伊藤忠商事（8001） – Consolidated Financial Results for the Fiscal Year 2022 (Year ended March 31, 2022)

ANNUAL FINANCIAL STATEMENTSFor years ended March 31, 2022 and 2021Page:1:Consolidated Financial Results for the Fiscal Year 2022 (Year ended March 31, 2022)3:1. Qualitative Information3:(1) Qualitative Information of the Consolidated Operating Results3:(a) General Economic Situation4:(b) Consolidated Operating Results8:(2) Qualitative Information of the Consolidated Financial Position8:(a) Consolidated Financial Position9:(b) Consolidated Cash Flows10:2. Summary Information (Notes)10:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changesin the consolidation scope)10:(2) Changes in accounting policies and accounting estimates11:3. Outlook for the Fiscal Year Ending March 31, 202312:4. Shareholder Returns Policy / Distribution of Profit12:5. Basic Concept on the Selection of Accounting Standards13:6. Consolidated Financial Statements13:(1) Consolidated Statement of Comprehensive Income15:(2) Consolidated Statement of Financial Position17:(3) Consolidated Statement of Changes in Equity18:(4) Consolidated Statement of Cash Flows19:(5) Assumption for Going Concern19:(6) Notes to Consolidated Financial Statements19:(Operating Segment Information)20:(Per Share Information)20:(Material Subsequent Events)May 10, 2022ITOCHU Corporation- 1 -Company name:ITOCHU CorporationStock exchange code:8001https://www.itochu.co.jp/en/ir/President and Chief Operating Officer:Keita IshiiGeneral Manager, Investor Relations Division:Suguru AmanoTEL: 81 – 3 – 3497 – 7295The date of Shareholders’ meeting:June 24, 2022 (Planned)The date of payout of dividend:June 27, 2022 (Planned)The date of issue of audited financial statements:June 24, 2022 (Planned)(1) Consolidated operating results (Summary)(%: Changes from the previous fiscal year)RevenuesTrading income (*4)Profit before taxNet profitNet profit attributable to ITOCHUTotal comprehensive income attributableto ITOCHUmillions of yen%millions of yen%millions of yen%millions of yen%millions of yen%millions of yen%Fiscal Year 202212,293,34818.6582,52244.41,150,029124.4878,97399.4820,269104.31,086,43165.8Fiscal Year 202110,362,628(5.6)403,4141.0512,475(26.9)440,883(21.2)401,433(19.9)655,259134.2Basic earnings per share attributable to ITOCHUDiluted earnings per share attributable to ITOCHURatio of net profit attributable to ITOCHU to shareholders’ equityRatio of net profit attributable to ITOCHU to total assetsyenyen%%Fiscal Year 2022552.86-21.87.0Fiscal Year 2021269.83-12.73.6Equity in earnings of associates and joint ventures (millions of yen)FYE 2022:291,435[27.5%]FYE 2021:228,636[11.1%]Total comprehensive income (millions of yen)FYE 2022:1,149,139[57.5%]FYE 2021:729,579[115.9%]Total assetsTotal equityTotal shareholders’ equityRatio of shareholders’ equity to total assetsShareholders’equity per sharemillions of yenmillions of yenmillions of yen%yenMarch 31, 202212,153,6584,763,7004,199,32534.62,857.50March 31, 202111,178,4323,870,2403,316,28129.72,232.84Operating activitiesInvesting activitiesFinancing activitiesCash and cash equivalentsmillions of yenmillions of yenmillions of yenmillions of yenFiscal Year 2022801,16338,637(846,706)611,715Fiscal Year 2021895,900(207,296)(728,767)544,009Dividend distribution per shareTotal Dividend distribution(Annual)Payout ratio(Consolidated)Ratio of dividend distribution to ITOCHUshareholders’ equity (Consolidated)End offirst quarterEnd ofsecond quarterEnd ofthird quarterYear-endAnnualyenyenyenyenyenmillions of yen%%Fiscal Year 2021-44.00-44.0088.00131,01732.64.1Fiscal Year 2022-47.00-63.00110.00162,62319.94.3Fiscal Year 2023(Planned)-65.00-65.00130.0027.3(%: Changes from the previous fiscal year)Net profit attributableto ITOCHUBasic earnings per shareattributable to ITOCHUmillions of yen%yenFiscal Year 2023700,000(14.7)476.33May 10, 2022-Unaudited-Consolidated Financial Results for the Fiscal Year 2022 (Year ended March 31, 2022)[Prepared in conformity with International Financial Reporting Standards]1. Consolidated operating results for the fiscal year 2022 (from April 1, 2021 to March 31, 2022)(2) Consolidated financial position(3) Consolidated cash flows information2. Dividend distribution3. Outlook of consolidated operating results for the fiscal year 2023 (from April 1, 2022 to March 31, 2023)(Note) Outlook of consolidated operating results for the first half of fiscal year 2023 is not prepared.- 2 -(a) Changes in accounting policies required by IFRS: None(b) Other changes: None(c) Changes in accounting estimates: None(a) Number of common shares outstanding:(including the number of treasury stock)End of Fiscal Year 20221,584,889,504Fiscal Year 20211,584,889,504(b) Number of treasury stock:End of Fiscal Year 2022115,310,164Fiscal Year 202199,659,483(c) Average number of commonshares outstanding:For Fiscal Year 20221,483,691,851Fiscal Year 20211,487,730,0854. Other information(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changesin the consolidation scope): None(2) Changes in accounting policies and accounting estimates(3) Number of common shares issuedNote: Based on the decision at the meeting of the Board of Directors,ITOCHU has carried out share buybacks of 15,757,200 own shares during the Fiscal Year 2022.[Note]*1. This document is an English translation of a statement initially written in Japanese. The original Japanese document should be considered as the primary version.*2. This document is unaudited by certified public accountants or audit firms.