SAKATA INX CORPORATION
Consolidated Financial Statements
As of December 31, 2022 and 2021SAKATA INX CORPORATIONCONSOLIDATED BALANCE SHEETS
Years ended December 31, 2022 and 2021
Millions of yen
ASSETS
Current assets:
Cash and deposits (Note 12) ·················································
Notes and accounts receivable - trade (Notes 7, 11, 12 and 15) ········
Merchandise and finished goods ············································
Work-in-process ······························································
Raw materials and supplies ··················································
Other ············································································
Allowance for doubtful accounts ···········································
Total current assets ························································

2022

¥

2021

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

12,68549,36312,803
1,228
14,562
2,786(566)
92,861

Property, plant and equipment (Notes 9, 10, 15 and 16):
Buildings and structures, net ················································
Machinery, equipment and vehicles, net ···································
Land ············································································
Leased assets, net ·····························································
Construction in progress ·····················································
Other, net·······································································
Total property, plant and equipment ····································

19,858
10,391
9,817
232
3,815
4,273
48,386

19,643
10,294
9,397
343
3,055
2,588
45,320Intangible assets:
Goodwill (Note 30) ···························································
Other ············································································
Total intangible assets·····················································

441
1,901
2,342

454
374
828

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

25,698
46
804
259
2,065
(982)
27,890166,899

Investments and other assets:
Investment securities (Notes 8, 12 and 13) ································
Long-term loans receivable ··················································
Retirement benefit asset (Note 18) ·········································
Deferred tax assets (Note 19)················································
Other ············································································
Allowance for doubtful accounts ···········································
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 11, 12 and 15)··············
Electronically recorded obligations - operating (Notes 11) ··················
Short-term loans payable (Notes 14 and 15) ······························
Current portion of long-term loans payable (Notes 14 and 15) ········
Lease obligations ·····························································
Accrued expenses ····························································
Income taxes payable ························································
Provision for bonuses ························································
Other ···········································································
Total current liabilities ···················································
Non-current liabilities:
Bonds payable (Note 12) ····················································
Long-term loans payable (Notes 12, 14, and 15) ·························
Lease obligations ·····························································
Deferred tax liabilities (Note 19) ···········································
Retirement benefit liability (Note 18) ·········································
Asset retirement obligations ·················································
Other ···········································································
Total non-current liabilities ··············································
Total liabilities ···························································· ¥

2022

2021

23,122
14,316
11,047
1,979
648
4,656
524
547
2,304
59,14323,01013,235
5,133
5,335
193
4,156
792
613
2,791
55,2581,000
11,244
1,338
3,555
4,869
75
3,227
25,30884,451

1,000
5,558
562
4,065
4,982
73
2,936
19,17674,434¥

Contingent liabilities (Note 21)
Net Assets (Note 32):
Shareholders’ equity
Capital stock:
Authorized – 144,000,000 shares
Issued – 54,172,361 shares in December 2022 and
62,601,161 shares in December 2021 ······················· ¥Capital surplus ································································
Retained earnings ····························································
Treasury shares, at cost – 4,143,541 shares in December 2022 and
4,164,408 shares in December 2021 ·······
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
5,672
71,7307,473
5,675
76,967(4,015)80,860(4,010)86,105

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

2,106(3)(1,606)
(222)
275
6,085
92,465
166,899

The accompanying notes are an integral part of these statements.

2

¥

¥

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2022 and 2021

Net sales ·····················································································
Cost of sales ················································································
Selling, general and administrative expenses (Note 23) ···························
Operating income··································································

Millions of yen
2022
2021
¥
215,531¥
181,488
176,313
143,803
35,09330,270
4,125
7,415

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 13 and 25) ·························
Gain on sales of non-current assets (Notes 24) ·····································
Loss on sales of non-current assets ···················································
Subsidy income ·········································································
Loss on retirement of non-current assets (Note 26) ································
Provision of allowance for doubtful accounts (Notes 27) ·························
Other, net ················································································
Income before income taxes ·····················································
Income taxes:
Current ···················································································
Deferred (Note 19) ·····································································Net income··················································································Net income attributable to non-controlling interests ······························Net income attributable to owners of parent ···································

¥

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

70
331
181
993
(238)
(84)
(295)
76
115
(22)
100
(425)
(566)
134
7,785

1,857
(508)
1,349

1,796
358
2,154

4,936
(381)
4,555

¥

5,631
(697)
4,934

¥
¥

84.43
30.00

Yen
Net income per share of capital stock (Note 34) ·······································Cash dividends per share applicable to the year (Note 34)····························¥¥

The accompanying notes are an integral part of these statements.

