Consolidated Financial Statements
Year Ended March 31, 2023

This English translation of the financial statements is prepared for reference purposes only andqualified in its entirety by the original Japanese version. In case of any discrepancy between thistranslation and the original version, the latter shall prevail.

Consolidated Balance Sheet
March 31, 2023
(Millions of Yen)ASSETS
CURRENT ASSETS
Cash and cash equivalents
Notes receivable-trade
Accounts receivable-trade
Inventories
Lending precious metals
Consumption taxes receivable
Accounts receivable-other
Advance payments-trade
Other
Allowance for doubtful accounts

717,940
88,908
3,636
119,337
404,960
57,584
21,357
3,882
11,276
7,110△113

NONCURRENT ASSETSPROPERTY, PLANT AND EQUIPMENT
Buildings and structures
Machinery and equipment
Land
Construction in progress
Lease assets
Other

169,008
89,59734,01325,612
15,140
9,203
2,513
3,114

INTANGIBLE FIXED ASSETS
Software
Software in progress
Customer related assets
Other

10,854
4,155
1,681
2,410
2,606

INVESTMENTS AND OTHERASSETS
Investment securities

68,556

Shares of associated companies

27,269Investments in associated affiliates
Other
Allowance for doubtful accounts

3,260
34,230△260

TOTAL ASSETS

886,948

4,055

Note: Amounts of less than one million yen have been omitted.

- 1 -LIABILITIESCURRENT LIABILITIES
Notes and Accounts payable-trade
Short-term borrowings
Borrowing precious metals
Current portion of long-term debt
Lease liabilities
Accounts payable-other
Income taxes payable
Contractual liabilities
Deposit
Provision for bonuses
Other477,547
87,451
30,696
247,766
8,698
701
49,631
4,310
6,094
30,5473,875
7,772

LONG-TERM LIABILITIESLong-term debt
Asset retirement obligations
Liability for retirement benefits
Lease liabilities
Deferred tax liabilities
Other
TOTAL LIABILITIES

40,31831,302
1,629
286
2,851
2,654
1,593
517,865

EQUITYSHAREHOLDERS' EQUITY
Common stock
Capital surplus
Retained earnings
Treasury stock

343,364500
9,719
341,009△7,864

ACCUMULATED OTHERCOMPREHENSIVE INCOME
Unrealized gain on available-for-salesecurities
Foreign currency translation adjustments
Defined retirement benefit plans
Non-controlling interests
TOTAL EQUITYTOTAL LIABILITIES and EQUITY

25,661
1,313
22,1302,218
57
369,083
886,948

Consolidated Statement of Income
Year Ended March 31, 2023
(Millions of Yen)

680,036
601,887

Net sales
Cost of sales

78,14842,202Gross profit
Selling, general and administrative expenses

35,946

Operating income
Non-operating income

421
209
2,113

Interest income and dividends
Royalty
Rent income

524

Gain on foreign exchange-net
Equity in earnings/losses of associated companies
Other

7,912
3,951

15,131

1,800
786

2,586

Non-operating expenses
Interest expenses
Other

48,491

Ordinary income
Extraordinary income
Gain on sales of non-current assets
Other

218
265

483

52
11

63

Extraordinary losses
Loss on sales and retirement of non-current assets
Other48,911

Income before income taxes
Income taxes-Current

15,357

Income taxes-Deferred△1,86913,48835,422

Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent
Note: Amounts of less than one million yen have been omitted.

- 2 -

△13
35,436

Consolidated Statement of Changes in Equity
Year Ended March 31, 2023
(Millions of Yen)
Shareholder’s equity
Common stock

Capital surplus

Retained earnings

Total
shareholders’equityTreasury stock

500

9,719

305,928△7,864308,283

Dividends of surplus

－

－

△355

－

△355

Net income attributable to ownersof parent－－

35,436－35,436

Net changes of items other thanshareholders’ equity

－

－

－

－

－

Balance as of April 1, 2022
Changes in the year

Net changes in the year－－

35,080－35,080

Balance as of March 31, 2023

500

9,719

341,009△7,864343,364

Accumulated other comprehensive income
Unrealized
gain onavailable-forsale securities

