Consolidated Financial Statements
Year Ended March 31, 2020

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, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Notes and accounts receivable-trade
Inventories
Lending precious metals
Consumption taxes receivable
Accounts receivable-other
Advance payments-trade
Other
Allowance for doubtful accounts

524,831
71,931
93,168
268,554
60,687
9,263
3,483
12,915
5,615△788

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

110,830
73,016INTANGIBLE FIXED ASSETS
Software
Software in progress
Goodwill
Customer related assets
Other

10,515
2,585
649
2,287
4,779
212

INVESTMENTS AND OTHERASSETS27,299Investment securities
Shares of associated companies
Investments in associated affiliates
Other
Allowance for doubtful accounts
TOTAL ASSETS

27,053
22,134
14,090
4,339
2,113
3,285

2,383
15,649
1,253
8,075
△13
635,662

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

- 1 -(Millions of Yen)
LIABILITIES
342,157
CURRENT LIABILITIES
Notes and Accounts payable-trade
48,047
Short-term borrowings
32,347
Borrowing precious metals
194,437
Current portion of bonds
1,250
Current portion of long-term debt
7,634
Lease liabilities
565
Accounts payable-other
24,848
Income taxes payable
6,086
Deposit
16,486
Provision for bonuses
3,108
Other
7,346

LONG-TERM LIABILITIESBonds payable
Long-term debt
Asset retirement obligations
Liability for retirement benefits
Lease liabilities
Deferred tax liabilities
Other
TOTAL LIABILITIESEQUITYSHAREHOLDERS' EQUITY
Common stock
Capital surplus
Retained earnings
Treasury stock
ACCUMULATED OTHERCOMPREHENSIVE INCOME
Unrealized gain on available-for-sal
e securities
Foreign currency translation adjust
ments
Defined retirement benefit plans
Non-controlling interests
TOTAL EQUITYTOTAL LIABILITIES and EQUITY

53,954
1,875
41,929
1,186
3,236
1,598
220
3,908
396,112239,158
500
9,719
236,803△7,864
259
513
2,346
△2,601
132
239,550
635,662

Consolidated Statement of Income
Year Ended March 31, 2020
(Millions of Yen)

1,149,604
1,089,357
60,24638,82021,426

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income and dividends
Royalty
Rent income
Equity in earnings/losses of associated companies
Other
Non-operating expenses
Interest expenses
Commitment fee
Loss on foreign exchange-net
Other
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Other
Extraordinary losses
Loss on sales and retirement of non-current assets
impairment losses
Other
Income before income taxes
Income taxes-Current
Income taxes-Deferred
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 -

215
169
1,342
1,604
1,282
678
17
160
711

189
58

4,614

1,567
24,473

249

175

263
42

482
24,2408,199△2,0296,169
18,071△42
18,113

Consolidated Statement of Changes in Equity
Year Ended March 31, 2020
(Millions of Yen)
Shareholder’s equity
Treasury stock

Total
shareholders’equity219,782△7,864

222,137

－

△39

－

△39

－

－

△875

500

9,719

218,867△7,864

221,222

Dividends of surplus

－

－

△177

－

△177

Net income attributable toowners of parent－－

18,113－

18,113

Net changes of items otherthan shareholders’ equity

－

－

－

－

－

Net changes in the year－－

17,936－

17,936

Balance as of March 31, 2019

500

9,719

236,803△7,864

239,158

Noncontrollinginterests

Total
equityCommon stock

Capital surplus

Balance as of April 1, 2019

500

9,719

Cumulative effects of changes inaccounting policies－

Cumulative effect of error
correction
Balance at beginning of year
after retrospective adjustment

Retainedearnings△875

Changes in the year

Accumulated other comprehensive income
Unrealized
gain onavailablefor-salesecurities

