SAKATA INX CORPORATION
Consolidated Financial Statements
As of December 31, 2023 and 2022SAKATA INX CORPORATIONCONSOLIDATED BALANCE SHEETS
Years ended December 31, 2023 and 2022
Millions of yen
ASSETS
Current assets:
Cash and deposits (Note 11 and 30) ········································
Notes and accounts receivable - trade (Notes 6, 10, 11, 14 and 19) ····
Merchandise and finished goods ············································
Work-in-process ······························································
Raw materials and supplies ··················································
Other ············································································
Allowance for doubtful accounts ···········································
Total current assets ························································

2023

¥

2022

17,01459,39816,0861,450
14,506
2,767(664)
110,557¥

12,12053,863
13,164
1,515
18,6702,394(575)
101,151

Property, plant and equipment (Notes 8, 9, and 15):
Buildings and structures, net ················································
Machinery, equipment and vehicles, net ···································
Land ············································································
Leased assets, net ·····························································
Construction in progress ·····················································
Other, net·······································································
Total property, plant and equipment ····································

19,892
10,685
9,817
256
2,224
4,201
47,07519,858
10,391
9,817
232
3,815
4,273
48,386

Intangible assets:
Goodwill (Note 31) ···························································
Other ············································································
Total intangible assets·····················································

386
3,519
3,905

441
1,901
2,342

30,118
29
340
1,208
1,736
(881)
32,550
194,087

23,943
33
19
843
1,697
(1,010)25,525
177,404

Investments and other assets:
Investment securities (Notes 7, 11, 12 and 14) ····························
Long-term loans receivable ··················································
Retirement benefit asset (Note 17) ·········································
Deferred tax assets (Note 18)················································
Other ············································································
Allowance for doubtful accounts (Note 3)·································
Total investments and other assets ······································¥

The accompanying notes are an integral part of these statements.

1¥

Millions of yen
LIABILITIES AND NET ASSETS
Current liabilities:
Notes and accounts payable - trade (Notes 10, 11 and 14)··············
Electronically recorded obligations - operating (Notes 10) ··················
Short-term loans payable (Notes 13 and 14) ······························
Current portion of long-term loans payable (Notes 13) ·················
Lease obligations ·····························································
Accrued expenses ····························································
Income taxes payable ························································
Provision for bonuses ························································
Other ···········································································
Total current liabilities ···················································
Non-current liabilities:
Bonds payable (Note 11) ····················································
Long-term loans payable (Notes 11, and 13)······························
Lease obligations ·····························································
Deferred tax liabilities (Note 18) ···········································
Retirement benefit liability (Note 17) ·········································
Asset retirement obligations ·················································
Other ···········································································
Total non-current liabilities ··············································
Total liabilities ···························································· ¥

2023

2022

25,57914,030
8,355
3,416
697
5,624
840
663
2,607
61,811

23,122
14,316
11,047
1,979
648
4,656
524
547
2,304
59,1431,000
11,285
1,151
4,353
5,041
77
3,718
26,62588,436

1,000
11,244
1,338
3,555
4,869
75
3,227
25,30884,451¥

Contingent liabilities (Note 20)
Net Assets (Note 33):
Shareholders’ equity
Capital stock:
Authorized – 144,000,000 shares
Issued – 54,172,361 shares in December 2023 and 2022 ············ ¥Capital surplus ································································
Retained earnings ····························································
Treasury shares, at cost – 4,127,549 shares in December 2023 and
4,143,541 shares in December 2022 ········
Total shareholders’ equity ···············································
Accumulated other comprehensive income
Valuation difference on available-for-sale securities ····················
Deferred gains or losses on hedges ········································
Foreign currency translation adjustment ··································
Remeasurements of defined benefit plans ································
Total accumulated other comprehensive income ·····················
Non-controlling interests ····················································
Total net assets ····························································
¥

7,473
5,673
77,7407,473
5,672
71,730(4,000)86,886(4,015)80,8602,151
2
10,169(411)
11,911
6,854
105,651
194,087

1,112
(0)
5,010
(710)
5,412
6,681
92,953
177,404

The accompanying notes are an integral part of these statements.

2

¥

¥

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2023 and 2022

Net sales ······················································································
Cost of sales ·················································································
Selling, general and administrative expenses (Note 22) ····························
Operating income···································································

Millions of yen
2023
2022
¥
228,312¥215,531
177,986
176,31338,92835,093
11,3984,125

Other income (expenses):
Interest income ···········································································
Dividend income ·········································································
Real estate rent ···········································································
Equity in earnings of affiliates ·························································
Interest expenses ·········································································
Commission expenses ···································································
Foreign exchange gains and losses ····················································
Gain on sales of investment securities (Notes 12 and 23) ··························
Gain on sales of business (Notes 24) ··················································
Loss on sales of non-current assets (Notes 25)·······································
Subsidy income ··········································································
Loss on retirement of non-current assets (Note 26) ·································
Loss on valuation of shares of affiliates (Note 27) ··································
Impairment loss (Notes 28)·····························································
Other, net ·················································································
Income before income taxes ······················································
Income taxes:
Current ····················································································
Deferred (Note 18)·······································································Net income···················································································Net income attributable to non-controlling interests································Net income attributable to owners of parent ····································

¥

208
138
180
1,750
(767)
416
38
415
(54)
100
(280)
(2,742)311
11,111

65
236
180
997
(531)
(100)
(250)
1,442
100
(218)
239
6,285

3,739
(141)
3,598

1,857
(508)
1,349

7,513
(46)
7,467

¥

4,936
(381)
4,555

¥
¥

85.52
30.00

Yen
Net income per share of capital stock (Note 35) ········································Cash dividends per share applicable to the year (Note 35)·····························¥¥

The accompanying notes are an integral part of these statements.

3

149.2235.00

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended December 31, 2023 and 2022

Net income·····················································································
Other comprehensive income (Note 29):
Valuation difference on available-for-sale securities··································
Deferred gains or losses on hedges ······················································
Foreign currency translation adjustment ················································
Remeasurements of defined benefit plans, net of tax ·································
Share of other comprehensive income of affiliates accounted
for using equity method ·································································
Total other comprehensive income ······················································
Comprehensive income ·····································································
Comprehensive income attributable to:
Owners of parent ···········································································
Non-controlling interests ·································································

Millions of yen
2023
2022
¥
7,513
¥
4,936
1,087
3
4,248
310

(953)
3
5,487
(473)

¥

1,326
6,974
14,487

¥

1,784
5,848
10,784¥¥

13,966
521

¥
¥

9,692
1,092

The accompanying notes are an integral part of these statements.

4

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Year ended December 31, 2023
Number ofshares ofcommon stock
Balance at the beginning of current period ··················

54,172,361-

Dividends of surplus (Notes 33 and 35) ······················Net income attributable to owners of parent ·················
Purchase of treasury shares ····································
Disposal of treasury shares·····································
Change in scope of consolidation ·····························
Change in scope of consolidation in
affiliates accounted for using equity method ···············Net changes of items other thanshareholders’ equity ······································
Total changes of items during the period ·····················
Balance at the end of current period ··························

Millions of yen
Capital stock

Capital surplus

¥

¥

7,473
-

5,672
1
-

Retainedearnings¥

Total
shareholders’equityTreasuryshares71,730¥(1,501)7,467(3)(4,015)
(0)
15
-

¥

47
54,172,361

¥

7,473

¥

1
5,673

¥

6,010
77,740Millions of yen
Valuationdifference on
available-forsale securities
Balance at the beginning of current period ·················· ¥Dividends of surplus (Notes 33 and 35) ······················Net income attributable to owners of parent ·················
Purchase of treasury shares ····································
Disposal of treasury shares·····································
Change in scope of consolidation ····························
Change in scope of consolidation in
affiliates accounted for using equity method ···············Net changes of items other thanshareholders’ equity ······································
Total changes of items during the period ·····················
Balance at the end of current period ·························· ¥

1,112
-

Foreigncurrencytranslation
adjustment

Deferred
gains or losses
on hedges
¥

(0)
-

¥

5,010
-

Remeasurementsof defined benefit
plans
¥

(710)
-

80,860(1,501)
7,467
(0)
16
(3)
47

¥

15
(4,000)Total
accumulated
othercomprehensive
income
¥
5,412
-

¥

6,026
86,886

Non-controllinginterests
¥

6,681
-

Total
net assets¥

92,953(1,501)
7,467
(0)
16
(3)
47

1,039
1,039
2,151

¥

2
2
2

5,159
5,159
¥

10,169299
299¥

The accompanying notes are an integral part of these statements.
5

(411)

6,499
6,499
¥

11,911

173
173
¥

6,854

6,672
12,698¥105,651

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Year ended December 31, 2022
Number ofshares ofcommon stock
Balance at the beginning of current period ··················

62,601,161(8,428,800)-

Dividends of surplus (Notes 33 and 35) ······················Net income attributable to owners of parent ·················
Purchase of treasury shares ····································
Disposal of treasury shares·····································
Cancellation of treasury shares ································
Transfer from retained earnings to capital surplus ···········Net changes of items other thanshareholders’ equity ······································
Total changes of items during the period ·····················
Balance at the end of current period ··························

54,172,361

Millions of yen
Capital stock

Capital surplus

¥

¥

¥

7,473
7,473

¥

5,675
(0)
(8,168)
8,165
(3)
5,672

Retainedearnings¥¥

76,967(1,627)
4,555(8,165)(4,010)(8,193)
20
8,168-(5,237)
71,730(5)(4,015)

Millions of yen
Valuationdifference on
available-forsale securities
Balance at the beginning of current period ·················· ¥Dividends of surplus (Notes 33 and 35) ······················Net income attributable to owners of parent ·················
Purchase of treasury shares ····································
Disposal of treasury shares·····································
Cancellation of treasury shares ································
Transfer from retained earnings to capital surplus ···········Net changes of items other thanshareholders’ equity ······································
Total changes of items during the period ·····················
Balance at the end of current period ·························· ¥

