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, 2022
[Japanese GAAP]May 10, 2022
Company name: PACIFIC METALS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 5541
URL: https://www.pacific-metals.co.jp/en/
Representative: Aoyama Masayuki, President and Representative Director
Contact: Matsuyama Terunobu, Managing Executive Officer and Director
Phone: +81-3-3201-6681
Scheduled date of Annual General Shareholders Meeting: June 24, 2022
Scheduled date of filing securities report: June 24, 2022
Scheduled date of commencing dividend payments: June 6, 2022
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, 2022 (April 1, 2021 - March 31, 2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable toOperating profit
Ordinary profit
Net sales(loss)
owners of parent
Fiscal year ended
Million yen%
Million yen%
Million yen%
Million yen%
March 31, 2022
57,12977.3
4,806–
12,999288.6
11,368877.8
March 31, 2021
32,217(27.0)
(493)
–
3,344
244.1
1,162
85.9
(Note) Comprehensive income: Fiscal year ended March 31, 2022: ¥13,921 million [285.9%]
Fiscal year ended March 31, 2021: ¥3,607 million [–%]
Basic earnings
per share

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

Fiscal year ended
Yen
Yen
%
March 31, 2022
582.93–
15.5
March 31, 2021
59.61
–
1.8
(Reference) Share of profit of entities accounted for using equity method:
Fiscal year ended March 31, 2022: ¥6,483 million
Fiscal year ended March 31, 2021: ¥3,539 million(2) Consolidated Financial Position
Total assets

Net assets

Million yen

89,852As of March 31, 2022
75,484As of March 31, 2021
(Reference) Equity: As of March 31, 2022: ¥79,866 million
As of March 31, 2021: ¥66,737 million

%

%

15.7
4.6

8.4
(1.5)

Equity ratio

Net assets per share

Million yen%

Yen

80,15367,01488.9
88.4

4,095.12
3,421.84

(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

7,857
5,829

(2,909)(1,781)

(785)
(102)

26,631
22,286

Fiscal year ended
March 31, 2022
March 31, 2021
2. Dividends
1stquarterend
Fiscal year ended
March 31, 2021
Fiscal year ending
March 31, 2022
Fiscal year ending
March 31, 2023
(Forecast)

Annual dividends
2nd
3rd
Yearquarter- quarterend
end
end

Total

Total
dividends(annual)Payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

–

0.00

–

20.00

20.00

390

33.6

0.6

–

20.00

–

155.00175.00

3,412

30.0

4.7

–

0.00

–

50.00

50.00

27.8

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 March 31, 2023)(% 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%

25,1644.4
50,210 (12.1)

Million yen%

735 (22.8)
925 (80.8)

Million yen%

2,101 (47.4)
3,844 (70.4)

Million yen%

1,856 (45.5)
3,513 (69.1)

Yen

95.17
180.13

* 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: Yes
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, 2022:
19,577,071 shares
March 31, 2021:
19,577,071 shares2) Total number of treasury shares at the end of the period:
March 31, 2022:
74,341 shares
March 31, 2021:
73,791 shares
3) Average number of shares during the period:
Fiscal year ended March 31, 2022:
Fiscal year ended March 31, 2021:

19,503,002 shares
19,503,962 shares(Reference) Outline of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31,
2022)(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, 2022
56,52778.9
4,776–
12,783290.6
11,159948.7
March 31, 2021
31,601 (27.3)
(526)
–
3,272
456.6
1,064
37.2
Basic earnings
per share
Fiscal year ended
March 31, 2022
March 31, 2021

Diluted earnings
per share
Yen

Yen

572.1754.56––(2) Non-consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

Equity ratio

Net assets per share%

Yen

75,797
66,32587.5
3,400.85
As of March 31, 2022
61,93053,97887.2
2,767.66
As of March 31, 2021
(Reference) Equity: As of March 31, 2022: ¥66,325 million
As of March 31, 2021: ¥53,978 million(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 of
production facilities remained firm in general. This is because demand picked up in line with trends towards thenormalization of economic activities. The LME nickel price applicable to the Company remained high, and as aresult, net sales and operating profit both increased. Ordinary profit increased due mainly to dividend income fromequity-method affiliates and foreign exchange gains resulting from the depreciation of the yen, in addition to theincreases in net sales and operating profit. Despite recording of an impairment loss as an extraordinary loss, profit
increased, too.
* 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 5.

