日鉄物産（9810） – [Delayed]Summary of Consolidated Financial Results for Fiscal Year Ended March 31, 2022

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation, nor for direct, indirect, or any other form of damages that may arise from use of this translation. Summary of Consolidated Financial Results for Fiscal Year Ended March 31, 2022 (Japanese GAAP) May 11, 2022 Stock Exchange: Tokyo Yasumitsu Saeki, President and Representative Director +81-(0)3-6772-5003 NIPPON STEEL TRADING CORPORATION 9810 https://www.nst.nipponsteel.com/en/ Listed company name: Code No.: URL: Representative name: Tel. Scheduled ordinary general meeting of shareholders: June 24, 2022 June 27, 2022 Start of cash dividend payments: June 24, 2022 Securities report to be submitted: Yes (Japanese only) Supplementary materials: Yes (for institutional investors and analysts; Japanese IR conference: only) 1. Consolidated Earnings through the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, (Figures rounded down to nearest million yen) 2022) (1) Consolidated Operating Results (%: change from the previous year) Net sales Operating profit Ordinary profit Millions of yen % Millions of yen % Millions of yen % Millions of yen FYE March 31, 2022 1,865,907 46.8 FYE March 31, 2021 1,271,050 − 44,627 22,361 99.6 − 47,810 25,772 85.5 − Profit attributable to owners of parent 35,417 121.5 15,992 % − Note: Comprehensive income FYE March 31, 2022 FYE March 31, 2021 ¥39,806 million (86.7%) ¥21,321 million (−%) Earnings per share Return on equity Diluted earnings per share Ordinary profit/total assets Operating profit/net sales FYE March 31, 2022 FYE March 31, 2021 Yen 1,098.03 495.79 Yen − − % 13.2 6.5 % 4.8 3.0 % 2.4 1.8 Reference: Shares of profit/loss of entities accounted for using equity method FYE March 31, 2022 FYE March 31, 2021 ¥2,439 million ¥2,559 million * As we have applied the changes in the accounting policies retrospectively, the financial figures shown for the fiscal year ended March 2021 are the figures after the retrospective application. The percentage change from the previous year is not shown. Total assets Net assets Equity ratio Net assets per share Millions of yen Millions of yen 1,100,441 883,285 308,198 278,090 % 25.7 28.9 Yen 8,759.36 7,917.51 (2) Consolidated Financial Position As of March 31, 2022 As of March 31, 2021 Reference: Equity capital As of March 31, 2022 As of March 31, 2021 ¥282,534 million ¥255,389 million 2021 are the figures after the retrospective application. (3) Consolidated Cash Flows * As we have applied the changes in the accounting policies retrospectively, the financial figures shown for the fiscal year ended March Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at the end of period Millions of yen Millions of yen Millions of yen Millions of yen As of March 31, 2022 As of March 31, 2021 (113,001) 47,255 (5,327) (6,451) 100,633 (9,993) 28,818 55,881 * As we have applied the changes in the accounting policies retrospectively, the financial figures shown for the fiscal year ended March 2021 are the figures after the retrospective application. 2. Dividends Annual dividends per share 1Q 2Q 3Q Fiscal year end Total Dividends paid (total) Payout ratio (consolidated) Dividends on equity ratio (consolidated) Yen Yen Yen Yen Yen FYE March 31, 2021 FYE March 31, 2022 FYE March 31, 2023 (Est.) − − − 50.00 160.00 − − − − 110.00 160.00 190.00 350.00 − 300.00 Millions of yen 5,161 11,290 % 32.4 31.9 32.3 % 2.1 4.2 * Regarding the second quarter and year-end dividends for the fiscal year ending March 2023 (forecast), since the consolidated earnings forecast for the fiscal year ending March 2023 is prepared only for the full year, and it is not possible to forecast the interim and year-end dividends separately, only the total amount of the annual dividend is indicated. 3. Projected Consolidated Results for Fiscal Year Ending March 31, 2023 (April 1, 2022 to March 31, 2023) (%: change from the same period of the previous year) Ordinary profit Earnings per share Profit attributable to owners of parent Full fiscal year 43,000 (10.1) 30,000 (15.3) Millions of yen % Millions of yen % Yen 930.09 * Notes (1) Changes in significant subsidiaries during period (changes in specified subsidiaries resulting in changes in scope of consolidation): None (2) Changes of accounting policies, changes of accounting estimates and retrospective restatements i. Changes in accounting policies resulting from changes in accounting standards, etc.: Yes ii. Other accounting policy changes: None iii. Changes in accounting estimates: None iv. Restatements: None (3) Number of shares outstanding (common shares) i. Number of shares outstanding at the end of the period (including treasury shares) 32,307,800 shares 32,307,800 shares As of March 31, 2022 As of March 31, 2021 ii. Number of treasury shares at the end of the period As of March 31, 2022 As of March 31, 2021 52,712 shares 51,577 shares iii. Average number of shares during the period FYE March 31, 2022 FYE March 31, 2021 32,255,655 shares 32,257,181 shares (Reference) Overview of Non-consolidated Financial Results Non-consolidated Results for Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022) (1) Non-consolidated Operating Results (%: change from the previous year) Net sales Operating profit Ordinary profit Profit Millions of yen % Millions of yen % Millions of yen % Millions of yen FYE March 31, 2022 1,245,531 51.6 FYE March 31, 2021 821,843 − 24,284 14,714 65.0 − 30,430 20,113 51.3 − 23,663 15,750 % 50.2 − FYE March 31, 2022 FYE March 31, 2021 Earnings per share Diluted earnings per share Yen 733.54 488.24 Yen − − * As we have applied the changes in the accounting policies retrospectively, the financial figures shown for the fiscal year ended March 2021 are the figures after the retrospective application. The percentage change from the previous year is not shown. (2) Non-consolidated Financial Condition Total assets Net assets Equity ratio Net assets per share Millions of yen Millions of yen 835,470 686,470 197,023 186,222 % 23.6 27.1 Yen 6,107.72 5,772.70 As of March 31, 2022 As of March 31, 2021 Reference: Equity capital As of March 31, 2022 As of March 31, 2021 ¥197,023 million ¥186,222 million 2021 are the figures after the retrospective application. * As we have applied the changes in the accounting policies retrospectively, the financial figures shown for the fiscal year ended March As the business environment for the Steel Business has recovered accompanying the recovery of demand for steel domestically and abroad, there has been a difference between the actual results for the previous fiscal year and the actual results for the fiscal year under audit. * Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation. * Explanation for the proper use of earnings projections, and other special matters (Caution on description of future events, etc.) The preceding projections are based on information available at the time of the publication of these materials, and are not intended as pledges on the part of the Company that the said projections will be achieved. Actual results may differ materially from projections due to various factors that may occur in the future. For the assumptions on which these earnings projections were based, see “1. Overview of Operating Results and Others, (1) Outline of Operating Results for the Fiscal Year” on page 2 of the attachment. (How to acquire supplementary materials) Supplementary materials were published on TDnet as of May 11, 2022, and they were published on the Group’s website on the same date. (How to acquire materials for briefing session) The Company has scheduled a briefing session for institutional investors and analysts on May 24, 2022. Soon after the session is over, the presentation materials distributed during the event will be posted on the Company’s website (Japanese only). NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 Index of attached documents 1. Overview of Operating Results and Others ……………………………………………………………………………………………………… 2 (1) Outline of Operating Results for the Fiscal Year ………………………………………………………………………………………………2 (2) Overview of Financial Position for the Fiscal Year …………………………………………………………………………………………..3 (3) Basic Policy on Distribution of Profits, and Dividends in Period under Review and Subsequent Period …………………..4 2. Basic Philosophy for Selecting Accounting Standards ………………………………………………………………………………………….. 4 3. Consolidated Financial Statements and Significant Notes Thereto ……………………………………………………………………. 5 (1) Consolidated Balance Sheets …………………………………………………………………………………………………………………………5 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ………………………………..7 (3) Consolidated Statements of Changes in Equity ………………………………………………………………………………………………..9 (4) Consolidated Statements of Cash Flows ……………………………………………………………………………………………………….. 11 (5) Consolidated Financial Statements and Significant Notes Thereto ……………………………………………………………………. 13 (Notes on Going Concern Assumption) ………………………………………………………………………………………………………… 13 (Changes in Accounting Policies) ………………………………………………………………………………………………………………… 13 (Additional Information) …………………………………………………………………………………………………………………………….. 13 (Segment Information, etc.) ………………………………………………………………………………………………………………………… 14 (Per Share Information) ……………………………………………………………………………………………………………………………… 19 (Subsequent Events) ………………………………………………………………………………………………………………………………….. 19 – 1 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 1. Overview of Operating Results and Others (1) Outline of Operating Results for the Fiscal Year Forward-looking statements in this document are based on the Group’s views as of the end of the fiscal year under audit. The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations have been applied from the beginning of the fiscal year. The Company has compared with the previous fiscal year, and analyzed the data using the figures after retrospectively applying the accounting standard and relevant ASBJ regulations. A. Operating Results for the Fiscal Year The world economy in the fiscal year under audit generally recovered due to the progress of measures against COVID-19 in the first half, but in the second half, the economy slowed down remarkably due to the invasion of Ukraine by Russia in addition to the labor shortage resulting from the renewed spread of COVID-19 with variants. Regarding the Japanese economy, although there was a recovery from the previous fiscal year, the recovery was slow due to a decrease in automobile production caused by restrictions on the supply of semiconductors, and consumer sentiment cooled due to the rapid increase in the number of people infected with COVID-19 in the winter, resulting in a continued slump in personal consumption. In this business environment, aiming at overcoming structural changes in the business environment for the future and becoming a “strong growth company