*3. Data and projections contained in these materials are based on the information available at the time of publication, and various factors may cause actual results to differ materially from those presented in such forward-looking statements. ITOCHU Corporation, therefore, wishes to caution that readers should not practice undue reliance on forward-looking statements, and further, that ITOCHU Corporation has no obligation to update any forward-looking statements as a result of new information, future events or other developments.*4. “Trading income” is presented in accordance with Japanese accounting practices. “Trading income” = “Gross trading profit” + “Selling, general and administrative expenses” + “Provision for doubtful accounts”*5. The consolidated financial statements are expressed in Japanese yen and, solely for the convenience of the reader, have been translated into U.S. dollars at the rate of 122.39 yen = 1 U.S. dollar, the exchange rate prevailing on March 31, 2022.The translation should not be construed as a representation that the Japanese yen amounts could be converted into U.S. dollars at the above or any other rate.*6. “ITOCHU” referred to in the consolidated financial statements represents ITOCHU Corporation.- 3 -1. Qualitative Information(1) Qualitative Information of the Consolidated Operating Results(a) General Economic SituationLooking back at the global economy in the fiscal year ended March 31, 2022, the U.S. and Europe temporarily experienced a strong recovery as the distribution of COVID-19 vaccines progressed and restrictions on the movement of people were eased. However, the pace of recovery subsequently slowed as new variants of the COVID-19 virus spread and upward pressure on prices intensified due to factors including disruptions in supply chains and the Russia-Ukraine situation. Meanwhile, emerging countries experienced an increasing sense of slowdown amid the resurgence of infections, as exemplified by China where domestic demand in particular stagnated. The WTI crude oil price gradually rose from the US$60 per barrel range at the beginning of the fiscal year as global oil production remained below demand. From late February onward, the price fluctuated sharply in the US$90–$130 per barrel range due to the economic sanctions imposed on Russia by various countries and uncertainty over the impact on supply and demand, before ending the fiscal year in the US$100 per barrel range.Although the Japanese economy saw an upturn in consumer spending from autumn through to the end of the calendar year as COVID-19 temporarily subsided, overall the economy remained flat as the nation experienced cycles of COVID-19 resurgence and the issuance of countermeasures including state of emergency declarations. The U.S. dollar-yen exchange rate started at about ¥110 per dollar at the beginning of the fiscal year, with the temporal appreciation of the yen to approximately ¥107 per dollar in April, afterwards subsequently weakened due to the forecast that the Federal Reserve would raise interest rates earlier than previously expected. The start of U.S. interest rate hikes in March saw the yen depreciate from about ¥114 to approximately ¥125 at one point, due to factors including forecasts of accelerated interest rate hikes, before ending the fiscal year at approximately ¥122. The Nikkei Stock Average declined from approximately ¥29,000 at the beginning of the fiscal year due to the state of emergency declared by the Japanese government, among other factors, to below the ¥27,000 mark at one point in August. Although it temporarily recovered to approximately ¥30,000 due in part to expectations of economic recovery, it trended downward again due to factors including the spread of new variants of the COVID-19 virus, rising oil prices, and the Russia-Ukraine situation, falling below the ¥25,000 at one point in March, before ending the fiscal year at approximately ¥27,000. The yield on 10-year Japanese government bonds fell from 0.12% at the beginning of the fiscal year to 0.01% at the beginning of August as the Bank of Japan continued to provide ample liquidity to the market and U.S. long-term interest rates declined, but subsequently rose to 0.26% through to late March in line with U.S. long-term interest rates to close at 0.22% at the end of the fiscal year.- 4 -Billions of YenMillions ofU.S. Dollars20222021Increase(Decrease)%2022Revenues ………………………………………….12,293.310,362.61,930.718.6%100,444Gross trading profit ……………………………1,937.21,780.7156.48.8%15,828Selling, general and administrativeexpenses …………………………………………..(1,346.7)(1,366.5)19.8(1.4%)(11,004)Gains on investments………………………….211.94.1207.7-1,731Losses on property, plant, equipmentand intangible assets…………………………..(17.6)(157.5)139.9-(143)Equity in earnings of associatesand joint ventures ………………………………291.4228.662.827.5%2,381Income tax expense…………………………….(271.1)(71.6)(199.5)278.6%(2,215)Net profit…………………………………………..879.0440.9438.199.4%7,182Net profit attributable to ITOCHU……….820.3401.4418.8104.3%6,702(Reference) Trading income………………..582.5403.4179.144.4%4,759(b) Consolidated Operating Results(i) Revenues (from external customers)Increased by 18.6%, or 1,930.7 billion yen, compared to the previous fiscal year to 12,293.3 billion yen (100,444 million U.S. dollars).・Energy & Chemicals Company:Increased by 683.8 billion yen compared to the previous fiscal year to 2,864.1 billion yen (23,402 million U.S. dollars), due to higher market prices and transaction volume in energy-related companies and chemical-related companies.・Metals & Minerals Company:Increased by 385.9 billion yen compared to the previous fiscal year to 1,043.1 billion yen (8,523 million U.S. dollars), due to higher iron ore prices and coal prices.・Food Company:Increased by 318.2 billion yen compared to the previous fiscal year to 4,293.5 billion yen (35,081 million U.S. dollars), due to higher transaction volume in NIPPON ACCESS and higher market prices in provision-related transactions.