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 .......................................................4(3) Overview of Cash Flows for the Fiscal Year under Review..................................................................5(4) Future Outlook ......................................................................................................................................6
2. Management Policy ...................................................................................................................................7(1) Medium- to Long-term Management Strategy of the Company ...........................................................7
3. Basic Policy on Selection of Accounting Standards ..................................................................................7
4. Consolidated Financial Statements and Key Notes ...................................................................................8(1) Consolidated Balance Sheets ................................................................................................................8(2) Consolidated Statements of Income and Comprehensive Income ......................................................10(3) Consolidated Statements of Changes in Equity ..................................................................................12(4) Consolidated Statements of Cash Flows .............................................................................................14(5) Notes to Consolidated Financial Statements .......................................................................................15(Notes on going concern assumption) ............................................................................................15(Changes in accounting policies)....................................................................................................15(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, 2022, the Japanese economy was somewhat lackluster. The
gradual easing of restrictions and other measures imposed to mitigate the impact of COVID-19 led to a pickup
in corporate earnings and other factors, but some weakness remained due to the impact of COVID-19, anduncertainty increased as the situation in Ukraine became more tense.
As for overseas economies, while there were signs of recovery in the employment and income
environment, partly due to economic stimulus measures aimed at economic normalization and the progress invaccinations, the outlook remained uncertain due to concerns about the resurgence of COVID-19, thedevelopment of trade policies between the U.S. and China, financial and capital market fluctuations, and theimpact of the tense situation in Ukraine.
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, capacity utilization of
production facilities remained firm in general. This is because demand picked up in line with trends towards
the normalization of economic activities, although a sense of uncertainty remained over the impacts of
COVID-19 trend, the electric power regulation issue in China, and other factors.
As a result, the demand for ferronickel continued to recover to a certain extent.
As for the procurement of nickel ore, the primary raw material for ferronickel products, mining
companies’ operations and shipments were generally stable, which allowed us to procure the volume sufficient
to meet our production and sales. In addition, nickel ore prices have remained high against the backdrop of the
impact of the Indonesia’s unprocessed ore export ban and a robust demand for stainless steel, which resulted inhigher production costs.
Nickel prices on the London Metal Exchange (LME) showed a temporary adjustment phase due to thecontinuation of the impact of financial and capital market fluctuations and unstable prices of crude oil andother commodities, as well as the major debt problem of the real estate conglomerate and the electric power
regulation issues in China. Then, the prices trended upward due to the growing resumption of economic
activities that had been restricted by the COVID-19 pandemic and against the backdrop of a sense of
expectation for accelerated vaccination efforts. However, nickel prices spiked in the fourth quarter due toconcerns over nickel supply triggered by the tense situation in Ukraine and other factors, and trading was
temporarily suspended because of the market turmoil, and although trading resumed toward the end of the year,