Foreigncurrencytranslation
adjustments

Remeasuremen
ts of defined
benefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total equity

1,198

11,0791,788

14,066

66

322,416

Dividends of surplus

－

－

－

－

－

△355

Net income attributable to ownersof parent

－

－

－

－

－

35,436

Net changes of items other thanshareholders’ equity

114

11,050429

11,595△9

11,585114

11,050429

11,595△946,666

1,313

22,1302,218

25,661

57

369,083

Balance as of April 1, 2022
Changes in the year

Net changes in the year
Balance as of March 31, 2023

Note: Amounts of less than one million yen have been omitted.

- 3 -〔Basis of Presentation of Consolidated Financial Statements〕
1.

Scope of consolidation(1)

Consolidated subsidiaries

40 companies

Names of principal subsidiaries
Tanaka Kikinzoku Kogyo K.K., Tanaka Denshi Kogyo K.K., EEJA Ltd., Tanaka Kikinzoku Jewelry
K.K., Metalor Technologies International SA, Metalor Technologies SA, Metalor Technologies USA
Corporation(2)

Name of non-consolidated subsidiary
EEJA(SHANGHAI) CO., LTD.
The assets, net sales, net income and retained earnings of the non-consolidated subsidiary are small, andthe aggregate effect on the consolidated financial statements is immaterial.

2.

Scope of the equity method(1) Subsidiaries and affiliates accounted for by the equity method
Non-consolidated subsidiary 1 company
Affiliates

8 companies

Names of principal subsidiaries and affiliates accounted for by the equity method
LT Metal Ltd., Furuya Metals Co., Ltd.
(2)Name of affiliate not accounted for by the equity method
Gimel Trading Co., Ltd., NPGM KOREA Co., Ltd.
The contributions to consolidated net income/loss, consolidated retained earnings and otherconsolidated financial statements of affiliate not accounted for by the equity method are negligible andimmaterial in the aggregate.

3.

Matters Related to Fiscal Years of Consolidated Subsidiaries(1) Excluding companies being liquidated on the fiscal year-end, the following consolidated subsidiaries havefiscal year-ends that are different from the consolidated fiscal year-end.
Names of main companies
Metalor Technologies International SA
Metalor Technologies SA
Metalor Technologies USA Corporation
TANAKA KIKINZOKU (NINGBO) Co., Ltd.
TANAKA KIKINZOKU (CHENGDU) Co., Ltd.
TANAKA ELECTRONICS (HANGZHOU) Co., Ltd.
TANAKA KIKINZOKU INTERNATIONAL (SHANGHAI) Co., Ltd.
Consolidated financial statements are prepared using financial statements of consolidated subsidiaries
as of the end of their fiscal year.
Note that necessary adjustment for consolidation is made regarding material transactions that occur
between December 31 and the consolidated fiscal year-end.

4.

Significant accounting principles(1) Valuation standards and methodology for material assets① Securities
Other securities
Items other than shares, etc. … Fair market value (with any unrealized gains or losses being
without market value

reported directly as a component of shareholders’ equity and thecost of any securities sold being computed by the moving
average method)- 4 -Shares, etc. without market … Cost determined by the moving average methodvalue② Derivatives… Fair market value③Inventories
Raw materials/… Cost determined by the periodic average method, with balance

products in progress/

sheet values reflecting write-downs for decreased profitability

finished products
Merchandise… Cost determined by the specific identification method, withbalance sheet values reflecting write-downs for decreased
profitability

Supplies (base stock of bullion)

Cost determined by the periodic average method, with balance
sheet values reflecting write-downs for decreased profitability

