,699

50
2,087
631
11
–
1,273
187
10
4,252
6,791

13,922
3,481
58,590(450)
75,542

13,922
3,481
50,540(452)
67,491

4,603
593
(969)
95
4,323
287
80,15389,852

3,831
593
(510)
340
4,254
287
72,03478,825

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Million yen)
For the fiscal year ended
March 31, 2022
Net sales
Cost of sales
Gross profit (loss)
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Rental income from real estate
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Rental expenses on facilities
Commitment fees
Commission for syndicated loans
Foreign withholding tax
Provision for environmental measures
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Received incentive
Total extraordinary income
Extraordinary losses
Impairment losses
Loss on retirement of non-current assets
Loss on retirement of inventories
Restoration expenses on facilities
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

11

For the fiscal year ended
March 31, 2023

57,12948,962
8,167

34,85245,144（10,292）

1,665
1,694
3,360
4,806

852
1,443
2,296
(12,588)

8
418
103

13
459
103

6,483

7,066

1,311
135
8,461

–
160
7,803

0
–
20
27
90
58
–
70
268
12,999

0
4
18
26
4
64
34
22
175
(4,960)

0
192
–
192

0
386
854
1,241

317
78
–
–
396
12,795
1,462
(46)
1,415
11,37910
11,368

–
115
34
418
567
(4,287)501
237
739(5,026)0(5,026)

Consolidated Statements of Comprehensive Income(Million yen)
For the fiscal year ended
March 31, 2022
Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

12

For the fiscal year ended
March 31, 2023

11,379(5,026)

1,932
37
349

(790)
–
101

222

620

2,541
13,921(68)(5,095)

13,910(5,095)100

(3) Consolidated Statements of Changes in Equity
Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Million yen)
Shareholders’ equity
Share capital
Balance at beginning of period
Changes during period
Dividends of surplus
Profit (loss) attributable to ownersof parent
Purchase of treasury shares
Reversal of revaluation reserve
for landNet changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Retainedearnings

Capital surplus

13,922

3,481

Treasury shares

47,950

(449)

Total
shareholders’equity64,903

(780)

(780)

11,36811,368
(1)

(1)

51

–
13,922–
3,481

10,64058,590

51

(1)
(450)

10,63875,542

Accumulated other comprehensive income
Valuation
Deferred gains
difference on
Revaluation
or losses onavailable-forreserve for land
hedgessale securities

Balance at beginningof period
Changes during
periodDividends ofsurplusProfit (loss)
attributable toowners of parent
Purchase oftreasury shares
Reversal ofrevaluation reserve
for landNet changes in
items other thanshareholders’ equity
Total changes during
periodBalance at end of
period

2,659

(37)

644

Foreigncurrencytranslation
adjustment(1,108)

Total
NonRemeasurements accumulated controlling Total net
assetsof defined
otherinterests
benefit plans comprehensive
income

(325)

1,833

276

67,014(780)
11,368
(1)
51
1,944

37

(51)

139

420

2,490

10

2,500

1,944

37

(51)

139

420

2,490

10

13,139

4,603

–

593

(969)

95

4,323

287

80,15313

Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(Million yen)
Shareholders’ equity
Share capital
Balance at beginning of period
Changes during period
Dividends of surplus
Profit (loss) attributable to ownersof parent
Purchase of treasury shares
Reversal of revaluation reserve
for landNet changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Retainedearnings

Capital surplus

13,922

3,481

Treasury shares

58,590

(450)

Total
shareholders’equity75,542(3,022)(3,022)(5,026)(5,026)
(1)

(1)
–

–
13,922–
3,481(8,049)50,540(1)(452)(8,051)
67,491

Accumulated other comprehensive income
Valuation
Deferred gains
difference on
Revaluation
or losses onavailable-forreserve for land
hedgessale securities

Balance at beginningof period
Changes during
periodDividends ofsurplusProfit (loss)
attributable toowners of parent
Purchase oftreasury shares
Reversal ofrevaluation reserve
for landNet changes in
items other thanshareholders’ equity
Total changes during
periodBalance at end of
period

4,603

–

593

Foreigncurrencytranslation
adjustment

(969)

Total
NonRemeasurements accumulated controlling Total net
assetsof defined
otherinterests
benefit plans comprehensive
income

95

4,323

287

80,153(3,022)(5,026)
(1)
–
(772)

–

–

458

245

(68)

0

(68)

(772)

–

–

458

245

(68)

0

(8,119)

3,831

–

593

(510)

340

4,254

287

72,03414

(4) Consolidated Statements of Cash Flows(Million yen)
For the fiscal year ended
March 31, 2022
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Impairment losses
Interest and dividend income
Share of loss (profit) of entities accounted for using equity
methodLoss on retirement of property, plant and equipment
Loss on retirement of inventories
Received incentive
Loss (gain) on sale of investment securities
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in advance payments to suppliers
Decrease (increase) in consumption taxes refund
receivable
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes
Increase (decrease) in provision for bonuses
Increase (decrease) in provision of restoration cost
Increase (decrease) in accrued expenses
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Increase (decrease) in provision for loss contract
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of securities
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of property, plant and equipment
Proceeds from redemption of securities
Purchase of intangible assets
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

