2022

Financial
Statements

Independent Auditor’s ReportInabata & Co., Ltd. and consolidated subsidiaries
For the Years ended March 31,
2022 and 2021

KPMG AZSA LLC
July 2022

This independent auditor’s report prepared by KPMG AZSA LLC (including the one that issigned with electoronic signatures) shall not be reprinted, disclosed, quoted, summarized,
translated, cited, circulated or otherwise used, in whole or in part, to any third party including
posting on the web without prior written consent as specified by KPMG AZSA LLC, except forthe purpose of compliance with laws, regulations and the like, or for usage in response to anorder or request from an administrative or judicial body.

© 2022 KPMG AZSA LLC, a limited liability audit corporation incorporated under the Japanese Certified Public Accountants Law
and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee. All rights reserved.

Independent auditor’s report
To the Board of Directors of Inabata & Co., Ltd.:
OpinionWe have audited the accompanying consolidated financial statements of Inabata & Co., Ltd. (“theCompany”) and its consolidated subsidiaries (collectively referred to as “the Group”), which comprisethe consolidated balance sheets as at March 31, 2022 and 2021, the consolidated statements of income
and comprehensive income, changes in net assets and cash flows for the years then ended , and notes,
comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2022 and 2021, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Valuation of allowance for doubtful accounts for trade receivables
The key audit matter

How the matter was addressed in our audit

Notes receivable - trade and Accounts
receivable - trade (hereinafter referred to as“trade receivables”) of ¥184,698 million wererecognized in the consolidated balance sheetof Inabata & Co., Ltd. (the “Company”) andits consolidated subsidiaries (collectively
referred to as the “Group”), representing

The primary procedures we performed to assess thereasonableness of the valuation of allowance for
doubtful accounts on trade receivables included thefollowing:(1) Internal control testingapproximately 47% of total assets.
Allowance for doubtful accounts of ¥389
million included in current assets was mostly
on trade receivables. In addition, other assetsof ¥7,380 million and allowance for doubtful
accounts of ¥5,035 million included ininvestments and other assets were mostly
attributed to trade receivables.
As described in Note 2 “Summary ofsignificant accounting policies (c) Allowancefor doubtful accounts” to the consolidated
financial statements, with respect to normal
accounts receivable – trade, the allowance isstated at an amount based on the actual rateof bad debts in the past, and for certain
doubtful receivables, the uncollectible
amount is individually estimated. As for
doubtful receivables of foreign consolidated
subsidiaries, management determines theestimate of the allowance.
Account receivables of the Group include
receivables of a large number of domestic
and overseas customers. Each groupcompany performs credit management
including the establishment of credit
classifications and preservation of claims.
The Company also performs credit
management for customers with receivables
that are material.
In the valuation of allowance for doubtful
accounts related to trade receivables, eachgroup company and the Company need to
identify the status of receivables, particularly
defaults on receivables and their subsequent
status in a timely and comprehensive
manner, and reasonably estimate future
uncollectible amounts using the debtor's
financial evaluation approach. The estimates
involve a certain level of uncertainty becausechanges in the economic environment andother factors affect the credit risk ofcustomers. Accordingly, management’s
judgment thereon may have a significant
effect on the estimates.
We, therefore, determined that the valuationof allowance for doubtful accounts on trade

We tested the design and operating effectiveness ofcertain of the Company’s internal controls relevant to
the process of recognizing an allowance for doubtful
accounts on trade receivables with a main focus on thefollowing:IT controls related to the preparation of a list of
past due receivables used for accurate andcomplete identification of past due receivables;andControls to obtain necessary information ofcustomers that are delinquent in payments andapprove credit classifications assigned to them aswell as the calculated the amount of allowance for
doubtful accounts.

(2) Assessment of the reasonableness of theestimated future uncollectible amounts
In order to assess the reasonableness of the estimatedfuture uncollectible amounts of past due receivables,we:inquired of the personnel responsible for credit
management about the bases on which credit
classifications are assigned to customers andestimated future uncollectible amounts arecalculated, and obtained related information
including external credit information to evaluate
the reasonableness of those bases; andexamined the recent collection status including
status after the end of the period, and when thestatus indicated increased credit risk, assessed
whether the increase in the risk was appropriatelyreflected in the estimated future uncollectible
amounts.

With respect to the valuation of allowance for doubtful
accounts on trade receivables of significant
consolidated subsidiaries, we requested the component
auditors of those subsidiaries to perform part of theabove audit procedures, and evaluated the report of thecomponent auditors on the results of the procedures
and concluded as to whether sufficient and appropriate
audit evidence was obtained.

receivables was one most significance in our
audit of the consolidated financial statements
for the current fiscal year, and accordingly, a
key audit matter.

Other Information
The other information comprises the information included in the disclosure documents that contain or
accompany the audited consolidated financial statements, but does not include the consolidated
financial statements and our auditor’s report thereon.
We do not perform any work on the other information as we determine such information does not exist.
Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
The audit and supervisory committee are responsible for overseeing the directors’ performance of theirduties with regard to the design, implementation and maintenance of the Group’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express anopinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with the audit and supervisory committee regarding, among other matters, theplanned scope and timing of the audit, significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the audit and supervisory committee with a statement that we have complied with
relevant ethical requirements regarding independence, and communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the audit and supervisory committee , we determine those mattersthat were of most significance in the audit of the consolidated financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2022 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 1 to the consolidated financial statements.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.

Koji Yasui
Designated Engagement Partner
Certified Public Accountant
Kazushi Chiba
Designated Other Partner
Certified Public Accountant

KPMG AZSA LLC
Osaka Office, Japan
July 8, 2022

INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMarch 31, 2022 and 2021
Thousands of
U.S. dollars(Note 1)Millions of yen
2022

2021

2022

ASSETS
Current assets:
Cash and time deposits (Notes 11 and 15)¥

Notes and accounts receivable - trade (Note 15):

35,403¥

31,462$289,267－

162,736－

Notes receivable - trade (Note 15)

22,548－184,235

Accounts receivable - trade (Note 15)

162,149－

1,324,862

Merchandise and finished goods

72,14549,210589,470

Work in Process

860

597

7,031

6,059
12,728

4,322
9,266

49,506
103,997

(389)

(613)

(3,183)

311,505

256,983

2,545,188

Land

3,043

2,911

24,865

Buildings and structures

17,184

16,039140,408

Machinery and equipment

18,64816,871

152,372

Construction in progress

205

294

1,675

Raw materials and supplies
Other current assets
Allowance for doubtful accounts (Note 15)
Total current assets
Property, plant and equipment:

Other property, plant and equipment
Less accumulated depreciation
Property, plant and equipment, net
Investments and other assets:
Investment securities (Notes 4, 7 and 15):
Long-term loans receivable (Note 15):
Intangible assets
Net defined benefit asset (Note 10)
Deferred tax assets (Note 6)

6,382

5,224

52,14845,464(30,151)

41,341(26,946)

371,470(246,357)

15,312

14,395125,11248,303
1,448
2,647
6,390
1,105

71,592
1,212
2,918
3,472
990

394,671
11,833
21,672
52,211
9,033

Other assets

7,380

6,209

60,306

Allowance for doubtful accounts (Note 15)
Total investments and other assets(5,035)(4,545)(41,141)

62,241

81,849508,548

Total assets¥

389,059¥

See accompanying Notes to Consolidated Financial Statements.

- 1 -353,228$

3,178,849

INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (CONTINUED)
March 31, 2022 and 2021
Thousands of
U.S. dollars(Note 1)Millions of yen
2022

2021

2022

LIABILITIES AND NET ASSETS
Current liabilities:
Notes and accounts payable - trade (Note 15):¥

115,959¥

104,113$

947,458

Short-term loans payable (Notes 9 and 15)
Income taxes payable
Accrued expenses
Provision for bonuses

58,657
4,093
1,367
1,608

33,731
3,155
1,080
1,279

479,267
33,446
11,172
13,144

Other current liabilities

11,498

7,229

93,948

193,185

150,591

1,578,438

5,880
8,761
33
159
18

7,475
14,84229131
18

48,046
71,585
270
1,303
151

Net defined benefit liability (Note 10)

1,624

2,144

13,275

Other non-current liabilities
Total non-current liabilities

2,481

2,190

20,27918,95926,833

154,912

9,364
7,044
130,540

9,364
7,184
116,794

76,51457,5581,066,593(7,398)(4,155)(60,449)

139,550

129,188

1,140,215

22,667398
11,793508

39,316
187
4,536
576

185,204
3,258
96,3584,152

35,36744,616288,974

Total current liabilities
Non-currrent liabilities:
Long-term loans payable (Notes 9 and 15)
Deferred tax liabilities (Note 6)
Provision for directors' retirement benefits
Provision for management board incentive plan trust
Provision for loss on guarantees

Contingent liabilities (Note 19)
Net assets
Shareholders' equity (Note 16)
Common stock:
Authorized - 200,000,000 shares
Issued - 60,799,227 shares in 2022 and 63,499,227 shares in 2021
Capital surplus
Retained earnings (Note 20)
Treasury stock, at cost: (Note 17)
3,682,139 shares in 2022 and 3,302,651 shares in 2021
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

¥

1,996

1,999

16,308

176,914

175,8031,445,498

389,059¥

See accompanying Notes to Consolidated Financial Statements.

- 2 -353,228$

3,178,849

INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
Years ended March 31, 2022 and 2021
Thousands of
U.S. dollars(Note 1)Millions of yen
2022
Net sales (Notes 3 and 13)¥

Cost of sales

2021

680,962¥2022

577,583$

5,563,871

623,591

531,543

5,095,121

57,37046,040468,749

37,31731,066

304,908

20,052

14,973

163,840

Interest and dividend income

1,673

1,541

13,675Interest expenses (Note 9)

(674)

(698)

(5,512)

53

(151)

436

Provision of allowance for doubtful accounts
Commission for purchase of treasury shares
Share of profit of entities accounted for using equity method

(151)
(129)
370

(7)
－
270

(1,234)(1,055)
3,026

Impairment loss

(168)

－

(1,375)Gain on sales of investment securities

8,975

2,984

73,331

453

587

3,704

30,455

19,499248,837

Income taxes - current

7,294

5,337

59,603

Income taxes - deferred

685

(43)

5,599

Net income

22,475124

14,204411

183,635
1,014

Gross profit
Selling, general and administrative expenses (Note 8)
Operating income
Other income (expenses):Foreign exchange gains (losses)

Other, net
Income before income taxes
Income taxes (Note 6)

Net income attributable to non-controlling interests
Net income attributable to owners of parent¥

22,351

Amounts per share:¥

13,792$

U.S. dollars(Note 1)

Yen
2022

Basic net income per share¥

Cash dividends per share applicable to the year

374.23110.002021¥

See accompanying Notes to Consolidated Financial Statements.