Supplies… Last purchase price method(2) Depreciation methods for material depreciable assets① Property, plant and equipment (excluding leased assets)
Buildings and structures… Declining-balance method (Except for buildings acquired after(Except for facilities attached toApril 1,1998, which apply the straight-line method, excluding

buildings andbuilding fixtures)assetsacquired

structures andbyforeignconsolidated subsidiaries)
Facilities attached to buildings … Declining-balance method (Except for Facilities attached toand structuresbuildings and structures acquired after April 1,2016, which(Except for assets acquired byapply the straight-line method)

foreign consolidated subsidiaries)
Machinery and equipment… Depreciation of machinery and equipment of the domestic

subsidiary is substantially calculated by the straight-line
foreign consolidated subsidiaries) method and of other subsidiaries principally by the decliningbalance method based upon the estimated economic usefullife.
Others… Declining-balance method (Whereas straight-line method is(Except for assets acquired byapplied to assets acquired by foreign consolidated subsidiaries)- 5 -The range of useful lives is as follows.
Buildings and structures… 2 to 60 years

Machinery and equipment… 2 to 10 years②Intangible assets… Straight-line method(excluding lease assets)

Software used in-house is depreciated over its estimated usefullife (five years) based on the straight-line method.
Customer related assets is amortized over nine to fourteen years.

③ Lease assets(a)Lease assets relating to finance … Straight-line method with estimated useful lives equal to lease
lease transactions that do notterms, zero residual value.

transfer ownership(b) Lease assets other than those in (a)Some overseas consolidated subsidiaries prepare financial
statements in accordance with International Financial ReportingStandards (IFRS). Under IFRS 16, in principle, lessees
recognize all leases as assets and liabilities on the balance sheet,and lease assets recognized as assets are subject to straight-line
depreciation.

(3) Recognitions of allowances①Allowance for doubtful accounts … Allowance for doubtful accounts is provided for possible credit
losses stemming from monetary receivables. Estimates ofirrecoverable amounts are based on historical loan-loss ratios forgeneral receivables, and on a consideration of feasibly
recoverable amounts in individual cases for specific dubious
accounts.
②Bonuses to employees… Bonuses to employees are accrued at the year-end to which suchbonuses are attributable.

③Bonuses to Directors and Audit & … Bonuses to Directors and Audit & Supervisory Board Members
Supervisory Board Members

are accrued at the year-end to which such bonuses are
attributable.

④Allowance for retirement benefits … In order to provide for payment of retirement benefits for
toDirectors

and

Audit

&

Directors and Audit & Supervisory Board Members, necessary

Supervisory Board Members

amount is recorded based on rules on retirement benefits (inhouse rules).

(4) Other significant accounting principles①Significant hedging transactions
Hedging accounting… Interest rate swaps which qualify for hedge accounting and meet
specific matching criteria are not premeasured at market value.
Also, some consolidated subsidiaries use fair value hedging for
precious metal bullion price swaps.

Hedging methods, items and policies
Hedging methods… Interest rate swaps
Precious metal bullion price swaps

Hedging items… Interest expense of borrowings with variable interest rates
Precious metal bullion inventories subject to effects from pricefluctuations

Hedging policies… Interest rate risks for certain transactions are subject to hedging
based on internal rules.
Also, precious metal bullion price swaps are used to avoid therisks of precious metal bullion price fluctuations.

- 6 -Hedging evaluation… For interest rate swaps for which special treatment is applied,evaluation of effectiveness is not conducted.
In addition, precious metal bullion price swaps are managed
each month such that the hedge targets and the hedge transaction
volume match, and at the end of the fiscal year, effectiveness isconfirmed by verifying whether the expected profit or loss andcash flow were achieved.

②Accounting for retirement benefit
In order to prepare retirement benefits for employees, assets/liability for retirement benefit isrecognized as net amount of pension benefit obligations and pension assets based on the estimate at
the end of fiscal year. The company adopted benefit formula basis method to impute pension befit
obligations.
Prior service cost is amortized on a straight-line method within the average remaining service years(15 years). Actuarial gains and losses is amortized on a straight-line method within the averageremaining service years (15 years) from the next fiscal year of recognition. Actuarial gains and losses
are recognized within accumulated other comprehensive income after adjusting for tax effect.
(5)