3

85.52
30.00

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended December 31, 2022 and 2021

Net income·····················································································
Other comprehensive income (Note 28):
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
2022
2021
¥
¥
4,936
5,631
(953)
3
5,487
(473)

354
(2)
4,415
831

¥

1,784
5,848
10,784

¥

1,601
7,199
12,830

¥
¥

9,692
1,092

¥
¥

11,654
1,176

The accompanying notes are an integral part of these statements.

4

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 32 and 34) ························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 ······················

Millions of yen
Capital stock

Capital surplus

¥

¥

-

Balance at the end of current period ····························

54,172,361

7,473
-

5,675
(0)
(8,168)8,165¥

Retainedearnings¥

76,967

(3)

7,473

¥

5,672

¥

(1,627)
4,555(8,165)(4,010)(8,193)
20
8,168-(5,237)(5)

71,730Millions of yen
Valuationdifference on
available-forsale securities
Balance at the beginning of current period ···················· ¥Dividends of surplus (Notes 32 and 34)························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 ······················

2,106
-

Balance at the end of current period ···························· ¥1,112

Foreigncurrencytranslation
adjustment

Deferred
gains or losses
on hedges
¥

(994)
(994)

(3)
-

¥

3
3
¥

(1,606)
-

¥

5,010

¥

(4,015)¥

86,105(1,627)
4,555(8,193)20(5,245)¥80,860Total
accumulated
othercomprehensive
incomeNon-controllinginterests

¥

¥

¥

(222)
(488)
(488)

¥

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

Remeasurementsof defined benefit
plans

6,616
6,616

(0)

Total
shareholders’equityTreasuryshares

(710)

275
5,137
5,137

¥

5,412

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 CHANGES IN NET ASSETS
Year ended December 31, 2021
Number ofshares ofcommon stock
Balance at the beginning of current period ····················

62,601,161-

Dividends of surplus (Notes 32 and 34) ························Net income attributable to owners of parent ···················
Purchase of treasury shares ······································
Disposal of treasury shares·······································
Change in scope of consolidation ·······························
Change of scope of consolidation in
affiliates accounted for using equity method ·················Net changes of items other thanshareholders’ equity·········································
Total changes in items during the period·······················
Balance at the end of current period ····························

Millions of yen
Capital stock

Capital surplus

¥

¥

7,473
-

5,673
2
-

Retainedearnings¥

Total
shareholders’equityTreasuryshares73,918(1,753)
4,934
(120)

¥

(4,028)
(0)
18
-

¥

83,036(1,753)
4,934
(0)
20
(120)

-

-

-

(12)

-

(12)

62,601,161

7,473

2
5,675

3,049
76,96718(4,010)3,069
86,105¥¥¥

Millions of yen
Valuationdifference on
available-forsale securities
Balance at the beginning of current period ···················· ¥Dividends of surplus (Notes 32 and 34)························Net income attributable to owners of parent ···················
Purchase of treasury shares ······································
Disposal of treasury shares·······································
Change in scope of consolidation ·······························
Change of scope of consolidation in
affiliates accounted for using equity method ·················Net changes of items other thanshareholders’ equity·········································
Total changes of items during the period ······················

1,652
-

Balance at the end of current period ···························· ¥2,106Foreigncurrencytranslation
adjustment

Deferred
gains or losses
on hedges
¥

(0)
-

¥

(1,045)-

Total
accumulated
othercomprehensive
income¥(6,675)-Remeasurementsof defined benefit
plans(7,282)
-

¥

¥

¥

Total
net assets

Non-controllinginterests
¥

5,061
-

¥

81,422(1,753)
4,934
(0)
20
(120)

-

-

-

-

-

-

(12)

454
454

(3)
(3)

5,676
5,676

823
823

6,950
6,950

1,024
1,024

7,974
11,043¥(3)¥(1,606)¥

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

(222)

¥

275

¥

6,085

¥

92,465

SAKATA INX CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2022 and 2021
Millions of yen
2022

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

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 ·····································
Interest and dividend income ·······················································
Interest expenses······································································
Equity in (earnings) losses of affiliates ············································
Loss (gain) on sales of investment securities ·····································
Loss (gain) on sales and retirement of non-current assets ·······················
Loss on retirement of non-current assets ··········································
Subsidy income ·······································································
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 ·······································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 ····························································
Other, net ···················································································Net cash provided by (used in) investing activities ·······································

The accompanying notes are an integral part of these statements.

