Consolidated Financial Statements
USHIO INC.
Year ended March 31, 2023 with
Independent Auditor’s ReportIndependent Auditor’s Report

The Board of Directors
USHIO INC.
OpinionWe have audited the accompanying consolidated financial statements of USHIO INC. (theCompany) and its consolidated subsidiaries (the Group), which comprise the consolidatedbalance sheet as at March 31, 2023, and the consolidated statements of income, comprehensive
income, changes in net assets, and cash flows for the year then ended, and notes to theconsolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2023, and its
consolidated financial performance and its consolidated cash flows for the year then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on thesematters.
Impairment of non-current assets in the imaging equipment business
Description of Key Audit Matter

Auditor’s Response

Certainconsolidated
subsidiaries
manufacture and sell cinema and generalimaging projectors (the “projectors”) to
customers worldwide. Although demand in
the cinema and general imaging businesslines was on a recovery track as movie
theaters resumed operations and events,
mainly in Europe and the United States, net
sales and operating income (loss) wereaffected due to the loss of sales opportunities
arising from the global shortage ofWe mainly performed the following audit
procedures on the estimates of total
undiscounted future cash flows used indetermining whether to recognize an
impairment loss on property, plant andequipment and intangible assets in theimaging equipment business. We also
involved component teams in performing
these audit procedures.
・ We evaluated the design and operating
effectiveness of internal controls related

components such as semiconductors andfrom a surge in raw material prices.
As a result, indications that certain asset
groups in the imaging equipment businessmay be impaired were identified, including
manufacturing facilities of the projectors. In
order to determine whether recognizing an
impairment loss was necessary, theCompany made estimates of future cash
flows.
External factors, such as the recovery andgrowth of the cinema and general imaging
markets, forecasts for the normalization of
supplies of components, and uncertainty
about surges in raw material prices, affectestimates of future cash flows.
As described in the Notes to Consolidated
Financial
Statements(Significant
Accounting Estimates), the Company did notrecognize any impairment losses during the
fiscal year ended March 31, 2023 for specificasset groups in the imaging equipment
business related to property, plant andequipment with carrying amounts of 6,935
million yen and intangible assets of 951
million yen since the total undiscounted
future cash flows generated from the asset
groups exceeded the book values of each
asset group. Future cash flows are estimatedmainly based on business plans authorized
by the Board of Directors and growth rates
for subsequent periods. The key assumptions
used in estimating future cash flows are net
sales growth rates and increases in operating
expenses, such as raw material and laborcosts.
Net sales growth rates and increases inoperating expenses, which are key
assumptions used by the Company, are ofparticular significance because they are
greatly affected by the recovery and growthof the cinema and general imaging markets,
forecasts for the normalization of supplies ofcomponents, and surges in raw material
prices, as described above. The estimation of
future cash flows, which include theseassumptions, involves a high level of
uncertainty as well as the book values of thecorresponding non-current assets that are
affected are also material. Based on theabove, we have determined that the
impairment of non-current assets in the

・

・

・

・

・

to the determination of whether torecognize an impairment loss.
To evaluate the accuracy ofmanagement’s estimates, we comparedprior year business plans withsubsequent actual figures.
We compared the estimation period for
future cash flows to the remaining
useful lives of major assets.
We assessed the consistency of future
cash flows with the business plans
authorized by the Board of Directors.
We discussed with management
regarding significant assumptions, aswell as the effects of the recovery andgrowth of the cinema and generalimaging markets, forecasts for thenormalizationofsuppliesofcomponents, and surges in raw material
prices on these assumptions. We also
compared the assumptions to available
external data.
We performed a sensitivity analysis forthe significant assumptions taking into
consideration future fluctuation risks.

imaging equipment business is a key audit
matter.
Revenue recognition for lithography equipment and EUV light sources in the opticalequipment business
Description of Key Audit Matter
As described in the Notes toConsolidated
Financial
Statements(Segment
Information,etc.),
theCompany’s consolidated net sales include
sales to external customers in the opticalequipment business segment of 57,794
million yen, an increase of 9,408 million
yen, or approximately 19%, from theprevious fiscal year.
Products in the optical equipment
business include projection lithographyequipment for advanced IC package
substrates and direct imaging lithographyequipment for packages and printed circuitboards manufactured and sold by theCompany and certain consolidated
subsidiaries. In addition, the Company
manufactures and sells EUV light sources
for mask inspections necessary in EUV
lithography used in the manufacturing of
next-generation semiconductors whereultra-miniaturization is progressing.
Sales
of
the
above-mentioned
lithography equipment are affected bysemiconductor-related markets and havebeen increasing in recent years due to theongoing demand gains for data center
servers in view of the deployment of 5G
technology and progress with the Internetof Things (IoT). However, at the end of thecurrent fiscal year, there were someadjustments to delivery dates due todiscrepancies in customer investment plans
and a slowdown in demand for end
products such as semiconductors. Amidst
this environment, projection lithographyequipment for advanced IC package
substrates and direct imaging lithographyequipment for packages and printed circuitboards, which are handled by the Company
and certain consolidated subsidiaries, are in
demand for laminating printed wiringboards. Capital expenditure plans varied forequipment manufacturers, the Company’s
customers, and net sales increased to meet

Auditor’s Response
We mainly performed the following audit
procedures related to the timing andappropriateness of amounts recorded forrevenue recognition for lithographyequipment and EUV light sources. We also
involved component teams in performing
audit procedures for revenue recognition bysubsidiaries.
・ We evaluated the design and operating
effectiveness of internal controls related
to revenue recognition.
・ To ensure consistency with the auditors’
understanding of market and businesstrends, we compared, by product type andby major customer, net sales oflithography equipment and EUV lightsources to external data available ontrends in semiconductor-related markets
and with regard to semiconductor
equipment manufacturers, production
capacity associated with increases incapital investment, and manufacturingcosts, such as the cost of purchased
components.
・ To identify performance obligations, we
inspected
sales
contracts
andmaintenance service contracts withsignificant customers and made inquiriesof relevant business divisions.
・ To examine the necessity of combining
contracts and stand-alone selling prices,
we made inquiries of related businessdivisions regarding the timing of theconclusion of significant contracts aswell as compared selling prices to thosein the previous fiscal year.
・ To determine whether the performanceobligations relating to the sales oflithography equipment and EUV lightsources have been satisfied, we inspected
the purchase orders and acceptancecertificates obtained from externalcustomers with respect to sales that arematerial.

customer demand. Net sales of EUV lightsources increased from the previous fiscal
year as after-sales maintenance services for
EUV light source inspection equipment
continued against the background ofgrowing demand for the mass production of
next-generation semiconductors, despite acorrection phase in the EUV mask
inspection market.
As a result, lithography equipment and
EUV light sources were major contributors
to the increase in net sales to externalcustomers in the optical equipment
business segment and have had asignificant impact on the Company’s
operating results.
Moreover, as product sales of theselithography equipment and EUV lightsources require high product performanceand steady operation through the use of
cutting-edge technologies, revenue isrecognized when the confirmation ofagreed performance such as the customer’s
acceptance of the product has been
completed, as described in the Notes toConsolidated
Financial
Statements(Revenue Recognition). In addition,
revenue for after-sales maintenanceservices is recognized over time or when
maintenance services are provided,
depending on the terms and conditions ofthecontract.
However,
servicespecifications have become more diverse
and the terms and conditions of contracts
have become more complex, and variableconsiderations based on a product’s
utilization rate have been included forcertain products.
Accordingly, high product performanceand steady operation are particularly
important in terms of generating sales oflithography equipment and EUV lightsources. Therefore, in many cases, it isnecessary to make judgments in accordancewith actual conditions in order to satisfy
performance obligations through customer
acceptance. In addition, estimations ofvariable consideration involve uncertainty
and subjectivity.
Based on the above, we have determinedthat the timing and appropriateness ofamounts recorded in revenue recognition

・・

To determine whether or not additionalcosts for satisfying performanceobligations were recorded after recording
sales, we inspected cost breakdowns byproduct and made inquiries of related
divisions regarding details of the costs.
To assess the accuracy of variableconsideration for maintenance services,
we made inquiries of persons responsible
for the status of the agreement processwith customers subsequent to fiscal yearend and inspected the operating records
and agreement proposals submitted tocustomers.

for lithography equipment and EUV lightsources is a key audit matter.
Other Information
Other information comprises the information included in the disclosure document that contains
audited consolidated financial statements but does not include the consolidated financial
statements and our auditor’s report thereon.
We have concluded that the other information does not exist. Accordingly, we have not
performed any work related to the other information.
Responsibilities of Management, the Audit and Supervisory Committee for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in Japan, andfor such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as required by accounting
principles generally accepted in Japan, matters related to going concern.
The Audit and Supervisory Committee is responsible for overseeing the Group’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and toissue an auditor’s report that includes our opinion. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
・ Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the consolidated financial statements is not expressing an opinion on the effectiveness of theGroup’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Group to cease tocontinue as a going concern.
・ Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentationin accordance with accounting principles generally accepted in Japan.
・ Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit and Supervisory Committee regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide the Audit and Supervisory Committee with a statement that we have compliedwith the ethical requirements regarding independence that are relevant to our audit of theconsolidated financial statements in Japan, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
From the matters communicated with the Audit and Supervisory Committee, we determine thosematters that were of most significance in the audit of the consolidated financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in our auditor’sreport unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected to outweighthe public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2023 are presented solely for convenience. Our audit also included thetranslation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made on the basis described in Note 4 (9) to the consolidated financial
statements.
Ernst & Young ShinNihon LLC
Tokyo, Japan
July 31, 2023

牧野 幸享

Designated Engagement Partner
Certified Public Accountant

Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Balance Sheet
As of March 31, 2022

As of March 31, 2023

(Millions of yen)

(Millions of yen) (Thousands of U.S. dollars)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, andcontract assets (*1)
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Right of use assets
Accumulated depreciation
Right of use assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Property, plant and equipment, net
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities (*2)
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－ 1 －88,68764,219480,899

35,29238,491

288,237

4,937
26,16920,282
18,891
10,134(2,686)
201,708

2,591
31,481
25,101
26,872
11,787(2,025)
198,519

19,404
235,745
187,970
201,230
88,272(15,170)
1,486,589

47,161(29,767)
17,39327,875(20,212)
7,662
8,630
2,708
41,498(31,730)
9,768
46,16248,513(31,365)
17,14728,146(21,058)
7,087
8,684
3,589
(783)
2,806
3,363
42,767(31,377)
11,38950,480363,289(234,879)
128,410
210,772(157,697)
53,07465,032
26,880(5,864)21,01625,189320,259(234,968)
85,291
378,014

235
2,755
2,991

252
2,782
3,034

1,888
20,83722,72559,146
15
4,135
5,592
1,924
(580)
70,234
119,388
321,096

58,484
20
4,333
6,647
2,224
(121)
71,588125,103
323,622437,952
151
32,454
49,776
16,660(912)
536,083
936,8222,423,412

As of March 31, 2022

As of March 31, 2023

(Millions of yen)

(Millions of yen) (Thousands of U.S. dollars)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease liabilities
Income taxes payable
Contract liabilities
Provision for bonuses
Provision for product warranties
Provision for loss on order received
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease liabilities
Deferred tax liabilities
Provision for directors' retirement
benefits
Provision for directors' stock payment
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares, at cost
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets－ 2 －21,164
2,185
16,402
12
3,828
14,388
2,699
2,597
9,113
72,393

26,205
3,921
796
3,210
11,731
2,530
3,775
0
10,23962,410196,239
29,362
5,962
24,03887,853
18,94728,275
076,677467,357

61
7,823

1,410
2,189
7,997

10,55816,39359,885

270

237

1,775

146
4,054
302
842
13,50085,893

193
3,839
318
921
17,106
79,517

1,452
28,7492,384
6,900
128,098
595,455

19,556
27,727
161,877(9,032)200,129

19,556
27,767
164,332(8,733)202,922

146,445
207,935
1,230,582(65,398)
1,519,565

21,39919,869148,793

14,186(598)

20,779520

155,606
3,897

34,98841,170308,29784
235,202
321,09612
244,105
323,62294
1,827,956
2,423,412

2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income

Net sales (*1)
Cost of sales (*2)
Gross profit
Selling, general and administrative expenses(*3, 4)
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Realized and unrealized profit on trading
securities, net
Gain on investments in investment partnerships
Subsidies for employment adjustment
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using
equity method
Loss on specified money in trust
Loss on sale of securities
Loss on valuation of securities
Settlement payments
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets (*5)
Gain on sales of investment securities
Gain on sale of businesses (*9)
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets (*6)
Loss on sales of non-current assets (*7)
Impairment loss (*8)
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on sale of shares of subsidiaries andassociates
Business structure improvement expenses (*10)
Loss on temporary closure (*11)
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit (loss) attributable to non-controllinginterests

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)
148,821
94,79254,029(Millions of yen) (Thousands of U.S. dollars)
175,025
1,310,656
111,809837,276
63,215473,380

Profit attributable to owners of the parent－ 3 －40,96047,353354,600

13,06815,861

118,779

670
914
377

1,602
1,051
1,909

12,002
7,871
14,297

207

10

80

26
468
338
3,004

24
353
4,951

180
2,646
37,078

329

218

1,633

86

115

866

101
28
119
211
877
15,195

87
57
80
109
668
20,144

656
428
605
817
5,008
150,849

1,153
17
1,171

216
963
360
1,539

1,617
7,216
2,695
11,530

98
11
164
15
1

81
9
588
35
212

606
68
4,409
268
1,589

-

188

1,411

161
151
603
15,7625,470(2,327)
3,143
12,619348
1,463
20,220
6,432
93
6,526
13,693

2,607
10,962
151,416
48,171703
48,874
102,542

13

(6)

(46)

12,606

13,699102,588

Consolidated Statement of Comprehensive Income

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to;

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)
12,619(Millions of yen) (Thousands of U.S. dollars)
13,693
102,542

Owners of the parent
Non-controlling interests

－ 4 －

3,119

(1,529)(11,456)

3
10,553
835

6,558
1,118

49,112
8,375

56

41

309

14,56927,1886,188
19,881

46,341
148,883

27,16919,880148,87519173) Consolidated Statement of Changes in Net Assets
Fiscal year ended March 31, 2022
(Millions of yen)
Shareholders' equity

Capital stock

Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies

Capital surplus

19,556

Retained earnings

Treasury shares, at cost

Total shareholders' equity

152,448(9,055)

190,676

27,727(35)

Restated balance

19,556

27,727(35)

152,412(9,055)

190,641

Changes of items during period
Dividends from surplus(3,141)(3,141)

Profit attributable toowners of the parent

12,606

12,606

Purchase of treasury shares

(5)

(5)

Disposal of treasury shares

28

28

Net changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current period

-

-

9,465

22

9,487

19,556

27,727

161,877(9,032)200,129

Accumulated other comprehensive income
Valuationdifference on
availablefor-salesecurities
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

18,280

Deferred
gains orlosses onhedges(3)

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

3,582(1,433)

20,426

77

Total net
assets211,180(35)

18,280(3)

3,582(1,433)

20,426

77

211,145

Changes of items during period
Dividends from surplus(3,141)

Profit attributable toowners of the parent

12,606

Purchase of treasury shares(5)

Disposal of treasury shares

28

Net changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current period

3,119

3

10,603835

14,562

6

14,5693,119

3

10,603835

14,562

6

24,057

21,399-14,186(598)

34,98884

235,202－ 5 －Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders' equity

Capital stock

Balance at beginning ofcurrent period

Capital surplus

19,556

Retained earnings

Treasury shares, at cost

Total shareholders' equity

161,877(9,032)200,129

27,727

Changes of items during period
Dividends from surplus(6,041)(6,041)

Profit attributable toowners of the parent

13,69913,699Purchase of treasury shares(5,004)(5,004)