that contributes to society” through the supply of socially valuable products and services, the Group has been working on measures based on the medium- to long-term management plan formulated in May 2021. The Group’s consolidated earnings, as compared with the previous fiscal year, were as follows: Net sales were ¥1,865.9 billion, up ¥594.8 billion (46.8%). Operating profit was ¥44.6 billion, up ¥22.2 billion (99.6%) and ordinary profit was ¥47.8 billion, up ¥22.0 billion (85.5%). Profit attributable to owners of parent was ¥35.4 billion, up ¥19.4 billion (121.5%). The Group recorded all-time-highs both in ordinary profit and profit attributable to owners of parent. Earnings for reportable segments are as below. (Steel) The business environment for the Steel business improved as demand for steel products recovered in Japan and overseas, and steel prices rose significantly compared to the previous fiscal year due to improvements in the supply-demand balance and steep rise in raw material prices. Ordinary profit for the Steel business, increased by 2.3 times or ¥24.0 billion, to ¥43.2 billion, due to the effects of promoting growth strategies and strengthening the business foundation, as well as the increase in sales volume and the gain on inventory sales when steel prices went up. (Industrial Supply and Infrastructure) In the Industrial Supply and Infrastructure business, although sales of high-performance materials such as aluminum increased, the business environment in the automobile parts business, which was affected by the decrease in production of manufacturers, continued to be severe. Ordinary profit in the Industrial Supply and Infrastructure business decreased by 17%, or ¥400 million year on year, to ¥2.1 billion, partially caused by the deterioration of earnings of Group companies. (Textiles) In the business environment surrounding the Textiles business, in addition to the structural contraction of the domestic apparel market, clothing sales declined due to the impact of more people refraining from going out and the increase in telecommuting accompanying measures to prevent the spread of COVID-19. Also, with the impact of cost increases resulting from transferring production to other regions to shorten delivery times and a steep rise in distribution costs, the difficult business conditions continued. The Textiles business posted an ordinary loss of ¥500 million, down ¥2.2 billion year on year. The Group has been working toward reinforcement of our business foundation and promotion of growth strategies including establishment of MN Inter-Fashion Ltd. through the integration of our textiles business with the textiles business of Mitsui & Co., Ltd in January 2022. – 2 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 (Foodstuffs) Although the business environment surrounding the Foodstuffs business continued to be severe due to the effects of restaurant closures and shortened business hours, in terms of business performance, as a result of implementing growth strategies that include capturing demand for ready-made takeout meals, ordinary profit of our Foodstuffs business increased 24%, or ¥500 million year on year, to ¥2.9 billion. B. Future Projection Regarding the global economy in FY2022, the situation is uncertain with concerns about the progress of inflation and the slowdown of economic growth due to the steep rise in prices of resources and materials and the deterioration of trade conditions due to the crisis in Ukraine, as well as the prolonged supply chain constraints caused by the COVID-19 pandemic. The Group aims to contribute to society and improve corporate value by promoting various measures of the medium- to long-term management plan and implementing necessary reinforcement measures, overcoming changes in the business environment, and supplying socially valuable products and services. For the fiscal year ending March 31, 2023, ordinary profit is projected to be ¥43.0 billion, and profit attributable to owners of parent is projected to be ¥30.0 billion. (2) Overview of Financial Position for the Fiscal Year A. Assets, Liabilities and Net Assets Total assets at the end of the fiscal year under audit increased by ¥217.1 billion from the end of the previous fiscal year to ¥1,100.4 billion, due mainly to an increase in accounts receivable – trade resulting from an increase in net sales. Interest-bearing debts increased by ¥117.2 billion from the end of the previous fiscal year to ¥415.6 billion, due to increases in working capital. As a result of posting profit attributable to owners of parent, total net assets increased by ¥30.1 billion from the end of the previous fiscal year to ¥308.1 billion. Shareholders’ equity at the end of the fiscal year was ¥282.5 billion, yielding an equity ratio of 25.7%, and a net interest-bearing debts to equity ratio (net debt-to-equity ratio) of 1.36. B. Cash Flows Cash and cash equivalents at the end of the fiscal year under audit decreased by ¥27.0 billion from the end of the previous fiscal year to ¥28.8 billion. Net cash used in operating activities in the fiscal year was ¥113.0 billion. The main factors in this decrease in funds were increases in trade receivables of ¥134.5 billion and inventories of ¥93.7 billion, while the main factors leading to an increase in funds were an increase in trade payables of ¥65.8 billion and posting profit before income taxes of ¥52.1 billion. Net cash used in investment activities