7

6,285

2021
¥

7,785

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

4,306
86
452
(582)
97
48
(401)
238
(993)
(76)
(93)
425
(100)
(3,629)(4,809)(1,176)
346
6,747
645
(550)
100
(1,997)
4,945

7,184
(753)
9,185
747
(233)
100
(2,243)
7,556(4,818)58(1,644)
(368)
4,628
(24)
77
423
(1,666)(5,276)
300
(912)
(99)
160
(50)
50
474
(5,353)

Millions of yen
2022
2021

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 ················································
Proceeds from issuance of bonds ························································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 ·······································

4,763
7,582
(5,669)(1,627)(643)
147(8,193)(257)(3,897)226
1,045(3,003)1,000(1,753)
(279)
127
(0)
(238)
(2,875)

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

225

680

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） ······························(393)
12,115

8
11,678-429¥

The accompanying notes are an integral part of these statements.

8

11,722¥

12,115

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-four
subsidiaries (twenty-six in 2021). The principal subsidiaries of the Company were THE INX GROUP
LIMITED, INX International Ink Co., SAKATA INX (INDIA) PRIVATE LIMITED and P.T. SAKATAINX INDONESIA. Sakata Inx Engineering Co.,Ltd. and another one company were excluded from the scopeof consolidation due to their liquidation. All significant intercompany transactions and accounts 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 2021). 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 14 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, 2022 and 2021 were ¥4,267 million and ¥3,823 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, 2022 and 2021
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
2021

2022
3,061
(223)

¥

2,876
(174)

(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.

Changes in Accounting Policies(Changes due to adoption of “Accounting Standard for Revenue Recognition”)
The Company and its subsidiaries have adopted the “Accounting Standard for Revenue Recognition”(ASBJ Statement No. 29, March 31, 2020) (referred to as “the Revenue Recognition Standards”) from the
beginning of the current consolidated fiscal year and, accordingly, adopted the accounting policy torecognize revenue at amounts expected to be received in exchange for the promised goods or services ascontrol of the goods or services are transferred to the customer.
For transactions in which the role of the Company and its subsidiaries in the sale of goods tocustomers is deemed to be that of an agent, revenue is recognized on a net basis, whereas it was previously
recognized by the gross amount of consideration received from the customers.
Sales discounts, which were previously recorded as other expenses, are now deducted from net sales.
For buy-sell translations in which the Group sells and buys back goods, the Company and its
subsidiaries have changed to the method in which they do not recognize the transfer of supplies in thetransactions if they are obliged to repurchase the supplies, the Companies previously recognized the transferof the supplies.
For buy-sell transaction in which the Group buys and sells back goods, revenue was previously
recognized at the gross amount of consideration, including the purchase price of raw materials, etc. However,that method was changed to one that recognizes only the amount equivalent to processing costs as revenue
on a net basis.
The application of these changes in accounting policies follows the transitional treatment prescribed in
Paragraph 84 of the Accounting Standard for Revenue Recognition such that the new accounting policy wasapplied from the beginning balance of retained earnings of the current consolidated fiscal year to add to or
deduct from the beginning balance of retained earnings of the current consolidated fiscal year the cumulative
effects of applying retrospectively the new accounting policy from the beginning of the current consolidated
fiscal year. The method prescribed in Paragraph 86 of the Accounting Standard for Revenue Recognition
Standard was applied, however, with no retrospective application of the new accounting policy to contracts
in which almost all amounts of revenue that have been recognized in accordance with prior treatments before
the beginning of the current consolidated fiscal year. As a result, the impact on the consolidated financial
statements has been immaterial and there was no impact on the beginning balance of retained earnings of thecurrent consolidated fiscal year.
In accordance with the transitional treatment set out in Paragraph 89-3 of the Revenue Recognition
Standard, notes related to revenue recognition for the prior fiscal year have been omitted.

13

(Changes due to adoption of “Accounting Standard for Fair Value Measurement”)
The Company and its subsidiaries have adopted the “Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 30, July 4, 2019) (referred to as “the Fair Value Measurement
Standards”) from the beginning of the current consolidated fiscal year and have applied the new accounting
policies prescribed by the Fair Value Measurement Standard in the future in accordance with the transitional
treatment prescribed in Paragraph 19 of the Fair Value Measurement Standards and in Paragraph 44-2 of the
Accounting Standard for Financial Instruments (ASBJ Statement No.10, July 4, 2019). The application of
the standards has had no impact on the consolidated financial statements
In addition, notes regarding the breakdown of the fair value of financial instruments by level havebeen described. However, notes for the prior consolidated fiscal year have not been described in accordancewith the transitional treatment set out in Paragraph 7-4 of the Implementation Guidance on the Disclosuresof the Fair Value of Financial Instruments (ASBJ Guidance No. 19, July 4, 2019)

5.