Income and expenses①Precious metal bullion commission
The company offers a service to buy and sell various types and quantities of precious metal bullions
with trading companies and other sources based on orders from customers. In such transactions,commission or equivalent consideration are recognized as income. The income is recognized at thetime when this service is provided to customers.
②Sale of industrial products
The company manufactures and sells industrial products that use precious metals. Income is recognized at the time when the products are handed over to customers, but for some c
ustomers, income is recognized at the time when the products are consumed by customers
based on contracts such as those for supplier managed inventory (SMI) transaction.
③Provision of precious metal recovery and refining services
The company offers a service to recover and refine scraps containing precious metals received bycustomers. In such transactions, recovery and refining fees are recognized as income. Income isrecognized at the time when this service is provided to customers.
④Precious metal accumulation service fees
Various types of fees are recognized as income in the precious metal accumulation service forindividual customers. Income is recognized at the time when this service is provided to customers.
For all the transactions stated above, the payment terms have due dates that usually arrive within shortperiods and any important financial elements are not included in contracts.

- 7 -[Income Recognition]
The basic information for understanding income is stated in “Income and expenses” under “Significant accounting principles”
of Basis of Presentation of Consolidated Financial Statements.
[Accounting Estimates]
Items whose amounts were recognized in the consolidated financial statements for the fiscal year under review based on
accounting estimates and that may have a material impact on the consolidated financial statements for the following fiscal year
are as follows:
Property, Plant and Equipment…

89,597 million yen

Inventories…

404,960 million yen(Property, plant and equipment)
When there are indications of impairment of property, plant and equipment, if the fair value of such an asset or asset groupexceeds the total undiscounted future cash flows expected from the asset or the asset group, the company writes down the fairvalue to the recoverable value and posts the decreased amount as an impairment loss.
The company conducts careful examinations when identifying indications of impairment of property, plant and equipment
and determining the recognition of impairment and measuring the impairment loss. However, if a change has occurred to theconditions and assumptions on which the estimated impairment loss is based due to a change in business plans or market
environments, such a change may affect the determination on the recognition of impairment and measurement of the impairment
loss.
(Inventories)
Inventories include precious metal bullion and coins, reserves of precious metals, products in progress, and supplies.
Of these, precious metal bullion and coins are platinum, gold, silver, iridium, rhodium, palladium, ruthenium, osmium, andtantalum for sales to customers, and they are assessed at cost determined by the periodic average method for each asset type. Incase the year-end value assessed at cost determined by the periodic average method exceeds the market value at the end of the
fiscal year, the company recognizes the decline in profitability and writes down the assessed value.
[Consolidated Balance Sheet]
1.

Precious metals stored by Metalor Technologies International SA, a Group foreign
consolidated subsidiary, and its subsidiaries for customers are not included in inventories
in the consolidated financial statements because ownerships and risks thereof are
attributable to customers.
The market value of precious metals stored by Group foreign consolidated subsidiaries forcustomers as of the end of their fiscal year was 69,080 million yen.

2.
3.

Accumulated depreciation of property,…
168,371 million yen
plant and equipment
Warranty liabilities
Contingent liabilities for guarantees and items of a similar nature of housing loans of employees fromfinancial institutions
Housing loans of employees…
26 million yen〔Consolidated statements of changes in equity〕
1. Number of shares as of March 31, 2023
Common stock
67,138 thousand
A class stock
30,299 thousand
2. Number of treasury stocks as of March 31, 2023
Common stock
37,506 thousand
A class stock
666 thousand- 8 -3. Dividends(1) Dividend paid
Resolution

Class

Source ofTotal dividends

Dividend

dividend

paid

per share¥133 million¥4.50¥133 million¥4.50¥44 million¥1.50¥44 million¥1.50

June 17, 2022

CommonRetained

Board meetingstock

earnings

June 17, 2022
Board meeting
November 21, 2022

A class stock

Board meeting

earnings

CommonRetainedstock

earnings

Board meeting
November 21, 2022

Retained

A class stock

Retainedearnings

Record date Effective date
March 31,

June 30,

2022

2022

March 31,

June 30,

2022

2022

September

November30, 2022

24, 2022

September

November30, 2022

24, 2022(2) Dividends for which the record date came during the year ended March 31, 2023, but for which the effective date will comein the following fiscal year
Source of Total dividend Dividend
Resolution
Class
Record date Effective datedividend
paid
per share
June 19, 2023

