Itochu : Other Items on Electronic Provision Measures Concerning Notice of the 100th Ordinary General Meeting of Shareholders（302KB）

This document is an unofficial translation of the Notice of the 100th Ordinary General Meeting of Shareholders and is provided for your convenience only, without any warranty as to its accuracy or as to the completeness of the information. The Japanese original version of the document is the sole official version.

Other Items on Electronic Provision Measures Concerning

Notice of the 100th

Ordinary General Meeting of Shareholders

Notes to Consolidated Financial Statements…………………… 1

Notes to Non-Consolidated Financial Statements……………… 30

(Reference) Consolidated Statement of Cash Flows…………… 42

(Reference) Operating Segment Information…………………… 43

The items of this document have been excluded from the paper-based documents to be delivered to shareholders

who requested the delivery of documents stating items subject to measures for electronic provision

pursuant to the provisions of laws and regulations and Article 16 of ITOCHU Corporation's Articles of Incorporation.

The Japanese original version of this document (excluding financial statements for reference) is in the scope of the

audit by the Corporate Auditors and Independent Auditor in preparing the Audit Reports.

ITOCHU Corporation's website: https://www.itochu.co.jp/en/ir/shareholder/general_meeting/

ITOCHU Corporation

[Notes to Consolidated Financial Statements]

[Basis of Presenting Consolidated Financial Statements] 1. Basis of Consolidated Financial Statements

The Consolidated Financial Statements of ITOCHU Corporation (the "Company") have been prepared in conformity with International Financial Reporting Standards (IFRS) pursuant to the provision of paragraph 1, Article 120 of the Ordinance on Company Accounting. Some of the descriptions and notes required under IFRS have been omitted based on the provision of the latter part of the said paragraph of the Ordinance.

2. Scope of Consolidation and Application of Equity Method

1. Number of consolidated subsidiaries and names of principal consolidated subsidiaries Number of Consolidated Subsidiaries: 190 (*1)
   Names of Principal Consolidated Subsidiaries:

		Name
	Domestic		Overseas
	Dole International Holdings, Inc.		ITOCHU International Inc.
	ITOCHU Techno-Solutions Corporation		ITOCHU (CHINA) HOLDING CO., LTD.
	ITOCHU ENEX CO., LTD.		ITOCHU Hong Kong Ltd.
	FamilyMart Co., Ltd.		ITOCHU Europe PLC
	DAIKEN CORPORATION (*2)		Orchid Alliance Holdings Limited
	C.I. TAKIRON Corporation		European Tyre Enterprise Limited
Subsidiaries	POCKET CARD CO., LTD.		ITOCHU FIBRE LIMITED
ITOCHU Property Development, Ltd.		ITOCHU Minerals & Energy of Australia Pty
	Prima Meat Packers, Ltd.		Ltd
	YANASE & CO., LTD.
	ITOCHU LOGISTICS CORP.
	ITOCHU-SHOKUHIN Co., Ltd.
	NIPPON ACCESS, INC.
	Citrus Investment LLC

1. Number of equity-method associated companies and names of principal associated companies Number of Equity-Method Associated Companies: 73 (*1)
   Names of Principal Associated Companies:

		Name
	Domestic		Overseas
Equity-	Orient Corporation		C.P. Pokphand Co. Ltd.
Tokyo Century Corporation
Method
Marubeni-Itochu Steel Inc.
Associated
FUJI OIL HOLDINGS INC.
Companies
DESCENTE LTD.

*1 Investment companies which are considered as part of the parent company (199 companies) and companies

other than those which are directly invested by the Company and its overseas trading subsidiaries (504 companies) are not included in the number of companies.

*2 DAIKEN CORPORATION is added as a principal consolidated subsidiary from this fiscal year.

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1. Major changes in the scope of consolidation and application of equity method New
   Equity-Method Associated Companies: Paraca Inc.
   Exclusion
   Equity-Method Associated Companies: TERAOKA SEISAKUSHO CO., LTD.

24M Technologies, Inc.

RICHBASE LIMITED

3. Material Accounting Policies

Material Accounting Policies are described in the "Material Accounting Policies" notes.

4. The Application of IFRS 17 "Insurance Contracts"

The Company and its subsidiaries have applied IFRS 17 "Insurance Contracts" from the fiscal year ended March 31, 2024.

The cumulative effects of this adoption are reflected through adjustment of retained earnings and other components of equity.