Changes in Presentation(Consolidated Cash-flow Statement)“Decrease (increase) in retirement benefit asset,” which was included in “Other, net” in “Net cash
provided by (used in) operating activities” in previous consolidated fiscal year, was presented as anindividual item in the current consolidated fiscal year due to an increase in its materiality. To reflect thischange in presentation, the consolidated financial statements for the previous fiscal year were reclassified, asa result, ¥(1,355) million presented in "Other, net" in “Net cash provided by (used in) operating activities” inprevious consolidated fiscal year was reclassified as “Decrease (increase) in retirement benefit asset” of¥(582) million and as "Other, net" of ¥(753) million.

“Purchase of intangible assets,” which was included in “Other, net” in “Net cash provided by (used in)investing activities” in previous consolidated fiscal year, was presented as an individual item in the current
consolidated fiscal year due to the increase of its materiality. To reflect this change in presentation, theconsolidated financial statements for the previous fiscal year were reclassified,
As a result, ¥(438) million presented in "Other, net" in “Net cash provided by (used in) investing
activities” in previous consolidated fiscal year was reclassified as “Purchase of intangible assets” of ¥(912)
million and as "Other, net" of ¥474 million.
“Purchase of treasury shares,” which was included in “Other, net” in “Net cash provided by (used in)financing activities” in previous consolidated fiscal year, was presented as an individual item in the current
consolidated fiscal year due to an increase in its materiality. To reflect this change in presentation, theconsolidated financial statements for the previous fiscal year were reclassified,
As a result, ¥(238) million presented in "Other, net" in “Net cash provided by (used in) financing
activities” in previous consolidated fiscal year was reclassified as “Purchase of treasury shares” of ¥(0)
million and as "Other, net" of ¥(238) million.

6.

Additional Information(Accounting estimates along with the spread of COVID-19)
The spread of COVID-19 has had comprehensive impacts on the economy and business activities andit also affects the Companies.
Although it was difficult to reasonably estimate the timing of the infection convergence and the extent
of its impact, the Company made accounting estimates such as the impairment of fixed assets and therecoverability of deferred tax assets on the assumption that the impact on our financial statements would be
limited.

14

(Loss on improper transactions by a subsidiary company)
In November 2021, overdue uncollectible receivables from a customer arose in SAKATA SANGYO,
LIMITED (hereinafter referred to as “SAKATA SANGYO”), a consolidated subsidiary of the Company
operating in the Other segment, as a result of suspending transactions with the customer in August 2021 afternegotiations failed to improve terms and conditions. At the same time, the existence of the transactions weredeemed doubtful as it turned out that SAKATA SANGYO conducted the transactions procuring from parties
related to the customer.
Accordingly, the Company set up an investigation committee including external experts on December
28, 2021 to investigate the relevant facts, internal controls and action plans from a professional and objective
perspective. The investigation concluded that most of SAKATA SANGYO’s past businesses with thecustomer and its related parties were fictitious round transactions with no substance. In relation to thesetransactions, a provision for allowance for doubtful accounts of ¥566 million (equivalent to the total amountof receivables) for the relevant uncollected receivables was recognized.

7.

Details of “Notes and accounts receivable – trade”
Receivables of contracts with customers included in the “Notes and accounts receivable – trade” as ofDecember 31, 2022 was as follows:
Millions of yen
2022
Notes receivable - trade ··················································¥

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

8.

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

2022
Investment securities - shares ···········································
Other in investments and other assets - capital ························

9.

¥

Millions of yen

18,881
34¥

2021
16,37065

Accumulated Depreciation

2022¥

Millions of yen

76,440¥2021
68,656

10.

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, 2022 and 2021.

15

11.

Effect of Bank Holiday
As financial institutions in Japan were closed on both December 31, 2022 and 2021, amounts thatwould have been settled on December 31 were collected or paid on the first business day in January 2022
and 2022. The amounts included in the consolidated balance sheet as of December 31, 2022 and 2021 wereas follows:

2022
Notes and accounts receivable - trade ··································¥

Millions of yen

780

2021
¥

927

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

38

33

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

2,144

1,917

12.

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 are 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 fractuation factors are considered, thefair value can be changed by the adoption of different premises.