Disposal of treasury shares

6

6

5,296

-

Cancellation of treasury
sharesPurchase of shares of
consolidated subsidiaries
Change in scope of
consolidation
Net changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current period(5,296)
40

40
92

92
-

-

40

2,454

299

2,793

19,556

27,767

164,332(8,733)202,922

Accumulated other comprehensive income
Valuationdifference on
availablefor-salesecurities
Balance at beginning ofcurrent period

21,399Deferred
gains orlosses onhedges-Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

14,186(598)

34,98884

Total net
assets235,202

Changes of items during period
Dividends from surplus(6,041)

Profit attributable toowners of the parent

13,699Purchase of treasury shares(5,004)

Disposal of treasury shares
Cancellation of treasury
sharesPurchase of shares of
consolidated subsidiaries
Change in scope of
consolidation
Net changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current period

6
(73)

(33)
92

(1,529)

-

6,592

1,118

(1,529)19,869

-

6,592

-

20,779

－ 6 －

6,181

1

6,182

1,118

6,181

(72)

8,902

520

41,17012

244,105

Fiscal year ended March 31, 2023
(Thousands of U.S. dollars)
Shareholders' equity

Capital stock

Balance at beginning ofcurrent period

Capital surplus

146,445

Retained earnings

Treasury shares, at cost

Total shareholders' equity

1,212,205(67,638)

1,498,646

207,634

Changes of items during period
Dividends from surplus(45,238)(45,238)

Profit attributable toowners of the parent

102,588

102,588

Purchase of treasury shares(37,472)(37,472)

Disposal of treasury shares

47

47

39,664-

Cancellation of treasury
sharesPurchase of shares of
consolidated subsidiaries
Change in scope of
consolidation
Net changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current period(39,664)
301

301
692

692
-

-

301

18,377

2,239

20,918146,445

207,935

1,230,582(65,398)

1,519,565

Accumulated other comprehensive income
Valuationdifference on
availablefor-salesecurities
Balance at beginning ofcurrent period

160,250

Deferred
gains orlosses onhedges-Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

106,237(4,478)262,009634

Total net
assets

1,761,290

Changes of items during period
Dividends from surplus(45,238)

Profit attributable toowners of the parent

102,588

Purchase of treasury shares(37,472)

Disposal of treasury shares
Cancellation of treasury
sharesPurchase of shares of
consolidated subsidiaries
Change in scope of
consolidation
Net changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current period

47
(551)

(250)
692

(11,456)-

49,368

8,375

46,287

11

46,298(11,456)-

49,368

8,375

46,287(540)

66,665

148,793-

155,606

3,897

308,29794

1,827,956－ 7 －4) Consolidated Statement of Cash Flows
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)

(Millions of yen) (Thousands of U.S. dollars)

Operating activities
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in net defined benefit liability
Amortization of goodwill
Increase (decrease) in allowance for doubtful
accounts
Business structure improvement expenses
Interest and dividend income
Subsidies for employment adjustment
Interest expenses
Loss (gain) on trading securities
Share of loss (profit) of entities accounted
for using equity method
Settlement payments
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sale of shares of subsidiaries
and associates
Loss (gain) on sale of businesses
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts
payable-trade

15,762
6,939
164
(55)
163

20,220
7,615
588
(141)
169

151,416
57,024
4,409(1,058)
1,269

(360)

(58)

(435)

161
(1,585)
(468)
329
(207)

348
(2,653)
218
(10)

2,607
(19,873)
1,633
(80)

86

115

866

119
(1,142)
98
(2)
1

(206)
81
(927)
212

(1,549)606(6,947)
1,589

-

188

1,411

-

(360)

(2,695)474(2,696)(20,194)(4,329)(16,549)(123,932)

4,142

4,356

32,625

Increase (decrease) in contract liabilities

673(3,369)(25,233)

Other
SubtotalInterest and dividends received
Interest paid
Subsidy income for employment adjustment
Payment of business structure improvement expenses
Income taxes paid
Settlement paid
Net cash provided by (used in) operating activities

641
21,607
1,641
(333)
688
(495)
(1,479)21,628(1,070)
6,069
2,662
(210)
(170)
(7,346)(131)871(8,013)45,447
19,934(1,574)(1,278)(55,015)
(987)
6,526

－ 8 －

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)

(Millions of yen) (Thousands of U.S. dollars)

Investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Payments of short-term loans receivableCollection of short-term loans receivable
Purchase of securities
Proceeds from sales and redemption of securities
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 and redemption of
investment securities
Payments for acquisition of business
Proceeds from sale of businesses
Payments of long-term loans receivableCollection of long-term loans receivable
Payments for sale of shares of subsidiaries
resulting in change inscope of consolidation
Other
Net cash provided by (used in) investing activities
Financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Net cash provided by (used in) financing
activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (*)－ 9 －(10,449)
7,329
(38)
326
(89)
1,472
(5,958)1,545(235)(3,652)(28,066)
31,074
(37)
50
3,887
(7,767)423(348)(3,207)(210,175)
232,697(281)
377
29,109(58,165)
3,173(2,608)(24,017)

3,903

2,733

20,469

(52)

(210)

(1,577)

-

360

2,695

(10)
370

(23)
2

(172)
19

-

(47)

(354)

18
(5,519)0(1,175)

6(8,801)(3,960)1,591

11,920(3,520)(5)(3,139)1,410(18,770)(5,004)(6,037)

10,558(140,563)(37,472)(45,214)(10,625)(26,811)(200,771)

5,717

3,011

22,551

11,200(24,103)(180,495)

70,41881,61981,61957,516611,197
430,702

Notes to Consolidated Financial Statements(Significant Matters Forming the Basis of Preparation of Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 46(2) The changes in the scope of consolidation for the fiscal year ended March 31, 2023 are as
follows:(Exclusion) ・One company excluded from the scope of consolidation due to merger with USHIO INC.
(the “Company”)
UIS, Inc.
･Two companies excluded from the scope of consolidation due to liquidation
Ushio Entertainment Holdings, Inc., WACOM ELECTRIC CO., LTD.
･One company excluded from the scope of consolidation due to sale of shares
USHIO MEDICAL TECHNOLOGY (SUZHOU) CO., LTD.
2. Application of equity method(1) Number of associates under equity method: One
Name of major company:
KA Imaging Inc.
(2) The associate that is not accounted for using the equity method (Hokkaido Saladpaprika Co.,
Ltd.) is excluded from the scope of the equity method since such exclusion has an immaterial
effect on the consolidated financial statements of USHIO INC. (the “Company”) in terms of
profit or loss (amount corresponding to the Company’s equity position), retained earnings(amount corresponding to the Company’s equity position) and others, and the entity, as a whole,is not material.
(3) The fiscal year-end dates of certain companies accounted for using the equity method are
different from the consolidated fiscal year-end date. In preparing the consolidated financial
statements, the Company uses the financial statements of these companies as of their fiscal yearend.
3. Fiscal years, etc. of consolidated subsidiaries
The consolidated subsidiaries whose fiscal year end is different from the consolidated fiscal
year end are as follows:
Company nameFiscal year-end date
USHIO (SUZHOU) CO., LTD.
USHIO SHANGHAI, INC.
USHIO (GUANGZHOU) CO., LTD.
USHIO (SHAOGUAN) CO., LTD.
CHRISTIE DIGITAL SYSTEMS (SHANGHAI) Co., LTD.
USHIO SHENZHEN, INC.
CHRISTIE DIGITAL SYSTEMS (SHENZHEN) CO., LTD.
United Designers of Architectural Lighting, Inc.

December 31*1
December 31*1
December 31*1
December 31*1
December 31*1
December 31*1
December 31*1
December 31*1

*1 Provisional financial statements as of the consolidated fiscal year-end date are used forthese companies.

－ 10 －

4. Accounting policies(1) Valuation bases and methods for significant assets(a) Securities
1) Trading securities
Carried at fair value (the cost of securities sold is calculated by the moving-averagemethod)2) Held-to-maturity securities
Carried at amortized cost (straight-line method)3) Available-for-sale securities
Other than stocks, etc. without market prices:
Carried at fair value (Valuation difference is stated as a component of net assets in the
consolidated balance sheets, the cost of securities sold is calculated by the movingaverage method.)
Stocks, etc. without market prices:
Carried at cost using the moving-average method
4) Investments in an investment limited partnership and other similar partnerships (deemed as
securities according to Article 2, paragraph 2 of the Financial Instruments and Exchange
Act)
Carried at their corresponding equity value, based on the latest financial statements
available prepared on the financial reporting dates as specified in the respective
partnership agreements.
(b) Derivatives
Carried at fair value(c) Money held in trust for investment purposes
Carried at fair value(d) Inventories
1) Merchandise and finished goods, and work in process
Merchandise and finished goods, and work in process are stated principally at cost
determined by the gross average method (balance sheet amounts are determined based on themethod of writing down book value in accordance with decreased profitability) for theCompany and its domestic consolidated subsidiaries and at the lower of cost or market, cost
being determined by the first-in, first-out method for overseas consolidated subsidiaries.
2) Raw materials
Raw materials are stated principally at cost determined by the moving-average method(balance sheet amounts are determined based on the method of writing down book value inaccordance with decreased profitability) for the Company and its domestic consolidated
subsidiaries and at the lower of cost or market, cost being determined by the first-in,
first-out method for overseas consolidated subsidiaries.
(2) Accounting policy for depreciation of significant assets(a) Property, plant and equipment (excluding leased assets and right-of-use assets)
Depreciation of property, plant and equipment is calculated principally by the straight-line
method.
The estimated useful lives of the major assets are as follows:
Buildings and structures:
2 to 50 years
Machinery, equipment and vehicles: 3 to 15 years
Others:2 to 15 years(b) Intangible assets (excluding leased assets)
Amortization of intangible assets is calculated by the straight-line method.
In addition, amortization of software for internal use is calculated by the straight-line
method based on the estimated useful life of five years.

－ 11 －

(c) Leased assets
Leased assets related to finance lease transactions that transfer ownership
Leased assets related to finance lease transactions that transfer ownership are depreciatedby the same approach as the depreciation method applied to self-owned non-current assets.
Leased assets related to finance lease transactions that do not transfer ownership
Leased assets related to finance lease transactions that do not transfer ownership are
depreciated by the straight-line method over the lease period that is deemed as the usefullife, assuming no residual value.
(d) Right-of-use assets
Right-of-use assets are depreciated by the straight-line method over the lease period thatis deemed as the useful life, assuming no residual value.
(3) Accounting policy for significant allowances(a) Allowance for doubtful accounts(i)

The Company and its domestic consolidated subsidiaries
To prepare for losses from bad debts, an estimated uncollectible amount is provided
either by making an estimation using the historical rate of credit loss in the case ofgeneral receivables, or based on individual consideration of collectibility in the caseof specific receivables such as highly doubtful receivables.

(ii) Overseas consolidated subsidiaries
To prepare for losses from bad debts, an estimated uncollectible amount is provided
based on consideration of collectibility for individual receivables.
(b) Provision for bonuses
The provision for bonuses represents the amounts for future payments of employees’ bonuses.
The provision is recognized in the amount that is expected to be paid.
(c) Provision for directors’ retirement benefits
Some of the consolidated subsidiaries recognize provision for retirement benefits for
directors, corporate auditors and others in the full amount that would have to be paid if all
the directors and corporate auditors resigned at the balance sheet date based on theirinternal regulations.
(d) Provision for directors’ stock payment
Provision for directors’ stock payment represents the amounts for future payments of theCompany’s stock to directors. The provision is recognized based on the amount that is
expected to be paid, which is determined using points allocated to each director as prescribedin the share granting rules.
(e) Provision for product warranties
Provision for product warranties is recognized for expenses for after-sales service and free
repairs for products sold by the Company and its consolidated subsidiaries in the estimatedamount to be incurred in the future.
(f) Provision for loss on orders received
To provide for future losses on contracted orders received, the Company recognizes aprovision for loss on orders received equal to the amount of losses it anticipates after the
year-end. Such a provision is recognized when losses on orders received are probable andreasonably estimated at the end of the current fiscal year.
(4) Accounting treatment of retirement benefits
1) Method for attribution of estimated retirement benefits to periods
In the calculation of retirement benefit obligations, the expected retirement benefits
attributed to the period up to the end of the current fiscal year are based on the benefit
formula method.
2) Accounting method for actuarial gains or losses and past service costs
Past service costs are amortized by the straight-line method over a certain period (mainly
12 years) that is within the average remaining years of service of the eligible employees when
the costs are incurred.

－ 12 －

Actuarial gains or losses are amortized from the fiscal year following the fiscal year inwhich the gains or losses are recognized by the straight-line method over a certain period(mainly 12 years) that is within the average remaining years of service of the eligible
employees when the gains or losses are recognized.
(5) Standards for the recognition of significant revenues and expenses(a) Sales of products
For halogen lamps, discharge lamps and solid-state light sources, this is primarily the
manufacturing and sales of various lamps. For the sales of these products, the control of the
products is deemed to be transferred upon delivery to the customer, so revenue is recognizedat the time of delivery. The alternative treatment prescribed in Paragraph 98 of the
Implementation Guidance on Accounting Standard for Revenue Recognition has been applied for
products sold in Japan, and revenue is recognized when products are shipped provided that
there is an ordinary length of time between shipping and when the control is transferred tocustomers.
For UV equipment, optical equipment and other, this is primarily the manufacturing and salesof various lithography equipment. For the sales of these products, where there is installationof such products based on a contract with the customer, customers generally do not receive
benefits without the installation, so the products and installation are identified as a single
performance obligation. In such case, the control of the assets is transferred to the customer
when the confirmation of agreed performance such as the customer’s acceptance of the producthas been completed, so that is when revenue is recognized. In addition, for some products that
do not include installation work, the control of the products is deemed to be transferred upondelivery to the customer, so revenue is recognized at the time of delivery.
For cinema equipment and general imaging equipment, this is primarily the manufacturing andsales of various projectors. For the sales of these products, the control of the products isdeemed to be transferred upon delivery to the customer, so revenue is recognized at the timeof delivery.
(b) Provision of maintenance services
For UV equipment, optical equipment and other, maintenance services are provided for the
products sold based on a separate contract. Maintenance services primarily guarantee thesteady operations of products, including the replacement of maintained items. For theidentification of performance obligations, for contracts that provide for performanceobligations to be satisfied over time, revenue is recognized according to the contract period.
For contracts where the performance obligations are primarily satisfied when the provision ofmaintenance ends, revenue is recognized at such time. In addition, for optical equipment andsome other products, variable consideration corresponding to the product’s capacity
utilization rate is included in the transaction price only to the extent that it is highly
probable that a material reversal of the cumulative amount of revenues recognized will notoccur when the uncertainty associated with the variable consideration is subsequently
resolved.
For cinema equipment and general imaging equipment, maintenance services are provided forthe products sold based on a separate contract. Maintenance services primarily guarantee thesteady operations of products, including the replacement of maintained items. For theidentification of performance obligations, for contracts that provide for performanceobligations to be satisfied over time, revenue is recognized according to the contract period.