- 3 -182,621229.13
63.00

2022
$

3.06
0.90

INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended March 31, 2022 and 2021
Thousands of
U.S. dollars(Note 1)Millions of yen
2022
Net income

¥

2021

22,475¥2022

14,204$

183,635

Other comprehensive income (Note 12):Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
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(16,560)

12,968(135,312)

206

55

1,691

7,276

3,155

59,456

(68)

1,593

(557)

(127)

164

(1,045)(9,273)

17,935(75,766)¥

13,202¥32,140$107,868¥

13,102¥

31,644$

107,052

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

99

See accompanying Notes to Consolidated Financial Statements.

- 4 -

496

815

INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Years ended March 31, 2022 and 2021
Millions of yen
2022
Shareholders' equity
Commonstock
Balance at April 1, 2021
Cumulative effects ofchanges in accounting
policies
Restated balance at April 1,
2021¥

Capitalsurplus
9,364

7,184

－
¥

9,364

Net income attributable toowners of parent
Dividends of surplus
Purchase of treasury stock
Cancellation of treasury
stock
Treasury stock transfer ofstock ownership trust
Purchase of shares of
consolidated subsidiaries
Net changes in items otherthan shareholders' equity
Balance at March 31, 2022¥

Retainedearnings¥¥

Treasurystock

116,794－¥¥(4,155)

－

7,184

¥

116,794－¥(4,155)－－22,351

－

－

－

－

－

－

(4,401)－(7,500)－(43)(4,203)

4,247

－

－

－

9

－

(96)

－

－

－

－

－

－

9,364

¥

7,044

¥

130,540¥(7,398)Millions of yen
2022
Accumulated other comprehensive income

Balance at April 1, 2021
Cumulative effects ofchanges in accounting
policies
Restated balance at April 1,
2021

Valuation
Deferred gains
difference on(losses) on
availablehedges
for-sale

Foreigncurrencytranslation
adjustments

Remeasurements Non-controllinginterestsof defined
benefit plans

¥

¥

¥

¥

－
¥

Net income attributable toowners of parent
Dividends of surplus
Purchase of treasury stock
Cancellation of treasury
stock
Treasury stock transfer ofstock ownership trust
Purchase of shares of
consolidated subsidiaries
Net changes in items otherthan shareholders' equity
Balance at March 31, 2022

39,316¥39,316

187
－

¥

187

4,536
－

¥

4,536

576

¥

－
¥

576

1,999

Total

¥

－
¥

1,999

175,803－¥

175,803

－

－

－

－

－

22,351

－
－

－
－

－
－

－
－

－
－

(4,401)(7,500)

－

－

－

－

－

－

－

－

－

－

－

9

－

－

－

－

－

(96)

(16,649)

211

7,257

(68)

(3)

(9,251)

22,667

¥

398

¥

- 5 -

11,793

¥

508

¥

1,996

¥

176,914

Millions of yen
2021
Shareholders' equity
Commonstock
Balance at April 1, 2020
Cumulative effects ofchanges in accounting
policies
Restated balance at April 1,
2020¥

Capitalsurplus9,364¥

Retainedearnings
7,752

－
¥

9,364

Net income attributable toowners of parent
Dividends of surplus
Purchase of treasury stock
Cancellation of treasury
stock
Treasury stock transfer ofstock ownership trust
Purchase of shares of
consolidated subsidiaries
Net changes in items otherthan shareholders' equity
Balance at March 31, 2021¥¥

Treasurystock

106,197－¥¥(4,155)

－

7,752

¥

106,197－¥(4,155)－－

13,792

－

－
－

－
－

(3,195)
－

－

-－

－

－

－

－

－

－

－

－

(567)

－

－

－

－

－

－

9,364

¥

7,184

¥

116,794(0)¥(4,155)

Millions of yen
2021
Accumulated other comprehensive income

Balance at April 1, 2020
Cumulative effects ofchanges in accounting
policies
Restated balance at April 1,
2020

Valuation
Deferred gains
difference on(losses) on
availablehedges
for-sale

Foreigncurrencytranslation
adjustments

Remeasurements
Non-controllingof definedinterests
benefit plans

¥

¥

¥

¥

－
¥

Net income attributable toowners of parent
Dividends of surplus
Purchase of treasury stock
Cancellation of treasury
stock
Treasury stock transfer ofstock ownership trust
Purchase of shares of
consolidated subsidiaries
Net changes in items otherthan shareholders' equity
Balance at March 31, 2021

26,196¥26,196

148
－

¥

148

1,436
－

¥

1,436

¥

(1,016) ¥

1,802

－

－

(1,016) ¥

1,802

Total
¥

147,726－¥

147,726

－

－

－

－

－

13,792

－

－

－

－

－

(3,195)

－

－

－

－

－

(0)

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

(567)

13,119

38

3,100

1,593

196

18,04839,316

¥

187

¥

4,536

¥

576

¥

See accompanying Notes to Consolidated Financial Statements.

- 6 -

1,999

¥

175,803

Thousands of U.S. dollars (Note 1)
2022
Shareholders' equity
Commonstock
Balance at April 1, 2021
Cumulative effects ofchanges in accounting
policies
Restated balance at April 1,
2021$

Capitalsurplus76,514$Retainedearnings
58,702－$

76,514

Net income attributable toowners of parent
Dividends of surplus
Purchase of treasury stock
Cancellation of treasury
stock
Treasury stock transfer ofstock ownership trust
Purchase of shares of
consolidated subsidiaries
Net changes in items otherthan shareholders' equity
Balance at March 31, 2022$$

Treasurystock

954,280－$$(33,949)－

58,702$954,280－$(33,949)－－

182,621

－

－
－

－
－

(35,964)－－(61,280)－(358)(34,344)

34,703

－

－

－

76

－

(785)

－

－

－

－

－

－

76,514$57,558$1,066,593$(60,449)

Thousands of U.S. dollars (Note 1)
2022
Accumulated other comprehensive income

Balance at April 1, 2021
Cumulative effects ofchanges in accounting
policies
Restated balance at April 1,
2021

Valuation
Deferred gains
difference on(losses) on
availablehedges
for-sale

Foreigncurrencytranslation
adjustments

Remeasurements
Non-controllingof definedinterests
benefit plans

$

$

$

$

－
$

Net income attributable toowners of parent
Dividends of surplus
Purchase of treasury stock
Cancellation of treasury
stock
Treasury stock transfer ofstock ownership trust
Purchase of shares of
consolidated subsidiaries
Net changes in items otherthan shareholders' equity
Balance at March 31, 2022

321,241$

321,241

1,528
－

$

1,528

37,063－$37,063

4,709 $－$

4,709 $

Total

16,333$ 1,436,423－－

16,333$ 1,436,423

－

－

－

－

－

182,621

－
－

－
－

－
－

－
－

－
－

(35,964)(61,280)

－

－

－

－

－

－

－

－

－

－

－

76

－

－

－

－

－

(785)

(136,036)

1,730

59,294

(557)

(25)

(75,593)

16,308$ 1,445,498

185,204

$

3,258

$

96,358

$

4,152

$

See accompanying Notes to Consolidated Financial Statements.

- 7 -INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended March 31, 2022 and 2021
Thousands of
U.S. dollars(Note 1)Millions of yen
2022

2021

2022

Cash flows from operating activities:
Income before income taxes¥

Adjustments to reconcile income before income taxes to cash provided
by operating activities:
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for doubtful accounts

30,455¥

19,499

3,160
168

2,874
－

$

248,837

25,8191,375

22(3,646)180(1,541)
698(270)

Increase (decrease) in provision for loss on business liquidation(1,673)
674
(370)
－

(246)

(13,675)
5,512(3,026)－

Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories(8,975)(11,227)(20,037)(2,984)(5,924)
3,127(73,331)(91,734)(163,716)

Decrease (increase) in other current assets
Decrease (increase) in other non-current assets(3,188)
(60)

(884)
4,071

(26,050)(497)

Increase (decrease) in notes and accounts payable - trade

4,363

4,261

35,655

Increase (decrease) in other current liabilities
Increase (decrease) in retirement benefit liability

3,864
(601)

491
360

31,578(4,917)

Decrease (increase) in retirement benefit asset(24,798)

Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using equity method(3,035)

196

Other, net

407

393

3,332

Subtotal(6,053)
1,793

20,476
1,733(49,457)
14,656

Interest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

(666)

(705)

(5,449)(6,521)(3,891)(53,287)(11,448)

17,613(93,537)(6,780)(5,162)(55,397)

Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits

5,742

3,992

46,922

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment(1,669)15(1,864)
149(13,639)
123

Purchase of intangible assets

(317)

(648)

(2,592)

Purchase of investment securities

(197)

(95)

(1,613)

Proceeds from sales of investment securities

9,645

3,128

78,811

Purchase of shares of subsidiaries

(554)

－

(4,534)

Net decrease (increase) in short-term loans receivable
Payments of long-term loans receivable

(35)
(151)

101
(219)

(291)
(1,239)Collection of long-term loans receivable

347

91

2,835

Other, net

(597)

104

(4,883)

5,446

(423)

44,501

Net cash provided by (used in) investing activities

See accompanying Notes to Consolidated Financial Statements.

- 8 -INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
Years ended March 31, 2022 and 2021
Thousands of
U.S. dollars(Note 1)Millions of yen
2022

2021

2022

Cash flows from financing activities:
Net increase (decrease) in short-term loans payable¥

21,488¥(9,276)$

175,574

Proceeds from long-term loans payable
Repayments of long-term loans payable438(3,041)729(4,357)

3,579(24,852)

Purchase of treasury stock
Cash dividends paid

(7,629)(4,415)(0)(3,205)(62,336)(36,078)

(107)

(312)

(880)

(96)

(557)

(785)

(636)

(602)

(5,199)5,999(17,582)

49,021

2,270

894

18,549Dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation
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

2,268

502

18,534

Cash and cash equivalents at beginning of year

25,98325,480212,301

Cash and cash equivalents at end of year (Note 11)¥28,251¥

See accompanying Notes to Consolidated Financial Statements.