2,106
-

¥

(994)
(994)
1,112

Foreigncurrencytranslation
adjustment

Deferred
gains or losses
on hedges

¥

(3)
-

¥

3
3
(0)

(1,606)
-

¥

6,616
6,616
¥

5,010

¥

The accompanying notes are an integral part of these statements.
6

¥

¥

(222)
-

Total
accumulated
othercomprehensive
income
¥
275
-

(488)
(488)

5,137
5,137

Remeasurementsof defined benefit
plans

(710)

Total
shareholders’equityTreasuryshares

¥

5,412

¥

¥

86,105(1,627)
4,555(8,193)20(5,245)80,860Non-controllinginterests
¥

6,085
-

Total
net assets
¥

596
596
¥

6,681

92,465(1,627)
4,555(8,193)
20
5,733
488

¥

92,953

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2023 and 2022
Millions of yen
2023

Cash flows from operating activities:
Income before income taxes ······························································¥

11,111

2022
¥

6,285

Depreciation and amortization ······················································
Amortization of goodwill····························································
Increase (decrease) in allowance for doubtful accounts ·························
Decrease (increase) in retirement benefit asset ···································
Increase (decrease) in retirement benefit liability ································
Increase (decrease) in provision for bonuses ·····································
Loss (gain) on sales of fixed assets ················································
Impairment loss ·······································································
Loss on valuation for shares of affiliates ··········································
Interest and dividend income ·······················································
Interest expenses······································································
Equity in (earnings) losses of affiliates ············································
Loss (gain) on sales of investment securities ·····································
Loss on retirement of non-current assets ··········································
Subsidy income ·······································································
Loss (gain) on sales of business ····················································
Decrease (increase) in notes and accounts receivable - trade ···················
Decrease (increase) in inventories··················································
Increase (decrease) in notes and accounts payable - trade,including electronically recorded obligations - operating ·······················
Other, net ··············································································
Subtotal ······································································
Interest and dividend income received ············································
Interest expenses paid ································································
Proceeds from subsidy income ·····················································
Income taxes paid ····································································Net cash provided by (used in) operating activities ·······································

4,868
118
(103)
(321)
182
112
54
2,742
280
(345)
767
(1,750)
(38)
(100)
(415)
(3,404)
3,027

4,799
108
(57)
785
(83)
(67)
(301)
531
(997)
(1,442)
218
(100)
(861)
(1,241)

1,085
127
17,997
693
(759)
100
(2,659)15,372(1,176)
346
6,747
645
(550)
100
(1,997)
4,945

Cash flows from investing activities:
Purchase of property, plant and equipment ·············································
Proceeds from sales of property, plant and equipment ································
Purchase of intangible assets ·····························································
Purchase of investment securities························································
Proceeds from sales of investment securities ··········································
Payments of loans receivable·····························································
Collection of loans receivable ····························································
Proceeds from sales of business ·························································
Other, net ···················································································Net cash provided by (used in) investing activities ·······································(4,270)250(1,744)(1,933)
47
(58)
65
415
(363)
(7,591)(4,818)58(1,644)
(368)
4,628
(24)
77
423
(1,666)

The accompanying notes are an integral part of these statements.

7

Millions of yen
2023
2022

Cash flows from financing activities:
Net increase (decrease) in short-term loans payable ··································
Proceeds from long-term loans payable·················································
Repayments of long-term loans payable ················································Cash dividends paid ·······································································
Dividends paid to non-controlling interests ············································
Proceeds from share issuance to non-controlling shareholders ····························
Purchase of treasury shares ·······························································
Other, net ···················································································Net cash provided by (used in) financing activities ·······································(3,305)
3,647(2,542)(1,501)
(348)
(0)
(250)
(4,299)

4,763
7,582
(5,669)(1,627)(643)
147(8,193)(257)(3,897)

Effect of exchange rate change on cash and cash equivalents ·······················

1,003

225

Net increase (decrease) in cash and cash equivalents ·································Cash and cash equivalents at beginning of period ·····································
Increase (decrease) in cash and cash equivalents resulting from change ofscope of consolidation ·······································································Cash and cash equivalents at end of period （Note 30） ······························

4,485
11,722(393)
12,115

12-¥

The accompanying notes are an integral part of these statements.

8

16,219¥11,722

SAKATA INX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.

Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of SAKATA INX CORPORATION (the“Company”) and its consolidated subsidiaries have been prepared in accordance with the provisions set forthin the Japanese Financial Instruments and Exchange Act and its related accounting regulations and in
conformity with generally accepted accounting principles in Japan (“Japanese GAAP”), which are different
in certain respects as to the application and disclosure requirements from International Financial ReportingStandards (IFRS).
The accounts of the Company’s consolidated foreign subsidiaries are based on IFRS or generally
accepted accounting principles in the United States of America (U.S. GAAP). The accompanying
consolidated financial statements have been restructured and translated into English with some expanded
descriptions and the inclusion of the consolidated statements of shareholders’ equity with the consolidated
financial statements of the Company prepared in accordance with Japanese GAAP and filed with theappropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments andExchange Act. Some supplementary information included in the statutory Japanese language consolidated
financial statements, but not required for fair presentation, is not presented in the accompanying consolidated
financial statements.
2.

Significant Accounting Policies
Consolidation
The consolidated financial statements include the accounts of the Company and its twenty-six
subsidiaries (twenty-four in 2022). The principal subsidiaries of the Company were THE INXGROUP LIMITED, INX International Ink Co., SAKATA INX (INDIA) PRIVATE LIMITED and P.T.
SAKATA INX INDONESIA. SAKATA INX (CAMBODIA) CO., LTD., an unconsolidated subsidiary in
2022, has been included in the scope of consolidation due to an increase in materiality, and INX
International Resources de México, S. de R.L. de C.V. has been newly founded and included in the scope of
consolidation. All significant intercompany transactions and balances have been eliminated.
In the elimination of investments in subsidiaries, the assets and liabilities of the subsidiaries, including
the portion attributable to non-controlling shareholders, are evaluated using the fair value at the time theCompany acquired control of the respective subsidiary.
The equity method was applied to four affiliates (four in 2022). The principal affiliate of the Company
was SIIX Corporation.
Securities
The Company and its consolidated subsidiaries (the “Companies”) classify securities as (a) securities
held for trading purposes (“trading securities”), (b) debt securities intended to be held to maturity(“held-to-maturity debt securities”), (c) equity securities issued by subsidiaries and affiliates and (d) all othersecurities that are not classified in any of the above categories (“available-for-sale securities”).
The Companies do not hold trading securities or held-to-maturity debt securities. Equity securities
issued by subsidiaries and affiliates accounted for by the equity method are stated at moving average cost.
Available-for-sale securities with available fair values are stated at fair value. Unrealized gains andunrealized losses on these securities are reported, net of applicable income taxes, as a separate component ofshareholders’ equity. Realized gains and losses on the sale of such securities are computed using moving
average cost. Other securities with no available fair value are stated at moving average cost. Investments ininvestment limited partnerships and similar partnerships (deemed to be securities in Article 2-2 of theJapanese Financial Instruments and Exchange Act) are recorded at the net amounts of the Company’s shareof the partnerships’ value based on available financial statements following the reporting date described in
the partnership agreement.

9

Inventories
Inventories of the Company and its consolidated domestic subsidiaries are stated at cost based on themoving average method, in which the amount of inventories shown on the balance sheet are written down
based on any decrease in profitability.
Inventories of the consolidated foreign subsidiaries are stated principally at the lower of cost or
market, cost being determined by the first-in, first-out method.
Property, plant and equipment
Property, plant and equipment are carried at cost. The Company and its consolidated domestic
subsidiaries depreciate property, plant and equipment principally by the straight-line method over theestimated useful life of the asset.
The range of useful lives is summarized as follows:
Buildings and structures
Machinery, equipment and vehicles
Other

3 to 60 years
2 to 17 years
2 to 20 years

Intangible assets
Intangible assets consist of in-house software and other. The straight-line method is used to amortize
intangible assets. The amortization of in-house software is computed using the straight-line method based on
the estimated useful life of mainly 5 years.
Finance leases
Lease assets under finance lease transactions that do not transfer title of the lease assets are capitalized
and depreciated on a straight-line basis with the lease period used as the useful life and no residual value.
Allowance for doubtful accounts
The Companies have adopted the policy of providing an allowance for doubtful accounts in an amountsufficient to cover possible losses on collection mainly by estimating the uncollectible amounts of certain
receivables and applying a percentage based on collection experience to the remaining receivables.
Bonuses
The Company and certain consolidated subsidiaries provide for employees’ bonuses at the balance
sheet date based on the estimated amounts of projected bonus payments.
Retirement benefits
1. Method used to attribute estimated amounts of retirement benefits to periods
In calculating retirement benefit obligations, the method used to attribute the estimated amount of
retirement benefits to a period until the end of the consolidated fiscal year is mainly based on the benefit
formula basis.
2. Accounting methods for actuarial difference and prior service cost
Prior service cost is recognized mainly as current costs, and actuarial gains and losses are recognizedin expenses using the straight-line method over mainly 13 years, a period which reflects the average of theestimated remaining service years of employees, commencing with the current period.