－ 13 －

(6) Significant hedge accounting(a) Hedge accounting
Deferral hedge is applied. When hedging foreign currency risk, certain domestic consolidated
subsidiaries apply the foreign exchange rate designated in the forward contract when thetransaction qualifies for such treatment.
(b) Hedging instruments and hedged items
Hedging instruments:
Forward foreign exchange contracts and interest rate swaps
Hedged items:
Monetary receivables and payables denominated in foreign currencies,
forecasted transactions denominated in foreign currencies, securities
and loans payable denominated in foreign currencies(c) Hedging policy
The Company and its consolidated subsidiaries (collectively, the “Group”) hedge the risksof fluctuation in foreign currencies and interest rates in accordance with internal management
rules on financial market risk and derivative transactions.
(d) Method of assessing the hedge effectivenessThe hedge effectiveness is assessed by comparing the cumulative changes in fair value orcash flows of the hedged items and those of the hedging instruments during the period from theinception of the hedge to the time of determining the effectiveness, and based on therespective amount of changes.
(7) Method and period for amortization of goodwill
Goodwill is amortized using the straight-line method over a period representing its useful life.
(8) Scope of cash and cash equivalents in the consolidated statement of cash flows
Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investmentsthat are readily convertible to known amounts of cash and subject to insignificant risk of change
in value and due within three months from the date of acquisition.
(9) U.S. Dollar Amounts
For the readers’ convenience, the accompanying consolidated financial statements with respect
to the fiscal year ended March 31, 2023 have been presented in U.S. dollars by translating all yen
amounts at ¥133.54 = U.S. $1.00, the exchange rate prevailing on March 31, 2023. This translation
should not be construed as a representation that the yen amounts have been, could have been, or
could in the future be converted into U.S. dollars at the above or any other rate.

－ 14 －

(Significant Accounting Estimates)
1. Impairment of non-current assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31,
2023
In the fiscal year ended March 31, 2023, the Company recognized indications of impairment forsome asset groups comprising assets of consolidated subsidiaries within the “Imaging equipment
business.” As a result, the Company reviewed the necessity of recording an impairment loss.
As a result of the review, no impairment loss was recognized because the undiscounted future
cash flows exceeded the book values said asset groups.
Fiscal year ended
Fiscal year ended March 31, 2023
March 31, 2022
(Millions of yen) (Millions of yen) (Thousands of U.S. dollars)Some asset groups inthe “Imaging
equipment business”

Property, plant andequipment

4,888

6,935

51,938Intangible assets

647

951

7,121

(2) Information on the nature of significant accounting estimates for identified items
1) Method of calculating the amount recorded in the consolidated financial statements for the
fiscal year ended March 31, 2023
For non-current assets or asset groups for which there is an indication of impairment, if thetotal undiscounted future cash flows from the asset or asset group is less than the book value,
the Group writes down the book value to the recoverable amount and records the amount of thewrite-down as an impairment loss.
2) Key assumptions used to calculate the amount recorded in the consolidated financial statements
for the fiscal year ended March 31, 2023
(Some asset groups in the “Imaging equipment business”)
There has been progress in the reopening of cinemas and the recovery in operating rates,
primarily in Europe and the United States, and we expect the impact of the spread of COVID-19
itself will decline going forward.
On the other hand, we are still being affected by the delays in supply of components due to theshortage of semiconductors and supply chain disruptions, despite signs of an easing of thesituation, and by soaring raw material prices caused by the Russia-Ukraine situation. Although it
is difficult to accurately forecast when these issues will be resolved, the Group expects them tocontinue until the middle of the second half of the fiscal year ending March 31, 2024.
We have estimated the undiscounted future cash flows based on the value in use calculated byfactoring in the impact of these issues on the net sales growth rate for major products and risein operating expenses, such as raw material costs and labor costs.
3) Effect on the consolidated financial statements for the next fiscal year
If the impacts on the net sales growth rate and rise in operating expenses from factors
including the protracted delays in supplies of components from suppliers and the surge in raw
material prices exceed expectations, and the future differs from our assumptions in 2) above,
impairment losses on non-current assets may be recorded in the next fiscal year.

－ 15 －

2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31,
2023
Fiscal year ended
Fiscal year ended March 31, 2023
March 31, 2022
Deferred tax assets
Some subsidiaries inthe “Imaging
equipment business”

Deferred tax assets(Before offsetting
against deferred tax
liabilities)(Millions of yen) (Millions of yen) (Thousands of U.S. dollars)
2,546
2,314
17,332

2,570

2,314

17,332(2) Information on the nature of significant accounting estimates for identified items
1) Method of calculating the amount recorded in the consolidated financial statements for the
fiscal year ended March 31, 2023
The Group determines the recoverability of deferred tax assets by making reasonable estimatesof future taxable income for mainly each tax jurisdiction. For certain consolidated subsidiaries,
the recoverability of deferred tax assets is determined by analyzing the cumulative profit orloss before income taxes for each company over a three-year period.
2) Key assumptions used to calculate the amount recorded in the consolidated financial statements
for the fiscal year ended March 31, 2023
The estimate of taxable income and profit or loss before income taxes is mainly based on thebusiness plan used by the Group.
Supplies of components are being delayed by the semiconductor shortage, although there are somesigns of alleviation. There are also supply chain disruptions, the Russia-Ukraine situation, andthe consequent surge in raw material prices. Given the difficulties of accurately predicting thetiming for these issues to be contained, the Group has assumed these impacts will continue until
midpoint of the latter half of the fiscal year ending March 31, 2024. The impact of these changes
on the net sales growth rate for major products and on the rise in operating expenses, such as
raw material costs and labor costs, is factored into the business plan, which is the basis forthe estimates.
In the “Imaging equipment business,” due to progress in the reopening of cinemas and in therecovery in operating rates, primarily in Europe and the United States, we expect the impact of
the spread of COVID-19 to decline going forward, and the impact is also factored into thebusiness plan.
3) Effect on the consolidated financial statements for the next fiscal year
If the impacts on the net sales growth rate and rise in operating expenses from factors
including the protracted delays in supplies of components from suppliers and the surge in raw
material prices exceed expectations, and the future differs from our assumptions in 2) above,
there is a risk that estimates for taxable income and profit or loss before income taxes will
decrease, and the judgment of recoverability of deferred tax assets will be significantly
impacted.

－ 16 －

(Changes in Accounting Policies)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
Ushio applied the Implementation Guidance on Accounting Standard for Fair Value Measurement(Accounting Standards Board of Japan (ASBJ) Guidance No. 31, issued on June 17, 2021) from the startof the year under review. The Company is prospectively applying the new accounting policy stipulated
in the Implementation Guidance on Accounting Standard for Fair Value Measurement in line with thetransitional provisions of Paragraph 27-2 of the Implementation Guidance on Accounting Standard for
Fair Value Measurement. This change has not affected the consolidated financial statements.
Moreover, in accordance with Paragraph 27-3 of the Implementation Guidance on Accounting Standard
for Fair Value Measurement, notes on investment trusts in the notes to “Financial Instruments” onmatters related to the breakdown of fair values of financial instruments by levels and other mattershave been omitted for the previous fiscal year.
(Application of Leases (ASU No. 2016-02 (Topic 842)))
Foreign subsidiaries that have adopted Generally Accepted Accounting Principles in the UnitedStates applied Leases (ASU No. 2016-02 (Topic 842)) in the fiscal year ended March 31, 2023. In
principle, lessees accordingly record all leases as assets and liabilities on their balance sheets.
The cumulative effect of applying this standard, permitted as a transitional measure, is recognizedat the adoption date.
As a result of applying ASU No. 2016-02 (Topic 842), right-of-use assets under non-current assets
increased ¥2,806 million ($21,016 thousand), lease obligations under current liabilities were up¥788 million ($5,902 thousand), and lease obligations under non-current liabilities rose ¥2,074
million ($15,537 thousand) in the consolidated balance sheet at the end of the current fiscal year.
The impact of this application on the profit or loss in the current fiscal year is immaterial.

－ 17 －

(Accounting Standards Issued but Not Yet Applied)・Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, issued on October 28, 2022)
・Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, issued on
October 28, 2022)
・Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, issued on October28, 2022)(1) Overview
In February 2018, ASBJ Statement No. 28 “Partial Amendments to Accounting Standard for Tax
Effect Accounting” and relevant ASBJ guidances were issued, and the practical guidelines on tax
effect accounting issued by the Japanese Institute of Certified Public Accountants (JICPA) weretransferred to the Accounting Standards Board of Japan (ASBJ). However, over the course of therelated deliberations, it was decided to reconsider the following two issues after ASBJ
Statement No. 28 and relevant ASBJ guidances were issued, and the issues were subsequently
deliberated and issued.
・Classification for recording tax expense (taxation relating to other comprehensive income)・Tax effects of sales of shares of subsidiaries, etc. (shares of subsidiaries and shares ofassociates) when the group taxation system is adopted(2) Date of application
These standards and guidance will be applied from the beginning of the fiscal year ending
March 31, 2025.
(3) Impact of application
The impact of applying the “Accounting Standard for Current Income Taxes” and otheraccounting standard and guidance on the consolidated financial statements is currently being
evaluated.
・Accounting Standard for Financial Instruments - Credit Losses (ASU 2016-13 (Topic 326))(1) Overview
Due to the application of this accounting standard, the classification and measurement methods
used for financial instruments have been revised, and the use of the expected credit loss model
when recognizing the impairment of financial assets is required.
(2) Date of application
This standard will be applied from the beginning of the fiscal year ending March 31, 2024.
(3) Impact of application
The impact of applying the accounting standard on the consolidated financial statements isminuscule.

－ 18 －

(Changes in Presentation)(Consolidated Balance Sheet)“Lease obligations” which were included in “Other” under “Current liabilities” and “Noncurrent liabilities” at the end of the previous fiscal year, have been presented separately fromthe current fiscal year, since the significance of the amounts has increased. To reflect this change
in presentation, the amounts in the consolidated financial statements at the end of the previous
fiscal year have been reclassified.
As a result, ¥9,126 million presented in “Other” under “Current liabilities“ in the
consolidated balance sheet at the end of the previous fiscal year has been reclassified into ¥12
million of “Lease obligations” and ¥9,113 million of “Other“, and ¥903 million presented in“Other” under “Non-current liabilities” has been reclassified into ¥61 million of “Leaseobligations” and ¥842 million of “Other”.
(Consolidated Statement of Income)“Loss on valuation of securities”, which was included in “Other” under “Non-operating
expenses” for the previous fiscal year, has been presented separately from the current fiscal year,
since the significance of the amount has increased. To reflect this change in presentation, theamounts in the consolidated financial statements for the previous fiscal year have been
reclassified.
As a result, ¥240 million presented in “Other” under “Non-operating expenses” in the
consolidated statement of income for the previous fiscal year has been reclassified into ¥28 millionof “Loss on valuation of securities” and ¥211 million of “Other”.

－ 19 －

(Additional Information)(Stock remuneration plan for directors)
The Company has introduced a stock remuneration plan for directors of the Company (excluding
outside directors) and executive officers who have entered into an engagement agreement with theCompany (excluding overseas residents, hereinafter “Directors, et al.”), in order to raise the
incentive to contribute to improving the Company’s medium- to long-term business performance and toincreasing enterprise value.
(1) Overview
The Company entrusts money equivalent to remuneration of Directors, et al. The Company’s
shares will be acquired using the entrusted money and the Company’s shares and the cash
equivalent of the conversion value of the Company’s shares will be delivered and paid to
Directors, et al. based on his or her position and the degree of accomplishment of businessperformance. Directors, et al. are eligible to receive the Company’s shares and the cash
equivalent of the conversion value of the Company’s shares, in principle after retiring fromthe position of Director, et al. In order to maintain neutrality toward management of theCompany, the voting rights of the Company’s shares in the trust may not be exercised during
the trust period.
(2) The Company’s shares in the trust
The Company’s shares in the trust were recorded as treasury shares in net assets on the
consolidated balance sheet with the carrying value in the trust (excluding ancillary
expenses). The carrying value and number of treasury shares in the trust were ¥381 million and
234,000 shares as of March 31, 2022 and ¥374 million ($2,805 thousand) and 230,100 shares asof March 31, 2023, respectively.

－ 20 －

(Consolidated Balance Sheet)*1 The amounts of receivables from contracts with customers within notes and accounts receivable trade, and contract assets are as follows.
As of March 31, 2022
(Millions of yen)

As of March 31, 2023
(Millions of yen)(Thousands of U.S. dollars)

Notes receivable-trade

3,622

3,681

27,568

Accounts receivable-trade

30,79333,722

252,525*2 Investments in associates are as follows:
As of March 31, 2022
Investment securities (stocks)(Millions of yen)191

As of March 31, 2023
(Millions of yen)
117

(Thousands of U.S. dollars)
879(Consolidated Statement of Income)*1 Revenue from contracts with customers
Revenue from contracts with customers and revenue from other sources are not presented separately in
net sales. The amount of revenue from contracts with customers is presented in “Notes to Consolidated
Financial Statements (Revenue Recognition) 1. Information on disaggregation of revenue from contracts
with customers.”*2 The ending inventory balance is the amount after write-downs of book value due to declines in
profitability, and the loss on valuation of inventories included in cost of sales is as follows:
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)

(Millions of yen)
370

(Thousands of U.S. dollars)
2,299

17,219*3 The main components of selling, general and administrative expenses are as follows:
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)

(Millions of yen)(Thousands of U.S. dollars)

11,201

13,117

98,228Provision for bonuses

913

755

5,660

Retirement benefit expenses

691

475

3,558

Provision for directors' retirement benefits

40

57

428

Provision for directors' stock payment

86

52

394

Research and development expenses

10,543

11,46085,822

(278)

6

45

Salaries and wages

Provision of allowance for doubtful accounts*4 Research and development expenses included in general and administrative expenses are as follows:
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)

(Millions of yen)
10,543(Thousands of U.S. dollars)
11,460－ 21 －

85,822

*5 The breakdown of gain on sales of non-current assets is as follows:
Fiscal year ended
March 31, 2022
(Millions of yen)

Fiscal year ended
March 31, 2023
(Thousands of(Millions of yen)
U.S. dollars)

Buildings and structures

756

182

1,368

Machinery, equipment and vehicles

12

30

227

Land

369

-

-

Other

14

2

21

1,153

216

1,617

Total

*6 The breakdown of loss on retirement of non-current assets is as follows:
Fiscal year ended
March 31, 2022
(Millions of yen)

Fiscal year ended
March 31, 2023
(Thousands of(Millions of yen)
U.S. dollars)

Buildings and structures

24

16

121

Machinery, equipment and vehicles

42

25

191

Construction in progress

6

6

49

Other

25

32

243

98

81

606

Total

*7 The breakdown of loss on sales of non-current assets is as follows:
Fiscal year ended
March 31, 2022
(Millions of yen)

Fiscal year ended
March 31, 2023
(Thousands of(Millions of yen)
U.S. dollars)

Machinery, equipment and vehicles

8

0

0

Land

-

7

58

Other

3

1

8

11

9

68

Total

－ 22 －

*8 Impairment loss
Fiscal year ended March 31, 2022
Location

Classification by use

Type of assets(Millions of yen)

Kitchener, Canada

Idle assets

Buildings and structures
and Machinery, equipment
and vehicles

54

Shenzhen, China

Idle assets

Machinery, equipment andvehicles37

Chiyoda-ku, Tokyo
Takasago, Hyogo

Business assets

Other (Property, plant andequipment)

58

Takasago, Hyogo
Himeji, Hyogo

Idle assets

Buildings and structures
and Machinery, equipment
and vehicles

14

In principle, the Group’s business assets are grouped according to division or to whom assets arelent, assets of consolidated subsidiaries are grouped by company, and the Group’s idle assets andassets planned to be sold are grouped on an individual asset basis.
The book value of a group of idle assets not used for business operations and not expected to be
used in the future are reduced to zero, and the write-downs are recorded as impairment loss in
extraordinary losses.
The book values of business assets are written down to zero or the net selling values due to adecrease in the recoverability of the assets, and the write-downs are recorded as impairment loss in
extraordinary losses.
* Breakdown of impairment loss by location is as follows:・Impairment loss of ¥54 million recognized for Kitchener, Canada includes ¥47 million formachinery, equipment and vehicles and ¥6 million for buildings and structures.
・Impairment loss of ¥37 million recognized for Shenzhen, China includes ¥37 million for machinery,equipment and vehicles.
・Impairment loss of ¥58 million recognized for Chiyoda-ku, Tokyo, etc. includes ¥58 million forother (property, plant and equipment).
・Impairment loss of ¥14 million recognized for Takasago, Hyogo, etc. includes ¥14 million formachinery, equipment and vehicles and ¥0 million for buildings and structures.