・General Products & Realty Company:Increased by 281.6 billion yen compared to the previous fiscal year to 1,037.0 billion yen (8,473 million U.S. dollars), due to the sales volume recovery in ETEL (European tire-related company) resulting from the alleviation of the impact of COVID-19 and the favorable performance in construction materials business.- 5 -(ii) Gross trading profitIncreased by 8.8%, or 156.4 billion yen, compared to the previous fiscal year to 1,937.2 billion yen (15,828 million U.S. dollars).・Metals & Minerals Company:Increased by 68.6 billion yen compared to the previous fiscal year to 179.0 billion yen (1,462 million U.S. dollars), due to higher iron ore prices and coal prices.・General Products & Realty Company:Increased by 42.9 billion yen compared to the previous fiscal year to 190.3 billion yen (1,555 million U.S. dollars), due to the sales volume recovery in ETEL resulting from the alleviation of the impact of COVID-19 and the favorable performance in construction materials business.・Machinery Company:Increased by 32.2 billion yen compared to the previous fiscal year to 205.8 billion yen (1,682 million U.S. dollars), due to the favorable sales in YANASE, the recovery in overall automobile-related business resulting from the alleviation of the impact of COVID-19, and the favorable performance in almost all businesses such as ship-related companies and North American IPP-related business.・Energy & Chemicals Company:Increased by 24.8 billion yen compared to the previous fiscal year to 253.1 billion yen (2,068 million U.S. dollars), due to the improvement in profitability in energy trading transactions and CIECO Azer (Crude oil exploration and production company) resulting from higher market prices, and the stable performance in chemical-related companies, partially offset by the absence of the favorable performance in electricity transactions in the previous fiscal year.(iii) Selling, general and administrative expensesDecreased by 1.4%, or 19.8 billion yen, compared to the previous fiscal year to 1,346.7 billion yen (11,004 million U.S. dollars), due to the conversion of Taiwan FamilyMart into an investment accounted for by the equity method from a consolidated subsidiary in the first quarter of this fiscal year, partially offset by the increase of expenses resulting from the stable growth in revenue and the depreciation of the yen.(iv) Gains on investmentsIncreased by 207.7 billion yen, compared to the previous fiscal year to 211.9 billion yen (1,731 million U.S. dollars), due to the gains on the partial sale of Taiwan FamilyMart, the de-consolidation of Paidy, and the sale of Japan Brazil Paper & Pulp Resources Development, in addition to the realization of foreign exchange gains due to the de-consolidation of ITOCHU Coal Americas.(v) Losses on property, plant, equipment and intangible assetsImproved by 139.9 billion yen, compared to the previous fiscal year to 17.6 billion yen (losses) (143 million U.S. dollars), due to the absence of the impairment losses in FamilyMart and Australian coal-related company, and of the impairment loss on a foreign company of Machinery in the previous fiscal year.- 6 -(vi) Equity in earnings of associates and joint venturesIncreased by 27.5%, or 62.8 billion yen, compared to the previous fiscal year to 291.4 billion yen (2,381 million U.S. dollars).・General Products & Realty Company:Increased by 25.1 billion yen compared to the previous fiscal year to 30.3 billion yen (248 million U.S. dollars). The increase was caused by improvement of earnings in IFL (European pulp-related company) due to higher pulp prices, and higher earnings in construction materials business.・Metals & Minerals Company:Increased by 24.6 billion yen compared to the previous fiscal year to 47.2 billion yen (385 million U.S. dollars). The increase was caused by higher earnings in Marubeni-Itochu Steel because of some factors such as the favorable results in North American sheet construction materials business, the improvement in North American steel pipe business and the steady performance in overall business due to higher steel material prices, in addition to higher earnings in iron ore companies due to higher prices.・Machinery Company:Increased by 16.8 billion yen compared to the previous fiscal year to 42.4 billion yen (347 million U.S. dollars). The increase was caused by higher earnings in IEI (European water-and-environment-related company) resulting from the gain on the sale of a water utility company, and higher earnings in ship-related companies.・Others, Adjustments & Eliminations: (*)Decreased by 17.6 billion yen compared to the previous fiscal year to 93.7 billion yen (765 million U.S. dollars). The decrease was caused by lower earnings in C.P. Pokphand due to the deterioration in profitability resulting from lower pork prices and the absence of extraordinary gain in the previous fiscal year, partially offset by higher earnings in CITIC Limited due to the stable performance especially in comprehensive financial business.(*) “Others, Adjustments & Eliminations” includes gains and losses, which do not belong to any operatingsegment and internal eliminations between operating segments. For more details, please refer topage 19, “ 6. (6) Operating Segment Information”.(vii) Income tax expenseIncreased by 278.6%, or 199.5 billion yen, compared to the previous fiscal year to 271.1 billion yen (2,215 million U.S. dollars), due to the stable growth in profits and the absence of lower tax expenses related to FamilyMart in the previous fiscal year.(viii) Net profit attributable to ITOCHUConsequently, net profit attributable to ITOCHU increased by 104.3%, or 418.8 billion yen, compared to the previous fiscal year to 820.3 billion yen (6,702 million U.S. dollars).