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
income

1,038

4,134

△1,0674,105

167

226,410

Cumulative effects of changes inaccounting policies

－

－

－

－

－

△39

Cumulative effect of error
correction

－

－

－

－

－

△875

1,038

4,134

△1,0674,105

167

225,495

Dividends of surplus

－

－

－

－

－

△177

Net income attributable toowners of parent

－

－

－

－

－

18,113

Net changes of items otherthan shareholders’ equity△524△1,787△1,534△3,845△35△3,881△524△1,787△1,534△3,845△35

14,054513

2,346△2,601259

132

239,550

Balance as of April 1, 2018

Balance at beginning of year
after retrospective adjustment
Changes in the year

Net changes in the year
Balance as of March 31, 2019

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

44 companies

Names of principal subsidiaries
Tanaka Kikinzoku Kogyo K.K., Tanaka Denshi Kogyo K.K., Electroplating Engineers of Japan Ltd.,
Tanaka Kikinzoku Jewelry K.K., Metalor Technologies International SA, Metalor Technologies SA,
Metalor Technologies USA Corporation
Of these, TANAKA Kikinzoku (India) Pvt. Ltd. was established during the consolidated fiscal year
under review, and accordingly is included among consolidated subsidiaries as of the fiscal year underreview. TANAKA Kikinzoku (Hangzhou) Co., Ltd. was liquidated and was removed from consolidated
subsidiaries.
(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

7 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.
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.

- 4 -

3.

Matters Related to Fiscal Years of Consolidated Subsidiaries(1) The following consolidated subsidiaries have fiscal year-ends that are different from theconsolidated fiscal year-end.
December 31: 30 companies
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 ofconsolidated 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
Securities with readily
determinable market value… Fair market value based on the quoted market price at the fiscal
year-end (with any unrealized gains or losses being reported
directly as a component of shareholders’ equity and the cost of
any securities sold being computed by the moving averagemethod)Securities with no readily… Cost determined by the moving average method

determinable market value② Derivatives… Fair market value③Inventories
Raw materials/
products in progress/… Cost determined by the periodic average method, with balance
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… Last purchase price method- 5 -(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)
The range of useful lives is as follows.
Buildings and structures… 2 to 60 years

Machinery and equipment… 2 to 10 years②Intangible assets(excluding lease assets)… Straight-line method
Software used in-house is depreciated over its estimated usefullife (five years) based on the straight-line method.
Goodwill is amortized using the straight-line method over five
years.
Customer related assets is amortised 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), and as stated in Changes in Accounting
Policies, IFRS 16 Leases was applied starting in the fiscal year
under review. Under IFRS 16, in principle, lessees recognize allleases as assets and liabilities on the balance sheet, and leaseassets recognized as assets are subject to straight-line
depreciation.

- 6 -(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.

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.

- 7 -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.
③Accounting for consumption tax … Booked exclusive of consumption taxes[Changes in Accounting Policies]
1. Application of IFRS 16 Leases to overseas subsidiaries
IFRS 16 Leases has been applied to some overseas consolidated subsidiaries since the start of the fiscal
year under review.
With the application of IFRS 16, a method of recognizing the cumulative effects of application of thisstandard on the initial date of application was adopted, a permissible provisional measure.
As a result, Lease Assets under Property, Plant and Equipment increased by 1,554 million yen, Lease
Obligations under Current Liabilities increased by 513 million yen, and Lease Liabilities under Long-term
Liabilities increased by 1,093 million yen on the Balance Sheet. Also, 465 million yen in land use rights thatwere previously included in Other under Intangible Fixed Assets are reported as Lease Assets under Property,
Plant and Equipment as of the fiscal year under review. The impact on these changes on the Consolidated
Statement of Income for the fiscal year under review is de minimis.
[Correction of Errors]
In the fiscal year under review, errors in consolidation adjustment entries for the previous fiscal year werediscovered and the errors were corrected. The effect of the correction of errors is reflected in the book valueof retained earnings at the beginning of the consolidated fiscal year under review.
As a result, the beginning balance of retained earnings in the Consolidated Statement of Changes in
Equity for the consolidated fiscal year under review decreased by 875 million yen.
[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 75,025 million yen.