－ 23 －

Fiscal year ended March 31, 2023
Location

Classification by use

Type of assets(Millions of yen)(Thousands of
U.S. dollars)

Idle assets

Machinery, equipment andvehicles, Other (Property,
plant and equipment) andConstruction in progress

34

260

Takasago, Hyogo
Himeji, Hyogo

Idle assets

Buildings and structures,
Machinery, equipment andvehicles, Other (Property,
plant and equipment) and
Other (Intangible assets)

508

3,808

Chiyoda-ku, Tokyo
Takasago, Hyogo

Business assets

Other (Property, plant andequipment) and Other(Intangible assets)

1076

Suzhou, China

Business assets

Machinery, equipment andvehicles, Other (Property,
plant and equipment) and
Other (Intangible assets)

28

211

Blonie, Poland

Idle assets

Machinery, equipment andvehicles752

Shenzhen, China

In principle, the Group’s business assets are grouped according to division or to whom assets arelent, assets of consolidated subsidiaries are grouped by company, and the Group’s idle assets andassets planned to be sold are grouped on an individual asset basis.
The book value of a group of idle assets not used for business operations and not expected to be
used in the future are reduced to zero, and the write-downs are recorded as impairment loss in
extraordinary losses.
The book values of business assets are written down to zero or the net selling values due to adecrease in the recoverability of the assets, and the write-downs are recorded as impairment loss in
extraordinary losses.
* Breakdown of impairment loss by location is as follows:･Impairment loss of ¥34 million ($260 thousand) recognized for Shenzhen, China, includes ¥22
million ($167 thousand) for construction in progress, ¥8 million ($67 thousand) for other(property, plant and equipment) and ¥3 million ($26 thousand) for machinery, equipment andvehicles.
･Impairment loss of ¥508 million ($3,808 thousand) recognized for Takasago, Hyogo, etc. includes¥445 million ($3,338 thousand) for machinery, equipment and vehicles, ¥33 million ($247 thousand)for buildings and structures, ¥23 million ($177 thousand) for other (property, plant andequipment) and ¥6 million ($45 thousand) for other (intangible assets).
･Impairment loss of ¥10 million ($76 thousand) recognized for Chiyoda-ku, Tokyo, etc. includes ¥8
million ($66 thousand) for other (property, plant and equipment) and ¥1 million ($10 thousand) for
other (intangible assets).
･Impairment loss of ¥28 million ($211 thousand) recognized for Suzhou, China, includes ¥21 million($164 thousand) for machinery, equipment and vehicles, ¥5 million ($44 thousand) for other(property, plant and equipment) and ¥0 million ($2 thousand) for other (intangible assets).
･Impairment loss of ¥7 million ($52 thousand) recognized for Blonie, Poland, includes ¥7 million($52 thousand) for machinery, equipment and vehicles.

－ 24 －

*9 Gain on sale of businesses
Fiscal year ended March 31, 2022
Not applicable.
Fiscal year ended March 31, 2023
The gain on sale of businesses is due to the transfer of the Group’s insurance agency business.
*10 Business structure improvement expenses
Fiscal year ended March 31, 2022
Business structure improvement expenses were incurred in implementing the business structure
improvement to maintain and improve the profitability of the Company’s businesses. The major
components in the breakdown of these expenses were ¥118 million of expenses for personnel
downsizing due to the restructuring of USHIO EUROPE B.V., Ushio Germany GmbH and USHIO FRANCE
S.A.R.L., loss due to the office relocation of USHIO EUROPE B.V. and USHIO FRANCE S.A.R.L. was ¥43
million.
Fiscal year ended March 31, 2023
Business structure improvement expenses were incurred in implementing the business structure
improvement to maintain and improve the profitability of the Company’s businesses. The major
component in the breakdown of these expenses was ¥348 million ($2,607 thousand) of expenses for
personnel downsizing due to the restructuring of USHIO GERMANY GmbH.
*11 Loss on temporary closure
Fiscal year ended March 31, 2022
In response to requests from national governments regarding COVID-19, the Group has temporarilyclosed part of the imaging equipment business after taking regulations in each country andprevention of the spread of infection into consideration.
As a result, fixed expenses (labor costs, depreciation, etc.) incurred during the period ofsuspension or closure are recorded as extraordinary losses due to closure of business, etc.
Fiscal year ended March 31, 2023
Not applicable.

－ 25 －

(Consolidated Statement of Comprehensive Income)
Reclassification adjustments and income tax effect allocated to each component of othercomprehensive income are as follows:
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

(Millions of yen)

(Millions of yen) (Thousands of U.S. dollars)

Valuation difference on available-for-salesecurities:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effect
Valuation difference on available-for-salesecurities

4,522
(16)

(1,247)(873)(9,342)(6,540)4,505(1,385)(2,120)591(15,882)
4,425

3,119

(1,529)(11,456)

1
3

-

-

5
(1)

-

-

3

-

-

10,553-6,464
93

48,411
701

10,553

6,558

49,112

Deferred gains or losses on hedges:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustment:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effectForeign currency translation adjustment

-

-

-

10,553

6,558

49,112

196
1,027

1,129
481

8,456
3,608

1,223
(388)

1,611
(492)

12,065(3,689)

835

1,118

8,375

56

41

309

56

41

309

14,5696,188

46,341Remeasurements of defined benefit plans:
Amount arising during the year
Reclassification adjustments
Amount before income tax effect
Income tax effectRemeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method:Amount arising during the year
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income－ 26 －

(Consolidated Statement of Changes in Net Assets)
Fiscal year ended March 31, 2022
1. Type and total number of shares issued, and type and number of treasury shares
Number ofshares as ofApril 1, 2021

Increase

Number ofshares as ofMarch 31, 2022

Decrease

Shares issued:
Common shares
Total

127,000,000--

127,000,000

127,000,000--

127,000,000

6,424,307

2,726

17,2006,409,833

6,424,307

2,726

17,2006,409,833

Treasury shares
Common shares (Note)
Total(Notes) 1. Treasury shares include the Company’s shares held by the trust for the stock remuneration planfor directors (251,200 shares and 234,000 shares at the beginning and end of the current fiscal
year, respectively).
2. The increase of 2,726 shares of treasury shares is due to purchase of shares of less thanstandard unit.
3. The decrease of 17,200 shares of treasury shares is due to issuance from the trust to eligible
persons according to the stock remuneration plan for directors.
2. Dividends(1) Dividends paid

Resolution

Type ofsharesTotal
dividends(Millionsof yen)Dividends
per share(Yen)

Cut-off
date

Effective
date

Annual general meetingof the shareholders on
June 29, 2021

Commonshares3,14126March 31,2021

June 30,2021(Note) Total dividends based on resolution at the annual general meeting of the shareholders on June 29,
2021 include ¥6 million of dividends on the Company’s shares held by the trust for the stock
remuneration plan for directors.
(2) Dividends with the cut-off date in the fiscal year ended March 31, 2022 and the effective datein the fiscal year ended March 31, 2023

Resolution

Type ofsharesTotal
dividends(Millionsof yen)Sourceofdividends

Dividends
per share(Yen)

Cut-off
date

Effective
date

Annual general
meeting of theshareholders on
June 29, 2022

Commonshares

6,041

Retainedearnings

50

March 31,2022

June 30,2022(Note) Total dividends based on resolution at the annual general meeting of the shareholders on June 29,
2022 include ¥11 million of dividends on the Company’s shares held by the trust for the stock
remuneration plan for directors.

－ 27 －

Fiscal year ended March 31, 2023
1. Type and total number of shares issued, and type and number of treasury shares
Number ofshares as ofApril 1, 2022

Increase

Number ofshares as ofMarch 31, 2023

Decrease

Shares issued:
Common shares (Note 1.)

127,000,000-

3,500,000

123,500,000

127,000,000-

3,500,000

123,500,000

Common shares (Note 2.3.4.)

6,409,833

2,917,819

3,503,900

5,823,752

Total

6,409,833

2,917,819

3,503,900

5,823,752

Total
Treasury shares(Notes) 1. The decrease of 3,500,000 shares in shares issued is due to retirement of treasury shares.
2. Treasury shares include the Company’s shares held by the trust for the stock remuneration planfor directors (234,000 shares and 230,100 shares at the beginning and end of the current fiscal
year, respectively).
3. The increase of 2,917,819 shares of treasury shares is made up of an increase of 2,915,400 sharesthrough market purchase and an increase of 2,419 shares due to purchase of shares of less thanstandard unit.
4. The decrease of 3,503,900 shares of treasury shares is made up of a decrease of 3,500,000 shares
resulting from cancellation of treasury shares and a decrease of 3,900 shares due to issuancefrom the trust to eligible persons according to the stock remuneration plan for directors.
2. Dividends(1) Dividends paid

Resolution

Type ofsharesTotal
dividends(Millionsof yen)Total
dividends(Thousands of
U.S. dollars)

Dividends
per share(Yen)

Dividends
per share(U.S.
dollars)Cut-off
date

Effective
date

Annual general
meeting of theshareholders on
June 29, 2022

Commonshares

6,041

45,23850

0.37

March 31,2022

June 30,2022(Note) Total dividends based on resolution at the annual general meeting of the shareholders on June 29,
2022 include ¥11 million ($87 thousand) of dividends on the Company’s shares held by the trust forthe stock remuneration plan for directors.

－ 28 －

(2) Dividends with the cut-off date in the fiscal year ended March 31, 2023 and the effective datein the fiscal year ending March 31, 2024

Resolution

Type ofsharesAnnualgeneralmeeting of
theshareholders
on June 29,2023

Commonshares

Total
Total
dividends
Sourcedividendsof(Thousands(Millionsof U.S.
dividendsof yen)dollars)

Dividends
per share(Yen)

Dividends
per share(U.S.
dollars)Cut-off
date

Effective
date

Retainedearnings

50

0.37

March 31,2023

June 30,
2023

5,895

44,146(Note) Total dividends based on resolution at the annual general meeting of the shareholders on June 29,2023 include ¥11 million ($86 thousand) of dividends on the Company’s shares held by the trust forthe stock remuneration plan for directors.

－ 29 －

(Consolidated Statement of Cash Flows)*
Reconciliation between cash and cash equivalents at end of period and the amount on the
consolidated balance sheet
Fiscal year ended
March 31, 2022
(Millions of yen)
88,687

Cash and deposits

Fiscal year ended
March 31, 2023
(Millions of yen)
64,219(Thousands of U.S. dollars)
480,899

Time deposits with a maturity of morethan three months(7,067)(6,703)(50,196)

Cash and cash equivalents

81,61957,516

430,702(Lease Transactions)1. Finance lease transactions
Finance lease transactions that do not transfer ownership
1) Leased assets
・Property, plant and equipment
These leases are mainly production facilities (machinery, equipment and vehicles) andinspection instruments (other) of the Company.
・Intangible assets
These leases are mainly software (other) of the Company’s consolidated subsidiaries.
2) Depreciation of leased assets
Leased assets are depreciated by the straight-line method over the lease period that is deemedas the useful life, assuming no residual value.
2. Operating lease transactions
Future minimum lease payments under non-cancelable operating leases
As of March 31, 2022

As of March 31, 2023

Due within one year

(Millions of yen)
1,245(Millions of yen)
633

(Thousands of U.S. dollars)
4,744

Due after one year

1,939

1,389

10,406

Total

3,184

2,023

15,151(Note) Foreign subsidiaries that have adopted Generally Accepted Accounting Principles in the United States
applied Leases (ASC No. 2016-02 (Topic 842)) from the fiscal year ended March 31, 2023. Amounts as ofMarch 31, 2023 do not include future minimum lease payments related to these foreign subsidiaries.

－ 30 －

(Financial Instruments)
1. Overview of financial instruments(1) Basic policy on managing financial instruments
The Group invests temporary surplus funds and funds reserved for future business expansion
mainly in highly safe financial assets, according to the Group’s cash management plan. The methodof fund raising is determined based upon the use of funds and financing environment. The Grouputilizes derivative transactions only to hedge foreign exchange rate fluctuation risk and interest
rate fluctuation risk, and does not use them for trading or speculative purposes.
(2) The nature and risk of financial instruments
Notes and accounts receivable – trade, which are operating receivables, are exposed to customer
credit risk. Operating receivables denominated in foreign currencies are also exposed to foreignexchange risk; however, such risk is hedged by using forward foreign exchange contracts.
Securities and investment securities consist mainly of equity securities issued by companies
with whom the Group has business alliances and equity or debt securities held for the purpose of
short-term investment of temporary surplus funds and reserved funds. These investments are exposed
to market risk. A part of securities and investment securities are denominated in foreign
currencies, and they are exposed to foreign exchange risk; however, such risk is hedged by using
forward foreign exchange contracts.
Notes and accounts payable – trade, which are operating payables, are mostly due within one
year. Some of them are denominated in foreign currencies and exposed to foreign exchange risk;
however, such risk is hedged by using forward foreign exchange contracts.
Loans payable, which are made to obtain working capital, are due within three years after theend of the current fiscal year.
Lease obligations include leases to which Leases (ASU No. 2016-02 (Topic 842)) has been appliedat some overseas consolidated subsidiaries.
As for derivative transactions, forward foreign exchange contracts are entered into for the
purpose of hedging foreign exchange risk deriving from operating receivables and payables
denominated in foreign currencies, loans payable denominated in foreign currencies and securities
denominated in foreign currencies. For the hedging instruments and hedged items under the hedge
accounting, hedging policy, and the method of assessing the hedge effectiveness, please refer to“Significant Matters Forming the Basis of Preparation of Consolidated Financial Statements, 4.
Accounting policies, (6) Significant hedge accounting” prescribed above.
(3) Risk management structure regarding financial instruments
1) Management of credit risk (customers’ default risk, etc.)
For operating receivables, the Company reviews the creditworthiness of customers by monitoring
their financial status on a daily and continuous basis in accordance with the internal regulations
for credit exposure management. At the same time, it endeavors to early identify and mitigate any
concern on the collection of receivables due to deteriorated financial conditions by managing due
dates and balances for each customer and appropriately reviewing the credit lines. The Company’s
consolidated subsidiaries also manage operating receivables in the same manner in accordance with
the Company’s internal rules for credit exposure management. The credit risk associated with debt
securities is immaterial since the Group invests mainly in debt securities with high credit
ratings.
Derivative transactions are entered into only with highly rated financial institutions in orderto mitigate counterparty risk.
As of the end of the current fiscal year, the maximum credit risk amount is presented as theconsolidated balance sheet amounts of financial assets that are exposed to credit risk.

－ 31 －

2) Management of market risk (fluctuation risk of foreign currency exchange and interest rates,
etc.)
The Company utilizes forward foreign exchange contracts for foreign exchange risk identified bycurrency and by month in relation to operating receivables and payables denominated in foreign
currencies, loans payable denominated in foreign currencies and securities denominated in foreign
currencies in accordance with the internal rules for market risk management. Some of theCompany’s consolidated subsidiaries also manage market risk in the same manner in accordance with
the Company’s internal rules for market risk management.
For securities and investment securities, market prices and the financial position of theissuers are periodically monitored and reported to directors in charge in accordance with theinternal rules for market risk management. In addition, the holding status of shares issued bycompanies with business relationships is continuously reviewed in consideration of therelationships with those companies.
Derivative transactions are reported to directors in charge on a daily basis as well as to theBoard of Directors in accordance with the internal rules for derivative transactions that define
the authorization policy and limits of transactions. The Company’s consolidated subsidiaries also
manage derivative transactions in the same manner in accordance with the Company’s internal
rules.
3) Management of liquidity risk associated with fund raising (risk of inability to pay on due
date)
Liquidity risk of the Company and its consolidated subsidiaries is managed by the Finance andTreasury Departments, preparing and updating the cash management plan based upon reports from eachdepartment as well as by maintaining certain level of liquidity.
(4) Supplementary explanation concerning fair values of financial instruments, etc.
The notional amounts of derivative transactions in Note“Derivative Transactions” do not, inthemselves, indicate the market risk associated with the derivative transactions.