was ¥5.3 billion. The main factor in cash outflows was ¥5.2 billion in purchase of property, plant and equipment. The main factor in cash inflows was proceeds from sale of investment securities of ¥4.2 billion. Net cash provided by financing activities was ¥100.6 billion. The main factors in cash inflows were an increase in short-term borrowings of ¥72.5 billion and an increase in commercial papers of ¥39.0 billion. The main factor in cash outflows was dividends paid of ¥8.7 billion. – 3 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 C. Cash Flow Indicators Equity ratio (%) Equity ratio, market value basis (%) Interest-bearing debts/Cash flow ratio (year) Interest coverage ratio (times) FYE March 31, 2019 FYE March 31, 2020 FYE March 31, 2021 FYE March 31, 2022 24.0 15.1 35.1 2.2 27.6 13.7 7.6 9.6 28.9 14.8 6.3 19.3 25.7 15.6 – – (Note) Equity ratio (%): Equity capital/Total assets Equity ratio, market value basis (%): Market capitalization/Total assets Interest-bearing debts/Cash flow ratio (year): Interest-bearing debts/Cash flows from operating activities Interest coverage ratio (times): Cash flows from operating activities/Interest payments * All calculations are based on consolidated financial figures. * Market capitalization is calculated by multiplying the closing stock price at fiscal year end by the number of shares outstanding at fiscal year end (minus treasury shares). * Cash flows from operating activities are taken from the Consolidated Statements of Cash Flows. * Interest-bearing debts include all those on the Consolidated Balance Sheet on which interest is being paid. * Interest payments are taken from the Consolidated Statements of Cash Flows. (3) Basic Policy on Distribution of Profits, and Dividends in Period under Audit and Subsequent Period The Company regards the return of profits to shareholders as one of the top priorities of corporate management, and aims at a consolidated payout ratio of at least 30%, while improving its financial condition. As for the year-end dividend for the fiscal year under audit, based on this Basic Policy, the Company will submit a proposal for the Ordinary General Meeting of Shareholders to pay ¥190 per share (together with the interim dividend of ¥160 per share, the yearly dividend will come to ¥350 per share with a payout ratio of 31.9%). As for the dividend of surplus in the next fiscal year, the Company is planning to distribute ¥300 per share for the whole year. 2. Basic Philosophy for Selecting Accounting Standards The Group plans to continue adopting the Japanese Accounting Standards, while giving consideration to inter-period and inter-company comparability. With respect to the application of IFRS (International Financial Reporting Standards), the Group will decide whether to apply IFRS at the appropriate time based on the situation in Japan and overseas. – 4 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 3. Consolidated Financial Statements and Significant Notes Thereto (1) Consolidated Balance Sheets Previous Fiscal Year (As of March 31, 2021) Current Fiscal Year (As of March 31, 2022) (Millions of yen) Assets Current assets Cash and deposits Notes and accounts receivable – trade Notes receivable – trade Electronically recorded monetary claims – operating Accounts receivable – trade Inventories Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures, net Machinery, equipment and vehicles, net Tools, furniture and fixtures, net Land Leased assets, net Construction in progress Total property, plant and equipment Intangible assets Goodwill Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Retirement benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets 56,857 542,576 – – – 113,143 20,337 (1,413) 731,502 20,131 12,664 1,648 23,864 2,244 1,193 61,747 326 584 910 73,963 33 2,089 2,478 13,435 (2,875) 89,125 151,783 883,285 30,559 – 51,144 116,085 511,374 200,104 28,155 (1,428) 935,995 21,351 12,785 1,500 23,962 1,179 970 61,750 233 680 913 85,545 367 1,629 2,829 14,408 (2,998) 101,781 164,445 1,100,441 – 5 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 Previous Fiscal Year (As of March 31, 2021) Current Fiscal Year (As of March 31, 2022) (Millions of yen) 255,025 87,482 46,000 – 979 4,705 4,151 22 28,792 427,159 80,000 84,915 1,341 2,470 721 617 3,297 4,671 178,035 605,195 16,389 54,492 175,270 (158) 245,993 7,184 (71) 1,784 498 9,395 22,701 278,090 883,285 312,316 169,581 85,000 15,000 327 9,703 4,659 62 39,180 635,831 65,000 81,019 859 832 512 – 3,398 4,787 156,410 792,242 16,389 54,358 201,960 (164) 272,543 3,770 16 5,765 437 9,990 25,664 308,198 1,100,441 Liabilities Current liabilities Notes and accounts payable – trade Short-term borrowings Commercial papers Current portion of bonds payable Lease liabilities Income taxes payable Provision for bonuses Provision for loss on liquidation of subsidiaries and associates Other Total current liabilities Non-current liabilities Bonds payable Long-term borrowings Lease liabilities Deferred tax liabilities Provision for retirement benefits for directors (and other officers) Provision for loss on guarantees Retirement benefit liability Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets – 6 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Consolidated Statements of Income) (Millions of yen) Previous Fiscal Year (April 1, 2020 to March 31, 2021) Current Fiscal Year (April 1, 2021 to March 31, 2022) 1,271,050 1,150,267 120,782 98,420 