uncertainty remained.
In this situation, the Company’s ferronickel sales volume increased by 30.1% year on year due to anincrease in both domestic and overseas sales against the backdrop of the aforementioned environment in thestainless steel industry, despite a partial shift in raw material procurement by overseas stainless steel producers
to nickel pig iron and other materials that are more price competitive.
The ferronickel production volume increased, generally following the same trend as the sales volume.
Amid continued responses to the increasingly uncertain business environment, the selling price offerronickel products increased as the LME nickel price applicable to the Company increased by 33.8% year on
year and the average exchange rate of Japanese yen applicable to the Company was 6.1% weaker year on year.
In this business environment characterized by continued uncertainty, the Group has strived to prevent
infections by formulating the Behavioral Guidelines for Preventing the Spread of Infections, making efforts to
reduce the COVID-19 impact on business activities while maintaining timely and appropriate communications
with its customers and procurement partners across the world. Although the COVID-19 pandemic is expected
to continue, the Company continues to implement these measures in response to the business environment. To
further strengthen its earnings base, the Company is striving to reduce total cost through energy conservationand low-cost production, strengthen facilities to build an optimal production system, work toward long-termand stable procurement of ore, and thoroughly focus on the profitability of orders, thereby building a flexible
production and sales system. Furthermore, the Company continues its efforts to improve business performanceand stabilize earnings through measures such as the early realization of overseas business development and2new mine development as well as reinforcement of operational efficiency improvement measures to pursue
cost minimization.
The ferronickel manufacturing facility’s electric furnace molten material leakage incident that occurredjust before the end of the fiscal year did not have an impact on the sales volume in the fiscal year under review
and had only a minor impact on the production volume and business performance. On the other hand, therestoration of the one affected unit of the production facilities is scheduled for the third quarter of the next
fiscal year in view of the lengthy delivery period for parts and materials due to recent supply chain disruptions
and other factors.
As a result, consolidated net sales for the fiscal year under review increased by 77.3% year on year to¥57,129 million. On the profit front, operating profit was ¥4,806 million (compared with operating loss of¥493 million for the previous fiscal year), ordinary profit, reflecting the recording of ¥6,483 million in share of
profit of entities accounted for using equity method under non-operating income increased by 288.6% year on
year to ¥12,999 million. Profit attributable to owners of the parent increased by 877.8% year on year to¥11,368 million.
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 increased 85.2%year on year to ¥56,338 million, and operating profit
was ¥4,950 million (compared with operating loss of ¥567 million for the previous fiscal year).
(ii) Gas businessIn the gas business, the Company maintained a stable operation, but this segment recorded a loss due
partly to increased costs associated with facility repair.
As a result, net sales in this segment decreased by 6.6% year on year to ¥576 million with operating lossof ¥10 million (compared with operating profit of ¥21 million for the previous fiscal year).
(iii) Other
The segment of other businesses recorded a loss. The real estate business recorded sales of land but thepositive impact was limited, and the waste recycling business’s order-taking was sluggish.
As a result, net sales in this segment decreased by 74.7% year on year to ¥324 million with operating lossof ¥142 million (compared with operating profit of ¥43 million for the previous fiscal year).
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Fiscal year ended March 31, 2021
32,217
(493)
3,344
1,162
(Million yen)
Fiscal year ended March 31, 2022
57,1294,806
12,99911,368(Million yen)
Change (%)
77.3
–
286.6
877.8
Sales volume (t)1st half