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[Notes to Consolidated Statement of Financial Position]
1. Pledged Assets as Collateral and Secured Obligations
(1) Pledged assets as collateral	(Millions of Yen)
	Cash and Time deposits	604
	Trade receivables and others	8,202
	Inventories	61,457
	Investments and non-current receivables	235,063
	Property, plant and equipment	4,969
	Total	310,295
(2) Secured obligations
	Short-term borrowings	1,566
	Trade payables and others	56,461
	Long-term borrowings	1,711
	Lease liabilities (short-term and long-term)	124,204
	Total	183,942

2. Allowance for doubtful accounts directly deducted from assets Allowance for doubtful receivables directly

	deducted from current assets, including trade receivables	¥25,362 million
	Allowance for doubtful receivables directly
	deducted from non-current assets, including non-current receivables	¥38,676 million
3.	Accumulated depreciation and accumulated impairment losses
	for property, plant and equipment	¥2,352,689 million
4.	Accumulated depreciation and accumulated impairment losses
	for investment property	¥52,259 million
5.	Fair value of investment property	¥43,705 million

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6. Guarantees of Contracts and Others

The maximum potential amount of future payments and the amount of substantial risk of the guarantees for

associates, joint ventures and customers of the Company and its subsidiaries at March 31, 2024 were as follows: The maximum potential amount of future payments represents the amounts that the Company and its

subsidiaries could be obliged to pay if there were defaults. The amount of substantial risk represents the actual amount of liability incurred by the guaranteed parties within the maximum potential amount of future payments. The amounts that may be reassured from third parties have been excluded in determining the amount of substantial risk.

			(Millions of Yen)
		Guarantees for
	Financial guarantees	performance	Total
		transactions
Guarantees for associates and joint ventures:
Maximum potential amount of future payments………	¥ 103,496	¥ 18,340	¥ 121,836
Amount of substantial risk……………………………	87,519	10,769	98,288
Guarantees for customers:
Maximum potential amount of future payments………	19,136	49,594	68,730
Amount of substantial risk……………………………	13,691	8,861	22,552
Total:
Maximum potential amount of future payments………	¥ 122,632	¥ 67,934	¥ 190,566
Amount of substantial risk……………………………	101,210	19,630	120,840

JAPÃO BRASIL MINÉRIO DE FERRO PARTICIPAÇÕES LTDA.("JBMF"), a subsidiary of the Company, currently holds CSN Mineração S.A. ("CM") which is recorded in Other investments accompanying the merger of Nacional Minérios S.A. ("NAMISA"), which was a joint venture of the Company, and the Casa de Pedra Mine and railway company shares and port facility usage rights owned by Companhia Siderúrgica Nacional, the major Brazilian steel producer which is the parent company of NAMISA, in November 2015. NAMISA received a tax assessment notice in December 2012 from the Brazilian tax authorities relating to corporation tax and social contributions attributable to income for the period from 2009 to 2011 related to the deductibility of the amortization of goodwill for tax purposes over the period from August 2009 to July 2014. CM, which took over this tax assessment, filed suit in Brazilian federal court in September 2017 upon exhausting the administrative appeal procedures. CM received a tax assessment notice in December 2018 from the Brazilian tax authorities relating to corporation tax and social contributions attributable to income for the period from 2013 to 2014, and proceeded with the administrative appeal procedures in January 2019. With regards to the tax assessment, the impact on JBMF will be ¥47,761 million in the event that the amortization of goodwill for tax purposes is not deductible. The Company's proportionate interest related to the tax assessment is ¥33,265 million, including interest and penalties of ¥26,451 million. CM, which took over the tax litigation, recorded no liabilities related to this assessment.

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7. Impairment of assets

If the recoverable amount of cash-generating units is less than the related carrying amount as a result of impairment tests for assets of the Company and its subsidiaries, the carrying amount is reduced to the recoverable amount, and impairment losses are recognized in profit or loss.

The major impairment losses for the fiscal year ended March 31, 2024 were as follows:

The Company calculated the recoverable amount of its investments accounted for by the equity method in Orient Corporation by comprehensively taking into account third-party valuations and stock prices, etc., due to the long-term decline in stock prices, and recorded an impairment loss of ¥15,161 million on its investments accounted for by the equity method in the company.