15

For the fiscal year ended
March 31, 2023

12,795
256
317
(427)

(4,287)
289
–
(472)

(6,483)(7,066)

78
–
–
(192)
(6,114)
592
319

115
34
(854)
(386)
7,400
(2,711)612

79(1,477)

(233)
156
186
–
634
(100)
–
(70)
(0)
(4)
1,788
6,744
(0)
(674)
7,857

(580)
(239)
(348)
187
(743)
(107)
(90)
(33)
(2)
(707)
(11,472)
5,229–(1,273)(7,516)(500)(1,126)225(1,427)–(6)(73)(2,909)

–
–
527
(942)
1,600
(129)
(80)
974

(781)
(3)
(785)
182
4,345
22,286
26,631(3,000)(5)(3,006)164(9,383)
26,631
17,248(5) Notes to Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.

(Segment information, etc.)[Segment information]
1. Overview of reportable segments
The Company’s reportable segments are components of the Company for which separate financial
information is available and which are subject to periodic review by the Board of Directors in order todetermine the allocation of management resources and evaluate their performance.
The Company mainly produces and sells ferronickel products. For product production, a manufacturing
division, which forms the basis of the product production system, is located at the Hachinohe Head Office, andfor product sales, a sales division spanning the Hachinohe Head Office and the Tokyo Head Office is
responsible for formulating comprehensive sales strategies and conducting business development in Japan andabroad.
In addition, gases used in the product manufacturing process at the Hachinohe Head Office are purchasedfrom Pacific Gas Center Co., Ltd., which operates the gas business.
Therefore, the Company is composed of segments by product based on production and sales systems, with“nickel business” and “gas business” as reportable segments.
2. The method of calculating net sales, profit or loss, assets, liabilities, and other items by reportable segment
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Million yen)
Reportable segment
Other(Note 1)

Total

Amountrecorded in
Adjustment Consolidated(Note 2) Statementsof Income(Note 3)

NickelbusinessGasbusiness

Net sales to outside
customers
Intersegment sales ortransfer

56,338466

56,805324

57,129

0

109

109

─

109

(109)

─

Total

56,338576

56,915324

57,239(109)

57,129Segment profit (loss)

4,950

(10)

4,940

(142)

4,797

9

4,806

Segment assets

86,237568

86,806

3,106

89,913(60)

89,852

Depreciation andamortization

222

24

247

9

256

─

256

Impairment loss

317

─

317

─

317

─

317

15,430─

15,430339

15,770─

15,770

649

35

685

1

686

─

686

Total

Net sales─ 57,129

Other items

Investment in entities
accounted for using equity
methodIncrease in property, plantand equipment andintangible assets

16Notes:1.

“Other” corresponds to business segments, etc. that are not included in the reportablesegments and comprises the real estate business and the waste recycling business.
2. Adjustments are as follows.
(1) Adjustment to segment profit (loss) of ¥9 million includes intersegment elimination of ¥9million and other adjustments of ¥0 million.
(2) Adjustment of segment assets of ¥(60) million is intersegment elimination.
3. Segment profit (loss) is adjusted with operating loss in the consolidated statements ofincome.

For the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(Million yen)
Reportable segment
Other(Note 1)

Total

Amountrecorded in
Adjustment Consolidated(Note 2) Statementsof Income(Note 3)

NickelbusinessGasbusiness

34,135677

34,81338

34,852

─

0

97

97

─

97

(97)

─

Total

34,135774

34,91038

34,949(97)

34,852

Segment profit (loss)(12,441)4(12,437)(160)(12,597)9(12,588)

Segment assets

75,778597

76,376

2,527

78,904(78)

78,825Total

Net sales
Net sales to outside
customers
Intersegment sales ortransfer─ 34,852

Other items
Depreciation and
258
24
282
7
289
─
289
amortization
Investment in entities
accounted for using equity
18,250─
18,250355
18,606
─
18,606
methodIncrease in property, plantand equipment and
1,169
29
1,198
2
1,201
─
1,201
intangible assets
Notes: 1. “Other” corresponds to business segments, etc. that are not included in the reportablesegments and comprises the real estate business and the waste recycling business.
2. Adjustments are as follows.
(1) Adjustment to segment profit (loss) of ¥9 million includes intersegment elimination of ¥9million and other adjustments of ¥0 million.
(2) Adjustment of segment assets of ¥(78) million is intersegment elimination.
3. Segment profit (loss) is adjusted with operating loss in the consolidated statements ofincome.