- 8 -

2.
3.

Accumulated depreciation of property,…
¥137,775 million
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…
¥49 million〔Consolidated statements of changes in equity〕
1. Number of shares as of March 31, 2019
Common stock
67,138 thousand
A class stock
30,299 thousand
2. Number of treasury stocks as of March 31, 2019
Common stock
37,506 thousand
A class stock
666 thousand
3. Dividends(1) Dividend paid
Resolution

Class

June 14, 2019

CommonBoard meetingstock

June 14, 2019
Board meeting
November 18, 2019
Board meeting
November 18, 2019
Board meeting

A class stock

Source ofTotal dividends

Dividend

dividend

paid

per share¥44 million¥1.50

Retainedearnings
Retainedearnings

CommonRetainedstock

earnings

A class stock

Retainedearnings¥44 million¥1.50¥44 million¥1.50¥44 million¥1.50

Record date Effective date
March 31,

June 27,

2019

2019

March 31,

June 27,

2019

2019

September

November30, 2019

21, 2019

September

November30, 2019

21, 2019(2) Dividends for which the record date came during the year ended March 31, 2018, but for which theeffective date will come in the following fiscal year
Source of Total dividend Dividend
Resolution
Class
Record date Effective datedividend
paid
per share
June 15, 2020

CommonRetained

Board meetingstock

earnings

June 15, 2020
Board meeting

A class stock

Retainedearnings¥44 million¥1.50¥44 million

¥1.50

- 9 -

March 31,

June 29,

2020

2020

March 31,

June 29,

2020

2020

〔Financial instruments〕
1. Policy for financial instruments
Our group have 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.
Our 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 to hedge 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, 2020 are as follows. Financial instruments for which
fair value cannot be reliably determined are excluded from the table (ref. Note 2).

(1) Cash and cash equivalents

Carrying amount
71,931(2) Notes and accounts receivable-

Fair value
71,931（Millions of yen）
Difference－

93,168

trade

△788

Allowance for doubtful accounts*1

92,380Net amount

92,38092,380－(3) Investment securities

1,833

1,833

－

(4) Shares of associated companies

3,652

6,683

3,031

(5) Notes and Accounts payable-trade△48,047△48,047－(6) Short-term borrowings△32,347△32,347－(7) Deposit△16,486△16,486－(8) Bonds payable to be redeemed△1,250△1,250－△7,634△7,634－(10) Bonds payable△1,875

1,881△6(11) Long-term debt

△41,929△43,675△1,745△2,376△2,376－

within one year
(9) Long-term debt to be repaid within
one year(12) Derivatives*2

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.

(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.

- 10 -

(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) Bonds payable to be redeemedwithin one year, (9) Long-term debt to be repaid within one year
The fair values of these items approximate fair value because of their short maturities.
(10) Bonds payable, (11) 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.
(12) 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 ¥435 million,
and shares of associated companies of ¥11,997 million, and investments in associated companies of¥1,253 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…
…

¥4,039.81¥305.64〔Business Combinations〕
Additional payment under share transfer agreement
The share transfer agreement entered into by the Group in September 2016 to acquire shares ofMetalor technologies International SA provides that additional payments shall be due in the case ofoccurrence of certain subsequent events. In the case of an additional payment of the acquisition price,
the acquisition costs will be revised as if the additional amount were paid at the time of acquisition,and the amount of goodwill and the amount of amortization thereof will be adjusted.
During the fiscal year under review, an additional payment of the acquisition price of 690 million yen was made. As
a result, goodwill increased by 276 million yen and amortization of goodwill reported in the Consolidated Statementof Income increased by 414 million yen as of the end of the fiscal year under review.

- 11 -