Production volume (t)2nd half

Full year

1st half

2nd half

Full year

Fiscal year ended March 31, 2021

9,674

11,11920,793

9,374

9,040

18,414

Fiscal year ended March 31, 2022

12,957

14,10327,06011,874

14,37526,249Applicable LME nickel price ($/lb)

Applicable exchange rate (¥/$)

1st half

1st half

2nd half

Full year

2nd half

Full year

Fiscal year ended March 31, 2021

5.94

7.07

6.54

106.06104.47105.21

Fiscal year ended March 31, 2022

8.12

9.33

8.75

109.16113.97111.673

(2) Overview of Financial Position for the Fiscal Year under Review
Assets, liabilities, and net assets of the Group as of March 31, 2022 are as follows.
Total assets increased by ¥14,368 million from the end of the previous fiscal year to ¥89,852 million.
Current assets increased by ¥10,028 million from the end of the previous fiscal year mainly due toincreases associated with a rise in selling price and the effect of the settlement timing in accounts receivable –trade and other factors, partially offset by a decrease in raw materials and supplies, in addition to a decrease inadvance payments to suppliers included in “Other.”Non-current assets increased by ¥4,339 million from the end of the previous fiscal year mainly due to anincrease in property, plant and equipment because of capital expenditure, an increase in investment securities
associated with an increase in share of profit of entities accounted for using equity method, and other factors.
Investment securities held by the Company amounting to ¥23,903 million consisted mainly of ¥13,390 million
in the amount reflected in the consolidated balance sheet of shares of entities accounted for using equity
method, ¥2,378 million in shares of subsidiaries and associates, and ¥7,047 million in shares of Nickel Asia
Corporation, a holding company of the Company’s equity-method affiliates listed on the Philippine Stock
Exchange.
Total liabilities increased by ¥1,228 million from the end of the previous fiscal year to ¥9,699 million.
Current liabilities increased by ¥979 million from the end of the previous fiscal year due to an increase inincome taxes payable in line with an increase in profit and other factors, despite a decrease in accounts payable- other included in “Other” in addition to a decrease in notes and accounts payable - trade caused by the effectof the settlement timing.
Non-current liabilities increased by ¥248 million from the end of the previous fiscal year mainly due to anincrease in deferred tax liabilities resulting from a rise in the market price of some stocks held, partially offset
by a decrease in retirement benefit liability.
Total net assets increased by ¥13,139 million from the end of the previous fiscal year to ¥80,153 million.
Shareholders’ equity increased by ¥10,638 million resulting from the recording of profit, partially offset
by the payment of dividends. Accumulated other comprehensive income increased by ¥2,490 million resulting
from increases in valuation difference on available-for-sale securities and foreign currency translation
adjustment. Non-controlling interests increased by ¥10 million.

4(3) Overview of Cash Flows for the Fiscal Year under Review
Net cash provided by operating activities amounted to ¥7,857 million, an increase of ¥2,027 million fromthe figure for the previous fiscal year. Main items for cash inflow were profit before income taxes amounting to¥12,795 million and interest and dividends received amounting to ¥6,744 million. Main items for cash outflow
were share of profit of entities accounted for using equity method amounting to ¥6,483 million and an increasein trade receivables amounting to ¥6,114 million.
Net cash used in investing activities amounted to ¥2,909 million, a ¥1,128 million increase in cash
outflow compared with the previous fiscal year. The main item for cash inflow was proceeds from sale ofinvestment securities amounting to ¥225 million and main items for cash outflow were purchase of investment
securities amounting to ¥1,126 million and purchase of property, plant and equipment amounting to ¥1,427
million.
Net cash used in financing activities amounted to ¥785 million, mainly due to dividends paid, a ¥682
million increase in cash outflow compared with the previous fiscal year.
Net increase in cash and cash equivalents increased by ¥373 million compared with the figure for theprevious fiscal year.
As a result, cash and cash equivalents at end of period amounted to ¥26,631 million, an increase of ¥4,345
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, 2018
31, 2019
31, 2020
31, 2021

Fiscal year
ended March
31, 2022

Equity ratio (%)

88.7

89.3

90.4

88.4

88.9

Equity ratio at market value(%)
Ratio of interest-bearing debt
to cash flows (year)

88.7

73.0

43.8

55.4

89.6

–

0.0

–

0.0

0.0

Interest coverage ratio (times)

–

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, 2018 and for the fiscal year ended March 31, 2020 are not indicatedbecause operating cash flows were negative.