－ 32 －

2. Fair value of financial instruments
The table below presents the amounts of financial instruments recorded in the consolidated balance
sheet and their fair values, as well as their differences.
As of March 31, 2022
Consolidated balance
sheet amount(Millions of yen)
(1) Notes and accounts receivable - trade,and contract assets

35,292

Allowance for doubtful accounts (*3)

(2,445)32,847

Fair value(Millions of yen)

Difference(Millions of yen)

32,847-(2) Securities and investment securities(*2)
Trading securities

598

598

-

Available-for-sale securities

61,46961,469-(3) Investments in money held in trust

1,712

1,712

-

96,626

96,626-(1) Notes and accounts payable-trade21,164

21,164-(2) Short-term loans payable

2,185

2,185

-

(3) Current portion of long-term loans payable

16,402

16,433

31

-

-

-

39,75239,783

31

(72)

(72)

-

Consolidated balance
sheet amount(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)

36,686

36,686-59,33659,336-

Assets, total(4) Long-term loans payable
Liabilities, total
Derivative transactions (*4)
for which hedge accounting is not applied
As of March 31, 2023

(1) Notes and accounts receivable - trade, and contract assets

38,491

Allowance for doubtful accounts (*3)

(1,805)(2) Securities and investment securities (*2)
Available-for-sale securities

96,022

96,022-(1) Notes and accounts payable-trade

Assets, total

26,205

26,205-(2) Short-term loans payable

3,921

3,921

-

(3) Long-term loans payable

1,410

1,407

(2)

(4) Lease obligations (*5)

2,985

2,913

(71)

34,522

34,448

(73)

22

22

-

Liabilities, total
Derivative transactions (*4)
for which hedge accounting is not applied－ 33 －

As of March 31, 2023
Consolidated balance
sheet amount(Thousands of U.S. dollars)(1) Notes and accounts receivable - trade, and contract assets

288,237

Allowance for doubtful accounts (*3)

(13,517)

Fair value(Thousands of U.S. dollars)

Difference(Thousands of U.S. dollars)

274,719274,719-444,336444,336-(2) Securities and investment securities (*2)
Available-for-sale securities

719,056

719,056-(1) Notes and accounts payable-trade

Assets, total

196,239

196,239-(2) Short-term loans payable

29,36229,362-(3) Long-term loans payable

10,558

10,541(16)(4) Lease obligations (*5)
Liabilities, total

22,355

21,820(534)

258,516

257,964

(551)

168

168

-

Derivative transactions (*4)
for which hedge accounting is not applied(*1): “Cash and deposits” are omitted because they are cash and because fair values of deposits
approximate their book values since deposits are settled in a short period of time.
(*2): Stocks, etc. without market prices and investments in business partnerships with limited
liability are not included in “(2) Securities and investment securities.” The recorded
amounts of those financial instruments on the consolidated balance sheet are as follows.
Classification

As of March 31, 2022

As of March 31, 2023

(Millions of yen) (Millions of yen) (Thousands of U.S. dollars)
Unlisted shares
1,454
1,385
10,376
Investments in business
partnerships with limited
561
353
2,644
liability(*3): The deducted amount includes general and specific allowance for doubtful accounts relating tonotes and accounts receivable - trade, and contract assets.
(*4): Assets and liabilities arising from derivative transactions are stated in the net amount. The
figures in brackets indicate net liabilities.
(*5): Includes current portion of lease obligations.

－ 34 －

(Notes) 1. Redemption schedule for monetary receivables and securities with maturity dates after the
consolidated balance sheet date
As of March 31, 2022
Due within one year
(Millions of yen)

Due after one
year and up to
five years(Millions of yen)

Due after five
years and up to Due after ten years
ten years(Millions of yen)
(Millions of yen)

Cash and deposits
Notes and accounts
receivable-trade, andcontract assets
Securities and investment
securities
Available-for-salesecurities withmaturities(1) National and local
government bonds

88,687---35,202

89

-

-

-

-

-

-

(2) Corporate bonds

1,539

7,941

2,793

1,958

(3) Other

1,468

367

367

-

126,897

8,398

3,160

1,958

Total

As of March 31, 2023
Due within one year
(Millions of yen)

Due after one
year and up to
five years(Millions of yen)

Due after five
years and up to Due after ten years
ten years(Millions of yen)
(Millions of yen)

Cash and deposits
Notes and accounts
receivable-trade,and
contract assets
Securities and investment
securities
Available-for-salesecurities withmaturities(1) National and local
government bonds

64,219---38,431

59

-

-

-

801

-

-

(2) Corporate bonds

1,200

10,373

2,270

2,136

-

801

-

-

103,851

12,035

2,270

2,136

(3) OtherTotal－ 35 －

As of March 31, 2023
Due within one year
(Thousands of
U.S. dollars)

Due after one
year and up to
five years(Thousands of
U.S. dollars)

Due after five
years and up toten years(Thousands of
U.S. dollars)

Due after ten years(Thousands of
U.S. dollars)

Cash and deposits
Notes and accounts
receivable-trade,and
contract assets
Securities and investment
securities
Available-for-salesecurities withmaturities(1) National and local
government bonds

480,899---

287,792

445

-

-

-

6,000

-

-

(2) Corporate bonds

8,987

77,68317,00016,000

-

6,000

-

-

777,678

90,12817,00016,000(3) OtherTotal

2. Redemption schedule for bonds, long-term loans payable, lease obligations and other interest
bearing debts after the consolidated balance sheet date
As of March 31, 2022
Due after two years
Due after three
Due after four years
and up to three
years and up to fourand up to five years
years
years
(Millions of yen)
(Millions of yen)
(Millions of yen)

Due within one year
(Millions of yen)

Due after one year
and up to two years(Millions of yen)

Short-term loans payable

2,185

-

-

-

-

Long-term loans payable

16,402

-

-

-

-

Total

18,587----

As of March 31, 2023

Short-term loans payable

3,921

Due after one
year and up to
two years(Millions ofyen)-Long-term loans payable--

Lease obligations

858

695

530

359

238

482

Total

4,779

695

1,940

359

238

482

Due after one year and Due after two years and Due after three years
up to two years
up to three years
and up to four years(Thousands of U.S.
(Thousands of U.S.
(Thousands of U.S.
dollars)
dollars)
dollars)

Due after four years
and up to five years(Thousands of U.S.
dollars)

Due after five years(Thousands of U.S.
dollars)

Due within one
year(Millions ofyen)

Due after two
years and up to
three years(Millions ofyen)-

Due after three
years and up to
four years(Millions ofyen)-

Due after four
years and up to
five years(Millions of
yen)
-

1,410

-

-

-

Due after fiveyears(Millions of
yen)-

As of March 31, 2023

Due within one year
(Thousands of U.S.
dollars)
Short-term loans payable

29,362

-

-

-

-

-

Long-term loans payable--

10,558---

Lease obligations

6,427

5,204

3,971

2,692

1,785

3,613

Total

35,7905,204

14,529

2,692

1,785

3,613

－ 36 －

3. Matters related to the breakdown of fair values of financial instruments by levels and othermatters
Fair values of financial instruments are categorized into the following three levels inaccordance with observability and significance of inputs used to measure fair value.
Level 1 fair value:
Fair value measured by quoted prices for assets and liabilities subject to the measurement offair value formed in active markets that are observable inputs related to fair value
measurement
Level 2 fair value:
Fair value measured by using observable inputs related to fair value measurement other than
inputs related to Level 1 fair value measurement
Level 3 fair value:
Fair value measured by using unobservable inputs related to fair value measurement
If multiple inputs are used that significantly affect the measurement of fair value, the fairvalue is categorized into the lowest priority level in fair value measurement among levels of
those inputs.
(1) Financial instruments recorded on the consolidated balance sheet at fair value
As of March 31, 2022
Classification

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Securities and investment securities
Trading securities

598

-

-

598

41,333--

41,333

Bonds-Corporate bonds-

16,704-

16,704

Bonds-Other

-

891

1,219

2,111

-

2

-

2

41,932

17,5981,219

60,750

-

(74)

-

(74)

-

(74)

-

(74)

Available-for-sale securities
StocksDerivative transactions
Currency-related transactions
Assets, total
Derivative transactions
Currency-related transactions
Liabilities, total

As of March 31, 2023
Classification

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Securities and investment securities
Available-for-sale securities
StocksBonds-National and local government bonds
Bonds-Corporate bonds
Bonds-Other
Other

39,811--

39,811

766

-

-

766

-

16,667-

16,667

-

690

-

690

1,400

-

-

1,400

-

23

-

23

41,97817,381-

59,359

-

(0)

-

(0)

-

(0)

-

(0)

Derivative transactions
Currency-related transactions
Assets, total
Derivative transactions
Currency-related transactions
Liabilities, total－ 37 －

As of March 31, 2023
Classification

Fair value (Thousands of U.S. dollars)
Level 1

Level 2

Level 3

Total

Securities and investment securities
Available-for-sale securities
Stocks298,121--298,121

5,739

-

-

5,739

Bonds-Corporate bonds-

124,813-

124,813

Bonds-Other

-

5,171

-

5,171

10,490--10,490Bonds-National and local government bonds

Other
Derivative transactions
Currency-related transactions
Assets, total

-

173

-

173

314,351

130,158-444,510

-

(4)

-

(4)

-

(4)

-

(4)

Derivative transactions
Currency-related transactions
Liabilities, total(2) Financial instruments other than financial instruments recorded on the consolidated balance
sheet at fair value
As of March 31, 2022
Classification

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Notes and accounts receivable - trade, and contract assets-

32,847-

32,847

Assets, total-

32,847-

32,847

Notes and accounts payable-trade-21,164-

21,164

Short-term loans payable

-

2,185

-

2,185

Current portion of long-term loans payable-

16,433-

16,433Liabilities, total-

39,783-39,783As of March 31, 2023
Classification

Fair value (Millions of yen)
Level 1

Level 2

Level 3

Total

Notes and accounts receivable - trade, and contract assets-

36,686-

36,686

Assets, total-

36,686-

36,686

Notes and accounts payable-trade-26,205-

26,205

Short-term loans payable

-

3,921

-

3,921

Long-term loans payable

-

1,407

-

1,407

Lease obligations

-

2,913

-

2,913

-

34,448-34,448

Liabilities, total－ 38 －

As of March 31, 2023
Classification

Fair value (Thousands of U.S. dollars)
Level 1

Level 2

Level 3

Total

Notes and accounts receivable - trade, and contract assets-

274,719-274,719

Assets, total-

274,719-274,719

Notes and accounts payable-trade-196,239-

196,239

Short-term loans payable-

29,362-29,362Long-term loans payable-

10,541-

10,541

Lease obligations-

21,820-21,820-257,964-

257,964

Liabilities, total(Notes) 1. Valuation techniques used in measurement of fair value and explanation of inputs pertaining to
the measurement of fair value(1) Securities and investment securities
Listed shares, national and local government bonds, corporate bonds and other bonds arevalued using quoted prices. Since listed shares and national and local government bonds aretransacted in active markets, their fair value is categorized as Level 1 fair value. On theother hand, corporate bonds and other bonds held by the Company and its consolidated
subsidiaries are categorized as Level 2 fair value since the frequency of transactions in themarket is low and their quoted prices cannot be recognized as being in active markets. Notethat some other bonds are measured at prices using significant unobservable inputs andcategorized as Level 3 fair value.
(2) Derivative transactions
The fair value is measured based on the prices provided by counterparty financial
institutions and categorized as Level 2 fair value.
(3) Notes and accounts receivable - trade, and contract assets
The fair value of these approximates their book value because these are settled in a shortperiod of time. Thus, the fair value is presented as their book value, measured based on
credit risk and the historical rate of credit loss, and categorized as Level 2 fair value.
(4) Notes and accounts payable-trade, and short-term loans payable
The fair value of these approximates their book value because these are settled in a shortperiod of time. Thus, the fair value is presented as their book value, and categorized as
Level 2 fair value.
(5) Long-term loans payable and lease obligations
The fair value of these is measured using the discounted present value method based on the
total amount of principal and interest and at an interest rate that takes account of the term
to maturity and credit risk of such liabilities, and is categorized as Level 2 fair value.

－ 39 －

2. Matters concerning Level 3 fair value for financial instruments recorded at fair value on the
consolidated balance sheet(1) Reconciliation between the balance at beginning of period and end of period
Fiscal year ended March 31, 2022
(Millions of yen)

Securities and investment securities
Available-for-sale securities
Bonds-Other
Balance at beginning of period

Total

1,131

1,131

Profit (loss) or other comprehensive income
Recorded in profit (loss)--

Recorded in other comprehensive income (*1)

88

88Purchase, sales, issuance and settlement--

Transfer to Level 3--

Transfer from Level 3
Balance at end of period

-

-

1,219

1,219

(*1) Included in “Valuation difference on available-for-sale securities” in “Other
comprehensive income” in the consolidated statement of comprehensive income.
Fiscal year ended March 31, 2023
(Millions of yen)

Securities and investment securities
Available-for-sale securities
Bonds-Other
Balance at beginning of period

Total

1,219

1,219

-

-

Profit (loss) or other comprehensive income
Recorded in profit (loss)
Recorded in other comprehensive income (*1)

44Purchase, sales, issuance and settlement(1,224)(1,224)

Transfer to Level 3--

Transfer from Level 3--

Balance at end of period--

Fiscal year ended March 31, 2023
(Thousands of U.S. dollars)

Securities and investment securities
Available-for-sale securities
Bonds-Other
Balance at beginning of period

Total

9,132

9,132

-

-

Profit (loss) or other comprehensive income
Recorded in profit (loss)
Recorded in other comprehensive income (*1)

37

37

Purchase, sales, issuance and settlement(9,169)(9,169)Transfer to Level 3--

Transfer from Level 3--

Balance at end of period--(*1) Included in “Valuation difference on available-for-sale securities” in “Other
comprehensive income” in the consolidated statement of comprehensive income.
(2) Description of method of measuring fair value
The Company and its consolidated subsidiaries evaluate fair value using quoted prices obtained
from third parties. The Finance and Treasury Departments confirm the valuation techniques andinputs that are used, compare the movements in fair value of similar observable inputs andverify the appropriateness of the price.

