Consolidated Financial Statements
Year Ended March 31, 2021

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 SheetYear Ended March 31, 2021
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

576,685
66,810113,972
289,266
65,992
14,241
4,253
17,195
5,442△516

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

132,482
79,930INTANGIBLE FIXED ASSETS
Software
Software in progress
Goodwill
Customer related assets
Other

11,234
2,215
2,904
1,143
4,760
211

INVESTMENTS AND OTHERASSETS41,317

Investment securities
Shares of associated companies
Investments in associated affiliates

29,07920,536
14,439
11,190
1,927
2,756

3,138
18,691
2,378

Other
Allowance for doubtful accounts

17,111△3

TOTAL ASSETS

709,140

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

- 1 -(Millions of Yen)
LIABILITIES
386,015
CURRENT LIABILITIES
Notes and Accounts payable-trade53,964
Short-term borrowings
42,109Borrowing precious metals
213,500
Current portion of bonds
1,250
Current portion of long-term debt
7,852
Lease liabilities
519
Accounts payable-other
17,306
Income taxes payable
15,346
Deposit
20,749Provision for bonuses
3,871
Other
9,544

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

50,025625
39,782
1,280
2,614
1,478
1,513
2,730
436,040

EQUITYSHAREHOLDERS' 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

270,942500
9,719
268,588△7,864
2,073
1,174
1,548
△649
82
273,099
709,140

Consolidated Statement of Income
Year Ended March 31, 2021
(Millions of Yen)

1,425,617
1,339,732
85,88437,65748,226

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 -

251
196
2,386
5,405
2,566
600
17
1,035
1,577

15
95
247
98
72
19,232△3,284

10,8063,230
55,802111

418
55,495
15,94739,547△49
39,597

Consolidated Statement of Changes in Equity
Year Ended March 31, 2021
(Millions of Yen)
Shareholder’s equity
Treasury stock

Total
shareholders’equity236,803△7,864

239,158－△7,635－△7,635500

9,719

229,168△7,864

231,523

Dividends of surplus

－

－

△177

－

△177

Net income attributable toowners of parent－－

39,597－39,597

Net changes of items otherthan shareholders’ equity

－

－

－

－

－

Net changes in the year－－

39,419－39,419Balance as of March 31, 2021

500

9,719

268,588△7,864

270,942

Common stock

Capital surplus

Balance as of April 1, 2020

500

9,719

Cumulative effect of error
correction－

Balance at beginning of year
after error correction

Retainedearnings

Changes in the year

Accumulated other comprehensive income
Unrealized
gain onavailablefor-salesecurities

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeBalance as of April 1, 2020

513

2,346

△2,601259

132

239,550

Cumulative effect of error
correction

－

－

－

－

－

△7,635

Balance at beginning of year
after error correction

513

2,346

△2,601259

132

231,914

Dividends of surplus

－

－

－

－

－

△177

Net income attributable toowners of parent

－

－

－

－

－

39,597

Net changes of items otherthan shareholders’ equity

660

△798

1,951

1,814

△49

1,764

Net changes in the year

660

△798

1,951

1,814

△49

41,184

Balance as of March 31, 2021

1,174

1,548

△649

2,073

82

273,099

Noncontrollinginterests

Total
equityChanges in the year

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., 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 International (Malaysia) Sdn. Bhd., Metalor Finance (Curacao) N.V.,
and Metalor Technologies (Deutschland) GmbH were liquidated and thus removed from consolidated
subsidiaries. Metalor Electrotechnics (USA) Corp. was also removed from consolidated subsidiaries as
it was merged into Metalor Technologies USA Corp.
(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.
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 the consolidated
fiscal year-end.
December 31: 27 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 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
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 (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- 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). 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.

- 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[Correction of Errors]
In the fiscal year under review, it was found that the inventory valuation methodology adopted from thetime of the establishment of TANAKA Kikinzoku Kogyo K.K., a subsidiary, to the previous fiscal year did
not appropriately reflect the actual economic conditions and accordingly, the errors were corrected. The effectof the correction of errors is reflected in the balance of retained earnings at the beginning of the year for the
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 7,635 million yen.
[Changes in Presentation Method](Application of Accounting Standard for Disclosure of Accounting Estimates)
The company adopts the Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement
No. 31, March 31, 2020), starting from the consolidated financial statements as of the end of the fiscal year
under review, and presents notes on accounting estimates.
[Accounting Estimates]
Items whose amounts were recognized in the consolidated financial statements for the fiscal year underreview 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
Inventories…

…

79,930 million yen

289,266 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 group exceeds the total undiscounted future cash flows expected from the asset or the asset
group, the company writes down the fair value 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 the conditions 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- 8 -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 inprogress, and supplies. Of these, precious metal bullion and coins are platinum, gold, silver, iridium, rhodium,
palladium, ruthenium, osmium, and tantalum for sales to customers, and they are assessed at cost determinedby the periodic average method for each asset type. If the year-end value assessed at cost determined by theperiodic average method exceeds the market value at the end of the fiscal year, the company recognizes thedecline 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 48,041 million yen.

2.
3.

Accumulated depreciation of property,…
¥144,896 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…
¥16 million〔Consolidated statements of changes in equity〕
1. Number of shares as of March 31, 2021
Common stock
67,138 thousand
A class stock
30,299 thousand
2. Number of treasury stocks as of March 31, 2021
Common stock
37,506 thousand
A class stock
666 thousand- 9 -3. Dividends(1) Dividend paid
Resolution

Class

Source ofTotal dividends

Dividend

dividend

paid

per share¥44 million¥1.50¥44 million¥1.50¥44 million¥1.50¥44 million¥1.50

June 15, 2020

CommonRetained

Board meetingstock

earnings

June 15, 2020
Board meeting
November 24, 2020

A class stock

Board meeting

earnings

CommonRetainedstock

earnings

Board meeting
November 24, 2020

Retained

A class stock

Retainedearnings

Record date Effective date
March 31,

June 29,

2020

2020

March 31,

June 29,

2020

2020

September

November30, 2020

26, 2020

September

November30, 2020

26, 2020(2) Dividends for which the record date came during the year ended March 31, 2021, 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 18, 2021

CommonRetained

Board meetingstock

earnings

June 18, 2021
Board meeting

A class stock

Retainedearnings¥133 million¥4.50¥133 million¥4.50

March 31,

June 29,

2021

2021

March 31,

June 29,

2021

2021

〔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.

- 10 -

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, 2021 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
66,810(2) Notes and accounts receivable-

Fair value
66,810（Millions of yen）
Difference－

113,972

trade
Allowance for doubtful accounts*1△516

Net amount

113,456

113,456－(3) Investment securities

2,568

2,568

－

(4) Shares of associated companies

4,702

9,968

5,265

(5) Notes and Accounts payable-trade△53,964△53,964－(6) Short-term borrowings△42,109△42,109－(7) Deposit△20,749△20,749－(8) Bonds payable to be redeemed△1,250△1,250－△7,852△7,852－(10) Bonds payable

△625

△627

△2

(11) Long-term debt

△39,782△41,464△1,682(12) Derivatives*2△1,668△1,668－within one year
(9) Long-term debt to be repaid within
one year

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.
(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- 11 -

institutions.
(Note 2) Unlisted securities of ¥114 million on the balance sheet, investments in partnerships of ¥455 million,
and shares of associated companies of ¥13,988 million, and investments in associated companies of¥2,378 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…
…

¥4,606.74¥668.15〔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.
There was no additional goodwill acquired in the fiscal year under review.

- 12 -