- 9 -25,983$230,835

INABATA & CO., LTD. AND CONSOLIDATED SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of INABATA & CO., LTD. (“the Company”) have been prepared inaccordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its related accounting
regulations and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to application and disclosure requirements from International Financial Reporting Standards.
The accounts of consolidated foreign subsidiaries are prepared in accordance with mainly either International Financial ReportingStandards or U.S. generally accepted accounting principles, with adjustments for the specified five items as applicable incompliance with ASBJ Practical Solution No. 18, “Tentative Treatment of Accounting for Foreign Subsidiaries in Preparing
Consolidated Financial Statements.”
The accompanying consolidated financial statements have been reformatted and translated into English (with some expanded
descriptions) from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filedwith the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law.
Certain supplementary information included in the statutory Japanese language consolidated financial statements is not presented in
the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside
Japan, using the prevailing exchange rate at March 31, 2022, which was ¥122.39 to US$1.00. These translations should not be
construed as representations that the Japanese yen amounts have been, could have been or could in the future be converted into
U.S. dollars at this or any other rate of exchange.
As permitted, amounts of less than one million Japanese yen are omitted in the presentation for 2021 and 2022. As a result, thetotals shown in the accompanying consolidated financial statements, both in Japanese yen and in U.S. dollars, do not necessarily
agree with the sum of the individual amounts.

- 10 -

2.

Summary of significant accounting policies(a) Consolidation
The consolidated financial statements include the accounts of the Company and its 43 (44 in 2021) significant domestic andforeign subsidiaries (together “the Companies”), the management of which is controlled by the Company. Investments inunconsolidated subsidiaries and affiliates are, with minor exceptions, accounted for by the equity method. The Company has 5affiliates (5 in 2021) accounted for by the equity method. Intercompany transactions and accounts are eliminated.
In the elimination of investments in subsidiaries, the assets and liabilities of the subsidiaries, including the portion attributable tonon-controlling shareholders, are evaluated using the fair value at the time the Company acquired control of the respective
subsidiary.
For 7 consolidated subsidiaries, including SHANGHAI INABATA TRADING CO., LTD., the consolidation method under which
tentative financial statements as of March 31 (the consolidated balance sheet date) were prepared in the same manner as the regular
year-end financial statements are used for consolidation purposes due to the regulations regarding the accounting period in therespective countries.
(b) Cash and cash equivalents
In preparing the consolidated statements of cash flows, cash on hand, readily available deposits and short-term highly liquid
investments with maturities not exceeding three months at the time of purchase are considered to be cash and cash equivalents.
(c) Allowance for doubtful accounts
An allowance for doubtful accounts is provided to cover possible losses on collection. With respect to normal accounts receivable- trade, the allowance is stated at an amount based on the actual rate of bad debts in the past. For certain doubtful receivables, theuncollectible amount is individually estimated. With respect to doubtful receivables of foreign consolidated subsidiaries, theallowance is determined by estimates of management.
(d) Securities
Equity securities issued by subsidiaries and affiliates which are not consolidated or accounted for using the equity method arestated at moving average cost.
Available-for-sale equity securities with fair market values are stated at the fair market value on the last day of the year. Nonequity available-for-sale securities with fair market values are stated at fair market value on the last day of the year. Unrealized
gains and losses on these securities are reported, net of applicable income taxes, as a separate component of net assets. Realized
gains and losses on the sale of such securities are computed using moving average cost. Other securities with no available fairmarket values are also stated at moving average cost.

- 11 -

(e) Derivative transactions and hedge accounting
Derivative transactions are measured at fair value. Hedging instruments which meet the criteria for hedge accounting are
accounted for using deferral hedge accounting, which requires that the unrealized gain or loss to be deferred as a component of net
assets until the loss or gain on the related hedged item is recognized.
Certain forward foreign exchange contracts, certain currency swap transactions and certain interest rate swap transactions areaccounted for using the allocation method and the special method. The allocation method requires that foreign currency monetary
receivables and payables covered by forward foreign exchange contracts are translated at contract rates. Under the special method,interest rate swap transactions are accounted for as if the interest rates under those transactions were originally applied to theunderlying loans.
With regard to forward foreign exchange contracts and currency swap transactions, the evaluation of the hedge effectiveness isomitted if the significant terms of the hedging instruments and those of the hedged items are the same and the risk of change in
foreign exchange rates is effectively hedged. With regard to interest rate swap transactions which meet the criteria for the special
method, the evaluation of hedge effectiveness is omitted.
The Companies enter into forward foreign exchange contracts, interest rate swap transactions and currency swap transactions tocontrol risks related to fluctuations in the exchange rates of foreign currencies and interest rates. Forward foreign exchange
contracts and currency swap transactions are used to hedge the risk of fluctuations in foreign currency exchange rates with respect
to monetary receivables, payables and forecasted transactions denominated in foreign currencies. Interest rate swap transactions
are used to hedge the risk of fluctuations in interest rates with respect to long-term loans payable.
The Companies use these derivative transactions in connection with managing their market risk and not for speculation or dealing
purposes. The Companies minimize the credit risk exposure of these derivative transactions by using only highly rated financial
institutions as counterparties. The derivative transactions are entered into in accordance with risk management policies.
(f) Inventories
Inventories are stated mainly at the lower of cost determined by the moving average method or net realizable value.
(g) Property, plant and equipment
Property, plant and equipment are carried at cost and depreciated by the straight-line method.
(h) Leased assets
Property and equipment capitalized under finance leases are depreciated by the straight-line method over the term of therespective lease.
(i) Intangible assets
Intangible assets are depreciated by the straight-line method. Software is depreciated by the straight-line method over its
estimated useful life.
(j) Goodwill
Goodwill is depreciated by the straight-line method over five years.
(k) Income taxes
Income taxes comprise corporation tax, prefectural and municipal inhabitants’ taxes and enterprise tax. The Companies recognize
the tax effects of temporary differences between the carrying amounts of assets and liabilities for tax purposes and financial
reporting purposes. The asset-liability approach is used to recognize deferred tax assets and liabilities for the expected future tax
consequences of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.
(l) Translation of foreign currencies
Receivables and payables denominated in foreign currencies are translated into Japanese yen at year-end exchange rates. Assets
and liabilities of foreign subsidiaries are translated into Japanese yen at year-end exchange rates, except for net asset accounts,
which are translated at historical exchange rates. Revenue and expense accounts are translated into Japanese yen at the averageexchange rates during the year. The resulting translation adjustments are presented separately in the consolidated financial
statements as foreign currency translation adjustments and in non-controlling interests.

- 12 -

(m) Retirement benefits
The Companies provide retirement payment plans and funded non-contributory pension plans under which all eligible employees
are entitled to benefits based on the level of wages and salaries at the time of retirement or termination, length of service andcertain other factors. The Companies sometime make additional payments that are not based on the amounts obtained by actuarial
calculations. The Company has employee retirement benefit trusts for both plans.
The Companies provide for employees’ severance and retirement benefits based on the estimated amounts of projected benefit
obligation and the fair value of plan assets at the end of the year. Actuarial differences and prior service costs are recognized
mainly in expenses using the straight-line method within the average of the estimated remaining service years of employees
commencing with the following period.
The estimated amount of all retirement benefits to be paid at future retirement dates is attributed to each period using a benefit
formula basis.
Actuarial differences are recognized in the income statement using the straight-line method over mainly 13 years.
Prior service cost is recognized in the income statement using the straight-line method over mainly 14 years.
Unrecognized actuarial differences and unrecognized prior service cost are recognized as remeasurements of defined benefit
plans within the net asset section after adjusting for tax effects.
Directors, corporate auditors and executive officers of certain subsidiaries receive retirement payments based on establishedguidelines similar to the employees’ retirement benefit plan, subject to shareholders’ approval. Retirement benefits provided for
directors and corporate auditors are sufficient to cover stipulated benefits arising from services performed as of the balance sheet
date.
Directors’ retirement benefits for officers of the Company’s subsidiaries had been made at an estimated amount based on the
Company’s internal rules for retirement allowances.
(n) Recognition of revenues and expenses
The Companies’ main businesses are the sale of goods, the manufacture and sale of various products, and the provision ofservices in Japan and overseas in the four business areas of IT & Electronics, Chemicals, Life Industry, and Plastics.
Sales of goods or products are recognized as revenue when the goods or products are delivered to customers. However, fordomestic sales, revenue is recognized at the time of shipment if the period from the time of shipment to the time when control ofthe product or product is transferred to the customer is a normal period. In export sales, revenue is recognized when the risk istransferred to the customer based on the trade terms mainly stipulated in Incoterms.
If the commitment with the customer is a performance obligation to arrange for goods or services to be provided by anotherparty, the Company does not control the goods or services to be transferred to the customer and only provides the services toarrange them, and therefore, the Company recognizes the net amount of fees or consideration as revenue as an agent.
(o) Provision for bonuses
The Company and certain subsidiaries accrue amounts for employees’ bonuses based on estimated amounts to be paid in thesubsequent period.
(p) Provision for management board incentive plan trust
To prepare for the payment of the Company's shares, etc., to the director, allowance for board benefit trust is recorded by theCompany’s executive share benefit provision at the expected amount of obligations on stock-based compensation to Directors.
(q) Provision for loss on guarantees
To cover possible losses associated with guarantees that the Companies provide to third parties, the Companies assess thefinancial condition of each guaranteed party and record an estimated allowance for such losses based on the estimated exposure.
(r) Amounts per share
Computations of net income per share of common stock are based on the weighted average number of shares outstanding during
each period.
Diluted net income per share is omitted because there are no dilutive shares at March 31, 2022 and 2021.
Cash dividends per share represent the cash dividends proposed by the Board of Directors as applicable to the respective fiscal
years together with the interim cash dividends paid.

- 13 -

3.