－ 40 －

(Securities and Investment Securities)
1. Trading securities
As of March 31, 2022
(Millions of yen)
Valuation difference included in
profit or loss

As of March 31, 2023
(Millions of yen)(Thousands of U.S. dollars)

(72)

-

-

Type

Carrying value(Millions of yen)

Acquisition cost
(Millions of yen)

Difference(Millions of yen)

(1) Shares

41,0089,258

31,749

-

-

-

2,250

2,228

21

612

612

0

2. Available-for-sale securities
As of March 31, 2022

Securities whosecarrying value
exceeds theiracquisition cost(2) Bonds:
1) National
and local
government
bonds2) Corporate
bonds3) Other(3) Other
Subtotal(1) Shares

1,319

856

462

45,19012,95532,235

325

407

(82)

-

-

-

14,454

15,409

(955)

1,498

1,591

(92)

(2) Bonds:
1) National
and local
government
bonds2) Corporate
bonds

Securities whosecarrying value
does not exceed
theiracquisition cost3) Other(3) Other
Subtotal
Total

-

-

-

16,27817,408(1,130)61,46930,364

31,104(Note) Shares, etc. without market prices (carrying value on the consolidated balance sheet: ¥1,454
million) and investments in business partnerships with limited liability (carrying value on the
consolidated balance sheet: ¥561 million) are not included in the above table of “Available-forsale securities.”－ 41 －

As of March 31, 2023

Securities whosecarrying value
exceeds theiracquisition cost

Type

Carrying value(Millions of yen)

Acquisition cost
(Millions of yen)

Difference(Millions of yen)

(1) Shares

39,4998,681

30,818

-

-

-

1,161

1,141

20

-

-

-

1,400

934

466

42,062

10,75731,304

311

416

(105)

766

791

(25)

15,505

17,248(1,742)

690

801

(110)

-

-

-

17,274

19,258(1,983)59,33630,01529,320(2) Bonds:
1) National
and local
government
bonds2) Corporate
bonds3) Other(3) Other
Subtotal(1) Shares

Securities whosecarrying value
does not exceed
theiracquisition cost(2) Bonds:
1) National
and local
government
bonds2) Corporate
bonds3) Other(3) Other
Subtotal

Total
As of March 31, 2023
Type(1) Shares

Securities whosecarrying value
exceeds theiracquisition cost(2) Bonds:
1) National
and local
government
bonds2) Corporate
bonds

Carrying value(Thousands of
U.S. dollars)

Subtotal(1) Shares

Securities whosecarrying value
does not exceed
theiracquisition cost(2) Bonds:
1) National
and local
government
bonds2) Corporate
bonds3) Other

65,008

230,780

-

-

-

8,699

8,549

150

-

-

-

10,490

7,000

3,490

314,980

80,558234,421

2,331

3,119

(787)

5,739

5,927

(187)

116,114129,165(13,050)

5,171

6,000

(828)

-

-

-

129,356

144,211(14,854)444,336

224,769

219,566(3) Other
Subtotal
Total

Difference(Thousands of
U.S. dollars)

295,7893) Other(3) Other

Acquisition cost(Thousands of
U.S. dollars)(Note) Shares, etc. without market prices (carrying value on the consolidated balance sheet: ¥1,385－ 42 －

million ($10,376 thousand)) and investments in business partnerships with limited liability(carrying value on the consolidated balance sheet: ¥353 million ($2,644 thousand)) are not includedin the above table of “Available-for-sale securities.”
3. Available-for-sale securities soldFiscal year ended March 31, 2022
Type

Sales proceeds(Millions of yen)

Aggregate gains on sales(Millions of yen)

Aggregate losses on sales(Millions of yen)

(1) Shares

30

10

-

(2) Bonds:
1) National andlocal government
bonds2) Corporate bonds

-

-

-

1,085

7

15

(3) Other

189

-

-

1,304

17

15

Aggregate gains on sales(Millions of yen)

Aggregate losses on sales(Millions of yen)

1,541

963

-

-

-

-

336

-

35

-

-

-

1,877

963

35

Sales proceeds(Thousands of U.S. dollars)

Aggregate gains on sales(Thousands of U.S. dollars)

Aggregate losses on sales(Thousands of U.S. dollars)

11,540

7,216

-

-

-

-

2,520

-

268

-

-

-

14,061

7,216

268

Total
Fiscal year ended March 31, 2023
Type

Sales proceeds(Millions of yen)

(1) Shares(2) Bonds:
1) National andlocal government
bonds2) Corporate bonds(3) Other
Total
Fiscal year ended March 31, 2023
Type(1) Shares(2) Bonds:
1) National andlocal government
bonds2) Corporate bonds(3) OtherTotal

4. Impairment loss recognized on securities
Fiscal year ended March 31, 2022
For the fiscal year ended March 31, 2022, impairment loss of ¥1 million was recognized for
securities for available-for-sale securities - bonds.
Fiscal year ended March 31, 2023
For the fiscal year ended March 31, 2023, impairment loss of ¥212 million ($¥1,589 thousand) was
recognized for securities (¥196 million ($1,468 thousand) for available-for-sale securities –shares and ¥16 million ($120 thousand) for available-for-sale securities – bonds).
Impairment loss is recognized for all the securities whose fair value at the end of the fiscal
year declines by 50% or more of their acquisition cost. It is also recognized when the fair value
declines by approximately 30% to 50% of the acquisition cost at the amount deemed necessary
considering the recoverability of the fair value of the security.

－ 43 －

(Derivative Transactions)
1. Derivative transactions for which hedge accounting is not applied
Currency-related transactions:
As of March 31, 2022
Classification

Notional amounts(Millions of yen)

Maturing
after one year
(Millions of yen)

Estimated
fair value(Millions of yen)

Valuation
gain (loss)(Millions of yen)

606

-

(4)

(4)

USD

132

-

2

2

JPY

1,503

-

(69)

(69)

2,242

-

(72)

(72)

Notional amounts(Millions of yen)

Maturing
after one year
(Millions of yen)

Estimated
fair value(Millions of yen)

Valuation
gain (loss)(Millions of yen)

258

-

12

12

USD

52

-

(0)

(0)

JPY

675

-

11

11

986

-

22

22

Notional
amounts(Thousands of
U.S. dollars)

Maturing
after one year
(Thousands of
U.S. dollars)

Estimated
fair value(Thousands of
U.S. dollars)

Valuation
gain (loss)(Thousands of
U.S. dollars)

1,934

-

90

90

USD

393

-

(4)

(4)

JPY

5,055

-

83

83

7,383

-

168

168

Type of transaction
Forward foreignexchange contracts:
Sell:

Off-market
transactions

USD
Buy:

Total

As of March 31, 2023
Classification

Type of transaction
Forward foreignexchange contracts:
Sell:

Off-market
transactions

USD
Buy:

Total
As of March 31, 2023
Classification

Type of transaction
Forward foreignexchange contracts:
Sell:

Off-market
transactions

USD
Buy:

Total

2. Derivative transactions for which hedge accounting is applied
Interest-rate-related transactions:
As of March 31, 2022
Not applicable.
As of March 31, 2023
Not applicable.

－ 44 －

(Retirement Benefit Plans)
1. Overview of retirement benefit plan adopted by the Company
To prepare for the payment of employees’ retirement benefits, the Company and its consolidated
subsidiaries adopted funded and unfunded defined benefit plans, and a defined contribution plan.
Under the defined benefit corporate pension plans, all of which are funded, the Company provides
lump-sum or pension benefits based on salaries and length of service.
In addition, retirement benefit trusts are set up for said corporate pension plans of the Company.
Under the lump-sum retirement benefit plans, which are principally unfunded and partially funded asa result of the setup of retirement benefit trusts, the Company provides lump-sum benefits based onsalaries and length of service.
Under the defined benefit corporate pension plans and the lump-sum retirement benefit plans forcertain consolidated subsidiaries, net defined benefit liability and retirement benefit expenses arecalculated by the simplified method.
2. Defined benefit plan
(1) Reconciliation between retirement benefit obligations at beginning of period and end of period
Fiscal year ended
March 31, 2022
Retirement benefit obligation at beginning of period
Current service costs(Millions of yen)
24,001

Fiscal year ended March 31, 2023
(Millions of yen)
24,520(Thousands of U.S. dollars)
183,621

1,207

1,231

9,220

Interest costs

176

191

1,437

Actuarial gains and losses arising during period(142)(1,675)(12,547)

Retirement benefits paid

(852)

(940)

(7,044)

97

-

-

229

-

-

(223)

-

-

Amount transferred due to change from
simplified accounting method to principle
methodExpenses associated with change from
simplified accounting method to principle
methodOther
Effect of exchange rate changes
Retirement benefit obligation at end of period

27

32

245

24,52023,360174,933－ 45 －

(2) Reconciliation between plan assets at beginning of period and end of period (excluding plans towhich simplified method is applied stated in (3))
Fiscal year ended
March 31, 2022
Plan assets at beginning of period
Expected return on plan assets(Millions of yen)
25,756

Fiscal year ended March 31, 2023
(Millions of yen)
26,283(Thousands of U.S. dollars)
196,824

365

366

2,744

Actuarial gains and losses arising during period

53

(546)

(4,090)Contributions from employer

905

937

7,017

Retirement benefits paid

(787)

(689)

(5,160)

(9)

37

283

26,283

26,390197,619

Effect of exchange rate changes
Plan assets at end of period(3) Reconciliation between net defined benefit liabilities for plans to which simplified method isapplied at beginning of period and end of period
Fiscal year ended
March 31, 2022
Net defined benefit liability at beginning of period(Millions of yen)
462

Retirement benefit expenses

Fiscal year ended March 31, 2023
(Millions of yen)
225

(Thousands of U.S. dollars)
1,687

33

19

145

Retirement benefits paid

(240)

(22)

(165)

Amounts transferred due to change from
simplified accounting method to principle
method

(97)

-

-

Other

55

(3)

(28)

Effect of exchange rate changes

11

2

20

225

221

1,659

Net defined benefit liability at end of period－ 46 －

(4) Reconciliation between retirement benefit obligation and plan assets at end of period, anddefined benefit liability and defined benefit asset for retirement recognized on the
consolidated balance sheet
As of March 31, 2022
Retirement benefit obligation for funded plans
Plan assets
Retirement benefit obligation for unfunded plans

As of March 31, 2023

(Millions of yen)
24,520(Millions of yen)
23,360(Thousands of U.S. dollars)
174,933(26,283)(26,390)(197,619)(1,763)(3,029)(22,686)

225

221

1,659

Net balance of liability and asset
recognized on the consolidated balance sheet(1,537)(2,807)(21,026)

Net defined benefit liability

4,054

3,839

28,749Net defined benefit asset(5,592)(6,647)(49,776)

Net balance of liability and asset
recognized on the consolidated balance sheet(1,537)(2,807)(21,026)(5) Retirement benefit expenses and their breakdown
Fiscal year ended
March 31, 2022
Current service costs
Interest costs(Millions of yen)
1,207

Fiscal year ended March 31, 2023
(Millions of yen)
1,231

(Thousands of U.S. dollars)
9,220

176

191

1,437

Expected return on plan assets

(365)

(366)

(2,744)

Amortization of actuarial gains and losses

1,044

529

3,965

Amortization of past service costs

(17)

(47)

(357)

Expenses associated with change from
simplified accounting method to principle
method

229

-

-

Other

(53)

(56)

(422)

Retirement benefit expenses applying
simplified method

33

19

145

2,254

1,501

11,244Retirement benefit expenses under defined
benefit plans(Note) In addition to the above, for the fiscal year ended March 31, 2022, ¥118 million in extra
retirement payments and other was recorded as part of business structure improvement expenses under
extraordinary losses.
In addition to the above, for the fiscal year ended March 31, 2023, ¥348 million ($2,607 thousand)in extra retirement payments and other was recorded as part of business structure improvement
expenses under extraordinary losses.

－ 47 －

(6) Remeasurements of defined benefit plans
The breakdown of the amount recognized in remeasurements of defined benefit plans (before tax
effect) in the consolidated statement of comprehensive income is as follows:
Fiscal year ended
March 31, 2022
Past service costs(Millions of yen)
17

Actuarial gains and losses
Total

Fiscal year ended March 31, 2023
(Millions of yen)
47

(Thousands of U.S. dollars)
357(1,240)(1,658)(12,422)(1,223)(1,611)(12,065)(7) Accumulated remeasurements of defined benefit plans
The breakdown of the amount recognized in accumulated remeasurements of defined benefit plans(before tax effect) on the consolidated balance sheet is as follows:
As of March 31, 2022
Unrecognized past service costs(Millions of yen)(56)

Unrecognized actuarial gains and losses
Total

As of March 31, 2023
(Millions of yen)
(9)

(Thousands of U.S. dollars)
(68)

866

(796)

(5,963)

809

(805)

(6,031)(8) Plan assets
1) Breakdown of plan assets
Percentage of each main category to total plan assets is as follows:
As of March 31, 2022

As of March 31, 2023

Bonds

29%

28%

Securities

35%

35%

Cash and deposits

6%

6%

Alternative investments (Note 1)

25%

27%

Other

5%

4%

100%

100%

Total (Note 2)(Notes) 1. Alternative investments mainly consist of investment to hedge funds.
2. Total plan assets include retirement benefit trusts of 7% and 6% that are set up for a
corporate pension plan as of March 31, 2022 and 2023, respectively.
2) Determination of expected long-term rate of return on plan assets
In determining the expected long-term rate of return on plan assets, the Company takes into
consideration the current and future plan asset allocation, and the current and expected longterm rate of return on various asset categories comprising plan assets.
(9) Actuarial assumptions
Major bases for actuarial calculation
Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

0.6～0.8%

1.0～1.2%

Long-term expected rate of return

1.5%

1.5%

Expected rate of salary increase

2.9%

2.6%

Discount rate

3. Defined contribution plan
The required contribution to the defined contribution plan amounts to ¥372 million and ¥462 million($3,464 thousand) for the fiscal years ended March 31, 2022 and 2023, respectively.

－ 48 －(Tax Effect Accounting)
1. Breakdown of major reasons for deferred tax assets and deferred tax liabilities
As of March 31, 2022
(Millions of yen)
Deferred tax assets:
Net losses carried forward (Note 2)
Allowance for doubtful accounts
Provision for bonuses
Provision for product warranties
Net defined benefit liability
Provision and accrual for directors'
retirement benefits
Loss on valuation of inventories
Research and development expenses
Impairment loss
Deferred revenue
Elimination of unrealized income oninventories
Other
Total gross deferred tax assets
Valuation allowance for tax losses carriedforward (Note 2)
Valuation allowance for total amount of
deductible temporary differences
Valuation allowance (Note 1)
Total deferred tax assets
Deferred tax liabilities:
Net defined benefit asset
Valuation difference on available-for-salesecurities
Retained earnings of subsidiaries andassociates
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)

As of March 31, 2023
(Millions of yen)(Thousands of U.S. dollars)

4,577
574
776
357
1,294

4,217
292
906
1,129
1,275

31,583
2,191
6,790
8,461
9,550

95

64

484

1,582
1,761
275
416

2,417
1,662
327
449

18,104
12,446
2,451
3,369

925

1,031

7,727

4,743
17,3805,529
19,30541,406
144,566(3,664)(4,177)(31,279)(4,613)(5,701)(42,698)(8,278)9,102(9,879)9,426(73,978)
70,588(1,274)(1,703)(12,759)(9,765)(9,469)(70,914)(1,723)(1,891)(14,160)(26)(12,790)(3,687)(24)(13,089)(3,663)(184)(98,018)(27,430)(Notes) 1. There is no significant change in the valuation allowance.
2. The amounts of tax losses carried forward and deferred tax assets by carry-forward expiry
period are as follows:
As of March 31, 2022
Due after
Due after
Due after
Due after
one year
two years
three years four years
Due after
Total
and up toand up toand up toand up to
five years
two years
three years four years
five years(Millions of (Millions of (Millions of (Millions of (Millions of (Millions of (Millions of
yen)
yen)
yen)
yen)
yen)
yen)
yen)
Due within
one yearTax losses
carriedforward (*1)
Valuation
allowance
Deferred tax
assets

347

86

215

259

329

3,337

4,577

184

7

44

105

40

3,282

3,664

163

79

171

154

289

54

912

－ 49 －

As of March 31, 2023
Due after
Due after
Due after
Due after
one year
two years
three years four years
Due after
Total
and up toand up toand up toand up to
five years
two years
three years four years
five years(Millions of (Millions of (Millions of (Millions of (Millions of (Millions of (Millions of
yen)
yen)
yen)
yen)
yen)
yen)
yen)
Due within
one yearTax losses
carriedforward (*1)
Valuation
allowance
Deferred tax
assets

15

59

65

46

74

3,957

4,217

14

57

65

46

74

3,919

4,177

0

1

-

-

-

38

40

Due after
one yearand up totwo years(Thousandsof U.S.
dollars)

Due after
two years
and up tothree years(Thousandsof U.S.
dollars)

Due after
three years
and up tofour years(Thousandsof U.S.
dollars)

Due after
four years
and up to
five years(Thousandsof U.S.
dollars)

As of March 31, 2023
Due within
one year(Thousandsof U.S.
dollars)

Due after
five years

Total(Thousandsof U.S.
dollars)(Thousandsof U.S.
dollars)

Tax losses
carried
112
441
486
348
559
29,634
forward (*1)
Valuation
106
429
486
348
559
29,349allowance
Deferred tax
512284
assets(*1) The amounts of tax losses carried forward are multiplied by the statutory tax rate.