10Translation of foreign currencies
Receivables and payables denominated in foreign currencies are translated into Japanese yen at
year-end rates. All revenues and expenses in foreign currencies are translated at the exchange rates
prevailing when such transactions are made. The resulting gains and losses are recognized in the statements
of income.
The balance sheet accounts of the consolidated foreign subsidiaries are translated into Japanese yen at
year-end rates, except for equity, which is translated at historical rates. Differences arising from thetranslations are presented as “Foreign currency translation adjustment” and “Non-controlling interests” in net
assets. Income statement accounts of the consolidated foreign subsidiaries are translated at average annual
rates.
Standards for recognition of significant revenue and expenses
The Company’s and its subsidiaries’ main businesses are the production and sale of Printing inks andDigital & Specialty products. For the sale of products and other goods, revenue is recognized when the
products or other goods are delivered to customers because the Company believes that the customer acquires
control over the products or other at the time of delivery and that the performance obligation is satisfied atthat time. For domestic sales, however, revenue is recognized when the products or other goods are shipped,
and the substitutional treatment prescribed in Article 98 of the Revenue Recognition Standards is applied
because the period from the time of shipment to the completion of delivery to the customer is considered tobe the normal period. For sales of export transactions, the revenue is recognized upon the completion of
shipment. For sales of graphic arts materials, the revenue is recognized upon customer acceptance.
Some of the Company’s subsidiaries recognize revenue when the goods are shipped or delivered, or as
the customer uses the goods, in accordance with the terms and conditions.
Revenue is measured at the amount of consideration promised in the contract with customers, deducting
discounts, rebates and returns. For transactions in which the role of the Company and its subsidiaries in thesale of goods to customers is deemed that of an agent, revenue is recognized on the net amount received
from the customer after deducting amounts paid to suppliers. For buy-sell translations in which the Groupsells and buys back goods, the Company and its subsidiaries do not recognize revenue from the transfer ofsupplies in the transaction if it is obliged to repurchase the supplies. For buy-sell transaction in which theGroup buys and sells back goods, revenue is recognized at the net amount of consideration after deducting
the purchase price of raw materials, etc.
Derivatives and hedge accounting
The Companies state derivative financial instruments at fair value and recognize changes in the fairvalue as gain or loss unless the derivative financial instruments are used for hedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Companies
defer recognition of gain or loss resulting from changes in the fair value of the derivative financial
instruments until the corresponding loss or gain on the hedged items is recognized. However, if forward
foreign exchange contracts are used as hedges and meet certain hedging criteria, the forward foreignexchange contracts and hedged items are accounted for at the forward foreign exchange contact rate. If
interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or
received under the interest rate swap contract is added to or deducted from the interest on the hedged assets
or liabilities for which the interest rate swap contracts were executed.
The following summarizes hedging derivative financial instruments used by the Companies and theitems hedged:
Hedging instruments
Forward foreign exchange contracts
Currency swap contracts
Interest rate swap contracts
Commodity swap contracts

Hedged items
Receivables and payables in foreign currency and others
Loans payable in foreign currency
Interest on loans payable in foreign currency and loans payable
Raw materials

The Companies use derivative financial instruments for hedging purposes to mitigate the risk offluctuation in foreign currency exchange rates, interest rates, and purchase price of raw materials.

11

The Companies evaluate hedging effectiveness by confirming a correlation between the hedging
instruments and the hedged items. However, interest rate swap contracts that meet the requirements for
special treatment are omitted from an assessment of effectiveness.
Cash and cash equivalents
Cash on hand, readily available deposits and short-term highly liquid investments with maturities notexceeding three months at the time of purchase are considered to be cash and cash equivalents.
Goodwill
Goodwill is amortized by the straight-line method over certain period within 20 years.
Research and development expenses
Research and development expenses are charged to income as incurred. Research and development
expenses for the year ended December 31, 2023 and 2022 were ¥4,548 million and ¥4,267 million,
respectively.
Income taxes
Income taxes comprise corporation tax, prefectural and municipal inhabitants taxes and enterprise tax.
The asset-liability approach is used to recognize deferred tax assets and liabilities for the expected
future tax consequences of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes and operating loss and tax credit
carryforwards.
Consumption taxes
Consumption taxes are excluded from revenue and expense accounts.
Amounts per share(a) Net income per share of common stock
The Companies have adopted Accounting Standard Board of Japan (“ASBJ”) Statement No. 2,“Accounting Standard for Earnings Per Share,” and Financial Accounting Standards Implementation
Guidance No. 4, “Implementation Guidance for Accounting Standard for Earnings Per Share.”(b) Cash dividends per share
Cash dividends per share presented in the statements of income represent the cash dividends declaredapplicable to the year, including dividends declared and paid after the end of the year.
Net assets
Under the Japanese Companies Act (the “Act”) and regulations, the entire amount paid for new sharesis 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.
The Act requires that an amount equal to 10% of dividends must be appropriated as additional paid-in
capital or legal earnings reserve until the total aggregate amount of legal reserve and additional paid-in
capital equals 25% of the common stock.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. However, alladditional paid-in capital and all legal earnings reserve may be transferred to other capital surplus andretained earnings, respectively, which are potentially available for dividends. The maximum amount that theCompany can distribute as dividends is calculated based on the nonconsolidated financial statements of theCompany in accordance with the Act.

12

3.

Significant Accounting Estimates
Allowance for doubtful accounts(1) Carrying amounts on the consolidated financial statements in December, 2023 and 2022
MAOMING SAKATA INX CO., LTD.
Notes and accounts receivable – trade (Total of current
and non-current asset) ············································ ¥Allowance for doubtful accounts (Non-current asset)

Millions of yen
2022

2023
3,544
(220)

¥

3,061
(223)

(2) Information on the nature of significant accounting estimates for identified items
To provide for possible losses from uncollectible receivables, the allowance for doubtful accounts is
recognized as estimated uncollectible amounts based on historical default rates for general receivables andthe assessment of individual collectability for specific receivables such as highly doubtful receivables.
MAOMING SAKATA INX CO., LTD. engages in the sale of printing inks mainly to customers in
China and recognizes an allowance for doubtful accounts for highly doubtful receivables by estimating thecollectible amount for each group of receivables classified based on the overdue period. In calculating thisallowance for doubtful accounts, we estimate the amount of uncollectible receivables based on the length oftime the receivables have been in arrears, past bad debt experience, and other factors that involve uncertainty,
so this may have a significant effect on the consolidated financial statements.

4.

Accounting Standards and Guidance not yet Adopted
Following accounting standards and guidance are those issued but not yet adopted.
- “Accounting Standard for Current Income Taxes (ASBJ Statement No.27, October 28, 2022)- “Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No.25,
October 28, 2022)- “Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No.28, October 28,
2022)(1) Overview
Transfer of JICPA’s practical guidelines on tax effect accounting to ASBJ was completed with theissuance of standards and guidance including ASBJ Statement No.28, Partial Amendments to AccountingStandard for Tax Effect Accounting (hereinafter collectively referred to as “ASBJ Statement No.28, etc.”) in
February 2018. During their deliberations, it had been determined that the following two issues would befurther discussed subsequent to the issuance of ASBJ Statement No. 28, etc. The above standards andguidance were issued as a result of the discussions on the two issues below:
・ Categories in which income tax expense should be recorded (taxes on other comprehensive income)・ Tax effects associated with sales of shares of subsidiaries, etc. (i.e., shares of subsidiaries oraffiliates) when the group taxation regime is applied.
(2) Effective date
Effective from the beginning of the fiscal year ending December 31, 2025.
(3) Effect of application of the standard
The Company and its consolidated domestic subsidiaries are currently in the process of determining
the effects of these new standards on the consolidated financial statements.

13

5.

Changes in Accounting Estimates(Changes in the period used for amortization of actuarial gain or loss in retirement benefits)
The Company and some of the domestic subsidiaries used the straight-line method for amortization of
actuarial gain or loss in retirement benefits over primarily 14 years, a period which reflects the average ofthe estimated remaining service years of employees. However, we changed the period to 13 years from theyear ended December 31, 2023 because the estimated remaining service years of employees were shorter
than the previous year.
As a result, operating income and income before income taxes decreased by ¥90 million compared tothose before the change in the estimated remaining service years of employees.

6.

Details of “Notes and accounts receivable – trade”
Receivables of contracts with customers included in the “Notes and accounts receivable – trade” as ofDecember 31, 2023 and 2022 were as follows:

2023
Notes receivable - trade ··················································¥

Accounts receivable - trade ··············································

7.

10,432¥

48,9662022
10,87842,985Investment Securities to Unconsolidated Subsidiaries and Affiliated Companies

2023
Investment securities - shares ···········································
Other in investments and other assets - capital ························

8.

Millions of yen¥

Millions of yen

21,457-¥2022
18,881
34

Accumulated Depreciation

2023¥

Millions of yen

80,012¥2022
76,4409.

Deferred Capital Gains on Tangible Fixed Assets
Under certain conditions, such as the exchange of similar kinds of fixed assets, gains from insurance
claims and sales and purchases resulting from expropriation, Japanese tax acts permit companies to defer
gains arising from such transactions by reducing the cost of the assets acquired. Accordingly, deferred
capital gains from insurance claims were deducted from the cost of replacement properties, which amounted
to ¥41 million as of both December 31, 2023 and 2022.

14

10.

Effect of Bank Holiday
As financial institutions in Japan were closed on both December 31, 2023 and 2022, amounts thatwould have been settled on December 31 were collected or paid on the first business day in January 2023
and 2023. The amounts included in the consolidated balance sheet as of December 31, 2023 and 2022 wereas follows:

2023
Notes and accounts receivable - trade ··································¥

Millions of yen

808

2022
¥

780

Notes and accounts payable - trade ·····································

40

38

Electronically recorded obligations - operating ·······················

2,178

2,144

11.