- 7 -(Reference) Trading income“Trading income” in accordance with Japanese accounting practices (“Trading income” = “Gross trading profit” + “Selling, general and administrative expenses” + “Provision for doubtful accounts”) increased by 44.4%, or 179.1 billion yen, compared to the previous fiscal year to 582.5 billion yen (4,759 million U.S. dollars).・Metals & Minerals Company:Increased by 69.7 billion yen compared to the previous fiscal year to 162.1 billion yen (1,325 million U.S. dollars), due to higher iron ore prices and coal prices.・Machinery Company:Increased by 32.6 billion yen compared to the previous fiscal year to 57.3 billion yen (468 million U.S. dollars), due to the favorable sales in YANASE, the recovery in overall automobile-related business resulting from the alleviation of the impact of COVID-19, and the favorable performance in almost all businesses such as ship-related companies and North American IPP-related business.・General Products & Realty Company:Increased by 30.7 billion yen compared to the previous fiscal year to 65.7 billion yen (536 million U.S. dollars), due to the sales volume recovery in ETEL resulting from the alleviation of the impact of COVID-19 and the favorable performance in construction materials business.・Energy & Chemicals Company:Increased by 20.5 billion yen compared to the previous fiscal year to 100.0 billion yen (817 million U.S. dollars), due to the improvement in profitability in energy trading transactions and CIECO Azer resulting from higher market prices, and the stable performance in chemical-related companies, partially offset by the absence of the favorable performance in electricity transactions in the previous fiscal year.- 8 -(2) Qualitative Information of the Consolidated Financial PositionBillions of YenMillions ofU.S. DollarsMar. 2022Mar. 2021Increase(Decrease)%Mar. 2022Total assets …………………………………….12,153.711,178.4975.28.7%99,303Interest-bearing debt ……………………….2,905.93,155.3(249.4)(7.9%)23,743Net interest-bearing debt ………………….2,283.02,601.4(318.4)(12.2%)18,654Total shareholders’ equity ………………..4,199.33,316.3883.026.6%34,311Ratio of shareholders’ equityto total assets ………………………………….34.6%29.7%Increased4.9ptNET DER (times) ……………………………0.540.78Improved0.24pt(a) Consolidated Financial Position(i) Total assetsIncreased by 8.7%, or 975.2 billion yen, compared to March 31, 2021 to 12,153.7 billion yen (99,303 million U.S. dollars), due to the impact of the depreciation of the yen, the increase in trade receivables and inventories resulting from the increase of trading transactions and higher market prices, and the increase in investments accounted for by the equity method, partially offset by the decrease due to the partial sale of Taiwan FamilyMart.(ii) Net interest-bearing debt (interest-bearing debt after deducting cash and cash equivalents and time deposits)Decreased by 12.2%, or 318.4 billion yen, compared to March 31, 2021 to 2,283.0 billion yen (18,654 million U.S. dollars), due to the stable performance in operating revenues and sales of investments, partially offset by dividend payments and share buybacks.Interest-bearing debt decreased by 7.9%, or 249.4 billion yen, compared to March 31, 2021 to 2,905.9 billion yen (23,743 million U.S. dollars).(iii) Total shareholders’ equityIncreased by 26.6%, or 883.0 billion yen, compared to March 31, 2021 to 4,199.3 billion yen (34,311 million U.S. dollars), due to net profit attributable to ITOCHU during this fiscal year and the impact of the depreciation of the yen, partially offset by dividend payments and share buybacks.(iv) Ratio of shareholders’ equity to total assets and NET DERRatio of shareholders’ equity to total assets increased by 4.9 points compared to March 31, 2021 to 34.6%. NET DER (net debt-to-shareholders’ equity ratio) improved by 0.24 points compared to March 31, 2021 to 0.54 times.- 9 -Billions of YenMillions ofU.S. Dollars202220212022Cash flows from operating activities …………….801.2895.96,546Cash flows from investing activities ……………..38.6(207.3)316Free cash flows…………………………………………839.8688.66,862Cash flows from financing activities …………….(846.7)(728.8)(6,918)(b) Consolidated Cash Flows(i) Cash flows from operating activitiesRecorded a net cash-inflow of 801.2 billion yen (6,546 million U.S. dollars), due to the stable performance in operating revenues in The 8th, Metals & Minerals, Energy & Chemicals and Food Companies.(ii) Cash flows from investing activitiesRecorded a net cash-inflow of 38.6 billion yen (316 million U.S. dollars), due to the partial sale of Pan Pacific International Holdings Corporation, the sale of Japan Brazil Paper & Pulp Resources Development and Paidy, partially offset by the purchase of fixed assets by Food, The 8th and Machinery Companies, and the decrease in cash as the conversion of Taiwan FamilyMart into an investment accounted for by the equity method from a consolidated subsidiary accompanying the partial sale.(iii) Cash flows from financing activitiesRecorded a net cash-outflow of 846.7 billion yen (6,918 million U.S. dollars), due to the repayment of borrowings and lease liabilities in addition to dividend payments and share buybacks.As a result of cash flows above and the impact of the depreciation of the yen, “Cash and cash equivalents” as of March 31, 2022 increased by 67.7 billion yen compared to March 31, 2021 to 611.7 billion yen (4,998 million U.S. dollars).