Accounting changes(Significant accounting estimates)(a) Carrying amounts in the current year’s financial statements
Thousands of
U.S. dollars

Millions of yen
2022

2021

2022

Equity securities:
Allowance for doubtful accounts (current assets)¥

Allowance for doubtful accounts (non-current aseets)

(389)

¥

(5,035)(613)(4,545)$(3,183)(41,141)(b) Information on the nature of significant accounting estimates for identified items
In calculating the allowance for doubtful accounts, the Company reasonably estimates the estimated uncollectible amount ofsubject receivables based on credit classifications, etc., established in consideration of past receivables and the actual
conditions of customers’ external credit information, etc., in accordance with the policy stated in “(2. Summary of significant
accounting policies) (c) Allowance for doubtful accounts ” and determines that such amount is appropriated. However,
unforeseeable changes in assumptions, such as changes in the economic environment and other factors, may cause the credit
risks of customers to fluctuate from the initial estimates, and lead to loan loss losses and an increase or decrease in the amountof allowance for loan losses. In addition, there is a possibility that an additional allowance for doubtful accounts may beprovided for general receivables due to an increase in the historical rate of bad debt.
With regard to the outlook for the future, we expect that uncertainty will continue as the end of the COVID-19 is still
uncertain and the situation in Ukraine and other factors are having an impact on the world economy.
(Changes in accounting policies)(Accounting Standard for Revenue Recognition)
The Company has adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020.
hereinafter referred to as "Accounting Standard for Revenue Recognition".) from the beginning of the current consolidated fiscal
year and has decided to recognize revenue in the amount expected to be received in exchange for promised goods or services whencontrol of those goods or services is transferred to customers.
Sales of goods or products are recognized as revenue when the goods or products are delivered to customers. However, fordomestic sales, the Company applies the alternative treatment set forth in Paragraph 98 of the “Guidance on Accounting Standard
for Revenue Recognition ” (ASBJ Guidance No. 30, March 26, 2021) and recognizes revenue at the time of shipment if the period
from the time of shipment to the time when control of the product or product is transferred to the customer is an ordinary period. In
export sales, revenue is recognized when the risk is transferred to the customer based on the trade terms stipulated mainly in
Incoterms.
If the commitment with the customer is a performance obligation to arrange for goods or services to be provided by anotherparty, the Company does not control the goods or services to be transferred to the customer and only provides the services toarrange them. Therefore, the Company recognizes the net amount of fees or consideration received as revenue as an agent.
The application of the new accounting policy is in accordance with the transitional treatment stipulated in Paragraph 84 of ASBJ
Statement No. 29, and although the new accounting policy has been applied from the beginning balance of the current consolidated
fiscal year, there has been no impact on the beginning balance of retained earnings.
In the consolidated balance sheet for the previous fiscal year, "Notes and accounts receivable" presented under "Current assets"
has been classified into "Notes and accounts receivable" and "Accounts receivable" from the current fiscal year. However, in
accordance with the transitional treatment set forth in Article 89-2 of the Accounting Standard for Revenue Recognition, no
reclassifications have been made for the previous fiscal year using the new presentation method.
As a result, net sales and cost of sales for the fiscal year under review each decreased by ¥25,279 million ($206,544 thousand).
In accordance with the transitional treatment set forth in Article 89, Paragraph 3 of the Accounting Standard for Revenue
Recognition, notes to "Revenue Recognition" for the previous consolidated fiscal year are not provided.

- 14 -

(Accounting Standard for Fair Value Measurement)
The Company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019, the “ASBJ
Statement No. 30”) from the beginning of the consolidated fiscal year ended March 31, 2022. In accordance with the transitional
treatment stipulated in Paragraph 19 of ASBJ Statement No. 30 and Paragraph 44-2 of the Accounting Standard for Financial
Instruments (ASBJ Statement No. 10, July 4, 2019), the Company has decided to apply the new accounting standard described by
ASBJ Statement No. 30 to transactions taking place on and after the application date.
In accordance with this, the Company has changed the measurement of fair value method based on the market price at the end of
the period from the average market price one month before the end of the period to the method based on the market price at theend of the period including foreign stocks. hereinafter the same.
In addition, fair value information for financial instruments categorized by level is disclosed in the notes of “Financial
Instruments.” However, following the transitional treatment in Paragraph 7-4 of the Implementation Guidance on Disclosuresabout Faire Value of Financial Instruments (ASBJ Guidance No.19, July 4, 2019), relevant information for the pevious
consolidated fiscal year is not provided.
(Changes in presentation method)(Consolidated Profit and Loss Statement)"Provision of allowance for doubtful accounts," which was included in "Miscellaneous losses" under "Non-operating expenses"
in the previous fiscal year, is presented as an independent item from the current fiscal year due to its increased financial
materiality. To reflect this change in presentation, the consolidated financial statements for the previous fiscal year have been
reclassified.
As a result, ¥7 million, which was presented in “Miscellaneous losses ” under“ Non-operating expenses ” in the consolidated
profit and loss statement for the previous fiscal year, has been reclassified into “Provision for allowance for doubtful accounts ” of
¥7 million.
(Consolidated Cash Flow Statement)
In the previous fiscal year, “Increase (decrease) in net defined benefit liability” included in “Other” under “Cash flows fromoperating activities” and “Increase (increase) in net defined benefit asset” included in “Increase (increase) in other fixed assets” arepresented separately from the current fiscal year due to their increased financial materiality. To reflect this change in presentation,
the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the consolidated cash flow statement for the previous fiscal year, ¥360 million presented in “Others ” of“ Cashflows from operating activities ” and ¥196 million presented in “Changes in other fixed assets (increases) ” have been reclassified
into“ Changes in retirement benefit liabilities (decreases) ” of ¥360 million and “Changes in retirement benefit assets (increases) ”
of ¥196 million, respectively.
(Additional information)- Performance-based Stock Compensation Plan for Directors
The Company has introduced a performance-based stock compensation plan, “Board Benefit Trust,” (the “Plan”) for Directors
with a view to increase their consciousness to contribute to performance improvement and corporate value increase in the mediumand long-term by clarifying the linkage between compensation for Directors and the Company’s financial performance and stock
value and sharing not only benefits of an increase in the Company’s equity value but risks of its decline.
(a) Overview of Transaction
The Plan is a performance-based stock compensation plan where a trust (a trust established under the Plan is referred to as the“Trust”) acquired the Company’s stock using money contributed by the Company and provides Directors with the Company’s
stock and money equivalent to the amount of the Company’s stock as converted using fair value (the “Company’s Stock, etc.”)
in accordance with the Rules for Stock Compensation Granted to Directors established by the Company. The timing of
Directors receiving the Company’s Stock, etc. is at their retirement from Directors in principle.
(b) Company’s Stock Remaining in Trust
The Company has recorded the Company’s stock remaining in the Trust at carrying value in the Trust (excluding the amountof ancillary expenses) as treasury stock under net assets section. The carrying value of such treasury stock was ¥164 million
and the number of such treasury stock was 100,000 shares at March 31, 2021, while the carrying value of such treasury stockwas ¥155 million ($1,268 thousand) and the number of such treasury stock was 94,300 shares at March 31, 2022.

- 15 -

4.

Securities(a) The following summarizes information on securities with fair values at March 31, 2022 and 2021.
(1) Trading securities:
At March 31, 2022 and 2021, there were no trading securities with fair market values.
(2) Available-for-sale securities at March 31, 2022 and 2021:
Securities with book values (fair values) exceeding acquisition costs:
Thousands of
U.S. dollars

Millions of yen
2022

2021

2022

Equity securities:
Acquisition costs
Book values

¥

5,145
35,505¥

5,685
59,707$42,041
290,099

Differences¥

30,359¥54,021$

248,058

¥

－

¥

10

$

－

Bonds:
Acquisition costs
Book values

10－

Differences

¥

－

¥

0

－
$

－

Securities with book values (fair values) not exceeding acquisition costs:
Thousands of
U.S. dollars

Millions of yen
2022

2021

2022

Equity securities:
Acquisition costs

¥

852

¥
¥

Book values

¥

850

(224)

¥

－

¥

628

Differences

$

6,965

(156)

$

(1,832)

－

$

－

694

5,132

Bonds:
Acquisition costs
Book values－

Differences

¥

－

－
¥

－

－
$

－

Unlisted equity securities in amount of ¥6,783 million ($55,427 thousand) and ¥6,450 million at March 31, 2022 and 2021,
respectively, are excluded from available-for-sale securities in the above table as they are stocks with no market price and the
difficulty in estimating future cash flows.
(b) The following table summarizes information on available-for-sale securities sold in the years ended March 31, 2022 and 2021:
Thousands ofMillions of yen
U.S. dollars
2022
Total sales of available-for-sale securities:

¥

2021

9,616

Amount of related gains

8,975

Amount of related losses

28

¥

2022

3,118

$

2,984
－

78,57173,331230(c) The loss on valuation of investment securities at March 31, 2022 and 2021 were as follows:
Thousands of
U.S. dollars

Millions of yen
2022
Loss on valuation of investment securities¥- 16 -

2021
69

¥

2022
67

$

567

The Companies recognize impairment loss when, at the end of the period, the fair value of marketable and investment securities
is reduced to less than 50% of the acquisition cost. A loss may also be recognized when the fair market value declines less than
50% but more than 30%, if necessary, considering the possibility of market value recovery and other factors.
5.

Derivatives(a) Derivative transactions for which hedge accounting is not applied(1) Currency related
Millions of yen
March 31, 2022
Classification

Non-market
transaction

Contracted
amountover 1 year

Contracted
amountType of derivative transaction

Recognized
gains(losses)

Fair
Value

Forward foreign exchange contracts:
Selling:
U.S. dollars¥

83

Buying:Japanese yen
Total

¥

321
¥

404

－

¥

(0)
(13)

－
¥

－

¥

¥

(14)

(0)
(13)

¥

(14)

Millions of yen
March 31, 2021
Classification

Non-market
transaction

Contracted
amountType of derivative transaction
Forward foreign exchange contracts:
Selling:
U.S. dollars
Buying:¥

22

U.S. dollars

4Japanese yen
S.G. dollars

158
65

Total

Contracted
amountover 1 year

¥

250

¥

－

¥

(0)

－
－
－
¥

－

Recognized
gains(losses)

Fair
Value

¥

¥

(0)

0

0

(1)
(0)

(1)
(0)

(1)

¥

(1)

Thousands of U.S. dollars
March 31, 2022
Classification

Contracted
amountover 1 year

Contracted
amountType of derivative transaction

Recognized
gains(losses)

Fair
Value

Forward foreign exchange contracts:
Non-market
transaction

Selling:
U.S. dollars

$

679

$

－

$

(7)

$

(7)

Buying:Japanese yen
Total

2,627
$

- 17 -

3,306

(112)

－
$

－

$

(119)

(112)
$

(119)

(2) Interest rate related
There were no interest rate related derivative transactions at March 31, 2022 and 2021.
(3) Stock related
There were no stock related derivative transactions at March 31, 2022 and 2021.

- 18 -

(b) Derivative transactions for which hedge accounting is applied(1) Currency related
Millions of yen
March 31, 2022
Method for hedge
accounting

Type of derivative transaction

Major
hedged item

Contracted
amountover 1 year

Contracted
amountFair
value

Forward foreign exchange contracts:
Selling:
U.S. dollars
G.B. poundEuro
China yuan
Deferral hedge
accounting (*1)

Thai baht
Swiss franc¥
Accounts
receivable- trade

1,944

¥

¥

(106)

1
74
33

－
－
－
－

75
0

－
－

(5)
(0)

5,346
1,102
34

3,100
－
－

550
73
(0)

657

－

42

795

－

53

0
(5)
(0)

Buying:U.S. dollars
Euro
China yuan
Thai baht

Accounts
payable- tradeJapanese yen
Forward foreign exchange contracts:
Selling:
U.S. dollars

Allocation method forforward foreignexchange contracts,
etc.