CommonRetained

Board meetingstock

earnings

June 19, 2023
Board meeting

A class stock

Retainedearnings¥133 million¥4.50¥133 million¥4.50

March 31,

June 30,

2023

2023

March 31,

June 30,

2023

2023

〔Financial instruments〕
1. Policy for financial instruments
The group has contractual commitment lines with major banks in order to secure sufficient liquidity and use a cash
management service covering the company and domestic subsidiaries to achieve integral cash control.
The group uses financial instruments, mainly short-term and long-term loans and bond, and uses interest rate swap
arrangements in order to hedge the risk of changes in variable interest rates on certain long-term loans payable, and also tohedge the risk of market rate changes on those long-term loans payable that have fixed interest rates.
Marketable securities are monitored for changes in market values, and the financial condition of the security issuers is
examined every six months.
2. Fair value of financial instruments
The carrying amounts of financial instruments on the consolidated balance sheets, their fair values, and the differences
between them as of March 31, 2023 are as follows. Shares without market value are excluded from the table (ref. Note 2).
（Millions of yen）
(1) Cash and cash equivalents(2) Notes and accounts receivable-

Carrying amount
88,902

Fair value
88,902Difference－

122,973

trade
Allowance for doubtful accounts*1△113

Net amount

122,860

122,860－(3) Investment securities

2,789

2,789

－

(4) Shares of associated companies

8,012

12,871

4,859(5) Notes and Accounts payable-trade△87,451△87,451－(6) Short-term borrowings△30,696△30,696－(7) Deposit△30,547△30,547－(8) Long-term debt to be repaid within△8,698△8,698－- 9 -one year(9) Long-term debt

△31,302△30,134

1,167

5,188

5,188

－

*2

(10) Derivatives

Note: Items marked with △ are liabilities*1

Allowance for doubtful accounts recorded for accounts receivable-trade has been deducted.

*2

Receivable and payables incurred by derivative transactions are presented in net amount.

(Note 1) Valuation method(1) Cash and cash equivalents (2) Notes and accounts receivable-trade
The fair values of these items approximate fair value because of their short maturities.
(3) Investment securities, (4) Shares of associated companies
The fair values of these items are measured at the quoted market prices on the respective securities exchanges.
(5) Accounts payable-trade, (6) Short-term borrowings, (7) Deposit, (8) Long-term debt to be repaid within one year
The fair values of these items approximate fair value because of their short maturities.
(9) Long-term debt
The fair values of these items are determined by discounting the cash flows with the assumed interest rate applicable if
newly borrowed.
(10) Derivatives
The fair value of derivatives and currency swap are based on valuations offered by financial institutions.
(Note 2) Unlisted securities of ¥114 million on the balance sheet, investments in partnerships of ¥1,150 million, and shares ofassociated companies of ¥19,260 million, and investments in associated companies of ¥3,260 million are not included in(3) Investment securities and (4) Shares of associated companies due to the lack of market prices and the inability of
estimating future cash flows, which makes determination of market value extremely difficult.
〔Per share information〕

1. Equity per share
2. Net income per share…
…

¥6,226.75¥597.93〔Business Combinations〕
Additional payment under share transfer agreement
The share transfer agreement entered into by the Group in September 2016 to acquire shares of Metalor technologies
International SA provides that additional payments shall be due in the case of occurrence of certain subsequent events.
In the case of an additional payment of the acquisition price, the acquisition costs will be revised as if the additionalamount were paid at the time of acquisition, and the amount of goodwill and the amount of amortization (amortized five
years from the time of accrual) thereof will be adjusted. The maximum amount of additional payment is 24.950 million
US dollars (equivalent to 3,310 million yen).
There was no additional goodwill acquired in the fiscal year under review.
〔Other Notes〕

Contingent Liabilities
Metalor Technologies SA is being required by the Spanish tax authorities to return the refund 16.571 million euros (equivalent
to 2,343 million yen) in value-added taxes in previous fiscal years, as well as pay interest and penalties in relation to the refund.
Metalor Technologies has filed an objection to the decision of the tax authorities.
The TANAKA Group is convinced that there have been absolutely no violations of laws and regulations and has not made any
additional provision in the current consolidated fiscal year.

- 10 -