- 10 -2. Summary Information (Notes)(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanyingchanges in the consolidation scope) : None(a) Changes in accounting policies required by IFRSNone(b) Other changesNone(c) Changes in accounting estimatesNone(2) Changes in accounting policies and accounting estimatesWith regards to the impact from the Russia-Ukraine situation, ITOCHU Group has exposure including resource-related investments in Russia, the ratio of them to our total assets is less than 1% as of the end of this fiscal year. In fair value measurement of resource-related investments, we use certain assumptions such as commodity prices and discount rate. Even if the assumptions change to the extent rationally possible, we do not expect a material impact on our operating results and financial position. In addition, we also do not expect a material impact on our subsidiaries and associates operating automobile-related business and aircraft-leasing-related business in Russia and Ukraine.Regarding COVID-19, we expect the impact will decrease in the fiscal year ending March 31, 2023 compared to the fiscal year ended March 31, 2022 though it remains uncertain that the pandemic around the world can be contained.- 11 -(Unit: Billion yen)FYE 2023 PlanMajor Indicators (Apr-Mar)Precondition FYE 2023Gross trading profit2,020.0Foreign exchange rate (Yen/US$)120Selling, general and administrative expenses(1,421.0)Interest (JPY 3M TIBOR) (%)0.1Provision for doubtful accounts(9.0)Interest (US$ 3M LIBOR) (%)2.5Trading income590.0Crude oil (Brent) (US$/BBL)90Net interest expenses(21.0)Iron ore (CFR China) (US$/ton)N.A.(Note)Dividends received94.0Equity in earnings of associates and joint ventures300.0Others27.0Profit before tax990.0Income tax expense(220.0)Net profit770.0Net profit attributable non-controlling interests(70.0)Net profit attributable to ITOCHU700.03. Outlook for the Fiscal Year Ending March 31, 2023Regarding the business outlook for the fiscal year ending March 31, 2023, with a high level of uncertainty surrounding Russia’s invasion of Ukraine, there are concerns that the surge in international commodity prices and supply chain disruptions will persist and continue to place downward pressure on the global economy through higher prices. Additionally, although an increasing number of countries are lifting restrictions on the movement of people, there is no guarantee that the COVID-19 pandemic can be contained, and the risk remains that a resurgence in the spread of infections could restrict economic activity. We therefore recognize that there are a range of uncertain factors in the future business outlook.Amid such conditions, the U.S. dollar-yen exchange rate is expected to remain yen weakness in the near future with U.S. interest rates projected to continue rising. In addition, crude oil prices are expected to remain high in the near future due to the unstable supply-demand environment caused by economic sanctions against Russia.Under these management circumstances, we will strongly realize business transformation and steadily increase core profit by promoting our basic policy “Realizing business transformation by shifting to a market-oriented perspective” and “Enhancing our contribution to and engagement with the SDGs through business activities” of “Brand-new Deal 2023”. We expect consolidated net profit attributable to ITOCHU of 700.0 billion yen for the fiscal year ending March 31, 2023.(Note) The prices of iron ore used in the FYE 2023 Plan are assumptions made in consideration of general transaction prices based on the market.The actual prices are not presented, as they are subject to negotiation with individual customers and vary by ore type.These plans are forward-looking statements that are based on management’s assumptions and beliefs based on information currently available and involve risks and uncertainties. Thus, the actual results could be substantially different from the above statements due to such factors including, but not limited to, global economic and market conditions, and currency exchange rate fluctuations.- 12 -4. Shareholder Returns Policy / Distribution of ProfitShareholder Returns PolicyITOCHU continues the progressive dividend policy during Medium-Term Management Plan “Brand-new Deal 2023” and implements incremental increases to the minimum dividend. Meanwhile, we commit to a payout ratio of 30% by FYE 2024, the final year of “Brand-new Deal 2023”, and have set a minimum dividend of ¥130 per share for FYE 2023, which renews the highest record.In addition, we will actively and continuously execute share buybacks as appropriate in consideration of the cash allocation situation based on market environment.Distribution of ProfitITOCHU plans to pay a dividend of ¥110 per share for the fiscal year ended March 31, 2022.(an interim dividend of ¥47 per share has been already paid)5. Basic Concept on the Selection of Accounting StandardsITOCHU Group (ITOCHU and its subsidiaries) deals with a wide variety of business with diverse range of industries through its global network. Anticipating further global expansion in the future and in order to improve the practicability and international comparability of the company’s financial information, we have prepared our consolidated financial statements in conformity with International Financial Reporting Standards (IFRS) from the annual report for the year ended March 31, 2014.- 13 -Millions of YenMillions ofU.S. Dollars202220212022Revenues:Revenues from sale of goods…………………………………………¥11,011,816¥9,156,193$89,973Revenues from rendering of services and royalties…………..1,281,5321,206,43510,471Total revenues……………………………………………………………..12,293,34810,362,628100,444Cost:Cost of sale of goods……………………………………………………(9,696,532)(7,989,246)(79,226)Cost of rendering of services and royalties……………………..(659,651)(592,635)(5,390)Total cost……………………………………………………………………(10,356,183)(8,581,881)(84,616)Gross trading profit……………………………………………………..1,937,1651,780,74715,828Other gains (losses):Selling, general and administrative expenses…………………..