G.B. poundEuro
China yuan
Thai baht
Buying:U.S. dollars
G.B. poundEuro
China yuan
Thai baht¥
Accounts
receivable- tradeAccounts
payable- trade

Total

¥

－

65
357
222

－
－
－

26

－

3,149
33

－
－

188

－
－

34
60
¥

- 19 -

5,079

19,286

(*2)

－
¥

3,100

¥

601

Millions of yen
March 31, 2021
Method for hedge
accounting

Type of derivative transaction

Major
hedged item

Contracted
amountover 1 year

Contracted
amountFair
value

Forward foreign exchange contracts:
Selling:
U.S. dollars

Deferral hedge
accounting

G.B. poundEuro
China yuan¥
Accounts
receivable- tradeThai baht
Buying:U.S. dollars
Euro
China yuan
Thai baht

Accounts
payable- tradeJapanese yen

2,284

¥

－

¥

(61)

0
92
80

－
－
－

(0)
(2)
(0)

82

－

(2)

6,483
625
45

3,590
－
－

353
6
7

352

－

4

122

－

(2)

Forward foreign exchange contracts:

Allocation method forforward foreignexchange contracts,
etc.

Selling:
U.S. dollars
G.B. poundEuro
Swiss franc
China yuan¥
Accounts
receivable- tradeEuro
Thai baht

Accounts
payable- tradeTotal¥- 20 -

¥

－
－
－
－

2
204

Thai baht
Buying:U.S. dollars
G.B. pound

7,780
24
301

－

107

－

3,385
54

－
－

82

－

91

－

22,202

¥

3,590

(*1)

¥

301

Thousands of U.S. dollars
March 31, 2022
Method for hedge
accounting

Type of derivative transaction

Major
hedged item

Contracted
amountover 1 year

Contracted
amountFair
value

Forward foreign exchange contracts:
Selling:
U.S. dollars
G.B. poundEuro
China yuan
Deferral hedge
accounting$
Accounts
receivable- tradeThai baht
Swiss franc
Buying:U.S. dollars

15,890

$

－

$

(873)

13
611
277

－
－
－

0
(45)
(7)

620
6

－
－

(46)
0

43,68225,333

4,500

Euro

Accounts

9,006

－

597

China yuan
Thai baht

payable- trade

282
5,369

－
－
－

(0)
349

Japanese yen

6,496

436

Forward foreign exchange contracts:
Selling:

Allocation method forforward foreignexchange contracts,
etc.

U.S. dollars
G.B. poundEuro
China yuan$
Accounts
receivable- trade41,506
538
2,917

$

1,821

Thai baht
Buying:U.S. dollars

－
－
－

219

－
－

25,734－

G.B. pound

Accounts

275

－

Euro
China yuan
Thai baht

payable- trade

1,543
279
491

－
－
－

Total

$

157,585$

25,333

(*1)

$

4,911

(*1) Foreign exchange forward contracts are accounted for as hedged items together with accounts receivable and accounts payable,
which are settled in a short period of time, and their fair values are close to their book values, so notes are omitted.

- 21 -

(2) Interest rate related
Millions of yen
March 31, 2022
Method for hedge
accounting

Type of derivative transaction

Major
hedged item

Contracted
amountContracted
amountover 1 year

1,500

1,000

(*1)

1,500

1,000

－

Fair
value

Interest rate swaps:
Special method(Pay fixed rate, receive floating rate)Long-termloans payable

Total

¥

Millions of yen
March 31, 2021
Method for hedge
accounting

Type of derivative transaction

Major
hedged item

Contracted
amountContracted
amountover 1 year

1,500

1,500

(*1)

1,500

1,500

－

Fair
value

Interest rate swaps:
Special method(Pay fixed rate, receive floating rate)Long-termloans payable

Total

¥

Thousands of U.S. dollars
March 31, 2022
Method for hedge
accounting

Type of derivative transaction

Major
hedged item

Contracted
amountContracted
amountover 1 year

Long-termloans payable

12,255

8,170

(*1)

12,255

8,170

－

Fair
value

Interest rate swaps:
Special method(Pay fixed rate, receive floating rate)
Total

$

(*1) Since interest rate swaps are accounted for by the special method (refer to Note 2(e)), the fair value of long-term loans payable andlong-term loans payable due within one year are included in that of the long-term loans payable and short-term loans payable
disclosed in Note 15, “Financial instruments” respectively.

- 22 -

6.

Income taxes
The Company and its domestic subsidiaries are subject to a number of taxes based on income, which, in the aggregate, indicate astatutory income tax rate in Japan of approximately 30.6% and 30.6% for the years ended March 31, 2022 and 2021, respectively.

(a) The following table summarizes the significant differences between the statutory tax rate and the effective tax rate for financial
statement purposes:
2022

2021

Statutory tax rate

30.6%

30.6%

Share of (profit) loss of entities accounted for using equity method
Expenses not deductible for income tax purposes
Dividends and other income deductible for income tax purposes

(0.4)
0.9
(2.0)

(0.4)
0.7
(2.6)

Net adjustment resulting from elimination of dividend income
Unrealized tax benefits, such as those on prior losses of consolidated subsidiaries
Unrealized tax benefits related to allowance for doubtful accounts

1.8
(0.6)
0.1

2.5
(0.8)
0.0

Different tax rates applied at foreign subsidiaries
Income taxes for prior periods

(4.1)
(0.4)

(3.5)
0.2

Foreign source taxes
Decrease in deferred tax assets (liabilities) resulting from changes in statutory tax rates
Other, net

0.3
0.0
0.0

0.3
0.0
0.2

Effective tax rate

26.2%

27.2%

(b) Significant components of the Companies’ deferred tax assets and liabilities at March 31, 2022 and 2021 were as follows:
Thousands ofMillions of yen
U.S. dollars
2022

2021

2022

Deferred tax assets:
Allowance for doubtful accounts¥

Loss carryforwards
Net defined benefit liability
Directors’ retirement benefits

366

¥

390

$

2,991

2,549
936
72

3,276
888
62

20,831
7,651
592

Unrealized profit on inventories
Unrealized profit on property, plant and equipment
Depreciation
Write-down of golf club memberships
Write-down of investment securities

384
328
284
12
312

271
377
158
12
380

3,138
2,687
2,326
98
2,555

Write-down of inventories
Provision for bonuses
Enterprise taxes payable

150
378
186

118
321
157

1,225
3,092
1,523

5
1,070

5
873

46
8,747

Total deferred tax assets

7,038

7,295

57,509Valuation allowance(3,811)(4,454)(31,138)

Net deferred tax assets

3,227

2,841

26,370

(661)

(661)

(5,405)(1,410)(8,404)(521)(15,275)(11,523)(68,666)

(407)

(234)

(3,326)

Provision for loss on guarantees
Other

Deferred tax liabilities:
Gain on securities contributed to employee retirement benefit trust
Net defined benefit asset
Valuation difference on available-for-sale securities
Other
Total deferred tax liabilities(10,883)

Net deferred tax liabilities¥- 23 -(7,655)(16,693)¥(13,852)(88,921)$(62,551)

7.

Pledged assets
At March 31, 2022 and 2021, the following assets were pledged as security for trading transactions:Thousands of
U.S. dollars

Millions of yen
2022
Investment securities
8.

¥

2021

7,952

¥

2022

12,508$64,976

Research and development expenses
Research and development expenses included in selling, general and administrative expenses for the years ended March 31, 2022
and 2021 were as follows:
Thousands ofMillions of yen
U.S. dollars
2022

Research and development expenses

¥

2021
36

¥

2022
37

$

296

9. Short-term loans payable and long-term loans payable
Short-term loans payable at March 31, 2022 and 2021 consisted of bank loans bearing interest at average annual rates of 1.13%
and 1.11%, respectively. Long-term loans payable due within one year at March 31, 2022 and 2021 consisted of bank loans bearing
interest at average annual rates of 0.57% and 0.71%, respectively.
(a) Long-term loans payable at March 31, 2022 and 2021 consisted of the follows:
Thousands of
U.S. dollars

Millions of yen
2022
Unsecured loans from banks and insurance companies

2022

¥

8,025
(2,145)¥

10,513(3,037)$65,573(17,527)

¥

5,880

¥

7,475

$

48,046

Less amounts due within one year
Total

2021

(b) The aggregate annual maturities of long-term loans payable at March 31, 2022 were as follows:

2024

Millions of yen

Thousands of
U.S. dollars

2022

2022

¥

2,346

2025
2026

¥

19,16819,436
8,265

11
132

95
1,080

2027
2028 and thereafter
Total

$

2,378
1,011

5,880

$

48,046(c) In order to achieve more efficient and flexible financing, the Company has concluded multi currency lines of credit agreementswith four banks. The status of these lines of credit at March 31, 2022 and 2021 were as follows:
Thousands of
U.S. dollars

Millions of yen
2022
Multi currency lines of credit¥

Credit utilized- 24 -

24,478－2021¥

22,142－2022$

200,000－

10. Retirement and pension plans(a) Defined benefit pension plans(1) The change in the retirement benefit obligation for the years ended March 31, 2022 and 2021 were as follows:
Thousands of
U.S. dollars

Millions of yen
2022
Balance at the beginning of the year

¥

2021

9,516

¥

2022

9,369

$

77,752Service cost
Interest cost

493
71

518
64

4,035
582

Actuarial differences
Retirement benefits paid

(36)
(480)

(176)
(367)

(300)
(3,924)

Others111

Balance at the end of the year

¥

9,675

106
¥

9,516

911
$

79,055(2) The change in plan assets for the years ended March 31, 2022 and 2021 were as follows:
Thousands of
U.S. dollars

Millions of yen
2022
Balance at the beginning of the year

¥

2021

10,843

Expected return on plan assets

¥

2022

9,006

$

88,599

262

232

2,142

Actuarial differences
Contributions by the Company and its consolidated subsidiaries

(170)
3,830

1,750
168

(1,392)
31,298Retirement benefits paid

(327)

(319)

(2,672)

2

4

OthersBalance at the end of the year¥

14,441¥

10,843

17$

117,991(3) The following table sets forth the funded status of the plans and the amounts recognized in the Company’s and its consolidated
subsidiaries’ defined benefit plans:
Thousands ofMillions of yen
U.S. dollars
2022
Funded projected benefit obligations¥

Plan assets
Subtotal

8,124(14,441)

2021
¥

8,124
(10,843)

2022$

66,381(117,991)

Unfunded projected benefit obligations(6,316)
1,551(2,718)
1,391(51,609)
12,673

Net amount of liability and asset in consolidated balance sheet(4,765)(1,327)(38,936)