31,58331,279303

2. Reconciliation of significant difference between statutory tax rate and effective tax rate after
application of tax effect accounting
As of March 31, 2022 As of March 31, 2023
Statutory tax rate
Reconciliation:
Increase (decrease) in valuation allowancefor deferred tax assets
Non-taxable income for income tax purposes(e.g. dividend income)Non-deductible expenses for income tax
purposes (e.g. entertainment expenses)
Inhabitant tax on per capita basis
Tax deductions related to R&D activities
Different tax rates applied to consolidated
subsidiaries
Amortization of goodwill
Share of profit (loss) of entities accounted
for using equity method
Retained earnings of subsidiaries andassociates
Other
Effective tax rate after application of tax
effect accounting

30.6%

30.6%

(6.5)

6.4

(0.5)

(0.6)

2.6

2.1

0.3
(5.2)

0.2
(6.7)

(3.2)

(1.8)

0.3

0.3

0.2

0.2

2.1

2.0

(0.6)

(0.3)

19.9

32.3

－ 50 －

(Revenue Recognition)
1. Information on disaggregation of revenue from contracts with customers
Fiscal year ended March 31, 2022
(Millions of yen)
Reportable segment
Light sourcesbusiness

Opticalequipment
business

Imagingequipment
business

Otherbusinesses(Note)

Total

Total

Halogen lamps

10,450--10,450-10,450Discharge lamps

38,334--38,334-38,334

Solid-state light sources

9,026

-

-

9,026

-

9,026

UV equipment-

28,812-

28,812-

28,812

Optical equipment and other-

19,293-

19,293-

19,293Cinema equipment--

17,017

17,017-

17,017

General imaging equipment--

19,72919,729-19,729

Other

-

-

-

-

3,450

3,450

57,811

48,10536,746142,6633,450

146,114

-

280

2,426

2,707

-

2,707

57,811

48,386

39,173

145,3713,450

148,821

Revenue from contracts with customers
Other revenue
Sales to external customers(Note) “Other businesses” represents business segments that are not included in other reportable segments
and other revenue-generating business activities, including industrial machinery and fund management
activities.
Fiscal year ended March 31, 2023
(Millions of yen)
Reportable segment
Light sourcesbusiness

Opticalequipment
business

Imagingequipment
business

Otherbusinesses(Note)

Total

Total

Halogen lamps

12,942--

12,942-

12,942

Discharge lamps

38,772--

38,772-

38,772

Solid-state light sources

10,099--10,099-10,099-38,469-38,469-38,469UV equipment
Optical equipment and other-

19,009-19,009-19,009Cinema equipment--

20,80320,803-20,803General imaging equipment--

25,32825,328-25,328

Other

-

-

-

-

4,087

4,087

61,81357,47846,132

165,424

4,087

169,512

-

316

5,196

5,512

-

5,512

61,813

57,794

51,328

170,937

4,087

175,025

Revenue from contracts with customers
Other revenue
Sales to external customers－ 51 －

Fiscal year ended March 31, 2023
(Thousands of U.S. dollars)
Reportable segment
Light sourcesbusiness

Opticalequipment
business

Imagingequipment
business

Otherbusinesses(Note)

Total

Total

Halogen lamps

96,917--

96,917-

96,917

Discharge lamps

290,344--

290,344-

290,344

Solid-state light sources

75,625--75,625-75,625

UV equipment-

288,073-

288,073-

288,073

Optical equipment and other-142,349-

142,349-

142,349

Cinema equipment--

155,784

155,784-

155,784

General imaging equipment--

189,670

189,670-

189,670

Other
Revenue from contracts with customers
Other revenue
Sales to external customers

-

-

-

-

30,60930,609462,887

430,423

345,454

1,238,765

30,6091,269,374

-

2,366

38,91541,281-

41,281

462,887432,790384,370

1,280,047

30,6091,310,656(Note) “Other businesses” represents business segments that are not included in other reportable segments
and other revenue-generating business activities, including industrial machinery and fund management
activities.
2. Information that forms the basis for understanding revenue from contracts with customers(1) Sales of products
For halogen lamps, discharge lamps and solid-state light sources, this is primarily the
manufacturing and sales of various lamps. For the sales of these products, the control of the
products is deemed to be transferred upon delivery to the customer, so revenue is recognized at
the time of delivery. The alternative treatment prescribed in Paragraph 98 of the Implementation
Guidance on Accounting Standard for Revenue Recognition has been applied for products sold inJapan, and revenue is recognized when products are shipped provided that there is an ordinarylength of time between shipping and when the control is transferred to customers. In addition,
consideration for transactions is generally received within four months after delivery of the
product.
For UV equipment, optical equipment and other, this is primarily the manufacturing and sales ofvarious lithography equipment. For the sales of these products, where there is installation ofsuch products based on a contract with the customer, customers generally do not receive benefits
without installation, so the products and installation are identified as a single performanceobligation. In such case, the control of the assets is transferred to the customer when theconfirmation of agreed performance such as the customer’s acceptance of the product has been
completed, so that is when revenue is recognized. In addition, for some products that do notinclude installation work, the control of the products is deemed to be transferred upon delivery
to the customer, so revenue is recognized at the time of delivery. Further, consideration fortransactions is primarily received in stages according to the payment terms of the contract.
For cinema equipment and general imaging equipment, this is primarily the manufacturing andsales of various projectors. For the sales of these products, the control of the products isdeemed to be transferred upon delivery to the customer, so revenue is recognized at the time ofdelivery. Significant financing components exist when part of the payments represent receivables
over a long period, but this is immaterial. In addition, consideration for transactions isgenerally received within two months after delivery of the product. For some customers,
consideration is received in stages according to the payment terms of the contract.

－ 52 －

(2) Provision of maintenance services
For UV equipment, optical equipment and other, maintenance services are provided for the
products sold based on a separate contract. Maintenance services primarily guarantee the steady
operations of products, including the replacement of maintained items. For the identification of
performance obligations, for contracts that provide for performance obligations to be satisfied
over time, revenue is recognized according to the contract period. For contracts where theperformance obligations are primarily satisfied when the provision of maintenance ends, revenue isrecognized at such time. In addition, for optical equipment and some other products, variableconsideration corresponding to the product’s capacity utilization rate is included in thetransaction price only to the extent that it is highly probable that a material reversal of the
cumulative amount of revenues recognized will not occur when the uncertainty associated with thevariable consideration is subsequently resolved. Further, consideration for transactions isreceived in stages, generally corresponding to the progress of performance obligations inaccordance with the terms of the contract.
For cinema equipment and general imaging equipment, maintenance services are provided for the
products sold based on a separate contract. Maintenance services primarily guarantee the steady
operations of products, including the replacement of maintained items. For the identification of
performance obligations, for contracts that provide for performance obligations to be satisfied
over time, revenue is recognized according to the contract period. In addition, consideration fortransactions is primarily received in stages according to the payment terms of the contract.

－ 53 －

3. Information concerning the satisfaction of performance obligations based on contracts withcustomers and the relationship with the cash flows that arise from such contracts as well as theamount of revenue and timing forecast to be recognized in or after the next fiscal year fromcontracts with customers that are in place at the end of the current fiscal year
(1) Balance of contract assets and contract liabilities
Fiscal year ended
March 31, 2022
Receivables from contracts with customers (at beginning of period)

Fiscal year ended March 31, 2023

(Millions of yen) (Millions of yen) (Thousands of U.S. dollars)
33,806
34,415
257,718

Receivables from contracts with customers (at end of period)
Contract assets (at beginning of period)
Contract assets (at end of period)

34,41537,403280,094

-

-

-

-

-

-

Contract liabilities (at beginning of period)

12,28014,388

107,750

Contract liabilities (at end of period)

14,388

11,73187,853Contract liabilities for UV equipment, optical equipment and other are related to advances
received from customers according to the payment terms of the contract for products that include
installation work and for which revenue is recognized when the confirmation of agreed performancesuch as the customer’s acceptance of the product has been completed. For cinema equipment andgeneral imaging equipment, this primarily refers to advances received from customers according to
the payment terms of the contract for maintenance services contracts. Contract liabilities arereversed on recognition of revenue.
The amount of revenue recognized in the previous fiscal year that was included in the balance ofcontract liabilities as of the beginning of the period is ¥8,362 million.
In addition, the change in contract liabilities was due to a decrease from the reversals
associated with the recognition of revenue and an increase from the receipts from customers. There
were no changes in terms causing significant change in the balance.
There was no revenue (primarily, change in transaction price) recognized in the previous fiscal
year arising from performance obligations satisfied (or partially satisfied) in past periods.
The amount of revenue recognized in the current fiscal year that was included in the balance ofcontract liabilities as of the beginning of the period is ¥10,972 million ($82,163 thousand).
In addition, the change in contract liabilities was due to a decrease from the reversals
associated with the recognition of revenue and an increase from the receipts from customers. There
were no changes in terms causing significant change in the balance.

－ 54 －

(2) Transaction price allocated to remaining performance obligations
The Company and its consolidated subsidiaries apply the practical expedient in describing thetransaction price allocated to remaining performance obligations and do not include notes oncontracts where the initially expected contract period is one year or less.
(Light sources business)
For the light sources business segment, the initially planned contract period with customers is
one year or less, so the total amount of transaction price allocated to remaining performanceobligations and the period forecast for recognizing revenue are omitted.
(Optical equipment business)
For the previous fiscal year, performance obligations that have not yet been satisfied (orpartially not yet satisfied) were ¥18,864 million. Such performance obligations are related to the
manufacturing and sales of products that include installation work in UV equipment, opticalequipment and other. Approximately 60% of the revenue is forecast to be recognized within one year
from the end of the period, with approximately 30% recognized within two years and the remaining
10% recognized within three years.
For the current fiscal year, performance obligations that have not yet been satisfied (orpartially not yet satisfied) were ¥38,161 million ($285,770 thousand). Such performanceobligations are related to the manufacturing and sales of products that include installation workin UV equipment, optical equipment and other. Approximately 50% of the revenue is forecast to berecognized within one year from the end of the period, with approximately 48% recognized within
two years and the remaining 2% recognized within three years.
(Imaging equipment business)
Such performance obligations are related to the manufacturing and sales of various projectors incinema equipment and general imaging equipment, with the total amount of transaction priceallocated to remaining performance obligations and the period forecast for recognizing revenue asfollows.
Fiscal year ended
March 31, 2022
Due within one year

Fiscal year ended March 31, 2023

(Millions of yen) (Millions of yen) (Thousands of U.S. dollars)
547
1,032
7,729

Due after one year and up to two years

712

624

4,674

Due after two years and up to three years

647

558

4,178

Due after three years and up to four years

566

503

3,767

Due after four years and up to five years

411

406

3,040

Due after five years

747

807

6,044

3,632

3,930

29,435Total－ 55 －

(Segment Information, etc.)
Segment information
1. Summary of reportable segments
The Company defines a reportable segment as a component of the Company for which discrete financial
information is available and whose operating results are regularly reviewed by the Board of Directors
to assess its business performance and make decisions about resources to be allocated to the segment.
The Company has a division system based on product type and similarity in sales market, etc., andeach division develops and implements comprehensive domestic and overseas strategies for its
development, manufacturing and sales of products and service, and engages in its business activities
globally.
Thus, reportable segments of the Company are divided into three categories based on product typeand sales market.
“Light sources business” conducts manufacturing and sales of halogen lamps and discharge lamps,
etc.
“Optical equipment business” conducts manufacturing and sales of optical equipment, etc.
“Imaging equipment business” conducts manufacturing and sales of imaging equipment, etc.
2. Methods of determining the amounts of net sales, profit or loss, assets, liabilities, and otheritems by reportable segment
Accounting policies for business segment reported are generally consistent with those given in“Significant Matters Forming the Basis of Preparation of Consolidated Financial Statements.”
Segment profit presents the operating profit of the segment.
Intersegment sales and transfers are recognized based on the market price.

－ 56 －

3. Information about net sales, segment profit or loss, assets, liabilities and other items byreportable segment
Fiscal year ended March 31, 2022
(Millions of yen)
Eliminations Amounts on
Reportable segment
Otheror
consolidated
Light
OpticalImagingbusinesses
Total
unallocatedfinancialsources equipment equipment
Total(Note 1)amountsstatements
businessbusinessbusiness(Note 2)
(Note 3)
Net sales
Sales to external customers
Intersegment sales or transfers

57,811
9

48,38624

39,173
7

145,371
41

3,450
36

148,82177(77)

148,821-

Total

57,82048,41039,180145,4123,486

148,899(77)

148,821

Segment profit (loss)
Segment assets

8,288

4,620

(53)

12,855112

12,968100

13,068101,016

84,88851,325237,230

67,260304,490

16,605321,096

Other items:
Depreciation
3,025
2,206
1,671
6,903
36
6,939
6,939
Amortization of goodwill
52
110
163
163
163
Investment in associates
191
191
191
191
under equity method
Increase in property,
plant and equipment and
1,831
3,600
1,673
7,104
274
7,378
7,378
intangible assets(Note 4)(Notes) 1. “Other businesses” represents business segments that are not included in other reportablesegments and other revenue-generating business activities, including industrial machinery andfund management activities.
2. Adjustments are as follows:(1) Eliminations or unallocated amounts of segment profit (loss), amounting to ¥100 million,
include elimination of intersegment transactions totaling ¥107 million.
(2) Eliminations or unallocated amounts of segment assets, amounting to ¥16,605 million, include
elimination of intersegment receivables and payables totaling ¥(9,597) million and corporate
assets not allocable to any reportable segment or other revenue-generating businessactivities totaling ¥26,321 million that consists primarily of surplus funds (cash andsecurities) and long-term investments (investment securities), etc.
3. Segment profit (loss) is reconciled to operating profit on the consolidated statement ofincome.
4. The increase in long-term prepaid expense is included in increases in property, plant andequipment and intangible assets.

－ 57 －

Fiscal year ended March 31, 2023
Reportable segment

Other
businesses(Note 1)

(Millions of yen)
Eliminations Amounts onorconsolidated
unallocatedfinancialamountsstatements(Note 2)
(Note 3)Light
sourcesbusiness

Opticalequipment
business

Imagingequipment
business

Total

Net sales
Sales to external customers
Intersegment sales or transfers

61,813
11

57,794
10

51,3284

170,937
27

4,087
26

175,02553- 175,025
(53)
-

Total

61,82557,80551,333

170,964

4,113

175,078(53) 175,025

Segment profit (loss)
Segment assets
Other items:
Depreciation
Amortization of goodwill
Investment in associates
under equity method
Increase in property,
plant and equipment andintangible assets (Note 4)

Total

9,020

7,160

(642)

15,539191

15,730101,373

91,922

67,544

260,839

80,422

341,262

3,069
57

2,446
96

2,081
15

7,598
169

16
-

7,615
169

-

7,615
169

-

117

-

117

-

117

-

117

2,237

3,058

3,038

8,334

773

9,107

-

9,107

－ 58 －

130

15,861(17,640) 323,622

Fiscal year ended March 31, 2023
Reportable segment

Net sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit (loss)
Segment assets
Other items:
Depreciation
Amortization of goodwill
Investment in associates
under equity method
Increase in property,
plant and equipment andintangible assets(Note 4)

Otherbusinesses(Note 1)(Thousands of U.S. dollars)Eliminations Amounts onorconsolidated
Total
unallocatedfinancialamountsstatements(Note 2)
(Note 3)Light
sourcesbusiness

Opticalequipment
business

Imagingequipment
business462,887432,790384,370 1,280,047

87

77

462,975

432,867

384,407 1,280,250

30,806 1,311,056

67,55253,624(4,814)

1,436

759,123

688,350

505,798 1,953,272

22,98818,321

15,58856,898126

57,024-57,024

433

721

114

1,269

-

1,269

-

1,269

-

879

-

879

-

879

-

879

16,75622,90022,75362,411

5,790

68,202-

68,202

37

Total

202
116,362

30,609 1,310,656
197

399
117,798

602,238 2,555,510- 1,310,656
(399)

-

(399) 1,310,656
980

118,779(132,098) 2,423,412(Notes) 1. “Other businesses” represents business segments that are not included in other reportablesegments and other revenue-generating business activities, including industrial machinery andfund management activities.
2. Adjustments are as follows:(1) Eliminations or unallocated amounts of segment profit (loss), amounting to ¥130 million ($980
thousand), include elimination of intersegment transactions totaling ¥129 million ($968
thousand).
(2) Eliminations or unallocated amounts of segment assets, amounting to ¥(17,640) million($(132,098) thousand), include elimination of intersegment receivables and payables totaling¥(43,826) million ($(328,186) thousand) and corporate assets not allocable to any reportablesegment or other revenue-generating business activities totaling ¥26,183 million ($196,074
thousand) that consists primarily of surplus funds (cash and securities) and long-term
investments (investment securities), etc.
3. Segment profit (loss) is reconciled to operating profit on the consolidated statement ofincome.
4. The increase in long-term prepaid expense is included in increases in property, plant andequipment and intangible assets.