22,361 1,865,907 1,705,635 160,272 115,644 44,627 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method Purchase discounts Other Total non-operating income Non-operating expenses Interest expenses Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Gain on sales of investments in capital Gain on change in equity Reversal of provision for loss on guarantees Total extraordinary income Extraordinary losses Impairment losses Loss on sale of investment securities Loss on valuation of investment securities Loss on sales of investments in capital Loss on valuation of investments in capital Loss on liquidation of subsidiaries and associates Provision for loss on guarantees Loss on termination of retirement benefit plan Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent – 7 – 400 1,116 2,559 426 2,527 7,030 2,439 1,180 3,620 25,772 478 784 – – – 1,263 – 23 651 3 714 – 617 51 2,061 24,974 8,307 (537) 7,770 17,204 1,211 15,992 368 1,345 2,439 629 2,471 7,254 2,684 1,387 4,071 47,810 – 1,032 15 3,749 86 4,884 31 179 225 41 76 38 – – 592 52,102 14,489 (765) 13,723 38,378 2,961 35,417 (Consolidated Statements of Comprehensive Income) Profit Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 Previous Fiscal Year (April 1, 2020 to March 31, 2021) Current Fiscal Year (April 1, 2021 to March 31, 2022) (Millions of yen) 17,204 5,056 299 (2,040) 1,444 (642) 4,116 21,321 20,520 801 38,378 (3,525) 86 4,515 (37) 388 1,427 39,806 36,012 3,794 – 8 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 (3) Consolidated Statements of Changes in Equity Previous Fiscal Year (April 1, 2020 to March 31, 2021) (Millions of yen) Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Shareholders’ equity Balance at beginning of period 16,389 54,689 160,669 (153) 231,594 (215) (215) Restated balance 16,389 54,689 160,454 (153) 231,379 0 (235) 37 (4,355) 15,992 89 3,089 (5) 0 Total changes during period Balance at end of period – 16,389 (197) 54,492 14,816 175,270 (5) (158) 14,613 245,993 Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Balance at beginning of period 2,168 (371) 3,989 (940) 4,845 18,437 254,877 Restated balance 2,168 (371) 3,989 (940) 4,845 18,437 254,662 – 9 – 5,015 5,015 7,184 300 300 (71) (2,204) (2,204) 1,784 1,439 1,439 498 4,550 4,550 9,395 4,263 8,814 4,263 23,428 22,701 278,090 Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Change in scope of equity method Difference on change in equity Net changes in items other than shareholders’ equity Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Change in scope of equity method Difference on change in equity Net changes in items other than shareholders’ equity Total changes during period Balance at end of period (4,355) 15,992 (5) 0 (145) 3,089 37 (215) (4,355) 15,992 (5) 0 (145) 3,089 37 NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 Current Fiscal Year (April 1, 2021 to March 31, 2022) (Millions of yen) Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Shareholders’ equity Balance at beginning of period 16,389 54,492 175,270 (158) 245,993 Restated balance 16,389 54,492 175,270 (158) 245,993 0 (134) (8,709) 35,417 (17) (6) 0 Total changes during period Balance at end of period – 16,389 (134) 54,358 26,690 201,960 (5) (164) 26,550 272,543 Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Balance at beginning of period 7,184 (71) 1,784 498 9,395 22,701 278,090 Restated balance 7,184 (71) 1,784 498 9,395 22,701 278,090 (3,413) (3,413) 3,770 88 88 16 3,980 3,980 5,765 (60) (60) 437 594 594 2,963 3,558 2,963 30,108 9,990 25,664 308,198 Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Difference on change in equity Net changes in items other than shareholders’ equity Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Difference on change in equity Net changes in items other than shareholders’ equity Total changes during period Balance at end of period – (8,709) 35,417 (6) 1 (17) (134) – (8,709) 35,417 (6) 1 (17) (134) – 10 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 (4) Consolidated Statements of Cash Flows Previous Fiscal Year (April 1, 2020 to March 31, 2021) Previous Fiscal Year (April 1, 2021 to March 31, 2022) (Millions of yen) 24,974 5,782 – 135 (260) (520) (1,846) (1,517) 2,439 (2,559) (478) (761) 651 3 714 – 23,353 16,505 (16,259) 4,572 54,929 2,301 (2,452) (7,522) 47,255 (271) (5,971) 1,594 (86) (339) 2,259 (2,680) (78) (23) 28 (881) (6,451) 52,102 5,918 31 103 75 849 471 (1,714) 2,684 (2,439) – (853) 225 25 76 (3,749) (134,554) (93,743) 65,874 5,551 (103,062) 2,344 (2,694) (9,588) (113,001) (692) (5,230) 167 (104) (2,941) 4,278 – 149 (350) 19 (623) (5,327) Cash flows from operating activities Profit before income taxes Depreciation Impairment losses Amortization of goodwill Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in retirement benefit liability Interest and dividend income Interest expenses Share of loss (profit) of entities accounted for using equity method Loss (gain) on sale of non-current assets Loss (gain) on sale of investment securities Loss (gain) on valuation of investment securities Loss (gain) on sales of investments in capital Loss on valuation of investments in capital Loss (gain) on change in equity Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities Decrease (increase) in time deposits Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Purchase of investment securities Proceeds from sale of investment securities Purchase of shares of subsidiaries