16

2. Fair values of financial instruments
Consolidated balance sheet amounts and fair values of financial instruments and any differences as ofDecember 31, 2022 and 2021 are set forth in the tables below.
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 was ¥2,105 million.
Year ended December 31, 2021

Millions of yen
Consolidatedbalance sheet
Fair value
Difference
amount(1) Cash and deposits································ ¥ 12,685¥ 12,685¥(2) Notes and accounts receivable - trade·········
49,36349,363(3) Investments:
Securities in affiliates ··························
15,20815,310102
Available-for-sale securities ··················
8,726
8,726
Total assets ············································ ¥ 85,982¥ 86,084¥102(1) Notes and accounts payable - trade············ ¥ 23,010¥ 23,010¥(2) Electronically recorded obligations
13,235
13,235- operating ···········································(3) Short-term loans payable
5,133
5,133
(4) Bonds payable ···································
1,000
999
(1)
(5) Long-term loans payable ·······················
10,893
10,865(28)
Total liabilities ········································ ¥ 53,271¥ 53,242¥(29)*1: Amounts for Non-listed equity securities classified as available-for sale securities or equity securities
issued by subsidiaries and affiliates are not included in “(3) Investments”. The amounts on
consolidated balance sheet was ¥1,764 million.
Note 1: Aggregate annual maturities of money claims and securities with maturities as of December 31, 2022
and 2021 were as follows:Year ended
December 31, 2022
Cash and deposits ··············· ¥Notes and accounts
receivable - trade ··············
Total ······························ ¥Millions of yen
2023

2024-2027

2028-2032

12,120¥-¥-2033 and
thereafter¥-

53,86365,983

¥

-

¥

-

¥

17

-

Year ended
December 31, 2021

Millions of yen

Cash and deposits ··············· ¥Notes and accounts
receivable - trade ··············
Total ······························ ¥2022

2023-2026

2027-2031

12,685¥-¥-2032 and
thereafter¥-

49,36362,048

¥

-

¥

-

¥

-

Note 2: Aggregate annual maturities of long-term loans payable as of December 31, 2022 and 2021 were as
follows:
Year ended
December 31, 2022

Millions of yen
2023

2024

2025

2026

Bonds payable·········· ¥

-

¥

-

¥

-

¥

1,000

Long-termloans payable ··········· ¥

1,979

¥

2,616

¥

2,765

¥

550

Year ended
December 31, 2021

2028 and
thereafter

2027
¥

-

¥

-

¥ 5,313

¥

-

2026

2027 and
thereafter¥ 1,000

¥

-

¥

¥

-

Millions of yen
2022

2023

2024

2025

Bonds payable·········· ¥

-

¥

-

¥

-

¥

-

Long-termloans payable ··········· ¥

5,335

¥

1,452

¥

2,014

¥

2,092

-

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.
(1) Financial instruments measured at fair value
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

¥
¥

¥
¥

18

4,193
4,193

-

¥
¥

Total
-

¥
¥

4,193
4,193

(2) Financial instruments other than those measured at fair value
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¥¥¥¥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.

19

13.

Securities
The following tables summarize the consolidated balance sheet amount, acquisition cost and fair valueof available-for sale securities as of December 31, 2022 and 2021. Available-for-sale securities (non-listed
equity securities) in the consolidated balance sheet amounted to ¥669 million as of December 31, 2022 and¥603 million as of December 31, 2021 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 ¥4,628 million for the year ended December 31, 2022 and ¥160
million for the year ended December 31, 2021, and the related gains amounted to ¥1,442 million for the year
ended December 31, 2022 and ¥76 million for the year ended December 31, 2021.
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 ··········································

Period ended December 31, 2021

(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
¥

¥

3,896
3,896
297
297
4,193

Consolidatedbalance sheet
amount
¥

¥

8,499
8,499
227
227
8,726

20

Millions of yen
Acquisition cost

¥

¥

2,358
2,358
348
348
2,706

Difference

¥

¥

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

Millions of yen
Acquisition cost

¥

¥

5,592
5,592
270
270
5,862

Difference

¥

¥

2,907
2,907
(43)
(43)
2,864

14.

Short-term Loans Payable and Long-term Loans Payable
Short-term loans payable at December 31, 2022 and 2021 consisted of short-term notes generally forone year bearing interest ranging from 0.38% to 9.20%.
Long-term loans payable at December 31, 2022 and 2021 consisted of the following:

Secured:Loans principally from banks at
3.65% ·································································
Unsecured:
Loans principally from banks at
0.18% - 4.00% maturing through 2027 ··························
Less amounts due within one year ·······································

2022

Millions of yen

¥

-

¥

13,223
13,223
1,979
11,244

2021

¥

79

¥

10,814
10,893
5,335
5,558

The aggregate annual maturities of long-term loans payable at December 31, 2022 were as follows:Year ending December 31,

Millions of yen

2023············································································
2024············································································
2025············································································
2026············································································
2027 and thereafter ··························································

¥

¥

1,979
2,616
2,765
550
5,313
13,223

The 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, 2022 ······························ ¥-15.