－ 59 －

Related information
Fiscal year ended March 31, 2022
1. Information by product and service
Information by product and service has been omitted as the similar information is disclosed in thesegment information.
2. Information by geographic area
(1) Net sales(Millions of yen)Japan
39,955

North America
U.S.A.
Other
28,296
1,278

Asia

EuropeChina
37,364

11,244Other
30,054

Other areas
627

Total
148,821(Note) Sales are classified by country or region based on the location of customers.
(2) Property, plant and equipment(Millions of yen)Japan
32,502

North America
U.S.A.
Canada7,470
1,430

Europe
1,366

Asia
3,391

Other areas

Total
0

46,162

3. Information about major customers
Information about major customers has been omitted since there is no external customer who accounts
for 10% or more of net sales in the consolidated statement of income.

－ 60 －

Fiscal year ended March 31, 2023
1. Information by product and service
Information by product and service has been omitted as the similar information is disclosed in thesegment information.
2. Information by geographic area
(1) Net sales(Millions of yen)Japan
38,060

North America
U.S.A.
Other
43,2932,020

Asia

EuropeChina
37,09812,125

Other areas

Other
41,146

Total

1,279

175,025(Thousands of U.S. dollars)Japan
285,010

North America
U.S.A.
Other
324,201
15,133

Asia

EuropeChina
277,809

90,797

Other areas

Other
308,118

Total

9,585

1,310,656(Note) Sales are classified by country or region based on the location of customers.
(2) Property, plant and equipment(Millions of yen)Japan
31,795

North America
U.S.A.
Canada11,8001,596Europe

Asia

1,458

Other areas

3,828

Total
1

50,480(Thousands of U.S. dollars)Japan
238,095

North America
U.S.A.
Canada88,368
11,953

EuropeAsia

10,920

Other areas

28,668Total
8378,014

3. Information about major customers
Information about major customers has been omitted since there is no external customer who accounts
for 10% or more of net sales in the consolidated statement of income.
Information on impairment loss on non-current assets by reportable segment
Fiscal year ended March 31, 2022

Impairment loss

Reportable segment
OpticalImagingLight sources
equipment
equipment
businessbusinessbusiness
14
58
91

Other
businesses

Total
164

-

(Millions of yen)
Eliminations
or
Total
unallocatedamounts-

164

Fiscal year ended March 31, 2023

Impairment loss

Reportable segment
OpticalImagingLight sources
equipment
equipment
businessbusinessbusiness
515
38
34－ 61 －

Total
588

Other
businesses-(Millions of yen)
Eliminations
or
Total
unallocatedamounts-

588

Fiscal year ended March 31, 2023

Impairment loss

Reportable segment
OpticalImagingLight sources
equipment
equipment
businessbusinessbusiness
3,861
287
260

(Thousands of U.S. dollars)Eliminations
Other
or
Total
businesses
unallocatedamounts

Total
4,409

-

-

4,409

Information on amortization and unamortized balance of goodwill by reportable segment
Fiscal year ended March 31, 2022
(Millions of yen)
Reportable segment
OpticalImagingLight sources
equipment
equipment
businessbusinessbusiness

Total

Other
businesses

Eliminations
orunallocatedamounts

Total

Amortization forthe year

52

110

-

163

-

-

163

Balance

137

97

-

235

-

-

235

Other
businesses

Eliminations
orunallocatedamounts

Fiscal year ended March 31, 2023
(Millions of yen)
Reportable segment
OpticalImagingLight sources
equipment
equipment
businessbusinessbusiness

Total

Total

Amortization forthe year

57

96

15

169

-

-

169

Balance

90

1

160

252

-

-

252

Fiscal year ended March 31, 2023
(Thousands of U.S. dollars)
Reportable segment
OpticalImagingLight sources
equipment
equipment
businessbusinessbusiness

Total

Other
businesses

Eliminations
orunallocatedamounts

Total

Amortization forthe year

433

721

114

1,269

-

-

1,269

Balance

679

9

1,199

1,888

-

-

1,888

Information on gain on negative goodwill by reportable segment
Fiscal year ended March 31, 2022
Not applicable.
Fiscal year ended March 31, 2023
Not applicable.

－ 62 －

Related party information
Fiscal year ended March 31, 2022
1. Related party transactions
Not applicable.
2. Information on the parent company and major associates
Not applicable.
Fiscal year ended March 31, 2023
1. Related party transactions
Not applicable.
2. Information on the parent company and major associates
Not applicable.
(Per Share Information)
Fiscal year ended March 31, 2022
Net assets per share¥1,949.73
Basic earnings per share¥104.54
Diluted earnings per share is notpresented since no potential
shares exist.

Fiscal year ended March 31, 2023
Net assets per share¥2,074.27
Basic earnings per share¥115.69
Diluted earnings per share is notpresented since no potential
shares exist.

Net assets per share$15.53
Basic earnings per share$0.86
Diluted earnings per share is notpresented since no potential
shares exist.

(Notes) 1. Diluted earnings per share is not presented since no potential shares exist.
2. The basis used for calculating basic earnings per share is as follows:
Fiscal year ended
March 31, 2022

Fiscal year ended March 31, 2023

(Millions of yen)
Profit attributable to owners of theparent(Millions of yen)(Thousands of U.S. dollars)

12,606

13,699102,588---

Profit attributable to owners of theparent attributable to common shares

12,606

13,699102,588

Average number of common shares
outstanding during the year (Shares)

120,586,712

118,414,343

118,414,343

Profit not attributable to commonshareholders

3. The Company’s shares held by the trust for the stock remuneration plan for directors arerecorded as treasury shares in shareholders’ equity which are deducted from the total numberof shares issued at the balance sheet date for the purpose of calculating net assets per share(234,000 shares and 230,100 shares as of March 31, 2022 and 2023, respectively).
The Company’s shares held by the trust for the stock remuneration plan for directors arerecorded as treasury shares in shareholders’ equity which are deducted from the weightedaverage number of shares outstanding during the year for the purpose of calculating the basic
earnings per share (238,895 shares and 230,700 shares for the fiscal years ended March 31, 2022
and 2023, respectively).

－ 63 －

(Subsequent Events)
Acquisition of business
At an investment and loans discussion meeting held on November 29, 2022, Necsel Intellectual
Property, Inc. (California, US), a consolidated subsidiary of the Company, resolved to acquire thelaser module business of Blue Sky Research, Incorporated (California, US), and it entered into thebusiness transfer contract with Blue Sky Research, Incorporated and acquired the business on April
3, 2023.
(1) Overview of business acquisition
1) Name of company transferred business and business descriptions
Name of company transferred business:
Business descriptions:Blue Sky Research, Incorporated
Development and sale of laser module products

2) Date of the business acquisition
April 3, 2023
3) Legal form of the business acquisition
Acquisition of business in exchange for cash4) Purpose of the business acquisition
To expand the Group’s solid-state light source business by obtaining the laser couplingtechnology, product lineup, and customer base of Blue Sky Research, Incorporated.
(2) Matters relating to the calculation of the acquisition cost
1) Acquisition cost of business and components thereof by consideration type
Consideration for the acquisition:
Acquisition cost:Cash¥1,381 million ($10,345 thousand)¥1,381 million ($10,345 thousand)Regarding the business acquisition value, note that the business transfer contract contains a
price-adjustment clause and therefore the amount above is a provisional amount.
2) Details of contingent consideration as set out in the business transfer contract, and policy on
accounting treatment thereof going forward
In accordance with the business transfer contract, the final acquisition cost will be adjusted
in the event that certain situations arise. In the event that acquisition cost changes,
goodwill and the amortization of goodwill will be revised.
3) Content and amount of major acquisition-related costs
Remuneration and fees for advisory services ¥36 million ($274 thousand) (approximate estimate)(3) Matters concerning the allocation of acquisition cost
1) Breakdown of main assets acquired on the date of the business acquisition
Not confirmed at this stage.
2) Amount of goodwill, reason for recognition, amortization method and amortization period
Not confirmed at this stage.

－ 64 －

Purchase of treasury shares
In accordance with the resolution by the Board of Directors meeting held on May 11, 2023 topurchase treasury shares pursuant to the provisions of Article 156 of the Companies Act, as appliedmutatis mutandis pursuant to the provisions of Article 165, paragraph 3 of the Companies Act, theCompany has made the purchase of treasury shares as follows:(1) Reason for purchase of treasury shares
To raise capital efficiency and enable the implementation of an agile capital policy.
(2) Details of purchase
Type of shares to be purchased:
Total number of shares to be purchased:
Total amount of shares to be purchased:
Purchase period:

Common shares of the Company
20,000,000 shares (maximum)¥30,000,000,000 ($224,651 thousand) (maximum)
May 29, 2023 to May 10, 2024

(3) Results of purchase
Type of shares purchased:
Total number of shares purchased:
Total amount of shares purchased:
Purchase period:
Purchasing method:

Common shares of the Company
3,495,000 shares¥6,673,573,600 ($49,974 thousand)May 29, 2023 to July 21, 2023
Market purchase on the Tokyo Stock Exchange

Segment Classification ChangeManagement concluded that it would be vital to shift from a product-centric approach to a marketcentric one to accelerate efforts to provide solutions as a Light Solutions Company under Vision
2030. It accordingly resolved to change reportable segments from the year ending March 31, 2024, inline with an organizational change implemented on April 1, 2023.
Ushio accordingly replaced its Light Source, Optical Equipment, and Imaging Equipment businesssegments with the Industrial Processes, Visual Imaging, Life Sciences, and Photonics Solutions
business segments.
Below is a summary of reportable segment classifications.
Reportable segment

Key products

Industrial Processes

Light sources: UV lamps, OA lamps, and optical equipment lamps
Equipment: UV equipment, curing equipment, EUV mask inspection
light sources, and maintenance services

Visual Imaging

Light sources: Cinema lamps and data projector lamps
Equipment: Digital cinema projectors, general imaging, videorelated equipment, and maintenance services

Life Sciences

Light sources: Products incorporating Care222
Equipment: UV treatment equipment

Photonics Solutions

Light sources: Solid state light sources

The Company is calculating net sales, earnings, assets, liabilities, and other amounts for the new
segments for the current fiscal year.

－ 65 －

5) Annexed Consolidated Detailed Schedules
Annexed detailed schedule of corporate bonds
Not applicable.
Annexed detailed schedule of borrowings

Classification

Balance at
beginning
Balance atBalance at
beginning ofof current
end of current
current
periodperiodperiod(Thousands(Millions of yen)
(Millions of yen)of U.S.
dollars)

Balance at
end ofcurrent
period(Thousandsof U.S.
dollars)

Averageinterest
rate(%)

Repayment
term

Short-term loans payable

2,185

3,921

16,36829,362

3.1-

Current portion of long-termloans payable

16,402-

122,825---

Current portion of leaseobligations

12

858

96

6,427

1.7

-

Long-term loans payable(excluding current portion)

-

1,410

-

10,5580.4

2025

Lease obligations (excluding
current portion)

61

2,305

460

17,267

2.5

From 2024
to 2043

18,662

8,495

139,750

63,616

-

-

Total

(Notes) 1. The average interest rate represents the weighted-average interest rate over the year-end
balance of loans.
2. Regarding the average interest rates on lease obligations, the total amount before deducting
interest equivalents included in the total lease payments is recorded as lease obligations,excluding some consolidated overseas subsidiaries that have adopted Leases (ASU No. 2016-02(Topic 842)). The lease obligations are not included in the calculation of the average interest
rates.
3. Foreign subsidiaries that have adopted Generally Accepted Accounting Principles in the UnitedStates applied Leases (ASU No. 2016-02 (Topic 842)) from the fiscal year ended March 31, 2023.
Lease liabilities for operating leases that have been recognized as a result of adopting thisstandard have been included in the balance at end of current period of current portion of leaseobligations and of lease obligations (excluding current portion).
4. The redemption schedule for long-term loans payable and lease obligations (excluding current
portions) for the five years after the consolidated balance sheet date is as follows:
Due after one year
and up to two years(Millions of yen)

Due after two years
and up to three years(Millions of yen)

Due after three years
and up to four years(Millions of yen)

Due after four years
and up to five years(Millions of yen)

Long-term loans
payable

-

1,410

-

-

Lease obligations

695

530

359

238

Due after one year
and up to two years(Thousands of U.S. dollars)Long-term loans
payableLease obligations

Due after two years
and up to three years(Thousands of U.S. dollars)

Due after three years
and up to four years(Thousands of U.S. dollars)

Due after four years
and up to five years(Thousands of U.S. dollars)-

10,558

-

-

5,204

3,970

2,692

1,785

－ 66 －

Annexed detailed schedule of asset retirement obligations
Information is omitted because the amounts of asset retirement obligations at the beginning and theend of the current fiscal year are not more than 1% of the total amounts of liabilities and net
assets at the beginning and the end of the current fiscal year, in accordance with the provision
under Article 92-2 of the Regulation on Terminology, Forms, and Preparation Methods of Consolidated
Financial Statements.
(2) Other Information
Quarterly information for the fiscal year ended March 31, 2023
First three months

First six months

First nine months

Fiscal year ended
March 31, 2023

Net sales (Millions of yen)

39,72887,955

128,362

175,025

Profit before income
taxes (Millions of yen)

6,455

13,993

18,111

20,220

Profit attributable toowners of the parent(Millions of yen)

3,858

9,512

12,078

13,699Basic earnings per share (Yen)

32.18

79.91

101.81115.69(Cumulative period)(Accounting period)
Basic earnings per share (Yen)First quarter

Second quarter

32.18

47.87

Third quarter

Fourth quarter

21.80

13.78

Quarterly information for the fiscal year ended March 31, 2023
First three months

First six months

First nine months

Fiscal year ended
March 31, 2023

Net sales(Thousands of U.S. dollars)

297,499

658,642961,229

1,310,656

Profit before income taxes(Thousands of U.S. dollars)

48,344

104,788

135,624

151,416

Profit attributable to ownersof the parent(Thousands of U.S. dollars)

28,897

71,23690,445102,588

Basic earnings per share(U.S. dollars)

0.24

0.59

0.76

0.86

(Cumulative period)(Accounting period)
Basic earnings per share(U.S. dollars)First quarter

Second quarter

0.24

0.35

－ 67 －

Third quarter
0.16

Fourth quarter
0.10