Financial Instruments
1. Qualitative information on financial instruments(1) Policies for using financial instruments
The Companies have policies to limit fund management to the use of highly secure financial assets
such as short-term deposits and financing and the use of bank loans. Derivative transactions are used to
manage the risk of fluctuation in the interest rates of bank loans with variable interest rates. The Companies
do not use derivative transactions for speculation.
(2) Details of risk and risk management for financial instruments
Operating receivables such as “Notes and accounts receivable - trade” are exposed to customer credit
risk. To manage such risk, due dates and the balances of operating receivables by customer are monitored byreviewing overdue receivable reports. In addition, credit research is performed regularly on customers whose
accounts need attention.
Securities such as available-for-sale securities consist mainly of securities of parties with whom theCompanies have business relationships and are exposed to market fluctuation risk. To manage such risk, theCompanies monitor the fair value of the securities and the financial condition of the investees regularly toevaluate investment policy, taking the business relationships with the investees into consideration.
Operating payables such as “Notes and accounts payable - trade” and “Electronically recorded
obligations - operating” are mostly due within one year.
Short-term loans payable is used as financing mainly for operating transactions, and long-term loans
payable and lease obligations on finance leases are used as financing mainly for capital expenditure.
Loans payable at variable interest rates are exposed to the risk of interest rate fluctuation. However,for some long-term loans payable, derivative transactions, namely interest rate swap contracts, are used as
hedging instruments to avoid interest rate risk and stabilize interest expense. Hedge effectiveness testing is
not conducted as the interest rate swap contracts meet certain hedging criteria.
For currency, the Company enters into forward foreign exchange contracts and currency swap
contracts to mitigate market fluctuation risk and currency swap contracts to mitigate interest rate risk. With
regard to commodities, commodity swap contracts are entered into to mitigate the risk of fluctuations in thepurchase price of raw materials.
The execution and management of derivative transactions are conducted under the Company’sderivative transaction management rules and regulations, and the counterparties to derivative financial
instruments are limited to high credit rating financial institutions to mitigate credit risk.
Operating payables and bank loans are exposed to liquidity risk, but the Companies manage the riskby preparing and reviewing respective monthly cash management plans.
(3) Supplementary explanation on fair value of financial instruments
For calculation for fair value of financial instrument, because fluctuation factors are considered, thefair value can be changed by the adoption of different premises.

15

2. Fair values of financial instruments
Consolidated balance sheet amounts and fair values of financial instruments and any differences as ofDecember 31, 2023 and 2022 are set forth in the tables below.
Year ended December 31, 2023

Millions of yen

Consolidatedbalance sheet
amountFair value

Difference(1) Investments:
Securities in affiliates ·························· ¥ 20,497¥ 15,818¥(4,679)Available-for-sale securities ··················
5,803
5,803
Total assets ············································ ¥ 26,300¥ 21,621¥(4,679)(1) Bonds payable ··································· ¥
1,000
¥
994
¥
(6)
(2) Long-term loans payable ·······················
14,701
14,432(269)
Total liabilities ········································ ¥ 15,701¥ 15,426¥(275)*1: “Cash and deposit,” “Notes and accounts receivable-trade,” “Short-term loans payable, ”and “Notes
and accounts payable-trade,” are omitted because these are cash items and their fair values
approximate their carrying values due to their short maturities.
*2: Amounts for Non-listed equity securities classified as available-for sale securities or equity securities
issued by subsidiaries and affiliates are not included in “(1) Investments”. The amounts on
consolidated balance sheet were ¥3,817 million.
Year ended December 31, 2022

Millions of yen

Consolidatedbalance sheet
amountFair value

Difference(1) Investments:
Securities in affiliates ·························· ¥ 17,645¥ 13,807¥(3,838)Available-for-sale securities ··················
4,193
4,193
Total assets ············································ ¥ 21,838¥ 18,000¥(3,838)(1) Bonds payable ··································· ¥
1,000
¥
991
¥
(9)
(2) Long-term loans payable ·······················
13,223
12,981(242)
Total liabilities ········································ ¥ 14,223¥ 13,972¥(251)*1: “Cash and deposit,” “Notes and accounts receivable-trade,” “Short-term loans payable, ”and “Notes
and accounts payable-trade,” are omitted because these are cash items and their fair values
approximate their carrying values due to their short maturities.
*2: Amounts for Non-listed equity securities classified as available-for sale securities or equity securities
issued by subsidiaries and affiliates are not included in “(1) Investments”. The amounts on
consolidated balance sheet were ¥2,105 million.
Note 1: Aggregate annual maturities of money claims and securities with maturities as of December 31, 2023
and 2022 were as follows:Year ended
December 31, 2023
Cash and deposits ··············· ¥Notes and accounts
receivable - trade ··············
Total ······························ ¥Millions of yen
2024

2025-2028

2029-2033

17,014¥-¥-2034 and
thereafter¥-

59,39876,412

¥

-

¥

-

¥

16

-

Year ended
December 31, 2022

Millions of yen

Cash and deposits ··············· ¥Notes and accounts
receivable - trade ··············
Total ······························ ¥2023

2024-2027

2028-2032

12,120¥-¥-2033 and
thereafter¥-

53,86365,983

¥

-

¥

-

¥

-

Note 2: Aggregate annual maturities of long-term loans payable as of December 31, 2023 and 2022 were as
follows:
Year ended
December 31, 2023

Millions of yen
2024

2025

2026

2027

2029 and
thereafter

2028

Bonds payable·········· ¥

-

¥

-

¥

1,000

¥

-

¥

-

¥

-

Long-termloans payable ··········· ¥

3,416

¥

3,600

¥

1,317

¥

6,126

¥

242

¥

-

Year ended
December 31, 2022

Millions of yen
2023

2024

2025

2026

2028 and
thereafter

2027

Bonds payable·········· ¥

-

¥

-

¥

-

¥

1,000

Long-termloans payable ··········· ¥

1,979

¥

2,616

¥

2,765

¥

550

¥

-

¥

-

¥ 5,313¥-

3. Breakdown of fair value of financial instruments by level
Fair values of financial instruments are categorized into three levels as described below on the basis of
the observability and the materiality of the inputs used in the fair value measurement.
Level 1: Fair values measured using quoted prices of identical assets or liabilities in active markets
among observable valuation inputs
Level 2: Fair values measured using inputs other than inputs included within Level 1 amongobservable valuation inputs
Level 3: Fair values measured using unobservable valuation inputs
When several inputs that have significant impact on fair value measurement are used, the fair value iscategorized into the lowest hierarchy level for fair value measurement among those in which each of the
inputs belongs.

17

(1) Financial instruments measured at fair value
Year ended December 31, 2023
Category
Investments:
Available-for-sale securities
Shares ············································
Total assets ············································
Year ended December 31, 2022
Category
Investments:
Available-for-sale securities
Shares ············································
Total assets ············································

Millions of yen

Level 1

Fair value
Level 2
Level 3

¥
¥

¥
¥

5,803
5,803

-

¥
¥

Total
-

¥
¥

5,803
5,803

Millions of yen

Level 1

Fair value
Level 2
Level 3

¥
¥

¥
¥

4,193
4,193

-

¥
¥

Total
-

¥
¥

4,193
4,193

(2) Financial instruments other than those measured at fair value
Year ended December 31, 2023
Category
Investments:
Securities in affiliates ···························
Total assets ··········································
Bonds payable ····································
Long-term loans payable························
Total liabilities ········································
Year ended December 31, 2022
Category
Investments:
Securities in affiliates ···························
Total assets ··········································
Bonds payable ····································
Long-term loans payable························
Total liabilities ········································

Millions of yen

Fair value
Level 2
Level 3

Level 1¥¥¥¥

15,817
15,817
-

¥
¥
¥

994
14,432
15,426

¥
¥
¥

Total
-

¥
¥
¥
¥

15,817
15,817994
14,432
15,426

Millions of yen

Fair value
Level 2
Level 3

Level 1¥¥¥¥13,807
13,807
-

¥
¥
¥

991
12,981
13,972

¥
¥
¥

Total
-

¥
¥
¥
¥

13,807
13,807991
12,981
13,972

Note: Description of valuation techniques used to measure fair value and inputs related to fairvalue measurement(1) Investment securities
Fair values of listed stocks are determined by using quoted prices. Fair values of listed
stocks are categorized as Level 1 since they are traded in active markets.

(2) Bonds Payable

The fair values of bonds payable issued by the Company are calculated using the discounted
present value method based on the total amount of principal and interest, remaining maturity,and interest rates taking into account credit risk, and are categorized as Level 2.

(3) Long-term loans payable

The fair values of long-term loans payable are calculated using the discounted present value
method based on the total amount of principal and interest, remaining maturity, and interest
rates taking into account credit risk, and are categorized as Level 2.

18

12.

Securities
The following tables summarize the consolidated balance sheet amount, acquisition cost and fair valueof available-for sale securities as of December 31, 2023 and 2022. Available-for-sale securities (non-listed
equity securities) in the consolidated balance sheet amounted to ¥2,857million as of December 31, 2023 and¥669 million as of December 31, 2022 were not included because they had no quoted market price, thefuture cash flows could not be estimated and the fair values were unavailable. Proceeds from the sale ofavailable-for-sale securities amounted to ¥46 million for the year ended December 31, 2023 and ¥4,628
million for the year ended December 31, 2022, and the related gains amounted to ¥38 million for the year
ended December 31, 2023 and ¥1,442 million for the year ended December 31, 2022.
Period ended December 31, 2023

(1) Equity securities withconsolidated balance sheet amountexceeding acquisition cost·············(2) Other ·····································
Subtotal ··································(1) Equity securities withconsolidated balance sheet amountnot exceeding acquisition cost ········(2) Other ·····································
Subtotal ··································
Total ··········································
Year ended December 31, 2022

(1) Equity securities withconsolidated balance sheet amountexceeding acquisition cost·············(2) Other ·····································
Subtotal ··································(1) Equity securities withconsolidated balance sheet amountnot exceeding acquisition cost ········(2) Other ·····································
Subtotal ··································
Total ··········································

Consolidatedbalance sheet
amount
¥

¥

5,772
5,772
30
30
5,802

Consolidatedbalance sheet
amount
¥

¥

3,896
3,896
297
297
4,193

Millions of yen
Acquisition cost

¥

¥

2,686
2,686
39
39
2,725

Difference

¥

¥

3,086
3,086
(9)
(9)
3,077

Millions of yen
Acquisition cost

¥

¥

2,358
2,358
348
348
2,706

Difference

¥

¥

1,538
1,538
(51)
(51)
1,487

(Impairment loss on securities)
Year ended December 31, 2023
Impairment loss of ¥280 million was recognized for non-listed securities.
In principle, when the fair value of securities at the fiscal year end is lower than the acquisition cost by
50% or more, the whole amount of such difference is recognized as impairment loss. When the fair value atthe fiscal year end is 30% to 50% lower than the acquisition cost, impairment loss in an amount deemednecessary is recognized after determining recoverability by considering recent market transactions during acertain period, business performance and other factors.
Year ended December 31, 2022
Not applicable.