5(4) Future Outlook
With regard to the consolidated financial forecast, the economic outlook remains highly uncertain as
COVID-19 and the situation in Ukraine continue to affect the domestic and overseas economies.
On the volume front, the sales environment is firm. However, near the end of the fiscal year under review,
during repair of one of the three electric furnaces, which are part of the ferronickel manufacturing facilities,
molten materials remaining in the furnace leaked out of the furnace. Operation of this electric furnace has beensuspended and the restoration of the furnace is scheduled for the third quarter of the next fiscal year. Therefore,
the production and sales volumes are expected to decrease.
On the selling price front, demand for nickel is expected to remain robust in view of the recovery trend of
the economies of various countries. The market is attracting a great deal of attention owing to complex factors
associated with the tension in Ukraine. The LME nickel price applicable to the Company, which is used as anindicator for determining the selling price of the Company’s ferronickel products, is expected to remain
unstable.
On the procurement front, production costs are expected to be affected by higher prices of nickel ore,fuels, and other raw materials, but the volume of nickel ore sufficient to meet production needs will be secured.
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

50,210

925

3,844

3,513

57,1294,806

12,99911,368(12.1)(80.8)(70.4)(69.1)Net sales
Forecast for the fiscal year ending
March 31, 2023 (Million yen)
Results for the fiscal year ended
March 31, 2022 (Million yen)
Change (%)[Reference] Results for the fiscal year ended March 31, 2022 and underlying assumptions for the forecast for the
fiscal year ending March 31, 2023 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
9,850
10,65020,5009,237
11,573
20,810March 31, 2023
Results for the fiscal year ended
12,957
14,10327,06011,874
14,37526,249March 31, 2022

Forecast for the fiscal year ending
March 31, 2023
Results for the fiscal year ended
March 31, 2022

Applicable LME nickel price ($/lb)

Applicable exchange rate (¥/$)

1st half

1st half

2nd half

Full year

10.27

9.23

9.73

8.12

9.33

8.75

6

2nd half

Full year

111.06111.04111.05109.16113.97111.67

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 new 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.

7

4. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheets(Million yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
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
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

8

As of March 31, 2022

21,486
7,879
–
3,000
5,670
333
6,279
3,206
(1)
47,853

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

16,369(13,610)2,758
55,979(55,910)
69
4,777
503
(501)
1
7,606
1

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

19,594435(5)20,023
27,63175,48423,903336(5)24,234
31,97089,852

(Million yen)
As of March 31, 2021
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
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
Deferred gains or losses on hedges
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

9

As of March 31, 2022

1,575
1,127
35
258
1,533
4,529

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

571
1,266
654
33
28
1,377
9
3,941
8,470

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

13,922
3,481
47,950(449)
64,903

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

2,659
(37)
644
(1,108)
(325)
1,833
276
67,01475,484

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

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Million yen)
For the fiscal year ended
March 31, 2021
Net sales
Cost of sales
Gross profit
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
Rental expenses on facilities
Commitment fees
Commission for syndicated loans
Foreign withholding tax
Settlement on contract
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Impairment losses
Loss on retirement of non-current assets
Loss on sale of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

10

For the fiscal year ended
March 31, 2022

32,21730,056
2,160

57,12948,962
8,167

1,143
1,510
2,654
(493)

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

5
274
109

8
418
103

3,539

6,483

113
181
4,224

1,311
135
8,461

0
26
27
11
37
215
66
385
3,344

0
20
27
90
58
20
50
268
12,999

1
–
1

0
192
192

1,896
47
1
1,946
1,399
370
(151)
219
1,180
17
1,162

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

Consolidated Statements of Comprehensive Income(Million yen)
For the fiscal year ended
March 31, 2021
ProfitOther 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:
Owners of parent
Non-controlling interests

11

For the fiscal year ended
March 31, 2022

1,180

11,379

2,379
(37)
154

1,932
37
349

(69)

222

2,426
3,607

2,541
13,9213,589
17

13,91010

(3) Consolidated Statements of Changes in Equity
Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(Million yen)
Shareholders’ equity
Share capital
Balance at beginning of period
Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Reversal of revaluation reserve
for landNet changes of items other thanshareholders’ equity
Total changes during period
Balance at end of period

Retainedearnings

Capital surplus

13,922

3,481

Treasury shares

46,677

(447)

Total
shareholders’equity63,633

(97)

(97)

1,162

1,162
(2)