Assets Pledged as Collateral
Assets pledged as collateral as of December 31, 2022 and 2021 were as follows:

2022
Notes and accounts receivable - trade ··································
Buildings and structures, net of accumulated depreciation ··········
Land ········································································
Investments in other ······················································¥¥

Millions of yen
8
47
55

2021
¥

¥

8
604
136
47
795

Liabilities secured by the above assets were as follows:
2022
Notes and accounts payable - trade ·····································
Short-term loans payable·················································
Current portion of long-term loans payable ···························
Long-term loans payable ·················································

21

¥

¥

Millions of yen
203
8
211

2021
¥

¥

187
8
77
79
351

16.

Finance Leases
Capitalized finance leases of the Companies at December 31, 2022 and 2021 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, 2022 and 2021 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.”17.

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.

18.

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
2021
2022
Balance at the beginning of current period ···················· ¥12,434¥
12,860Service cost (*) ·················································
508
517
Interest cost ·····················································
91
104
Actuarial loss (gain) ···········································
106
(709)
Benefits paid ····················································
(767)
(727)
Past service cost(0)
Other·····························································
12
389
Balance at the end of current period ···························· ¥12,384¥
12,434(*) 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 ···························· ¥

22

2022

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

¥

¥

2021

8,141
185
89
248
(453)
46
8,256

(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·································· ¥2022

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

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

¥

4,850

¥

2021

4,178

4,869
(19)
4,850

7,790
(8,256)
(466)
4,644

4,982
(804)
¥

4,178

(4) Retirement benefit costs
Millions of yen
2021
Service cost (*) ················································· ¥
508
¥
517
Interest cost ·····················································
91
104
Expected return on plan assets ·······························
(186)
(186)
Net actuarial loss amortization ·······························
152
349
Past service cost(0)
Other·····························································(72)
6
Total retirement benefit costs
¥
493
¥
790
for defined benefit plans ································(*) Service cost includes retirement benefit costs of consolidated subsidiaries applying the simplified
method.
2022(5) Remeasurements of defined benefit plans
Millions of yen
Actuarial gains and losses ····································
Total ·························································· ¥

2022

(657)
(657)

2021
¥

1,155
1,155

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

23

2022

955
955

2021
¥

298
298

(7) Plan assets

2021

2022

(a) Plan assets comprise:
Bonds ·························································
55.3 %
56.1 %
Equity securities ············································
10.2
11.8
Alternative assets (*) ·······································
23.4
21.2
Other··························································
11.1
10.9
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

2021

2022

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 ··········· ¥

24

2022
532

¥

2021
539

19. Deferred Income Taxes
Significant components of the Companies’ deferred tax assets and liabilities as of December 31, 2022
and 2021 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) ·········································

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)

¥

2021
208
155
1,913
91
513
1,377
911
5,168
(1,371)(521)(1,892)
3,276
(871)
(887)
(776)
(3,715)(833)(7,082)(3,806)¥(Change in presentation)“Depreciation,” which was included in “Other” in previous consolidated fiscal year, is presented as anindividual item in the current consolidated fiscal year due to the increase in its materiality. To reflect thischange in presentation, the note for the previous fiscal year was reclassified,

Note 1: Valuation allowance decreased by ¥140 million. The decrease was mainly due to the change of company
category in judging on collectability of differed tax assets in a part of subsidiaries.
Note 2: Expiration periods for tax loss carryforwards and deferred tax assets as of December 31, 2022 and 2021

were as follows: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.

25

Year ended
December 31, 2021

Millions of yen
2022

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

2023
-

¥

2024
26

¥

2025
53

¥

2027 and
thereafter

2026
-

¥

Total

15

¥ 1,284 ¥

1,378

-

(26)

(53)

-

(15)

(1,277)(1,371)

-

-

-

-

-

7

7

(*) 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, 2022 and 2021 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 ···············

2022
30.6%

2021
30.6%

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

3.4
(4.9)
(4.1)
(3.9)
5.5
0.7
4.3
(4.3)
0.4
27.7%

20. Revenue Recognition
1. Disaggregated revenue from contracts with customers
Information on disaggregated revenue from contracts with customers is described in Note 30, “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
2022

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····················

26

49,36353,863
106
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, 2022, the amounts included in liabilities
from contracts with customers at the beginning of the fiscal year were ¥106 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.
21. Contingent Liabilities
At December 31, 2022 and 2021, the Companies were contingently liable as follows:

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

Millions of yen
2022
2021
¥
178
¥
170
¥
178
¥
170

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.