19

13.

Short-term Loans Payable and Long-term Loans Payable
Short-term loans payable at December 31, 2023 and 2022 consisted of short-term notes generally forone year bearing interest ranging from 0.23% to 9.70%.
Long-term loans payable at December 31, 2023 and 2022 consisted of the following:

Unsecured:
Loans principally from banks at
0.18% - 5.10% maturing through 2028 ··························
Less amounts due within one year ·······································

2023

Millions of yen

14,701
3,416
11,285¥2022
13,223
1,979
11,244¥

The aggregate annual maturities of long-term loans payable at December 31, 2023 were as follows:Year ending December 31,

Millions of yen

2024············································································
2025············································································
2026············································································
2027············································································
2028 and thereafter ··························································

¥

¥

3,416
3,600
1,317
6,126
242
14,701The Company has specific commitment lines with two banks to finance working capital as follows:
Specific commitment lines ············································ ¥ 3,000 million
Used portion as of December 31, 2023 ······························ ¥-14.

Assets Pledged as Collateral
Assets pledged as collateral as of December 31, 2023 and 2022 were as follows:

2023
Notes and accounts receivable - trade ··································
Investments in other ······················································¥¥

Millions of yen
9
54
63

2022
¥
¥

8
47
55

Liabilities secured by the above assets were as follows:
2023
Notes and accounts payable - trade ·····································
Short-term loans payable·················································

20

¥
¥

Millions of yen
192
9
201

2022
¥
¥

203
8
211

15.

Finance Leases
Capitalized finance leases of the Companies at December 31, 2023 and 2022 were as follows:(As lessee)
Finance leases for which the ownership of the lease assets was not considered to be transferred to thelessee as of and for the year ended December 31, 2023 and 2022 were as follows:(1) Description of lease assets
Tangible fixed assets:
Mainly, the production facilities in the printing ink business (machinery and equipment) for
common purposes or each business.
(2) Depreciation method for lease assets
As described in Note 2, “Significant Accounting Policies - Finance leases.”16.

Derivative Transactions
1. Derivative transactions to which hedge accounting has not been applied
Not applicable
2. Derivative transactions to which hedge accounting has been applied
A description is omitted because it is immaterial.

17.

Retirement Benefits
1. Outline of adopted retirement benefit plans
The Company and certain domestic consolidated subsidiaries provide funded non-contributory pension
plans, which include defined benefit pension plans and unfunded lump-sum payment plans. Certain foreign
consolidated subsidiaries provide defined contribution plans as well as defined benefit pension plans.
2. Defined benefit plans, including plans applying the simplified method(1) Movement in retirement benefit obligations
Millions of yen
2022
2023
Balance at the beginning of current period ···················· ¥12,384¥
12,434Service cost (*) ·················································
512
508
Interest cost ·····················································
111
91
Actuarial loss (gain) ···········································
72
106
Benefits paid ····················································
(596)
(767)
Other·····························································
96
12
Balance at the end of current period ···························· ¥12,579¥12,384(*) Service cost includes retirement benefit costs of consolidated subsidiaries applying the simplified
method.

(2) Movement in plan assets
Millions of yen
Balance at the beginning of current period ···················· ¥Expected return on plan assets ·······························
Actuarial loss (gain) ···········································
Contributions paid by the employer ·························
Benefits paid ····················································
Other·····························································
Balance at the end of current period ···························· ¥

21

2023

7,534
175
257
241
(375)
46
7,878

¥

¥

2022

8,256
186
(719)
266
(479)
24
7,534

(3) Reconciliation from retirement benefit obligations and plan assets to net defined benefit liability (asset)
Millions of yen
Funded retirement benefit obligations ························· ¥Plan assets ·························································
Total ·····························································
Unfunded retirement benefit obligations ······················
Total net liability (asset) for retirement benefits
at the end of current period·································· ¥2023

Net defined benefit liability ·····································Net defined benefit asset ·········································
Total net liability (asset) for retirement benefits
at the end of current period ·································· ¥

7,937(7,878)
59
4,642

¥

4,701

¥

2022

4,850

5,041
(340)
4,701

7,806
(7,534)
272
4,578

4,869
(19)
¥

4,850

(4) Retirement benefit costs
Millions of yen
2022
2023
Service cost (*) ················································· ¥
512
¥
508
Interest cost ·····················································
111
91
Expected return on plan assets ·······························
(175)
(186)
Net actuarial loss amortization ·······························
235
152
Other·····························································
Total retirement benefit costs
(12)
(72)
for defined benefit plans ······································
¥
671
¥
493
(*) Service cost includes retirement benefit costs of consolidated subsidiaries applying the simplified
method.

(5) Remeasurements of defined benefit plans
Millions of yen
Actuarial gains and losses ····································
Total ·························································· ¥

2023

437
437

2022
¥

(657)
(657)

(6) Accumulated remeasurements of defined benefit plans
Millions of yen
Actuarial gains and losses that are yet to be recognized ··Total ·························································· ¥

22

2023

517
517

2022
¥

955
955

(7) Plan assets

2022

2023

(a) Plan assets comprise:
Bonds ·························································
53.7 %
55.3 %
Equity securities ············································
10.6
10.2
Alternative assets (*) ·······································
24.8
23.4
Other··························································
10.9
11.1
Total ························································
100.0 %
100.0 %(*) Alternative is investments mainly for multi-asset investment funds.
(b) Long-term expected rate of return
Current and expected plan assets portfolio and historical and expected returns on various categoriesof plan assets have been considered in determining the long-term expected rate of return.

(8) Actuarial assumptions

2022

2023

The principal actuarial assumptions were as follows:
Discount rate ················································
Long-term expected rate of return ························
Expected rate of pay raises ································

Mainly 0.30%
Mainly 2.00%
Mainly 2.63%

Mainly 0.30%
Mainly 2.00%
Mainly 2.63%

3. Defined contribution plan
Millions of yen
Accrued contribution by consolidated subsidiaries ··········· ¥

23

2023
1,523

¥

2022
532

18. Deferred Income Taxes
Significant components of the Companies’ deferred tax assets and liabilities as of December 31, 2023
and 2022 were as follows:
Millions of yen
Deferred tax assets:
Allowance for doubtful accounts ······································
Provision for bonuses ···················································Net defined benefit liability ············································
Write-down of inventories ·············································
Intangible assets ·························································Tax loss carryforwards ·················································
R&D expenses ···························································
Other ······································································
Subtotal ········································································
Valuation allowance for tax loss carryforwards ·····················
Valuation allowance for total of deductible temporary differences
Subtotal ········································································
Total deferred tax assets ·····················································
Deferred tax liabilities:
Valuation difference on available-for-sale securities ···············
Special reserves··························································
Depreciation ·····························································
Retained earnings of subsidiaries and affiliates ·····················
Other ······································································
Total deferred tax liabilities·················································Net deferred tax assets (liabilities) ·········································

2023
¥

180
165
2,078
124
380
1,041
724
1,709
6,401
(886)
(661)
(1,547)
4,854

¥

(931)
(878)
(1,009)(4,348)(833)(7,999)(3,145)

¥

¥

2022
200
132
1,964
122
414
1,579
432
1,163
6,006
(1,576)(176)(1,752)
4,254
(448)
(915)
(990)
(3,970)(643)(6,966)(2,712)

Note 1: Valuation allowance decreased by ¥205 million. The decrease was mainly due to the decrease of valuation
allowance related to tax loss carry forwards in a part of subsidiaries.
Note 2: Expiration periods for tax loss carryforwards and deferred tax assets as of December 31, 2023 and 2022

were as follows:Year ended
December 31, 2023

Millions of yen
2024

Tax losscarryforwards ······· ¥Valuation
allowance ···········
Deferredtax assets ···········

2025
12

¥

2026
-

¥

2027
-

¥

2029 and
thereafter

2028
-

¥

Total

13

¥ 1,016 ¥

1,041

(12)

-

-

-

(13)

(861)

(886)

-

-

-

-

-

155

155

(*) The amount of tax loss carryforwards in the above table is after multiplying the statutory tax rate.

24

Year ended
December 31, 2022

Millions of yen
2023

Tax losscarryforwards ······· ¥Valuation
allowance ···········
Deferredtax assets ···········

2024
16

¥

2025
12

¥

2026
34

¥

2028 and
thereafter

2027
-

¥

Total

-

¥ 1,517 ¥

1,579

(16)

(12)

(34)

-

-

(1,514)(1,576)

-

-

-

-

-

3

3

(*) The amount of tax loss carryforwards in the above table is after multiplying the statutory tax rate.