(2)

207

–
13,922

–
3,481

1,272
47,950

207

(2)
(449)

1,270
64,903

Accumulated other comprehensive income
Valuation
Deferred gains
Revaluationdifference onor losses onreserve for landavailable-forhedges
sale securities

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

283

–

852

Foreigncurrencytranslation
adjustment(1,138)

Total
NonRemeasurements accumulated controlling Total net
assetsotherof definedinterests
benefit plans comprehensive
income

(383)

(386)

259

63,506

(97)
1,162
(2)
207
2,375

(37)

(207)

30

58

2,219

17

2,237

2,375

(37)

(207)

30

58

2,219

17

3,507

2,659

(37)

644

(1,108)

(325)

1,833

276

67,01412

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 attributable to owners ofparentPurchase of treasury shares
Reversal of revaluation reserve
for landNet changes of 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

1,064058,590

51

(1)
(450)

10,63875,542

Accumulated other comprehensive income
Valuation
Deferred gains
Revaluationdifference onor losses onreserve for landavailable-forhedges
sale securities

Balance at beginningof period
Changes during
periodDividends ofsurplusProfit attributable toowners of parent
Purchase oftreasury shares
Reversal ofrevaluation reserve
for landNet changes of
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
assetsotherof definedinterests
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

(4) Consolidated Statements of Cash Flows(Million yen)
For the fiscal year ended
March 31, 2021
Cash flows from operating activities
Profit 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 (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 accrued expenses
Increase (decrease) in retirement benefit liability
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

14

For the fiscal year ended
March 31, 2022

1,399
378
1,896
(279)

12,795
256
317
(427)

(3,539)(6,483)

47
1
1,001
1,702
364

78
(192)
(6,114)
592
319

(329)

79

560
78
20
(51)
(79)
(129)
(422)
(386)
2,235
3,800
(0)
(205)
5,829

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

(2,200)
–
–
(319)
800
(15)
(46)
(1,781)(500)(1,126)225(1,427)–(6)(73)(2,909)

(98)
(4)
(102)
25
3,971
18,314
22,286

(781)
(3)
(785)
182
4,345
22,286
26,631

(5) Notes to Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.
(Changes in accounting policies)(Application of accounting standard for revenue recognition, etc.)
The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020; hereinafter referred to as the “Revenue Recognition Accounting Standard”), etc. effectivefrom the beginning of the fiscal year ended March 31, 2022, and has decided to recognize the amount expected
to be received in exchange for promised goods or services as revenue when the control of such goods orservices has been transferred to the customer. In line with this change, regarding certain domestic sales of thenickel business, although revenue was previously recognized on a shipment basis, the Company has shifted tothe method by which it recognizes revenue when products have been delivered to customers.
The Revenue Recognition Accounting Standard, etc. is applied in accordance with the transitional
treatment stipulated in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standard. The
cumulative effect of retrospectively applying the new accounting policy to the periods prior to the beginning of
the fiscal year ended March 31, 2022 was added to or subtracted from the balance of retained earnings at the
beginning of the fiscal year ended March 31, 2022, and thus the new accounting policy was applied from the
beginning balance. However, by applying the method stipulated in Paragraph 86 of the Revenue Recognition
Accounting Standard, the new accounting policy has not been applied retrospectively to contracts for whichalmost all revenues had been recognized in accordance with the previous treatment before the beginning of the
fiscal year ended March 31, 2022. In addition, by adopting the method stipulated in Paragraph 86 (1) of the
Revenue Recognition Accounting Standard, the Company has implemented the following procedures as listedin (i) through (iii) below for the contract modifications made prior to the beginning of the fiscal year ended
March 31, 2022 based on the contract terms after reflecting all the contract modifications, and the cumulative
effect of the procedures has been added to or subtracted from the beginning balance of retained earnings of the
fiscal year ended March 31, 2022.
As a result, compared with the figures prior to the application of the Revenue Recognition AccountingStandard, etc., there is no impact on net sales; cost of sales; selling, general and administrative expenses;
operating profit; ordinary profit; and profit before income taxes for the fiscal year ended March 31, 2022. Also,
there is no impact on the beginning balance of retained earnings.
There is no impact on the consolidated statement of changes in equity for the fiscal year ended March 31,
2022.
There is no impact on the per share information for the fiscal year ended March 31, 2022.
Furthermore, in accordance with the transitional treatment stipulated in Paragraph 89-3 of the Revenue
Recognition Accounting Standard, notes on “Revenue recognition” for the fiscal year ended March 31, 2021
are not presented.
(Application of accounting standard for fair value measurement, etc.)
The Company has applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30,
July 4, 2019; hereinafter referred to as the “Fair Value Measurement Accounting Standard”), etc. from the
beginning of the fiscal year ended March 31, 2022, and has decided to prospectively apply the new accounting
policies stipulated in the Fair Value Measurement Accounting Standard, etc. in accordance with the transitional
treatment set forth in Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44-2 ofthe Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). This will have no
impact on consolidated financial statements.