22.

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”.
23.

Selling, General and Administrative Expenses
The main items of selling, general and administrative expenses for the years ended December 31, 2022
and 2021 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 ·······································

27

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

2021
¥
5,984
10,266
701
(75)
311
727
3,823

24.

Gain on Sales of Non-Current Assets
The details of gain on sales of property, plant and equipment for the years ended December 31, 2022
and 2021 were as follows:
Millions of yen
2022
Building ········································································
Land ············································································
Total ···········································································

¥

2021
-

¥

¥
¥

6
109
115

25.

Gain on Sales of Investment Securities
Because of cancellation of capital alliance with Toyo Ink SC Holdings Co., Ltd., ¥1,442 million ofgain on sales of investment securities was calculated for the year ended December 31, 2022.

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,
2022 and 2021 were as follows:
Millions of yen
2022
Buildings and structures······················································
Machinery, equipment and vehicles ········································
Other fixed assets ·····························································
Demolition and removal expenses ··········································
Software in progress ··························································
Total ···········································································

27.

¥

¥

1
26
0
191
218

2021
¥

¥

3
1
0
27
394
425

Provision of allowance for doubtful accounts
SAKATA SANGYO calculated a provision of allowance for doubtful accounts of ¥566 million foruncollected receivables relevant to insubstantial transactions for the year ended December 31, 2021.

28

28.

Consolidated Statements of Comprehensive Income
The reclassification adjustment and the tax benefit concerning other comprehensive income for theyears ended December 31, 2022 and 2021 were as follows:
Millions of yen
2021

2022
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 ····································

¥

¥

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

¥

580
(76)
504
(150)
354

5,487

4,415

2
2
4
(1)
3

(4)
1
(3)
1
(2)

(742)
85
(657)
184
(473)

753
402
1,155
(324)
831

1,787
(3)

1,601
0

1,784
5,848

1,601
7,199

¥

29.

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, 2022 and 2021 were as follows:
Millions of yen
Cash and deposits ·····························································
Time deposits with original maturity of more than three months ·······Cash and cash equivalents ················································

29

2022
12,120(398)¥
11,722¥2021
12,685(570)¥
12,115¥

30.

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(Adoption of “Accounting Standard for Revenue Recognition”)
As described in “4. Changes of Accounting Policies”, “Accounting Standard for Revenue
Recognition” (ASBJ Statement No. 29, March 31, 2020) is applied from the beginning of the current fiscal
year and changed the accounting method for revenue recognition, and therefore, the profit and loss
calculation method for the reportable segments has been changed in the same manner.
The effect of the change on sales and revenues in each reportable segment is immaterial.
3. Information about reportable segment sales, segment income or loss, segment assets and other items
Year ended
December 31, 2021

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

Printing
inks(Americas)

Printing
inks(Europe)

Digital &Specialty
products

Otherbusinesses
(*1)

Total

Adjustments Consolidated
(*2)
(*3)

Total

Net sales to outside
customers

50,43438,312

54,114

15,127

14,272

172,259

9,229

181,488-

181,488

Intersegment sales
and transfers

10

263

816

803

57

1,949

8,001

9,950

(9,950)-Total

50,444

38,57554,93015,93014,329174,208

17,230191,438(9,950)181,488

Segment income

1,366

2,244

1,465

(188)

1,901

6,788

351

7,139

276

7,415

Segment assets

40,251

41,541

31,623

12,628

10,243

136,286

6,447

142,733

24,166

166,899

Depreciation

1,343

800

954

392

738

4,227

57

4,284

22

4,306

-

-

84

2

-

86

-

86

-

86

1,888

2,510

1,434

220

694

6,746

28

6,774

7

6,781

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 ¥276 million for segment income includes eliminations for intersegment transactions of ¥977 million and corporate expenses of¥(701) million that have not been allocated to any segment. Corporate expenses are mainly service fees to unconsolidated subsidiaries and affiliates.
2. The adjustment of ¥24,166 million for segment assets includes eliminations for intersegment transactions of ¥(6,619) million and corporate assets of¥30,785 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 ¥22 million for depreciation are mainly related to Corporate assets that have not been allocated to any segment.
4. The adjustment of ¥7 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, 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.
Year ended December 31, 2021
1. Information about each product and service
Year ended
December 31, 2021