The reconciliation between the effective tax rate reflected in the consolidated financial statements andthe statutory tax rate for the years ended December 31, 2023 and 2022 is summarized as follows:

Statutory tax rate of the Company ·········································(Reconciliation)
Expenses not qualifying for deduction ································
Revenues not in gross revenue ·········································Tax credits ································································
Equity in earnings of affiliates ·········································
Elimination of dividend income ·······································
Valuation allowance ·····················································
Retained earnings of foreign subsidiaries ····························
Difference in the effective tax rates of foreign subsidiaries ········
Other ······································································
Effective tax rate after adoption of tax effect accounting ···············

2023
30.6%

2022
30.6%

1.4
(4.7)
(2.3)
(4.8)
4.0
5.9
3.4
(2.1)
1.0
32.4%

1.8
(8.4)
(4.1)
(4.9)
7.2
(2.9)
4.1
(1.8)
(0.1)
21.5%

19. Revenue Recognition
1. Disaggregated revenue from contracts with customers
Information on disaggregated revenue from contracts with customers is described in Note 31, “Segment
Information”.
2. Basic information for understanding revenue from contracts with customers
Basic information on disaggregated revenue from contracts with customers is described in Note 2,“Significant Accounting Policies, Standards for recognition of significant revenue and expenses”.
3. Information about the relationship between the satisfaction of performance obligations under contracts
with customers and cash flows generated from those contracts, and the amount and timing of revenue
expected to be recognized in subsequent fiscal years from contracts with customers that existed at the end of
the current fiscal year.
(1) Contract balancesMillions of yen
Receivables from contracts with customers at the¥
beginning of the year ·····································
Receivables from contracts with customers at the endof the year ··················································
Contract liabilities at the beginning of the year ············
Contract liabilities at the end of the year····················

25

2022

2023
53,86349,36359,39853,863

72

106

187

72

The receivables from contracts with customers are notes receivable and accounts receivable – trade.
Contract liabilities are in “Other” current liabilities on the consolidated balance sheets. Contract
liabilities are mainly related to advance payments from customers in sales contracts and are reduced alongwith recognition of revenue.
For revenues recognized for the year ended December 31, 2023, the amounts included in liabilities
from contracts with customers at the beginning of the fiscal year were ¥72 million.
(2) Transaction price allocated to remaining performance obligations
A practical expedient is applied and a description of information on the remaining performanceobligations is omitted because there were no important transactions for which the expected contract period
was over one year.
And, in the consideration from contracts with customers, there are no significant amounts which are notincluded in transaction prices.
20. Contingent Liabilities
At December 31, 2023 and 2022, the Companies were contingently liable as follows:

TAIWAN SAKATA INX CORP ············
Total ·············································

Millions of yen
2023
2022
¥
189
¥
178
¥
189
¥
178

The Company provides letters of awareness to banks for bank loans of unconsolidated subsidiaries andaffiliates, and the Company also provides guarantees of indebtedness for leases of unconsolidated
subsidiaries and affiliates. The guarantee obligations include amounts guaranteed by other parties, and thoseamounts are excluded from the amounts stated above.

21.

Revenue from contracts with customers
With regard to sales, revenue from contracts with customers and other revenue are not separately
presented.
The amounts of revenue from contracts with customers are described in Note 30, “Segment
Information, 3. Information about reportable segment sales, segment income or loss, segment assets andother items”.
22.

Selling, General and Administrative Expenses
The main items of selling, general and administrative expenses for the years ended December 31, 2023
and 2022 were as follows:
Millions of yen
Freightage and packing expenses ···········································
Salaries and allowances ······················································
Depreciation ···································································
Provision of allowance for doubtful accounts ·····························
Provision for bonuses·························································
Retirement benefit expenses ·················································
Research and development expenses ·······································

26

2023
¥
6,513
13,156
844
54
339
1,314
4,548

2022
¥
6,949
11,802
752
36
279
488
4,267

23.

Gain on Sales of Investment Securities
Year ended December 31, 2023

¥38 million of gain on sales of investment securities was calculated due to sales of investment
securities.
Year ended December 31, 2022
Because of cancellation of capital alliance with Toyo Ink SC Holdings Co., Ltd., (currently artience
Co., Ltd.) ¥1,442 million was calculated for the year ended December 31, 2022.

24.

Gain on Sales of BusinessYear ended December 31, 2023

SAKATA SANGYO, LIMITED recognized the gain on sales of business of ¥415 million arising fromthe transfer of the insurance service business.
Year ended December 31, 2022
Not applicable.

25.

Loss on Sales of Non-Current Assets
The details of loss on sales of property, plant and equipment for the years ended December 31, 2023
and 2022 were as follows:
Millions of yen
2023

2022

Building ········································································¥-17¥
Land ············································································
68
Demolition and removal expenses ··········································
3
Total ···········································································¥
54¥(*) Gain on sales of building, loss on sales of land, and demolition and removal expenses were offset, whenrecognizing the sales of the same property, and they were described as Loss on sales of fixed assets in the
Income statement.

26.

Loss on Retirement of Non-Current Assets
The details of loss on retirement of property, plant and equipment for the years ended December 31,
2023 and 2022 were as follows:
Millions of yen
2023
Buildings and structures······················································
Machinery, equipment and vehicles ········································
Other fixed assets ·····························································
Demolition and removal expenses ··········································
Total ···········································································

27

¥

¥

2022
-

¥

¥

1
26
0
191
218

27.

Loss on Valuation of Shares of Affiliates
Year ended December 31, 2023

Impairment loss on the valuation of shares of the affiliate, Wonder Future Corporation, wasrecognized because the valuation of shares declined significantly.
Year ended December 31, 2022
Not applicable.

28.

Impairment LossYear ended December 31, 2023
Impairment loss recognized for the year ended December 31, 2023 was as follows:
Location

Purpose of use

Type

MAOMINGSAKATA INX
CO.,LTD.,(China)Assets for business(Maoming second factory)

Construction in
ProgressAmount(Millions of yen)
¥

2,742

The business assets of the Companies are generally grouped based on business segment, while theassets of certain consolidated subsidiaries are grouped based on the individual company.
The assets in the table above were for demand expansion of offset inks in the market of China and theconstruction started in September 2018. However, there had been significant delays in the construction due
to the COVID-19 pandemic and other factors, and significant increase in total construction cost due tosoaring costs of construction materials and labor. As the demand for offset inks was expected to remain
sluggish for the foreseeable future due to the stagnation of Chinese economy, and the completion of the plant
construction was not foreseeable, the impairment loss was recognized for these assets.
As no future cash flow was expected from the above assets, the recoverable amounts were estimated to
be zero and the entire book value was recognized as impairment loss. The ratio of the investment in
MAOMING SAKATA INX CO., LTD. was 63.26%, so the impact on net income attributable to owners ofparent was ¥1,735 million.

Year ended December 31, 2022
Not applicable.

28

29.

Consolidated Statements of Comprehensive Income
The reclassification adjustment and the tax benefit concerning other comprehensive income for theyears ended December 31, 2023 and 2022 were as follows:
Millions of yen
2022

2023
Valuation difference on available-for-sale securities
Amount arising during the period ······································
Reclassification adjustment included in net income ·················
Pre-tax amount ························································Tax benefit ·····························································
Valuation difference on available-for-sale securities ·············
Foreign currency translation adjustment
Amount arising during the period ···································
Deferred gains or losses on hedges
Amount arising during the period ······································
Reclassification adjustment included in net income ·················
Pre-tax amount ························································Tax benefit ·····························································
Deferred gains or losses on hedges ·································
Remeasurements of defined benefit plans
Amount arising during the period ·····································
Reclassification adjustment included in net income ·················
Pre-tax amount ························································Tax benefit ·····························································
Remeasurements of defined benefit plans ·························
Share of other comprehensive income of affiliates
accounted for using equity method
Amount arising during the period ······································
Reclassification adjustment included in net income ·················
Share of other comprehensive income of affiliates
accounted for using equity method ···························
Total other comprehensive income ····································

¥

¥

1,609
(38)
1,571
(484)
1,087

¥

65
(1,442)
1,377
(424)
(953)

4,248

5,487

2
2
4
(1)
3

2
2
4
(1)
3

179
258
437
(127)
310

(742)
85
(657)
184
(473)

1,337
(11)

1,787
(3)

1,326
6,974

1,784
5,848

¥

30.

Supplementary Cash Flow Information
The reconciliation of cash and cash equivalents in the consolidated statements of cash flows and cash
and deposits in the consolidated balance sheets as of December 31, 2023 and 2022 were as follows:
Millions of yen
Cash and deposits ·····························································
Time deposits with original maturity of more than three months ·······Cash and cash equivalents ················································

29

2023
17,014(795)¥
16,219¥2022
12,120(398)¥
11,722¥

31.