resulting in change in scope of consolidation Decrease (increase) in short-term loans receivable Long-term loan advances Proceeds from collection of long-term loans receivable Other, net Net cash provided by (used in) investing activities – 11 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 Previous Fiscal Year (April 1, 2020 to March 31, 2021) Previous Fiscal Year (April 1, 2021 to March 31, 2022) (Millions of yen) Cash flows from financing activities Net increase (decrease) in short-term borrowings Net increase (decrease) in commercial papers Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid Dividends paid to non-controlling interests Purchase of shares of subsidiaries not resulting in change in scope of consolidation Other, net Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation Decrease in cash and cash equivalents resulting from corporate division Cash and cash equivalents at end of period 749 (4,000) 25,200 (25,779) (4,356) (741) (15) (1,049) (9,993) (363) 30,447 25,314 119 – 55,881 72,538 39,000 7,000 (7,487) (8,708) (699) (17) (993) 100,633 1,283 (16,411) 55,881 – (10,652) 28,818 – 12 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 (5) Consolidated Financial Statements and Significant Notes Thereto (Notes on Going Concern Assumption) Not applicable. (Changes in Accounting Policies) Application of Accounting Standard for Revenue Recognition, Etc. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the fiscal year under audit, and it has recognized revenue at the time the control of promised goods or services is transferred to the customer at the amount expected to be received upon exchange of said goods or services. The major changes are as follows: ・Revenue recognition relating to agent transactions The full amount of consideration received from customers was previously recognized as revenue for some transactions, but for transactions in which the role of the Group in providing goods or services to customers was as an agent, the revenue is recognized at the net amount calculated by deducting the amount paid to suppliers from the amount received from the customer. The change in the accounting policy has been applied retrospectively, in principle. Therefore, the new accounting policy was reflected in the consolidated financial statements for the previous fiscal year; provided, however, that in the retrospective application, the methods set forth in paragraph 85 of the Accounting Standard for Revenue Recognition were applied. (1) Comparative information is not retrospectively restated for contracts where nearly all the revenue amounts have been recognized prior to the beginning of the previous fiscal year subject to the previous treatment (2) Comparative information is retrospectively restated for the amount of variable consideration included in contracts where nearly all the revenue amounts have been recognized prior to the beginning of the current fiscal year subject to the previous treatment, using the amount when the uncertainty associated with the variable consideration is subsequently resolved (3) Consolidated financial statements for the previous fiscal year are not retrospectively restated for the contracts that began and ended within the previous fiscal year In addition, “Notes and accounts receivable – trade” indicated in “Current assets” in the consolidated balance sheet of the previous fiscal year is included in “Notes receivable – trade,” “Electronically recorded monetary claims – operating” and “Accounts receivable – trade” from the fiscal year under audit. For the previous fiscal year, as a result of this change, and compared with the figures before the retrospective application, net sales decreased by ¥802,190 million, cost of sales decreased by ¥802,275 million, while operating profit, ordinary profit and profit before income taxes each increased by ¥84 million. In addition, because the cumulative effect was reflected in net assets as of the beginning of the previous fiscal year, retained earnings as of the beginning of the previous fiscal year decreased by ¥215 million. Application of Accounting Standard for Fair Value Measurement, Etc. The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019) and relevant ASBJ regulations have been applied from the beginning of the fiscal year under audit, and the new accounting policies provided in the Accounting Standard for Fair Value Measurement and relevant ASBJ regulations will be applied going forward in accordance with the transitional treatment stipulated in paragraph 19 of the Accounting Standard for Fair Value Measurement and paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). There is no effect on the consolidated financial statements. (Additional Information) Accounting Estimates in Relation to the Impact of the Spread of COVID-19 The Group bases accounting estimates for impairment loss accounting for non-current assets, and recoverability of deferred tax assets on information available at the time the consolidated financial statements are created, and we assume that the impact of COVID-19 will remain to a certain extent in this consolidated fiscal year and thereafter. However, these assumptions involve uncertainty, and going forward this could have an impact on the Group’s financial position, operating results, and cash flow status. – 13 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 (Segment Information, etc.) [Segment Information] 1. Overview of Reportable