(1,346,720)(1,366,489)(11,004)Provision for doubtful accounts…………………………………….(7,923)(10,844)(65)Gains on investments……………………………………………………211,8514,1051,731Losses on property, plant, equipmentand intangible assets……………………………………………………(17,601)(157,524)(143)Other-net…………………………………………………………………….9,645(6,197)79Total other-losses…………………………………………………………(1,150,748)(1,536,949)(9,402)Financial income (loss):Interest income……………………………………………………………20,41223,114167Dividends received………………………………………………………80,74153,145660Interest expense…………………………………………………………..(28,976)(36,218)(237)Total financial income………………………………………………….72,17740,041590Equity in earnings of associates and joint ventures…………….291,435228,6362,381Profit before tax…………………………………………………………..1,150,029512,4759,397Income tax expense……………………………………………………….(271,056)(71,592)(2,215)Net profit……………………………………………………………………..878,973440,8837,182Net profit attributable to ITOCHU…………………………………..820,269401,4336,702Net profit attributable to non-controlling interests……………..58,70439,450480-Unaudited-6. Consolidated Financial Statements(1) Consolidated Statement of Comprehensive IncomeITOCHU Corporation and its SubsidiariesYears ended March 31, 2022 and 2021- 14 -Millions of YenMillions ofU.S. Dollars202220212022Other comprehensive income, net of tax:Items that will not be reclassified to profit or lossFVTOCI financial assets……………………………………………..¥(8,927)¥80,764$(73)Remeasurement of net defined pension liability……………..3,89712,44932Other comprehensive income in associatesand joint ventures……………………………………………………..(4,932)13,474(41)Items that will be reclassified to profit or lossTranslation adjustments………………………………………………170,109114,8791,390Cash flow hedges……………………………………………………….4,5193,47037Other comprehensive income in associatesand joint ventures……………………………………………………..105,50063,660862Total other comprehensive income, net of tax……………..270,166288,6962,207Total comprehensive income………………………………………..1,149,139729,5799,389Total comprehensive income attributable to ITOCHU………..1,086,431655,2598,877Total comprehensive income attributable tonon-controlling interests………………………………………………..62,70874,320512-Unaudited-Note 1 : The gains and losses on disposal and remeasurement of equity financial instruments, of which the changes in fair value are recorded in “Other comprehensive income”, are recognized in “FVTOCI financial assets”.Note 2 : “Trading income” is presented in accordance with Japanese accounting practices.“Trading income” = “Gross trading profit” + “Selling, general and administrative expenses”+ “Provision for doubtful accounts”Trading income for the years ended March 31, 2022 and 2021 were 582,522 million yen(4,759 million U.S. dollars) and 403,414 million yen, respectively.- 15 -AssetsMillions of YenMillions ofU.S. DollarsMar. 2022Mar. 2021Mar. 2022Current assets:Cash and cash equivalents………………………………………………………………….¥611,715¥544,009$4,998Time deposits……………………………………………………………………………………11,1859,94591Trade receivables………………………………………………………………………………2,458,9912,122,81520,092Other current receivables……………………………………………………………………236,864166,2821,935Other current financial assets……………………………………………………………..101,93244,930833Inventories……………………………………………………………………………………….1,077,160898,6928,801Advances to suppliers………………………………………………………………………..123,38280,5211,008Other current assets…………………………………………………………………………..188,727161,2561,542Assets held for sale …………………………………………………………………………..-248,861-Total current assets………………………………………………………………………..4,809,9564,277,31139,300Non-current assets:Investments accounted for by the equity method…………………………………..2,288,7621,867,77718,701Other investments……………………………………………………………………………..958,218952,3747,829Non-current receivables…………………………………………………………………….728,965658,6585,956Non-current financial assets other than investmentsand receivables………………………………………………………………………………..172,191166,6111,407Property, plant and equipment…………………………………………………………….1,936,0441,939,79115,819Investment property…………………………………………………………………………..47,74250,665390Goodwill and intangible assets……………………………………………………………1,081,6071,125,8368,837Deferred tax assets…………………………………………………………………………….54,63960,446447Other non-current assets…………………………………………………………………….75,53478,963617Total non-current assets………………………………………………………………….7,343,7026,901,12160,003Total assets…………………………………………………………………………….¥12,153,658¥11,178,432$99,303-Unaudited-(2) Consolidated Statement of Financial PositionITOCHU Corporation and its SubsidiariesAs of March 31, 2022 and 2021- 16 -Liabilities and EquityMillions of YenMillions ofU.S. DollarsMar. 2022Mar. 2021Mar. 2022Current liabilities:Short-term debentures and borrowings……………………………………………….¥522,448¥710,213$4,269Lease liabilities (short-term)……………………………………………………………..235,791238,4461,926Trade payables…………………………………………………………………………………1,967,1171,628,76616,072Other current payables……………………………………………………………………..210,857199,7571,723Other current financial liabilities………………………………………………………..83,72440,172684Current tax liabilities………………………………………………………………………..74,02657,370605Advances from customers…………………………………………………………………132,51384,6991,083Other current liabilities……………………………………………………………………..424,071374,4893,465Liabilities held for sale……………………………………………………………………..-220,722-Total current liabilities ……………………………………………………………..3,650,5473,554,63429,827Non-current liabilities:Long-term debentures and borrowings……………………………………………….2,383,4552,445,09919,474Lease liabilities (long-term)………………………………………………………………775,180825,1706,334Other non-current financial liabilities…………………………………………………58,21753,483476Non-current liabilities for employee benefits……………………………………….103,975116,631850Deferred tax liabilities………………………………………………………………………250,999150,2752,051Other non-current liabilities………………………………………………………………167,585162,9001,369Total non-current liabilities ……………………………………………………….3,739,4113,753,55830,554Total liabilities ……………………………………………………………………………..7,389,9587,308,19260,381Equity:Common stock:Authorized: 3,000,000,000 shares;issued: 1,584,889,504 shares………………………………………………………….253,448253,4482,071Capital surplus………………………………………………………………………………….