Segment Information

1. Overview of reportable segments
The Companies’ reportable segments are components of the Companies for which separate financial
information is obtainable and which the Board of Directors and Management Committee regularly consider
in order to determine the allocation of business resources and evaluate business performance. The
Companies are engaged mainly in the manufacturing and sale of printing inks. Multiple divisions of theCompany are engaged in the domestic market, and the foreign subsidiaries are engaged in their own
respective overseas markets, such as the markets of Asia, Americas and Europe.
Foreign subsidiaries that have independent management units establish their own comprehensive
strategies and develop business activities in their respective regions and surrounding areas. Besides the saleof printing inks, the Company purchases and sells graphic arts materials in the domestic market. In addition,
the Company purchases and sells printing equipment in the domestic market.
The digital & specialty products business such as inkjet ink, toner, pigment dispersion and others
developed through the basic technology of printing inks like pigment dispersion make up various
independent operational segments. The Companies are focused on expanding the revenue base of the digital& specialty products business led by the Company.
Therefore, the Companies’ printing inks business, our core business, comprises the geographic
segments based on the production and sales structure. The Companies’ printing inks business consists of thefour reportable segments of “Printing inks and graphic arts materials (Japan),” “Printing inks (Asia),”“Printing inks (Americas)” and “Printing inks (Europe).” Furthermore, the “Digital & Specialty products”
business, in which the Companies promote business expansion, constitutes another reportable segment for a
total of five reportable segments.
Reportable segment
Printing inks and graphic arts
materials (Japan)
Printing inks (Asia)
Printing inks (Americas)
Printing inks (Europe)
Digital & Specialty products

Main products and merchandise
Packaging ink, Flexible packaging gravure ink, Newspaper printing ink,
Commercial printing ink, Print and plate making equipment andmaterials, Packaging equipment and supplies
Packaging ink, Flexible packaging gravure ink, Metal decorating ink,
Newspaper printing ink, Commercial printing ink
Packaging ink, Flexible packaging gravure ink, Metal decorating ink,
Commercial ink
Packaging ink, Flexible packaging gravure ink, Metal decorating ink,
Commercial ink
Inkjet ink, Toner, Pigment dispersion for color filter,
Functional coating

2. Basis of measurement for reported segment sales, income or loss, assets and other items
The accounting policies of the reportable segments are essentially the same as those described in Note
2, “Significant Accounting Policies.”
Segment income or loss is stated on an operating income basis. Intersegment income and transfers are
based on the prevailing markets prices.
The Company has reviewed the criteria for allocating corporate expenses and assets in order to reflect
the performance of each reportable segment more appropriately from the current consolidated fiscal year.
The segment information for the previous consolidated fiscal year is stated based on the allocation
method of expenses and assets after the change.

30

3. Information about reportable segment sales, segment income or loss, segment assets and other items

Year ended
December 31, 2023

Millions of yen
Reportable Segment
Printing inks
andgraphic arts
materials(Japan)

Revenue fromcontracts withcustomers
Other revenue

Printing
inks(Asia)

Printing
inks(Americas)

Printing
inks(Europe)

Digital &Specialty
products

Total

Other
businesses
(*1)

Total

Adjustments Consolidated
(*2)
(*3)

52,09552,274

77,90318,858

16,795217,925

10,387228,312-228,312

-

-

-

-

-

-

-

-

-

-

Net sales to outside
customers

52,09552,274

77,90318,858

16,795217,925

10,387228,312-228,312Intersegment sales
and transfers

9

161

607

697

42

1,516

4,916

6,432

(6,432)-

52,10452,43578,51019,555

16,837

219,441

15,303

234,744(6,432)

228,312Segment income

533

4,347

4,337

(790)

1,882

10,309465

10,774624

11,398Segment assets

41,764

48,60842,632

14,654

11,188

158,847

6,665

165,51328,574

194,087

Depreciation

1,323

1,129

1,311

397

640

4,800

50

4,850

18

4,868

-

-

116

2

-

118

-

118

-

118

2,154

1,656

1,964

191

530

6,495

11

6,506

4

6,510

Total

Amortization of
goodwill
Increase in property,
plant and equipment
and intangible assets(*1) The “Other businesses” category includes the chemical products business, color film developing and printing services and equipment for color
matching systems not shown in reportable segments.
(*2) Adjustments are as follows:
1. The adjustment of ¥624 million for segment income includes eliminations for intersegment transactions of ¥1,295 million and corporate expenses of¥(671) million that have not been allocated to any segment. Corporate expenses are mainly service fees to unconsolidated subsidiaries and affiliates.
2. The adjustment of ¥28,573 million for segment assets includes eliminations for intersegment transactions of ¥(5,720) million and corporate assets of¥34,294 million that have not been allocated to any segment. Corporate assets are mainly investment securities held for a common corporate purpose.
3. The adjustment of ¥17 million for depreciation are mainly related to Corporate assets that have not been allocated to any segment.
4. The adjustment of ¥4 million for increase in property, plants and equipment, and intangible assets are mainly related to Corporate assets that have notbeen allocated to any segment.
(*3) Segment income is adjusted to be consistent with operating income shown on the consolidated statements of income.

31Year ended
December 31, 2022

Millions of yen
Reportable Segment
Printing inks
andgraphic arts
materials(Japan)

Revenue fromcontracts withcustomers
Other revenue

Printing
inks(Asia)

Printing
inks(Americas)

Printing
inks(Europe)

Digital &Specialty
products

Otherbusinesses
(*1)

Total

Adjustments Consolidated
(*2)
(*3)

Total

51,42647,84372,58818,534

15,432205,823

9,708

215,531-

215,531

-

-

-

-

-

-

-

-

-

-

Net sales to outside
customers

51,42647,84372,58818,534

15,432205,823

9,708

215,531-

215,531

Intersegment sales
and transfers

10

208

1,302

953

76

2,549

4,339

6,888

(6,888)-51,43648,05173,89019,487

15,508208,372

14,047

222,419(6,888)215,531

Segment income

407

1,746

360

(572)

1,585

3,526

337

3,863

262

4,125

Segment assets

41,142

44,942

39,666

13,923

10,540150,213

6,056

156,269

21,135

177,404

Depreciation

1,350

1,094

1,182

398

698

4,722

57

4,779

20

4,799

-

-

106

2

-

108

-

108

-

108

1,756

2,215

1,697

163

295

6,126

7

6,133

(1)

6,132

Total

Amortization of
goodwill
Increase in property,
plant and equipment
and intangible assets(*1) The “Other businesses” category includes the chemical products business, color film developing and printing services and equipment for color
matching systems not shown in reportable segments.
(*2) Adjustments are as follows:
1. The adjustment of ¥262 million for segment income includes eliminations for intersegment transactions of ¥1,030 million and corporate expenses of¥(768) million that have not been allocated to any segment. Corporate expenses are mainly service fees to unconsolidated subsidiaries and affiliates.
2. The adjustment of ¥21,135 million for segment assets includes eliminations for intersegment transactions of ¥(7,529) million and corporate assets of¥28,664 million that have not been allocated to any segment. Corporate assets are mainly investment securities held for a common corporate purpose.
3. The adjustment of ¥20 million for depreciation are mainly related to Corporate assets that have not been allocated to any segment.
4. The adjustment of ¥(1) million for increase in property, plants and equipment, and intangible assets are mainly related to Corporate assets that havenot been allocated to any segment.
(*3) Segment income is adjusted to be consistent with operating income shown on the consolidated statements of income32

(Related information)
Year ended December 31, 2023
1. Information about each product and service
Year ended
December 31, 2023

Millions of yen
Printing inks

Net sales to outside
customers¥

Graphic arts
materials

189,714 ¥Digital & Specialty
products

11,465 ¥Other

16,795 ¥Total

10,338 ¥228,312

Other

Total

2. Information about geographic areas
Year ended
December 31, 2023

Millions of yen
Japan

Asia

America

EuropeNet sales¥

66,530 ¥55,341 ¥66,632 ¥17,145 ¥22,664 ¥228,312

Property, plant andequipment¥

18,506 ¥11,701 ¥

10,524 ¥4,242 ¥

2,102 ¥

47,075

Note: Net sales are classified by country and region based on customer location.

3. Major customers
No information is available as there were no outside customers accounting for 10% or more of theCompanies’ total net sales.
Year ended December 31, 2022
1. Information about each product and service
Year ended
December 31, 2022

Millions of yen
Printing inks

Net sales to outside
customers¥

Graphic arts
materials

179,443 ¥Digital & Specialty
products

10,970 ¥Other

15,432 ¥Total

9,686 ¥

215,531

Other

Total

2. Information about geographic areas
Year ended
December 31, 2022

Millions of yen
Japan

Asia

America

EuropeNet sales¥

64,570 ¥51,181 ¥

62,539 ¥17,297 ¥19,944 ¥215,531

Property, plant andequipment¥

19,679 ¥13,115 ¥10,374 ¥4,094 ¥

1,123 ¥

48,385

Note: Net sales are classified by country and region based on customer location.

3. Major customers
No information is available as there were no outside customers accounting for 10% or more of theCompanies’ total net sales.

33

(Impairment loss by reportable segments)
Year ended December 31, 2023
Year ended
December 31, 2023

Millions of yen
Reportable Segment

Impairment loss

Printing inks
andgraphic arts
materials(Japan)Printing
inks(Asia)

Printing
inks(Americas)

Printing
inks(Europe)

Digital &Specialty
products

Total

Other
businesses

Adjustments

Consolidated¥¥ 2,742¥¥¥¥ 2,742¥¥¥ 2,742

-

-

-

-

-

-

Year ended December 31, 2022
Not applicable.
(Amortization and unamortized balance of goodwill)
Year ended December 31, 2023
Year ended
December 31, 2023

Millions of yen
Reportable Segment
Printing inks
andgraphic arts
materials(Japan)Printing
inks(Asia)

Printing
inks(Americas)

Printing
inks(Europe)

Digital &Specialty
products

Total

Other
businesses

Adjustments

Consolidated

Amortization of
goodwill

¥

-

¥

-

¥ 116

¥ 2

¥

-

¥ 118

¥

-

¥

-

¥ 118

Balance as ofDecember 31, 2023

¥

-

¥

-

¥ 371

¥ 15

¥

-

¥ 386

¥

-

¥

-

¥ 386

Year ended December 31, 2022
Year ended
December 31, 2022

Millions of yen
Reportable Segment
Printing inks
andgraphic arts
materials(Japan)Printing
inks(Asia)

Printing
inks(Americas)

Printing
inks(Europe)

Digital &Specialty
products

Total

Other
businesses

Adjustments

Consolidated

Amortization of
goodwill

¥

-

¥

-

¥ 106

¥ 2

¥

-

¥ 108

¥

-

¥

-

¥ 108

Balance as ofDecember 31, 2022

¥

-

¥

-

¥ 425

¥ 16

¥

-

¥ 441

¥

-

¥

-

¥ 441

(Negative goodwill in other income by reportable segments)
Year ended December 31, 2023
Not applicable.
Year ended December 31, 2022
Not applicable.