Segments Reportable segments of the Group are those constituent units of the Company for which separate financial information can be derived. These segments are subject to periodic examination in order for the Board of Directors to make decisions on the allocation of management resources and to evaluate earnings. The Group is primarily engaged in the sale of steel, industrial supply and infrastructure, textiles, foodstuffs, and other products in Japan and abroad. For each category of product handled, it establishes sales divisions to draft comprehensive strategies for Japan and abroad, and conduct business activities accordingly. Thus, the Company consists of four business divisions based on the products it handles and has four reportable segments: Steel, Industrial Supply and Infrastructure, Textiles, and Foodstuffs. The major products handled in the Steel segment are steel plates and sheets, steel pipes and tubes, bars and special steel, structural products, raw materials and fuels, and machinery. The major products handled in the Industrial Supply and Infrastructure segment are industrial machinery, non-ferrous metals, cast and forged products, and railroad machinery. Also in this segment, industrial estates are developed and sold, and power generation facilities developed through equity method affiliates. The major products handled in the Textiles segment are textiles products and materials. The major products handled in the Foodstuffs segment are imported meats and sea food. 2. Methods of Calculating Amounts of Each Reporting Segment’s Net Sales, Profit/Loss, Assets and Other Items Profits of reportable segments are based on ordinary profit. Inter-segment trade is treated as inter-company trade, and as such is based on market prices, etc. – 14 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 3. Information on Amounts of Each Reporting Segment’s Net Sales, Profit/Loss, Assets and Other Items Previous Fiscal Year (April 1, 2020 to March 31, 2021) Depreciation 3,801 842 1,054 Total 1,022,243 62,937 96,844 89,561 1,271,587 392 1,271,979 (929) 1,271,050 19,132 2,563 1,675 2,388 25,760 11 25,772 0 25,772 Segment assets 691,096 62,278 51,384 39,398 844,157 1,680 845,837 37,447 883,285 Reportable segments Steel Textiles Foodstuffs Total Industrial Supply and Infrastructure Others (Note 1) Total Adjusted amount (Notes 2, 3) (Millions of yen) Amount recorded in consolidated financial statements (Note 4) 1,021,872 62,442 96,840 89,561 1,270,717 332 1,271,050 – 1,271,050 371 495 – 869 59 929 (929) – – 41 2 101 367 2,153 394 2,109 3 – 5 96 55 5,757 135 400 2,416 2,559 59 94 24 64 – – 24 – – – – 5,782 135 400 2,559 35,843 22 2,439 12,378 23,040 425 35,843 5,782 135 400 2,439 2,559 35,843 – – – – – – – Net sales Sales to external customers Intersegment sales or transfers Segment profit (Ordinary profit) Others Amortization of goodwill Interest income Interest expenses Equity in earnings (losses) of affiliates Investment in equity method affiliates Increase in property, plant and equipment and intangible assets 4,678 1,253 78 31 6,042 15 6,057 6,057 (Notes) 1. “Others” represents items not included under “reportable segments,” and it includes real estate business. 2. The adjustment in “segment profit” represents the elimination of inter-segment trade. 3. The adjustment of ¥37,447 million in “segment assets” represents ¥37,593 million in the Group-wide assets not allocated to any reportable segment and an elimination of ¥146 million in inter-segment trade. The Group-wide assets consist primarily of the parent company’s cash and deposits. 4. The total profit of the “reportable segments” and “others” aligns with the ordinary profit in the consolidated statements of income excepting the adjustment. – 15 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 Depreciation 4,215 957 Current Fiscal Year (April 1, 2021 to March 31, 2022) Reportable segments Steel Textiles Foodstuffs Total Industrial Supply and Infrastructure Others (Note 1) Total Adjusted amount (Notes 2, 3) Net sales (Millions of yen) Amount recorded in consolidated financial statements (Note 4) 1,593,758 89,910 75,619 106,400 1,865,689 217 1,865,907 – 1,865,907 630 651 – 1,284 60 1,345 (1,345) – Total 1,594,388 90,561 75,622 106,400 1,866,974 278 1,867,252 (1,345) 1,865,907 43,205 2,118 (536) 2,950 47,738 71 47,810 0 47,810 Segment assets 938,050 72,728 31,646 49,604 1,092,030 1,707 1,093,737 6,703 1,100,441 10 335 2,374 3 689 – 7 53 – 6 191 5,903 103 368 2,669 2,439 39 93 19 50 – – 15 – – – – 5,918 103 368 2,439 58,606 14 2,684 1,364 1,163 (88) 14,152 25,009 19,445 58,606 Sales to external customers Intersegment sales or transfers Segment profit (loss) (Ordinary profit (loss)) Others Amortization of goodwill Interest income Interest expenses Equity in earnings (losses) of affiliates Investment in equity method affiliates Increase in property, plant and equipment and intangible assets 5,918 103 368 2,684 2,439 58,606 – – – – – – – 4,261 856 28 155 5,302 32 5,334 5,334 (Notes) 1. “Others” represents items not included under “reportable segments,” and it includes real estate business. 2. The adjustment in “segment profit” represents the elimination of inter-segment trade. 3. The adjustment of ¥6,703 million in “segment assets” represents ¥7,104 million in the Group-wide assets not allocated to any reportable segment and an elimination of ¥400 million in inter-segment trade. The Group-wide assets consist primarily of the parent company’s cash and deposits. 