(161,917)(155,210)(1,323)Retained earnings……………………………………………………………………………..3,811,9913,238,94831,146Other components of equity:Translation adjustments………………………………………………………………….383,215131,6123,131FVTOCI financial assets………………………………………………………………..146,63838,7401,198Cash flow hedges…………………………………………………………………………..7,154(9,897)59Total other components of equity……………………………………………537,007160,4554,388Treasury stock…………………………………………………………………………………..(241,204)(181,360)(1,971)Total shareholders’ equity……………………………………………………..4,199,3253,316,28134,311Non-controlling interests……………………………………………………………………564,375553,9594,611Total equity…………………………………………………………………………………..4,763,7003,870,24038,922Total liabilities and equity………………………………………………………..¥12,153,658¥11,178,432$99,303-Unaudited– 17 -(Unit: Millions of Yen)Shareholders’ equityNon-controllinginterestsTotalequityCommon stockCapital surplusRetained earningsOthercomponentsof equityTreasurystockTotalshareholders’equityBalance on Apr. 1, 2021¥253,448¥(155,210)¥3,238,948¥160,455¥(181,360)¥3,316,281¥553,959¥3,870,240Net profit820,269820,26958,704878,973Other comprehensive income266,162266,1624,004270,166Total comprehensive income820,269266,1621,086,43162,7081,149,139Cash dividends to shareholders(135,356)(135,356)(135,356)Cash dividends to non-controlling interests-(20,897)(20,897)Net change in acquisition (disposition) of treasury stock(59,844)(59,844)(59,844)Net change in sale (purchase) of subsidiary shares to (from) non-controlling interests(6,707)(1,480)(8,187)(31,395)(39,582)Transfer to Retained earnings(111,870)111,870–Balance on Mar. 31, 2022253,448(161,917)3,811,991537,007(241,204)4,199,325564,3754,763,700(Unit: Millions of Yen)Shareholders’ equityNon-controlling interestsTotalequityCommon stockCapital surplusRetained earningsOther componentsof equityTreasurystockTotal shareholders’ equityBalance on Apr. 1, 2020¥253,448¥50,677¥2,948,135¥(88,971)¥(167,338)¥2,995,951¥844,658¥3,840,609Net profit401,433401,43339,450440,883Other comprehensive income253,826253,82634,870288,696Total comprehensive income401,433253,826655,25974,320729,579Cash dividends to shareholders(129,008)(129,008)(129,008)Cash dividends to non-controlling interests-(27,832)(27,832)Net change in acquisition (disposition) of treasury stock(14,022)(14,022)(14,022)Net change in sale (purchase) of subsidiary shares to (from) non-controlling interests(205,887)13,988(191,899)(337,187)(529,086)Transfer to Retained earnings18,388(18,388)–Balance on Mar. 31, 2021253,448(155,210)3,238,948160,455(181,360)3,316,281553,9593,870,240(Unit: Millions of U.S. Dollars)Shareholders’ equityNon-controllinginterestsTotalequityCommon stockCapital surplusRetained earningsOthercomponentsof equityTreasurystockTotalshareholders’equityBalance on April 1, 2021$2,071$(1,268)$26,464$1,311$(1,482)$27,096$4,526$31,622Net profit6,7026,7024807,182Other comprehensive income2,1752,175322,207Total comprehensive income6,7022,1758,8775129,389Cash dividends to shareholders(1,106)(1,106)(1,106)Cash dividends to non-controlling interests-(171)(171)Net change in acquisition (disposition) of treasury stock(489)(489)(489)Net change in sale (purchase) of subsidiary shares to (from) non-controlling interests(55)(12)(67)(256)(323)Transfer to Retained earnings(914)914–Balance on Mar. 31, 20222,071(1,323)31,1464,388(1,971)34,3114,61138,922-Unaudited-(3) Consolidated Statement of Changes in EquityITOCHU Corporation and its SubsidiariesYears ended March 31, 2022 and 2021- 18 -Millions of YenMillions ofU.S. Dollars202220212022Cash flows from operating activities:Net profit………………………………………………………………………………………..¥878,973¥440,883$7,182Adjustments to reconcile net profit to net cashprovided by operating activitiesDepreciation and amortization………………………………………………………..404,184424,2973,302(Gains) losses on investments…………………………………………………………(211,851)(4,105)(1,731)(Gains) losses on property, plant, equipmentand intangible assets……………………………………………………………………17,601157,524143Financial (income) loss…………………………………………………………………..(72,177)(40,041)(590)Equity in earnings of associates and joint ventures…………………………….(291,435)(228,636)(2,381)Income tax expense……………………………………………………………………….271,05671,5922,215Provision for doubtful accounts and other provisions…………………………(2,836)30,504(23)Changes in assets and liabilities, other-net………………………………………..(241,650)58,976(1,974)Proceeds from interest………………………………………………………………………19,70624,142161Proceeds from dividends…………………………………………………………………..201,532144,7321,647Payments for interest………………………………………………………………………..(29,807)(39,412)(244)Payments for income taxes………………………………………………………………..(142,133)(144,556)(1,161)Net cash provided by (used in) operating activities……………………….801,163895,9006,546Cash flows from investing activities:Net change in investments accounted for by the equity method……………..67,043(20,694)548Net change in other investments………………………………………………………..83,344(50,913)681Net change in loans receivable…………………………………………………………..15,67223,300128Net change in property, plant, equipment and intangible assets……………..(124,883)(152,583)(1,020)Net change in time deposits……………………………………………………………….(2,539)(6,406)(21)Net cash provided by (used in) investing activities……………………….38,637(207,296)316Cash flows from financing activities:Net change in debentures and loans payable………………………………………..(349,350)251,606(2,854)Repayments of lease liabilities…………………………………………………………..