17

3. Information on the amounts of net sales, profit or loss, assets, liabilities, and other items by reportable segment
and information on breakdown of revenue
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Million yen)
Reportable segment
Nickel business Gas business

Other(Note 1)

Total

Total

Japan

21,256466

21,722324

22,047

South Korea

3,429

─

3,429

―

3,429

Taiwan12,830─

12,830―12,830China

15,025

─

15,025―15,025

India

3,797

─

3,797

―

3,797

Revenue from contracts withcustomers

56,338466

56,805324

57,129

Revenue from other sources

─

─

─

─

―

56,338466

56,805324

57,129Net sales to outside customers(Note) “Other” corresponds to business segments, etc. that are not included in the reportable segments andcomprises the real estate business and the waste recycling business.

For the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)

Reportable segment
Nickel business Gas business

Other(Note 1)

Total

Total

Japan

18,418677

19,09538

19,134South Korea

4,509

─

4,509

―

4,509

Taiwan

5,043

─

5,043

―

5,043

China

5,640

─

5,640

―

5,640

India

524

─

524

―

524

Revenue from contracts withcustomers

34,135677

34,81338

34,852

Revenue from other sources

─

─

─

─

―

34,135677

34,81338

34,852

Net sales to outside customers(Note) “Other” corresponds to business segments, etc. that are not included in the reportable segments andcomprises the real estate business and the waste recycling business.

18

[Related information]
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
1. Information by product/service
This information is omitted because the amount of net sales to outside customers in a single
product/service category exceeds 90% of the amount of net sales in the consolidated statement of income.
2. Information by geographical area
(1) Net sales(Million yen)
Japan

South Korea

22,047

Taiwan

3,429

China

12,83015,025

India

Total

3,797

57,129Note: Net sales are based on the location of customers and are classified by country or region.
(2) Property, plant and equipment
This information is omitted because the amount of property, plant and equipment located in Japan exceeds
90% of the amount of property, plant and equipment in the consolidated balance sheet.

3. Information by major customer(Million yen)
Customer name

Net sales

Related segment nameNIPPON STEEL Stainless Steel Corporation

19,902 Nickel business

TISCO TRADING (H.K.) LTD

14,231 Nickel business

TANG ENG IRON WORKS CO., LTD.

7,053 Nickel business

WALSIN LIHWA CORPORATION

5,777 Nickel Business

For the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
1. Information by product/service
This information is omitted because the amount of net sales to outside customers in a single
product/service category exceeds 90% of the amount of net sales in the consolidated statement of income.
2. Information by geographical area
(1) Net sales(Million yen)Japan
19,134South Korea
4,509

Taiwan

China

5,043

5,640

India

Total
524

Note: Net sales are based on the location of customers and are classified by country or region.

19

34,852

(2) Property, plant and equipment
This information is omitted because the amount of property, plant and equipment located in Japan exceeds
90% of the amount of property, plant and equipment in the consolidated balance sheet.

3. Information by major customer(Million yen)
Customer name

Net sales

Related segment nameNIPPON STEEL Stainless Steel Corporation

17,359 Nickel business

TISCO TRADING (H.K.) LTD

5,086 Nickel business

WALSIN LIHWA CORPORATION

5,043 Nickel business

POSCO

4,509 Nickel business[Information on loss on impairment of non-current assets]
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Million yen)
Reportable segment

Corporate/elimination

Other
Nickel business Gas businessImpairment loss

317

Total

―

317

─

For the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
Not applicable[Information on amortization of goodwill and unamortized balance by reportable segment]
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Not applicable.
For the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
Not applicable.
[Information on gain on bargain purchase by reportable segment]
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Not applicable.
For the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
Not applicable.

20

―

Total
317

(Per share information)
For the fiscal year ended
March 31, 2022
Net assets per share
Basic earnings (loss) per share

Notes:

1.

2.

For the fiscal year ended
March 31, 2023

¥4,095.12¥3,678.90¥582.93¥(257.75)

Diluted earnings per share is not presented for the previous fiscal year because there were
no dilutive shares. Diluted earnings per share is not presented for the current fiscal year
because net loss per share was recorded and because there are no dilutive shares.
The basis for calculation of net assets per share and the basis for calculation of basic
earnings per share or basic loss per share are as follows.

Basis for calculation of net assets per share
As of March 31, 2022
Total net assets in consolidated balance sheets(million yen)Amount deducted from total net assets (Million
yen)(of which non-controlling interests (Million
yen))
Net assets at end of period attributable to sharesof common stock (Million yen)
Number of shares of common stock at end of
period used for calculation of net assets per share(Thousand shares)

As of March 31, 2023

80,15372,034

287

287

(287)

(287)

79,866

71,746

19,502

19,502For the fiscal year ended
March 31, 2022

For the fiscal year ended
March 31, 2023

11,368(5,026)――

11,368(5,026)

19,503

19,502Basis for calculation of basic earnings (loss) per share

Profit (loss) attributable to owners of parent(Million yen)Amount not attributable to common shareholders(Million yen)
Profit (loss) attributable to owners of parent
relating to shares of common stock (Million yen)
Average number of shares of common stockduring period (Thousand shares)(Significant subsequent events)
Not applicable.

21