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[Notes to Consolidated Statement of Changes in Equity]

1. The total number of issued shares was 1,584,889,504 shares of common stock as of March 31, 2024.
2. Cash dividends on common stock Dividends paid were as follows:

Resolution	Type of shares	Total cash	Source	Dividends	Dividends	Dividends
dividends	per share	record date	effective date
Ordinary general
meeting of	Common	¥109,265	Retained	¥75	March 31,	June 26,
shareholders held	stock	million	earnings	2023	2023
on June 23, 2023
Board of
Directors meeting	Common	¥116,192	Retained	¥80	September 30,	December 4,
held on	stock	million	earnings	2023	2023
November 6, 2023

Dividend for which the record date is in this fiscal year but the effective date is in the following fiscal year is as follows:

Resolution	Type of shares	Total cash	Source	Dividends	Dividends	Dividends
(Plan)	dividends	per share	record date	effective date
Ordinary general
meeting of	Common	¥115,224	Retained		March 31,	June 24,
shareholders to be	¥80
stock	million	earnings	2024	2024
held on June 21,
2024

[Financial Instruments]

1. Status of financial instruments

The Company and its subsidiaries hold financial instruments such as trade receivables and payables, loans and guarantees, corporate bonds and borrowings, investments, and derivatives.

The Company and its subsidiaries conduct business transactions and operations in regions around the world, and consequently are exposed to foreign exchange rate risk, interest rate risk, commodity price risk, stock price risk, credit risk, and liquidity risk. The Company and its subsidiaries utilize periodic monitoring and other means to manage these risks.

(1) Foreign exchange rate risk management

The Company and its subsidiaries are exposed to foreign exchange rate risk related to transactions in foreign currencies due to their significant involvement in import/export trading. Therefore, the Company and its subsidiaries work to minimize foreign exchange rate risk through hedge transactions that utilize derivatives, such as foreign exchange forward contracts.

(2) Interest rate risk management

The Company and its subsidiaries are exposed to interest rate risk in both raising and using funds for investing, financing, and operating activities. Among interest insensitive assets, such as investment securities or fixed assets, the portion acquired using floating interest loans is considered to be the interest mismatch amount exposed to interest rate risk. The Company and its subsidiaries seek to quantify the interest rate risk to better control the fluctuation of gains and losses due to interest rate changes.

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In addition, the Company and its subsidiaries periodically track interest rate trends and monitor the

amount of influence on interest payments due to interest rate changes, using the Earnings at Risk (EaR).

(3) Commodity price risk management

The Company and its subsidiaries conduct actual demand transactions that are based on the hedge

transactions of a variety of commodities. As a result, because it holds long or short positions in light of market prices, in some cases the Company and its subsidiaries are exposed to commodity price fluctuation risk. Therefore, the Company and its subsidiaries analyze inventories and purchase and sales contracts, and each Division Company has established middle and back offices for major commodities, which establish a balance limit and loss cut limit for each commodity, as well as conduct monitoring, management, and periodic reviews.

To reduce commodity price risks, the Company and its subsidiaries use such hedges as futures and forward contracts.

(4) Stock price risk management

The Company and its subsidiaries hold a variety of marketable equity securities, mainly to strengthen relationships with customers, suppliers, and other parties, and to secure business income, and to increase corporate value through means such as making a wide range of proposals to investees, and consequently are exposed to stock price fluctuation risk. Therefore, the Company and its subsidiaries periodically track and monitor the amount of influence on consolidated shareholders' equity, using the Value at Risk (VaR).

(5) Credit risk management

Through trade receivables, loans, guarantees, and other formats, the Company and its subsidiaries grant

credit to their trading partners, both domestically and overseas. The Company and its subsidiaries, therefore, bear credit risk in relation to such receivables becoming uncollectible due to the deteriorating credit status or insolvency of the Company's and its subsidiaries' partners, and in relation to assuming responsibilities to fulfill contracts where an involved party is unable to continue its business and therefore cannot fulfill its obligations under the contracts. Therefore, when granting credit, the Company and its subsidiaries work to reduce risk by conducting risk management through the establishment of credit limits and the acquisition of collateral or guaranties as needed. At the same time, the Company and its subsidiaries establish an allowance for doubtful accounts by estimating expected credit losses based on the creditworthiness, the status of receivable collection, and the status of receivables in arrears of business partners. The Company and its subsidiaries, having transactions in a broad range of businesses across a wide range of regions, are not exposed to credit risk that is significantly concentrated on any individual counterparty.

(6) Liquidity risk management

The Company and its subsidiaries are exposed to liquidity risk in both raising and using funds for investing, financing, and operating activities, as well as repayments of borrowings. In addition to securing flexibility in fundraising in response to changes in financial conditions and reducing the cost of funds, the Company and its subsidiaries have taken steps to diversify their sources of funds and methods of fundraising.