Millions of yen
Printing inks

Net sales to outside
customers¥

Graphic arts
materials

144,821 ¥Digital & Specialty
products

13,198 ¥Other

14,272 ¥Total

9,197 ¥

181,488

Other

Total

2. Information about geographic areas
Year ended
December 31, 2021

Millions of yen
Japan

Asia

America

EuropeNet sales¥

63,237 ¥41,138 ¥47,354 ¥15,765 ¥13,994 ¥

181,488

Property, plant andequipment¥

21,247 ¥11,300 ¥8,513 ¥

3,783 ¥

477 ¥

45,320Note: 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, 2022
Not applicable.
Year ended December 31, 2021
Not applicable.
(Amortization and unamortized balance of goodwill)
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

Year ended December 31, 2021
Year ended
December 31, 2021

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

¥

-

¥

-

¥ 84

¥ 2

¥

-

¥ 86

¥

-

¥

-

¥ 86

Balance as ofDecember 31, 2021

¥

-

¥

-

¥ 437

¥ 17

¥

-

¥ 454

¥

-

¥

-

¥ 454

(Negative goodwill in other income by reportable segments)
Year ended December 31, 2022
Not applicable.
Year ended December 31, 2021
Not applicable.

34

31.

Related Party Transactions
Transactions with related parties for the years ended December 31, 2022 and 2021 were as follows: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.

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.

Year ended December 31, 2021
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¥ 3,395

Notes andaccounts
receivable- tradeInvestments
and otherassets:Other

Balance atyear end(Millionsof yen)¥ 2,576¥

174

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 ¥174 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, 2021 was ¥21 million.

35

32.

Changes in Net Assets
1. Shares issued and treasury sharesYear 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.

Year ended December 31, 2021
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--

Number of shares
as of the end ofcurrent period

Shares issued:
Common stock

62,601,161

Treasury shares:
Common stock

4,182,625
200
18,417
4,164,408
Note: The increase of 200 shares in the number of treasury shares was due to the purchase of fractional shares.
The decrease of 18,417 in the number of treasury shares was due to disposal of treasury shares as restricted stock
based compensation.

2. Dividends
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)

Record date

Effective dateCommon
stock

¥

876

¥

15

December 31,
2021

March 30,
2022

Common
stock

¥

750

¥

15

June 30,
2022

September 2,
2022

Record date

Effective date

Dividends paid in the year ended December 31, 2021
Date of resolution
Annual meeting ofstockholders held on
March 26, 2021
Directors' meeting
held on
August 11, 2021

TypeofsharesAmount ofdividends(Millions of yen)

Cash dividends
per share(Yen)

Common
stock

¥

876

¥

15

December 31,
2020

March 29,2021

Common
stock

¥

876

¥

15

June 30,
2021

September 3,
2021

36

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

Dividends with a record date attributable to the year ended December 31, 2021 but an effective dateafter December 31, 2021

33.

Date of resolution

Typeofshares

Sourceofdividends

Annual meetingof stockholders
held onMarch 29, 2022

Commonstock

Retainedearnings

Amount ofCash dividends
dividends
per share(Millions of yen)
(Yen)
¥ 877

¥ 15

Record date

Effective
date

December 31,
2021

March 30,
2022

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, 2022 and 2021
Millions of yen
2022

2021

Current assets ··········································· ¥150,276¥

122,797

Non-current assets ····································· ¥54,894¥

47,124Current liabilities······································· ¥96,598¥79,833

Non-current liabilities ································· ¥31,182¥

23,719Net assets ··············································· ¥77,390¥66,369

Summarized statements of income for the years ended December 31, 2022 and 2021
Millions of yen
2022

2021

Net sales ················································· ¥277,032¥

226,834

Income before income taxes ·························· ¥

7,960

¥

5,935

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

4,734

¥

4,562

37

34.

Amounts Per Share
Yen
2022

2021

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

1,724.45¥

1,478.18

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

¥

30.00

¥

30.00

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

¥

85.52

¥

84.43

Note 1: There were no dilutive securities.
Note 2: As described in “4. Changes of Accounting Policies”, “Accounting Standard for Revenue
Recognition” (ASBJ Statement No. 29, March 31, 2020) is applied from the beginning of the current
fiscal year and the application of such changes in accounting policies follows the transitional

treatment prescribed in the proviso of paragraph 84 of the Accounting Standard for Revenue
Recognition,.There are no impact on net assets per share and net income per share in current

consolidated fiscal year.
Note 3: The calculation of net income per share was as follows:

Yen
2022
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) ····················

38

2021

¥

4,555

¥

4,934

¥

4,555

¥

4,934

¥

53,264¥58,431