15

(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
As mentioned in “Changes in accounting policies,” the Company has applied the Revenue Recognition
Accounting Standard, etc. effective from the consolidated financial statements for the fiscal year ended March
31, 2022 and changed accounting treatment for revenue recognition. Accordingly, the Company also changed
the method of calculating profit or loss of reportable segments.
There is no impact of this change on segment profit or loss.
For the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(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

30,419513

30,933

1,283

32,217―32,217

0

103

103

─

103

(103)

―

Total

30,419617

31,036

1,283

32,320(103)

32,217

Segment profit (loss)

(567)

21

(546)

43

(502)

9

(493)

Segment assets

71,765497

72,263

3,270

75,533(48)

75,484

Depreciation andamortization

337

23

360

18

378

―

378

Impairment loss

1,896

―

1,896

─

1,896

―

1,896

13,818―13,818378

14,196―

14,196

1,237

7

1,244

4

1,249

―

1,249

Total

Net sales

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 ¥ (48) 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, 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

Total

Net sales
57,129Other items

Investment in entities
accounted for using equity
15,430─
15,430339
15,770─
15,770methodIncrease in property, plantand equipment and
649
35
685
1
686
─
686
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 ¥ (60) 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(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

18

[Related information]
For the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
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

11,496

Taiwan

2,799

China

7,870

8,829

India

Total

1,221

32,217

Note: 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

9,006 Nickel business

TISCO TRADING (H.K.) LTD

5,214 Nickel business

TANG ENG IRON WORKS CO., LTD.

5,159 Nickel business

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
22,047

South Korea
3,429

TaiwanChina

12,83015,025

India
3,797

Total
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.

19

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[Information on loss on impairment of non-current assets]
For the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(Million yen)
Reportable segment

Corporate/elimination

Other
Nickel business Gas businessImpairment loss

1,896

Total

―

1,896

─

―

Total
1,896

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

─

[Information on amortization of goodwill and unamortized balance by reportable segment]
For the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Not applicable.
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Not applicable.
[Information on gain on bargain purchase by reportable segment]
For the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)
Not applicable.
For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
Not applicable.

20

―

Total
317

(Per share information)
For the fiscal year ended
March 31, 2021
Net assets per share
Basic earnings per share

Notes:

1.
2.

For the fiscal year ended
March 31, 2022

¥3,421.84¥4,095.12¥59.61¥582.93

Diluted earnings per share is not presented 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 are as follows.

Basis for calculation of net assets per share
As of March 31, 2021
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, 2022

67,01480,153

276

287

(276)

(287)

66,737

79,866

19,503

19,502For the fiscal year ended
March 31, 2021

For the fiscal year ended
March 31, 2022

1,162

11,368

―

―

1,162

11,36819,503

19,503Basis for calculation of basic earnings per share

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

21