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2. Fair values of financial instruments

The carrying amounts and fair values of financial instruments as of March 31, 2024 are as follows:

		(Millions of Yen)
	Carrying amount	Fair value
Financial assets:
FVTPL financial assets……………………………………..	¥ 91,893	¥ 91,893
FVTOCI financial assets……………………………………	1,106,564	1,106,564
Derivative assets……………………………………………	57,576	57,576
Non-current receivables and Non-current financial assets
other than investments and receivables (excluding
derivative assets)…………………………………………	406,326	400,934
Financial liabilities:
Derivative liabilities………………………………………..	61,065	61,065
Long-term debentures and borrowings and Other non-
current financial liabilities (excluding derivative
liabilities)…………………………………………………	2,675,263	2,675,126

Note: Of the Non-current receivables reflected on the Consolidated Statement of Financial Position, the shareholder loan to Chia Tai Bright Investment Company Limited ("CTB") accompanying the acquisition of CITIC Limited shares is not included above, and the information concerning the said financial instrument is described in (4) below.

(1) Valuation techniques for fair values of financial instruments

IFRS 13 "Fair Value Measurement" defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. IFRS 13 also establishes a hierarchy for inputs used in measuring fair value and requires that each fair value be categorized into one of the following three levels based on its observability of inputs:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for identical assets or liabilities.

The Company and its subsidiaries use the following valuation techniques for assets and liabilities that are measured at fair value on a recurring basis.

The financial instruments classified as FVTPL and FVTOCI financial assets consist of securities and alternative investments. Securities that are listed on exchanges are measured using quoted market prices. When quoted prices in active markets in which transactions occur with sufficient frequency are available, they are classified as Level 1. In contrast, instruments that are measured at quoted prices in markets in which there are relatively few transactions are classified as Level 2.

Securities that are not listed on exchanges are measured mainly using the discounted cash flow and modified net assets methods based on comprehensive consideration of various inputs that are available to the Company and its subsidiaries, including expectation of future income of the investee, the net asset value of the subject stock, and the actual value of significant assets held by the said investee. If the amount affected by unobservable inputs covers a significant proportion of the fair value, the security is classified as Level 3, and if the amount affected by unobservable inputs does not cover a significant proportion of fair value, the security is classified as Level 2.

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On the Consolidated Statement of Financial Position, the financial instruments classified as FVTPL and FVTOCI financial assets are included in Other current financial assets and Other investments.

Derivative assets and derivative liabilities consist of currency derivatives, interest rate derivatives, and commodity derivatives. The derivative instruments that are traded in the active market are valued at quoted market prices and classified as Level 1. The other derivative instruments that are measured using commonly used fair value pricing models, such as the Black-Scholes model, based upon observable inputs only, are classified as Level 2.

On the Consolidated Statement of Financial Position, derivative assets are included in Other current financial assets and Non-current financial assets other than investments and receivables, and derivative liabilities are included in Other current financial liabilities and Other non-current financial liabilities.

The fair values of Non-current receivables and Non-current financial assets other than investments and receivables (excluding derivative assets) are estimated based on the present value of future cash flows discounted using the current rates of loans or receivables with similar terms, conditions, and maturities being offered to borrowers or customers with similar credit ratings and are classified as Level 2.

Non-current receivables and Non-current financial assets other than investments and receivables, for which the Company and its subsidiaries recognized an allowance for doubtful accounts, are classified as Level 3.

The fair values of Long-term debentures and borrowings and Other non-current financial liabilities (excluding derivative liabilities) are based on the present value of future cash flows discounted

using the current borrowing rates of similar debt instruments having comparable maturities and are classified as Level 2.

Of the securities included in Other current financial assets and Other investments, financial assets measured at amortized cost are primarily public and corporate bonds for which the fair values are approximately the same as their carrying amounts.

The carrying amounts of current financial assets and liabilities other than those mentioned above are approximately the same as their fair values mainly because of their short maturities.

Based on the policies and procedures defined by the Company, the Company and its subsidiaries apply the best available valuation techniques and inputs to measure the fair value of assets and liabilities by considering their nature, features, and risk. The assets and liabilities that are classified as Level 3 are mainly measured by the discounted cash flow and modified net assets methods. In addition, the result of the measurement of the fair value has been approved by the appropriate authority in each Division Company.

The fair value of assets and liabilities that are measured by discounted cash flow fluctuates depending on the discount rates that are applied. These discount rates are applied to each financial asset by calculating the risk-free rate, which includes country risk premium (Approximately 8-17%. Meanwhile, for the resource- related investments in Russia, higher discounted rate reflecting rise of the country risk was applied.)

If the unobservable inputs have been changed to reflect reasonably possible alternative assumptions, the effect is expected to be insignificant.

The Company and its subsidiaries recognize transfers of assets or liabilities between levels of the fair value hierarchy at the end of quarter when the transfer occurs.

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