34

32.

Related Party Transactions
Transactions with related parties for the years ended December 31, 2023 and 2022 were as follows:Year ended December 31, 2023

Attribute

Name

SHENZHEN
Affiliate SAKATA INX
CO., LTD.

Location

Shenzhen,
China

Capitalstock(Millionsof RMB)

2

Operationsoroccupation

Printing ink

Holding
equity(%)

Direct25.0

Relationship

Sales offinished
goods

Transaction
details

Sales offinished
goods

Transaction
amount(Millionsof yen)Account¥ 3,769

Notes andaccounts
receivable- tradeInvestments
and otherassets:Other

Balance atyear end(Millionsof yen)¥ 3,146¥

220

Note 1: The trade terms of the above transactions were determined using the same methods as those for third-party transactions.
Note 2: The amount of ¥220 million was accounted for as allowance for doubtful accounts to cover possible losses on collection fromSHENZHEN SAKATA INX CO., LTD., and the amount of the reversal of allowance for doubtful accounts for the year
ended December 31, 2023 was ¥11 million.

Year ended December 31, 2022
Attribute

Name

Toyo Ink SC
Major
Holdings Co.,
shareholder
Ltd.

Location

Chuo,
Tokyo

Capitalstock(Millionsof Yen)31,733Operationsoroccupation

Printing ink

Holding
equity(%)-

Relationship

Business andCapitalAlliance

Transaction
details

Transaction
amount(Millionsof yen)Purchase oftreasuryshares (1)¥Account

Balance atyear end(Millionsof yen)

8,193

-

¥

-

Sales amounts
Sales on¥ 4,628
investment
Gain
on salessecurities (2)¥ 1,442-¥-

Note 1: The purpose of the transaction was to dissolve the capital alliance, and based on the resolution by a resolution of the Board
meeting held on May 13, 2022, common stock of the Company was acquired through the off-auction own share repurchasetrading system (ToSTNeT-3) of the Tokyo Stock Exchange.
Note 2: Regarding sales of investment securities, and based on a resolution of the Board meeting held on May 13, 2022, theCompany applied for an off-auction own share repurchase set up by Toyo Ink SC Holdings Co., Ltd. through ToSTNeT-3,
and the amounts were calculated based on the closing price on the day before the transaction, May 13, 2022.
Note 3: Toyo Ink SC Holdings Co., Ltd changed their company name into artience Co., Ltd. as of January 1st, 2024.

Attribute

Name

SHENZHEN
Affiliate SAKATA INX
CO., LTD.

Location

Shenzhen,
China

Capitalstock(Millionsof RMB)

2

Operationsoroccupation

Printing ink

Holding
equity(%)

Direct25.0

Relationship

Sales offinished
goods

Transaction
details

Sales offinished
goods

Transaction
amount(Millionsof yen)Account¥ 3,567

Notes andaccounts
receivable- tradeInvestments
and otherassets:Other

Balance atyear end(Millionsof yen)¥ 2,676¥

223

Note 1: The trade terms of the above transactions were determined using the same methods as those for third-party transactions.
Note 2: The amount of ¥223 million was accounted for as allowance for doubtful accounts to cover possible losses on collection fromSHENZHEN SAKATA INX CO., LTD., and the amount of the reversal of allowance for doubtful accounts for the year
ended December 31, 2022 was ¥41 million.

35

33.

Changes in Net Assets
1. Shares issued and treasury sharesYear ended December 31, 2023
Type

Number of shares
as of the beginningof current period

Increase in numberof shares
during the period

Decrease in numberof shares
during the period

54,172,361--

Number of shares
as of the end ofcurrent period

Shares issued:
Common stock

54,172,361

Treasury shares:
Common stock

4,143,541
194
16,186
4,127,549
Note : The increase of 194 shares in the number of treasury shares was due to the purchase of fractional shares.
The decrease of 16,186 in the number of treasury shares was due to disposal of treasury shares as restricted stock
based compensation.

Year ended December 31, 2022
Type

Number of shares
as of the beginningof current period

Increase in numberof shares
during the period

Decrease in numberof shares
during the period

62,601,161-

8,428,800

Number of shares
as of the end ofcurrent period

Shares issued:
Common stock

54,172,361

Treasury shares:
Common stock

4,164,408
8,429,313
8,450,180
4,143,541
Note: The decrease of 8,428,800 shares in the number of shares issued was due to the cancellation of treasury shares.
The increase of 513 shares in the number of treasury shares was due to the purchase of fractional shares and8,428,800 shares was due to purchase of treasury shares.
The decrease of 21,380 in the number of treasury shares was due to disposal of treasury shares as restricted stock
based compensation and 8,428,800 was due to cancellation of treasury shares.

2. Dividends
Dividends paid in the year ended December 31, 2023
Date of resolution
Annual meeting ofstockholders held on
March 29, 2023
Directors' meeting
held on
August 10, 2023

TypeofsharesAmount ofdividends(Millions of yen)

Cash dividends
per share(Yen)

Record date

Effective dateCommon
stock

¥

750

¥

15

December 31,
2022

March 30,
2023

Common
stock

¥

750

¥

15

June 30,
2023

September 1,
2023

Record date

Effective date

Dividends paid in the year ended December 31, 2022
Date of resolution
Annual meeting ofstockholders held on
March 29, 2022
Directors' meeting
held on
August 10, 2022

TypeofsharesAmount ofdividends(Millions of yen)

Cash dividends
per share(Yen)

Common
stock

¥

876

¥

15

December 31,
2021

March 30,
2022

Common
stock

¥

750

¥

15

June 30,
2022

September 2,
2022

36

Dividends with a record date attributable to the year ended December 31, 2023 but an effective dateafter December 31, 2023
Date of resolution

Typeofshares

Sourceofdividends

Annual meetingof stockholders
held onMarch 27, 2024

Commonstock

Retainedearnings

Amount ofCash dividends
dividends
per share(Millions of yen)
(Yen)
¥ 1,000¥ 20

Record date

Effective
date

December 31,
2023

March 28,
2024

Dividends with a record date attributable to the year ended December 31, 2022 but an effective dateafter December 31, 2022

34.

Date of resolution

Typeofshares

Sourceofdividends

Annual meetingof stockholders
held onMarch 29, 2023

Commonstock

Retainedearnings

Amount ofCash dividends
dividends
per share(Millions of yen)
(Yen)
¥ 750

¥ 15

Record date

Effective
date

December 31,
2022

March 30,
2023

Information on Significant Affiliates
A summary of the financial statements of SIIX Corporation, a significant affiliate, is as follows:
Summarized balance sheets as of December 31, 2023 and 2022
Millions of yen
2023

2022

Current assets ··········································· ¥157,621¥150,276

Non-current assets ····································· ¥59,216¥54,894Current liabilities······································· ¥88,654¥96,598Non-current liabilities ································· ¥38,638¥31,182

Net assets ··············································· ¥89,545¥77,390

Summarized statements of income for the years ended December 31, 2023 and 2022
Millions of yen
2023

2022

Net sales ················································· ¥309,768¥

277,032

Income before income taxes ·························· ¥11,852¥

7,960

Net income attributable to owners of parent········ ¥

8,185

¥

4,734

37

35.

Amounts Per Share
Yen
2023

2022

Net assets per share ····································¥

1,974.19¥

1,724.45

Dividends per share ····································

¥

35.00

¥

30.00

Net income per share ··································¥

149.22¥

85.52

Note 1: There were no dilutive securities.
Note 2: The calculation of net income per share was as follows:Yen
2023
Net income attributable to owners of parent(millions of yen) ········································Net income attributable to owners of parent
related to common stock (millions of yen)··········
Average number of shares of common stockduring the fiscal year (thousands) ····················

36.

2022

¥

7,467

¥

4,555

¥

7,467

¥

4,555

¥

50,039¥53,264

Subsequent Events(Change in Subsidiary by the Transfer of Equity Interests)
The Company resolved at the Board meeting held on February 28th, 2024, that all equity interests in
MAOMING SKATA INX CO.,LTD. Held by the Company were to be transferred to MAOMING HUACAIINK CO.,LTD., and concluded the contract on the transfer of equity interests on March 12th, 2024.
(1) The reason for the transfer
The Company had been expanding the business by the foundation of subsidiaries or extending sales
channels in China to expand its market share in the global ink market.
However, in consideration of the future of offset inks in China, it is challenging to set up a business plan to
add more value and assist further growth. The Company determined to transfer of all equity interests in
MAOMING SKATA INX CO.,LTD. under the recognition that the best course of action for the company was tocontinue the business as a subsidiary of the co-investing partner in China, with conditions below.
The other subsidiaries in China will continue their operations.
(2) Overview of the subsidiary to be transferred
Name

MAOMING SAKATA INX CO.,LTD.

Business lines

Production and sale of printing inks for Asian market(3) The name of the transferee
MAOMING HUACAI INK CO.,LTD.

38

(4) Equity interests transferred, amounts for the transfer, and status of equity interests before and after thetransfer
Equity ratio before the transfer

63.26%

Equity interests transferred

63.26%

Amounts for the transfer*

69,500,000 RMB

Income or loss for the transfer

Currently being evaluatedEquity interests after the transfer－%(5) Transfer schedule
Resolution at the meeting of the Board of Directors

February 28, 2024

Execution date of transfer agreement

March 12, 2024

Implementation date of the transfer

April, 2024 (Scheduled)(6) Future outlook
The impact of the above change on the consolidated financial statements for the fiscal year ending
December 31, 2024 is immaterial.

39