Liabilities (net defined benefit liability)
Assets (net defined benefit asset)

1,624(6,390)2,144(3,472)

13,275(52,211)

Net amount of liability and asset in consolidated balance sheet- 25 -¥(4,765)¥(1,327)$(38,936)(4) The components of retirement benefit expense for the years ended March 31, 2022 and 2021 were as follows:
Thousands of
U.S. dollars

Millions of yen
2022
Service cost

¥

2021
493

Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service cost

¥

518

71
(262)
41
(6)

Retirement benefit expense

¥

338

2022
$

64
(232)
387
(18)
¥

719

4,035
582
(2,142)
340
(50)

$

2,764

Actuarial differences and prior service cost included in other comprehensive income for the years ended March 31, 2022 and2021 were as follows:
Thousands ofMillions of yen
U.S. dollars
2022
Prior service cost

2022

¥

(6)
(92)

¥

(18)
2,314

$

(50)
(752)

¥

(98)

¥

2,295

$

(802)

Actuarial differences
Total

2021

(5) Unrecognized actuarial differences and unrecognized prior service cost included in accumulated other comprehensive income atMarch 31, 2022 and 2021 were as follows:
Thousands of
U.S. dollars

Millions of yen
2022
Unrecognized prior service cost¥

Unrecognized actuarial differences

2021
－

¥

(6)

(732)

Total

¥

(732)

2022
$

(824)
¥

(830)

－
(5,983)$(5,983)(6) The allocation of plan assets by major category as a percentage of total plan assets at the fair value at March 31, 2022 and 2021
were as follows:
2022

2021

Bonds

35.4%

47.1%

Equity securities
Cash and time deposits

38.0
26.3

49.9
1.5

Others
Total

0.3

1.5

100.0%

100.0%

Notes: 1. The expected long-term rate of return on plan assets is determined with consideration for both the present and future portfolio
allocation and the expected long-term rate of return on multiple plan assets at present and in the future.
2. Total plan assets include securities contributed to the retirement benefit trust (26.4% at March 31, 2022 and 28.7% at March
31, 2021).
(7) The assumptions used in accounting for the above plans were as follows:
2022

2021

Discount rate (mainly)

0.4%

0.4%

Expected long-term rate of return on plan assets (mainly)

3.0%

3.0%

- 26 -

(b) Defined contribution pension plans
The required contribution to the defined contribution pension plans for the years ended March 31, 2022 and 2021 were as follows:
Thousands ofMillions of yen
U.S. dollars
2022
Contribution to defined contribution pension plans by the Company and its¥
consolidated subsidiaries

2021
81

¥

2022
79

$

665

11. Cash and time deposits
The reconciliation of cash and time deposits in the consolidated balance sheets and cash and cash equivalents in the consolidated
statements of cash flows at March 31, 2022 and 2021 were as follows:
Thousands ofMillions of yen
U.S. dollars
2022
Cash and time deposits- 27 -

2022¥

35,403(7,151)¥

31,462(5,479)$289,267(58,431)¥

28,251¥

25,983$230,835

Time deposits with maturities of more three months
Cash and cash equivalents

202112. Other comprehensive income
Amounts reclassified to net income (loss) in the current period that were recognized in other comprehensive income in the current
or previous periods and the tax effects for each component of other comprehensive income for the years ended March 31, 2022 and2021 were as follows:
Thousands ofMillions of yen
U.S. dollars
2022

2021

2022

Valuation difference on available-for-sale securities:
Increase (decrease) during the year
Reclassification adjustments¥(14,525) ¥(8,907)

20,242 $(2,984)(118,679)(72,777)

Tax effect(23,432)
6,871

17,257(4,289)(191,456)
56,144

Subtotal, net of tax effect(16,560)

12,968(135,312)

372

3,046

Amount before tax effect

Deferred gains (losses) on hedges:
Increase (decrease) during the year
Reclassification adjustments

(75)

80
－

Amount before tax effectTax effect

297
(90)

80
(25)

2,430
(739)

Subtotal, net of tax effect

206

55

1,691

7,189

Foreign currency translation adjustment:
Increase (decrease) during the year

(615)

87

3,155
－

58,738

Reclassification adjustments
Amount before tax effectTax effect

7,276
－

3,155
－

59,456－

Subtotal, net of tax effect

7,276

3,155

59,456

Remeasurements of defined benefit plans, net of tax:
Increase (decrease) during the year
Reclassification adjustments

(151)
53

1,911
384

(1,238)435

Tax effect

(98)
30

2,295
(702)

(802)
245

Subtotal, net of tax effect

(68)

1,593

(557)

Increase (decrease) during the year
Reclassification adjustments

(127)
－

164
－

(1,045)－

Subtotal

(127)

164

(1,045)(9,273) ¥17,935

Amount before tax effect717

Share of other comprehensive income of entities accounted
for using equity method:

Total other comprehensive income¥- 28 -$(75,766)13. Revenue recognition(a) Breakdown of revenue from contracts with customers
Millions of yen
Year ended March 31, 2022

Japan
Southeast Asia¥

Northeast Asia
The Americas
EuropeRevenue fromContracts with
Customers (*2)
Other income (loss)
Sales to externalcustomers¥

IT &Electronics

Life
Industry

Chemicals

96,78817,13654,166
9,943

26,263
182

103,149
134,531

280,368
161,794

117,932
9,843

7,286
4,222

929
8,906

65,102
11,738191,250
34,710

－
－
－

6,012

3,025

1,922

1,703

12,664－

12,664

247,71378,64438,203

316,226

680,788－680,788

－

－

－

－

－

174

174

247,71378,64438,203

316,226

680,788174

680,962

Others (*1)

Consolidated

Plastics

Total

Others (*1)

Consolidated－

280,368
161,794
191,250
34,710Thousands of U.S. dollars
Year ended March 31, 2022
IT &Electronics

Chemicals

790,823
140,013442,573
81,248

Northeast Asia
The Americas
Europe963,577
80,427
49,127

Revenue fromContracts withJapan
Southeast Asia

Life
Industry

Plastics

Total

214,5851,487

842,797
1,099,207

2,290,779
1,321,956－－

2,290,779
1,321,956

59,532
34,497
24,724

7,593
72,771
15,707531,925
95,914
13,914

1,562,628
283,609
103,473－－－

1,562,628
283,609
103,473

2,023,968

642,575

312,145

2,583,758

5,562,448－

5,562,448

－

－

－

－

－

1,423

1,423

$ 2,023,968

642,575

312,145

2,583,758

5,562,448

1,423

5,563,871$

Customers (*2)
Other income (loss)
Sales to externalcustomers(*1) "Others" include businesses, such as real estate rental services, not included in reportable segments.
(*2) “Revenue from Contracts with Customers” is classified into countries or regions based on the location of the distributor.
(b) The basic information for understanding revenue from contracts with customer
The basic information for understanding revenue from contracts with customer is as described in Note 2. (n), “Recognition of revenues
and expenses.”- 29 -

(c) Information regarding the relationship between satisfaction of performance obligations under contracts with customers and cash
flows arising from such contracts and the amount and timing of revenue expected to be recognized from contracts with customers
existing at the end of the current consolidated fiscal year in the following consolidated fiscal year
(1) Contract assets and contract liabilities

Accounts receivables arising from contracts with customers(Beginning balance)
Accounts receivables arising from contracts with customers(Ending balance)

Millions of yen

Thousands of
U.S. dollars

2022

2022

¥

Contract liabilities (Beginning balance)
Contract liabilities (Ending balance)

162,736$

1,329,653

184,698

1,509,097

2,100
3,818

17,16331,196

Contract liabilities are mainly the consideration received from customers before delivery of goods and are included in "Other"under "Current liabilities" in the consolidated balance sheets. The amount of revenue recognized in the consolidated fiscal year underreview that was included in contract liabilities at the beginning of the consolidated fiscal year under review was ¥1,746 million.
(2) Transaction price allocated to remaining performance obligations
There are no significant transactions in the Companies with an expected term of more than one year. In addition, there is nomaterial amount of consideration arising from contracts with customers that is not included in the transaction price.

- 30 -

14. Segment information(a) General information about reportable segments
Inabata Group’s reportable segments represent the group’s component divisions for which separate financial information isavailable. This information is regularly evaluated by the Board of Directors in deciding how to allocate management resources andin assessing performance. Inabata Group is primarily engaged in the trading of merchandise, the manufacture and sale of various
products and the provision of services in Japan and abroad and operates its business in line with a comprehensive strategy
regarding merchandise, products and services for domestic and international markets. For effective business management
purposes, Inabata Group has segmented its corporate sales and marketing functions into four divisions (reportable segments) basedon merchandise, products and target markets/industries, namely: IT & Electronics, Chemicals, Life Industry and Plastics.
The major merchandise, products and services covered by each reportable segment are as follows:
IT & Electronics:

Semiconductor manufacturing equipment
Electronic materials, including parts
Dyes for printing

Chemicals:

Raw materials for copying
Motor parts and raw materials
Raw materials for plastic resin
Dyestuffs
LumberComposite materials
Wooden building materials

Life Industry:

Residential housing equipment
Pharmaceutical and agricultural chemicals and bulk raw materials
Raw materials for insecticides
Raw materials for toiletries
Raw and processed agricultural products
Raw and processed marine products

Plastics:

General purpose plastics
Engineering plastics(b) Basis of measurement for reportable segment profit and loss, segment assets, segment liabilities and other material items
Accounting methods applied to the reportable business segments are generally the same as those described in Note 2, “Summaryof significant accounting policies.” Segment income derives from operating income. Inter-segment profits and transfers are basedon prevailing market prices.
As described in “Changes in accounting policies”, the Company adopted the Accounting Standard for Revenue Recognition, etc.
from the beginning of the current consolidated fiscal year, and then, changed the accounting treatment for revenue recognition.
As a result, compared with the previous method, sales to external customers in the current consolidated fiscal year decreased by¥13,801 million ($112,765 thousand) in the IT & Electronics segment, ¥5,718 million ($46,725 thousand) in the Chemicals
segment, ¥3,254 million ($26,588 thousand) in the Life Industry segment and ¥2,504 million ($20,465 thousand) in the Plastics
segment, but there was no impact on segment profit.