(266,974)(277,493)(2,181)Cash dividends…………………………………………………………………………………(135,356)(129,008)(1,106)Net change in treasury stock………………………………………………………………(60,036)(14,266)(491)Other………………………………………………………………………………………………(34,990)(559,606)(286)Net cash provided by (used in) financing activities……………………….(846,706)(728,767)(6,918)Net change in cash and cash equivalents…………………………………………….(6,906)(40,163)(56)Cash and cash equivalents at the beginning of the year (Openingbalance on the consolidated statement of financial position)…………………..544,009611,2234,445Reclassification of cash and cash equivalents included inassets held for sale in the opening balance……………………………………………44,331-362Cash and cash equivalents at the beginning of the year……………………………588,340611,2234,807Effect of exchange rate changes on cash and cash equivalents………………….30,28117,280247Cash and cash equivalents included in assets held for sale……………………….-(44,331)-Cash and cash equivalents at the end of the year………………………………..¥611,715¥544,009$4,998-Unaudited-(4) Consolidated Statement of Cash FlowsITOCHU Corporation and its SubsidiariesYears ended March 31, 2022 and 2021- 19 –Unaudited-(5) Assumption for Going Concern: NoneFor the year ended March 31, 2022 (April 1, 2021 -March 31, 2022)Millions of YenTextileMachineryMetals&MineralsEnergy&ChemicalsFoodGeneral Products&RealtyICT&FinancialBusinessThe 8thOthers,Adjustments&EliminationsConsolidatedtotalRevenues:Revenues from external customers…¥444,750¥1,193,976¥1,043,071¥2,864,111¥4,293,543¥1,036,990¥863,997¥457,920¥94,990¥12,293,348Intersegment revenues………………….1384-38,62411,88621,88313,0771,942(87,509)-Total revenues…………………………..444,7631,194,0601,043,0712,902,7354,305,4291,058,873877,074459,8627,48112,293,348Gross trading profit………………………..96,775205,799178,957253,050320,437190,338295,876387,5888,3451,937,165Trading income……………………………..13,66957,254162,126100,02074,22165,65178,52242,140(11,081)582,522Net profit attributable to ITOCHU…..25,14280,039225,97189,62958,988105,239104,28849,02181,952820,269[Equity in earnings ofassociates and joint ventures]………..[4,464][42,439][47,167][12,444][16,679][30,289][43,504][797][93,652][291,435]Total assets on March 31, 2022……….436,8071,302,6921,285,2581,489,2601,979,5201,126,1711,350,4141,813,7691,369,76712,153,658For the year ended March 31, 2021 (April 1, 2020 -March 31, 2021)Millions of YenTextileMachineryMetals&MineralsEnergy&ChemicalsFoodGeneral Products&RealtyICT&FinancialBusinessThe 8thOthers,Adjustments&EliminationsConsolidatedtotalRevenues:Revenues from external customers…¥435,026¥1,053,415¥657,165¥2,180,359¥3,975,295¥755,419¥751,225¥478,758¥75,966¥10,362,628Intersegment revenues………………….8750-37,1455,00318,76412,9081,971(75,928)-Total revenues…………………………..435,1131,053,465657,1652,217,5043,980,298774,183764,133480,7293810,362,628Gross trading profit………………………..89,521173,596110,380228,225331,192147,440280,579418,8199951,780,747Trading income……………………………..7,58424,69692,45579,49174,01334,91966,90141,750(18,395)403,414Net profit attributable to ITOCHU…..1,60922,830104,07836,06625,03221,27058,13421,267111,147401,433[Equity in earnings ofassociates and joint ventures]…………[2,003][25,621][22,612][11,010][12,276][5,206][39,134][(443)][111,217][228,636]Total assets on March 31, 2021……….418,7201,124,873913,5821,279,2101,799,3201,036,6821,236,7772,280,4721,088,79611,178,432For the year ended March 31, 2022 (April 1, 2021 -March 31, 2022)Millions ofU.S. DollarsTextileMachineryMetals&MineralsEnergy&ChemicalsFoodGeneral Products&RealtyICT&FinancialBusinessThe 8thOthers,Adjustments&EliminationsConsolidatedtotalRevenues:Revenues from external customers…$3,634$9,755$8,523$23,402$35,081$8,473$7,059$3,741$776$100,444Intersegment revenues………………….01-3159717910716(715)-Total revenues…………………………..3,6349,7568,52323,71735,1788,6527,1663,75761100,444Gross trading profit………………………..7911,6821,4622,0682,6181,5552,4173,1676815,828Trading income……………………………..1124681,325817606536642344(91)4,759Net profit attributable to ITOCHU…..2056541,8467324828608524016706,702[Equity in earnings ofassociates and joint ventures]…………[36][347][385][102][136][248][355][7][765][2,381]Total assets on March 31, 2022……….3,56910,64410,50112,16816,1749,20111,03414,82011,19299,303(6) Notes to Consolidated Financial Statements(Operating Segment Information)ITOCHU Corporation and its SubsidiariesYears ended March 31, 2022 and 2021Information concerning operations in different operating segments for the years ended March 31, 2022 and 2021 is as follows:Note 1 : “Equity in earnings of associates and joint ventures” is included in “Net profit attributable to ITOCHU”.Note 2 : “Trading income” = “Gross trading profit” + “Selling, general and administrative expenses” + “Provision for doubtful accounts”Note 3 : “Others, Adjustments & Eliminations” includes gains and losses, which do not belong to any operating segment and internal eliminations between operating segments. The investments in CITIC Limited and C.P. Pokphand Co. Ltd. and the profits and losses from them are included in this segment.- 20 -(Unit: Yen)20222021ITOCHU shareholders’ equity per share2,857.502,232.84Earnings per share attributable to ITOCHU (basic)552.86269.83Earnings per share attributable to ITOCHU (diluted)–(Numerator)(Unit: Millions of Yen)20222021Net profit attributable to ITOCHU820,269401,433Effect of dilutive securities–Net profit attributable to ITOCHU (diluted)820,269401,433(Denominator)(Unit: Share)20222021Average number of common shares outstanding1,483,691,8511,487,730,085-Unaudited-(Per Share Information) The following is the information on ITOCHU shareholders’ equity per share and earnings per share attributable to ITOCHU for the years ended March 31, 2022 and 2021. The base data to calculate the basic and diluted earnings per share attributable to ITOCHU for March 31, 2022 and 2021 are as follows:(Material Subsequent Events)None