4. The total profit of the “reportable segments” and “others” aligns with the ordinary profit in the consolidated statements of income excepting the adjustment. 4. Information regarding change to reportable segments, etc. Application of Accounting Standard for Revenue Recognition, Etc. As described in “Changes in Accounting Policies,” the revenue recognition accounting standards, etc. have been applied from the beginning of the fiscal year under audit. For the fiscal year under audit, as a result, compared with the figures obtained by the previous method, net sales decreased by ¥1,085,858 million in the Steel business, by ¥18,718 million in the Industrial Supply and Infrastructure business, by ¥1,149 million in the Textiles business, and by ¥42,638 million in the Foodstuffs business respectively. The effect on ordinary profit is immaterial. Please note that the segment information for the previous fiscal year were prepared based on the new method of measuring segment profit or loss. – 16 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 [Related information] Previous Fiscal Year (April 1, 2020 to March 31, 2021) 1. Product- and service-specific information Omitted, since it is the same as the reportable segments. 2. Region-specific information (1) Net sales Japan Asia Others Total 917,279 240,230 113,539 1,271,050 (Note) Net sales are based on customers’ locations, and are categorized according to country/region. (2) Property, plant and equipment (Millions of yen) (Millions of yen) Japan Asia Others Total 39,728 9,001 13,016 61,747 3. Major customer-specific information There are no customers this item applies to. Current Fiscal Year (April 1, 2021 to March 31, 2022) 1. Product- and service-specific information Omitted, since it is the same as the reportable segments. 2. Region-specific information (1) Net sales Japan Asia Others Total 1,271,413 393,733 200,760 1,865,907 (Note) Net sales are based on customers’ locations, and are categorized according to country/region. (2) Property, plant and equipment (Millions of yen) (Millions of yen) Japan Asia Others Total 39,290 8,902 13,557 61,750 3. Major customer-specific information There are no customers this item applies to. – 17 – NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 [Information on Impairment Loss on Non-current Assets for Each Reporting Segment] Previous Fiscal Year (April 1, 2020 to March 31, 2021) Not applicable. Current Fiscal Year (April 1, 2021 to March 31, 2022) Reportable segments Steel Textiles Foodstuffs Total Others Total Industrial Supply and Infrastructure (Millions of yen) Amount recorded in consolidated financial statements Group-wide/elimination Impairment loss 31 – – – 31 – 31 – 31 [Information on Amortized and Unamortized Amounts of Goodwill for Each Reportable Segment] Previous Fiscal Year (April 1, 2020 to March 31, 2021) Reportable segments Steel Textiles Foodstuffs Total Others Total Industrial Supply and Infrastructure (Millions of yen) Amount recorded in consolidated financial statements Group-wide/elimination Current Fiscal Year (April 1, 2021 to March 31, 2022) Amortization in current period Balance at end of current period Amortization in current period Balance at end of current period – – 10 – 41 – – – – – – – 94 135 326 326 93 103 326 326 – – – – 135 326 103 233 Reportable segments Steel Textiles Foodstuffs Total Others Total Industrial Supply and Infrastructure (Millions of yen) Amount recorded in consolidated financial statements Group-wide/elimination – – – – 135 326 103 233 [Information on Gain on Bargain Purchase for Each Reportable Segment] Previous Fiscal Year (April 1, 2020 to March 31, 2021) Not applicable. Current Fiscal Year (April 1, 2021 to March 31, 2022) Not applicable. – 18 – (Per Share Information) Net assets per share Earnings per share NIPPON STEEL TRADING CORPORATION (9810) Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 Previous Fiscal Year (April 1, 2020 to March 31, 2021) Current Fiscal Year (April 1, 2021 to March 31, 2022) ¥7,917.51 ¥495.79 ¥8,759.36 ¥1,098.03 (Notes) 1. Earnings per share after adjustment for the effects of dilutive potential shares is not reported due to the absence of dilutive potential shares. 2. The basis for calculating earnings per share during the period is as follows. The average number of shares during the period was calculated by deducting the treasury shares from the number of shares outstanding during the period. Previous Fiscal Year (April 1, 2020 to March 31, 2021) Current Fiscal Year (April 1, 2021 to March 31, 2022) 3. The basis for calculating net assets per share is as follows. End of Previous Fiscal Year (March 31, 2021) End of Current Fiscal Year (March 31, 2022) 15,992 – 15,992 32,257 278,090 22,701 (22,701) 255,389 35,417 – 35,417 32,255 308,198 25,664 (25,664) 282,534 32,256 32,255 Profit attributable to owners of parent (millions of yen) Amount not belonging to common shareholders (millions of yen) Profit attributable to owners of parent on common stock (millions of yen) Average common shares during the period (1,000 shares) Total net assets (millions of yen) Amount deducted from total net assets (millions of yen) (of which, non-controlling interests) (millions of yen) Net assets on common stock at end of period (millions of yen) Number of common shares at end of period used to calculate net assets per share (1,000 shares) (Subsequent Events) Not applicable. – 19 –