- 31 -

(c) Information about reportable segment profit and loss, segment assets, segment liabilities and other material items for the years
ended March 31, 2022 and 2021 were as follows:
Millions of yen
Year ended March 31, 2022
IT &Electronics

Life
Industry

Chemicals

Outside customers ¥Intersegment

247,713－78,644－38,203－

316,226
－

174
－

－
－

680,962－

Total

Plastics

Elimination& Corporate

OthersConsolidated

Net sales:

247,71378,64438,203

316,226

174－

680,962

Segment income

¥

6,422

2,207

2,618

8,677

127

－

20,052

Total assets¥

113,181

49,033

21,145

164,811348

40,539389,059

¥

592

333

260

1,973

－

－

3,160

goodwill
Investments inequity method

－

－

－

2

－

－

2

affiliates
Increases in

2,174

1,382

－

905

－

－

4,462

160

220

140

1,254

－

210

1,986

Elimination& Corporate

Consolidated

Depreciation andamortization
Amortization of

tangible andintangible assets¥

Millions of yen
Year ended March 31, 2021

Net sales:
Outside customers ¥Intersegment
Total

IT &
Electronics

Life
Industry

Chemicals

224,534－

66,626－37,361－

248,888
－

172
－

－
－

577,583－

Plastics

OthersSegment income¥

224,534
6,327

66,626
1,320

37,361
1,563

248,888
5,631

172
130

－
－

577,583
14,973

Total assets¥

99,533

46,626

20,498

129,592

433

56,542353,228

Depreciation andamortization

¥

506

299

239

1,828

－

－

2,874

－

－

－

2

－

－

2

2,099

1,410

－

850

－

－

4,360

80

193

227

1,241

－

770

2,512

Amortization of
goodwill
Investments inequity method
subsidiary andaffiliates
Increases intangible andintangible assets¥- 32 -

Thousands of U.S. dollars
Year ended March 31, 2022
IT &Electronics

ChemicalsLife
Industry

Plastics

OthersElimination& Corporate

Consolidated

Net sales:
Outside customers $ 2,023,968－
Intersegment

642,575－

312,145－

2,583,758
－

1,423
－

－
－

5,563,871－

Total

2,023,968

642,575

312,145

2,583,758

1,423

－

5,563,871

Segment income$

52,47618,033

21,39670,896

1,037－

163,840

Total assets$

924,757

400,635

172,769

1,346,607

2,850

331,228

3,178,849

Depreciation andamortization

$

4,841

2,728

2,128

16,121－－25,819

－

－

－

17

－

－

17

17,763

11,298

－

7,400

－

－

36,463

1,314

1,805

1,148

10,246－

1,718

16,231

Amortization of
goodwill
Investments inequity method
affiliates
Increases intangible andintangible assets$

Notes: 1. “Others” includes business, such as real estate rental services, not included in reportable segments.
2. Corporate assets included in the Elimination & Corporate column in the amount of ¥40,539 million ($331,228 thousand) and¥56,542 million for the years ended March 31, 2022 and 2021, respectively, are mainly surplus funds (cash and deposits),
long-term investment funds (investment securities, etc.) and assets pertaining to administrative functions of the Company.
3. Increases in tangible and intangible assets stated in the Elimination & Corporate column in the amount of ¥210 million($1,718 thousand) and ¥770 million for the years ended March 31, 2022 and 2021, respectively, are attributable to theCompany’s administrative functions.
4. Segment income has been adjusted to be consistent with operating income in the consolidated financial statements.

- 33 -

[Related information](a) Geographic information(1) Net sales
Millions of yen
Year ended March 31, 2022
Japan¥

Southeast Asia

240,775¥

Northeast Asia

170,471¥

The Americas

227,595¥

Europe29,935¥

Consolidated

12,182¥680,962

Millions of yen
Year ended March 31, 2021
Japan¥

Southeast Asia

221,593¥

Northeast Asia

126,530¥

The Americas

202,631¥

Europe18,505¥

Consolidated

8,323

¥

577,583

Thousands of U.S. dollars
Year ended March 31, 2022
Japan$

Southeast Asia

1,967,281$

Northeast Asia

1,392,858$

The Americas

1,859,596$

Europe244,594$

Consolidated

99,540$5,563,871

Note: Sales amounts are based on customer locations and divided into countries and regions.
(2) Property, plant and equipment
Millions of yen
Year ended March 31, 2022
Japan¥

Southeast Asia
4,809

¥

Northeast Asia

6,705

¥

The Americas

1,635

¥

Europe1,298¥

Consolidated
863¥

15,312Millions of yen
Year ended March 31, 2021
Japan
¥

5,005

Southeast Asia
¥

6,091

Northeast Asia¥

The Americas

1,252

¥

Europe1,156¥

Consolidated
889¥

14,395

Thousands of U.S. dollars
Year ended March 31, 2022
Japan$

39,294Southeast Asia$

54,791

Northeast Asia$

The Americas

13,362$Europe10,612$

7,052

Consolidated$

125,112

Elimination& Corporate

Consolidated¥¥(b) Information on the amount of impairment loss on non-current assets by reportable segment
There was no impairment loss on non-current assets for the year ended March 31, 2021.
Millions of yen
Year ended March 31, 2022
IT &Electronics
Impairment loss

¥

19

Life
Industry

Chemicals
¥

－

¥

－

Plastics¥

149

Others
¥

－

－

168

Thousands of U.S. dollars
Year ended March 31, 2022
IT &Electronics
Impairment loss

$

156

Life
Industry

Chemicals
$

－

$

－

- 34 -

Plastics$

1,218

Others$－Elimination& Corporate

Consolidated

$

$

－

1,375

(c) Information on the amount of amortization and the unamortized balance of goodwill by reportable segment
Millions of yen
Year ended March 31, 2022
IT &Electronics
Amortization
Unamortized

¥

－

¥

－

balance

Life
Industry

Chemicals－¥－

Plastics¥－－

Others2¥－－

Elimination& Corporate

Consolidated

¥

¥

－

－

2

－

－

Elimination& Corporate

Consolidated¥¥

Millions of yen
Year ended March 31, 2021
IT &Electronics
Amortization¥

Unamortizedbalance－

Life
Industry

Chemicals
¥

－

－

¥

－

－

Plastics¥

Others
2

¥

－

2

－

－

2

－

2

Elimination& Corporate

Consolidated

$

$

－

Thousands of U.S. dollars
Year ended March 31, 2022
IT &Electronics
Amortization
Unamortizedbalance

$

－
－

Life
Industry

Chemicals
$

－
－

$

－
－

- 35 -

Plastics$

17－

Others
$

－
－

－
－

17
－

15. Financial Instruments(Fair values of financial instruments)
Book values and fair values of the financial instruments on the consolidated balance sheet at March 31, 2022 and 2021 were as
follows:
Millions of yen
March 31, 2022
Book values

Fair values

Differences

Securities and investment securities (*3)
Available-for-sale securities
Long-term loans receivable
Allowance for doubtful accounts (*4)

36,133
1,448(151)

36,133

1,297
Total Assets¥

Long-term loans payable (*2)

37,430

1,284
¥

8,025

Total Liabilities－

37,418

(12)
¥

7,949

(12)
76

¥

8,025

¥

7,949

¥

76

¥

(14)

¥

(14)

¥

－
－

¥

－

Derivative transactions (*5)
Derivative transactions for which hedge accounting is not applied
Derivative transactions for which hedge accounting is applied
Total Derivative Transactions

601
¥

586

601
¥

586

Millions of yen
March 31, 2021
Book values

Fair values

Differences

Securities and investment securities (*3)
Available-for-sale securities
Long-term loans receivable

60,411
1,212

Total Assets¥

Long-term loans payable (*2)

61,62360,411
1,207¥

10,513

Total Liabilities

61,619－(4)¥

10,563

(4)
(50)

¥

10,513¥

10,563

¥

(50)

¥

(1)
301

¥

(1)
301

¥

－
－

¥

299

¥

299

¥

－

Derivative transactions (*5)
Derivative transactions for which hedge accounting is not applied
Derivative transactions for which hedge accounting is applied
Total Derivative Transactions- 36 -

Thousands of U.S. dollars
March 31, 2022
Book values

Fair values

Differences

Securities and investment securities (*3)
Available-for-sale securities

295,232

Long-term loans receivable

11,833

Allowance for doubtful accounts (*4)

295,232－

10,497(102)(1,234)
10,599Total Assets$

Long-term loans payable (*2)

305,832$

305,730

65,573

Total Liabilities

$

(102)

64,952621$

65,573$64,952

$

621

$

(119)
4,911

$

(119)
4,911

$

－

4,791

$

4,791

$

Derivative transactions (*5)
Derivative transactions for which hedge accounting is not applied
Derivative transactions for which hedge accounting is applied
Total Derivative Transactions$－－(*1) "Cash and time deposits," "Notes receivable - trade," "Accounts receivable - trade," "Notes and accounts payable - trade" and"Short-term loans payable" are omitted because cash and time deposits, notes receivable - trade, accounts receivable - trade, notes
and accounts payable - trade, and short-term loans payable are close to their book values because they are settled in a short periodof time.
(*2) Long-term loans payable include ¥2,145 million ($17,527 thousand) and ¥3,037 million of long-term loans payable within 1 year
for the years ended March 31, 2022 and 2021.
(*3) Stocks with no fair values are not included in “Securities and investment securities.” The amounts recorded on the consolidatedbalance sheet for these financial instruments at March 31, 2022 and 2021 were as follows.
Thousands of
U.S. dollars

Millions of yen
2022
Shares of subsidiaries and associates

¥

2021

5,038
347
6,762

Investments in capital of subsidiaries and associates
Unlisted equity securities
Investments in capital

¥

2022

4,740
－
6,450

41,1702,840
55,250

0

177

21

$

(*4) The balance of “Allowance for doubtful accounts” is deducted individually from the balances of “Long-term loans receivable.”(*5) Net receivables and payables generated from derivative transactions are shown above. Items that represent net payables are shownin parentheses.
(a) Financial instruments with maturities at March 31, 2022 and 2021 were as follows:
Millions of yen
March 31, 2022
Over 1 year but
within 5 years

Within 1 year
Cash and time deposits¥

35,403

Notes receivable - trade
Accounts receivable - trade22,548162,010

Available-for-sale securities
Bonds
OthersLong-term loans receivable
Total

¥

¥

－

Over 5 years but
within 10 years
¥

－

¥

－

139

－
－

－
－

－

－

－

－

－

－

－

－

－

1,133

314

0

219,962－Over 10 years¥- 37 -

1,272

¥

314

¥

0

Millions of yen
March 31, 2021
Over 1 year but
within 5 years

Within 1 year
Cash and time deposits¥

Notes and accounts receivable - trade
Available-for-sale securities
Bonds

31,462¥－

Over 5 years but
within 10 years¥－

Over 10 years¥－

162,258

477

－

－

－

－

Others

10
－

－

－

－

Long-term loans receivable

－

814

397

0

Total

¥

193,731

¥

1,292

¥

397

－

¥

0

Thousands of U.S. dollars
March 31, 2022
Over 1 year but
within 5 years

Within 1 year
Cash and time deposits$

Notes receivable - trade
Accounts receivable - trade
Available-for-sale securities
Bonds
OthersLong-term loans receivable
Total

$

289,267$－Over 5 years but
within 10 years$－

Over 10 years$－

184,235－－－

1,323,725

1,137

－

－

－
－
－

－
－

－
－

－
－

9,262

2,568

2

1,797,228$

10,399

$

2,568

$

2

(b) Short-term loans payable and long-term loans payable with maturities at March 31, 2022 and 2021 were as follows:
Millions of yen
March 31, 2022
Over 1 year but
within 5 years

Within 1 year
Short-term loans payable¥

Long-term loans payable
Total

56,512¥

2,145¥

58,657－

Over 5 years but
within 10 years
¥

5,748
¥

5,748

－

Over 10 years
¥

132
¥

132

－
－

¥

－

Millions of yen
March 31, 2021
Over 1 year but
within 5 years

Within 1 year
Short-term loans payable¥

30,693¥33,731Long-term loans payable
Total

¥

3,037

－

Over 5 years but
within 10 years
¥

7,439
¥

7,439

－

Over 10 years
¥

－
－

¥

－

35
¥

35

Thousands of U.S. dollars
March 31, 2022
Over 1 year but
within 5 years

Within 1 year
Short-term loans payable$

461,740
17,527$$479,267$

Long-term loans payable
Total

－

Over 5 years but
within 10 years$

46,966- 38 -

46,966－

Over 10 years
$

－
－

$

－

1,080
$

1,080

(Fair value information for financial instruments by level of inputs)
Based on the observability and the significance of the inputs used to determine fair values, fair value information for financial
instruments is presented by categorizing measurements into the following three levels:
Level 1 fair value: The fair value measured by quoted prices of identical assets or liabilities in active markets.
Level 2 fair value: The fair value measured using observable inputs other than Level 1.
Level 3 fair value: The fair values measured using unobservable inputs.
When multiple inputs of different categories are used in measuring fair value, the Company and its subsidiaries classifiy fairvalues into a category to which the lowest priority is assigned.
Millions of yen
March 31, 2022
Level 1
Securities and investment securities

Level 2¥Available-for-sale securities

Level 3

¥

Total

¥

¥

36,133－－36,133

－

(14)

－

(14)

－

601

－

601

Derivative transactions
Derivative transactions for which hedge
accounting is not applied
Derivative transactions for which hedge
accounting is applied
Total

¥

36,133

¥

586

¥

－

¥

36,720Thousands of U.S. dollars
March 31, 2022
Level 1
Securities and investment securities$

Available-for-sale securities
Derivative transactions$

Level 3

$

Total

$

$

295,232－－

295,232

－

(119)

－

(119)

－

4,911

－

4,911

Derivative transactions for which hedge
accounting is not applied
Derivative transactions for which hedge
accounting is applied
Total

Level 2295,232

$

4,791

$

－

$

300,024

Millions of yen
March 31, 2022
Level 1Long-term loans receivable¥

Level 2－Long-term loans payable¥

Level 3

1,284

－

¥

－
7,949

－

Total
¥

1,284
7,949

Thousands of U.S. dollars
March 31, 2022
Level 1Long-term loans receivable
Long-term loans payable$

Level 2－－$

- 39 -

Level 3

10,497－$－64,952

Total$

10,49764,952

(a) Valuation techniques and inputs used in measuring fair values(1) Securities and investment securities
Listed equity securities are measured using quoted prices. Fair values of listed equity securities are classified as Level 1 because
they are exchanged in active markets.
(2) Long-term loans receivable
Long-term loans receivable are classified as Level 2 because the fair value at fixed interest rates is the present value of future cash
flows of the receivables. The receivables are categorized into certain periods and divided into groups according to credit risk. In
calculating the fair values, the allowance for doubtful accounts, which is separately provided for in long-term loans receivable, isdeducted.
(3) Long-term loans payable
Long-term loans payable are classified as Level 3 because the fair value is measured using the discounted present value method
based on the interest rates that reflect the total amount of payment obligations of principal and interests, when a similar loan is
newly borrowed. As the fair value of some long-term loans payable is subject to currency swaps and interest rate swaps, the fairvalue is calculated using the discounted present value method using future cash flows which are treated together with the currency
swaps and interest rate swaps and are based on the interest rate that would be assumed if a similar new payable was made.
(4) Derivative Transactions
Derivative Transactions are classified as Level 2 because, the fair value is based on the prices presented by financial institutions.
The special treatment of interest rate swaps is treated as an integral part of the long-term loans payable that are hedged, and,
therefore, the fair values are included in the fair values of such long-term loans payable.

- 40 -

16. Shareholders’ equity
The Japanese Corporate Law (the “Law”) became effective on May 1, 2006, replacing the Japanese Commercial Code (the“Code”). The Law is generally applicable to events and transactions occurring after April 30, 2006 and for fiscal years ending
after that date.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock.
However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one half of the price of the
new shares as additional paid-in capital, which is included in capital surplus.
Under the Law, in cases in which a dividend distribution of surplus is made, the smaller of an amount equal to 10% of thedividend or the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve must
be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in theaccompanying consolidated balance sheets.
Under the Law, additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Code,however, on condition that the total amount of legal earnings reserve and additional paid-in capital remained equal to or exceeded
25% of common stock, they were available for distribution by resolution of the shareholders’ meeting. Under the Law, alladditional paid-in capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings,
respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial
statements of the Company in accordance with Japanese laws and regulations.
The change in common stock for the years ended March 31, 2022 and 2021 were as follows:
Number of sharesYear ended March 31, 2022
April 1, 2021
Common stock

Increase

63,499,227

Decrease

March 31, 2022

2,700,000－

60,799,227

1. The decrease in common stock related with the cancellation of treasury stock by resolution of the Board of Directors for the year
ended March 31, 2022.
Number of sharesYear ended March 31, 2021
April 1, 2020
Common stock

63,499,227- 41 -

Increase

Decrease－

March 31, 2021－

63,499,227

17. Treasury stock
The change in treasury stock for the years ended March 31, 2022 and 2021 were as follows:
Number of sharesYear ended March 31, 2022
April 1, 2021
Treasury stock

3,302,651

Increase

Decrease

3,085,188

March 31, 2022

2,705,700

3,682,139

1. Treasury stock at the end of the current consolidated fiscal year included 94,300 shares of the Company owned by the Board Benefit
Trust (BBT trust account) for the year ended March 31, 2022.
2. The increase in treasury stock consists of 3,085,100 shares from the purchase of shares by resolution of the Board of Directors and 88
shares from the purchase of shares of less than one voting unit for the year ended March 31, 2022.
3. The decrease in treasury stock consists of 2,700,000 shares from the cancellation of treasury stock by resolution of the Board of
Directors and 5,700 shares from the transfer of stock ownership trust for the year ended March 31, 2022.
Number of sharesYear ended March 31, 2021
April 1, 2020
Treasury stock

3,302,640

Increase

Decrease
11

March 31, 2021－

3,302,651

1. Treasury stock at the end of the current consolidated fiscal year included 100,000 shares of the Company owned by the Board
Benefit Trust (BBT trust account) for the year ended March 31, 2021.
2. The increase in treasury stock is related with the purchase of shares of less than one voting unit for the year ended March 31, 2021.

- 42 -

18. Related party disclosures
The Company is an affiliate of SUMITOMO CHEMICAL COMPANY, LIMITED, which owned 24.5% and 22.9% of theCompany’s voting shares at March 31, 2022 and 2021, respectively.
SUMIKA TECHNOLOGY CO., LTD. is the subsidiary of SUMITOMO CHEMICAL COMPANY, LIMITED.
The Company controlled 15% and 15% of the voting shares of SUMIKA TECHNOLOGY CO., LTD. at March 31, 2022 and
2021, respectively.
(a) Significant transactions with related parties for the years ended March 31, 2022 and 2021 were as follows:
Thousands of
U.S. dollars

Millions of yen
2022

2021

2022

SUMITOMO CHEMICAL COMPANY, LIMITEDNet sales
Purchases
Notes and accounts receivable - trade

¥

8,933
14,752
－

¥

9,138
9,921
4,914
－

$

72,990120,538－

Accounts receivable - trade
Notes and accounts payable - trade

3,482
3,610

2,510

28,45329,502Pledges of investment securities
SUMIKA TECHNOLOGY CO., LTD.
Net sales
Notes and accounts receivable - trade

6,849

10,981

55,963¥

Accounts receivable - trade

14,802－¥

15,001
7,604
－

5,514

$

120,945－
45,053(b) The consolidated subsidiaries’ significant transactions with related parties for the years ended March 31, 2022 and 2021 were as
follows:
TAIWAN INABATA SANGYO CO., LTD.
Thousands of
U.S. dollars

Millions of yen
SUMIKA TECHNOLOGY CO., LTD.

2022

Purchases

¥

2021
－
－

Notes and accounts payable - trade

¥

2022

16,201
3,509

$

－
－

19. Contingent liabilities
At March 31, 2022 and 2021, the Company and its consolidated subsidiaries were contingently liable as follows:
Thousands of
U.S. dollars

Millions of yen
2022
Discounted notes receivables¥

Guarantees for loans of customers and others

2021
368

¥

572

Total

¥

- 43 -

941

2022
343

$

703
¥

1,046

3,014
4,678

$

7,693

20. Subsequent events(Cash dividends)
At the meeting of the Board of Directors of the Company held on May 10, 2022 and May 11, 2021, an appropriation of nonconsolidated
retained earnings for the years ended March 31, 2022 and 2021 were duly approved as follows:
Thousands ofMillions of yen
U.S. dollars
2022
Cash dividends - ¥80.00 ($0.65) per share

¥

4,592

2021
¥

2,601

2022
$

37,521

Note: Total dividends of ¥4,592 million ($37,521 thousand) and ¥2,601 million for the years ended March 31, 2022 and 2021,
respectively, by the resolution at the Board of Directors include dividends on the Company’s stock held by the Board Benefit Trust(BBT trust account) of ¥7 million ($61 thousand) and ¥4 million.
(Sales of investment securities)
The Company resolved to sell part of the investment securities held by the Company at the Board of Directors' meeting held on May
26, 2022.
(1) Reason for sale of investment securities
In order to pursue greater efficiency of owned assets.
(2) Details of sales of investment securities① Investment securities to be sold: Marketable securities of two listed companies owned by the Company② Time of recognition of gain on sales of investment securities: In the current fiscal year ending March 31, 2023
③ Gain on sales of investment securities: Approximately ¥6,200 million ($50,657 thousand) (estimate)- 44 -