日東工器（6151） – [Delayed]Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Under Japanese GAAP)

Translation Note: 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. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Under Japanese GAAP) May 10, 2022 Company name: NITTO KOHKI CO., LTD. Tokyo Stock ExchangeListing:6151 Securities code: https://www.nitto-kohki.co.jpURL:Akinobu Ogata, Representative Director, President CEO Representative: Kenji Mori, Director, Executive Senior Managing Officer, Chief Administrative Officer Inquiries: TEL:+81-3-3755-1111Scheduled date of annual general meeting of shareholders: Scheduled date to commence dividend payments: Scheduled date to file annual securities report: Preparation of supplementary material on financial results: Holding of financial results briefing: June 23, 2022 June 24, 2022 June 24, 2022 Yes Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 toMarch 31, 2022)(1) Consolidated operating results(Percentages indicate year-on-year changes.) Net sales Operating profitOrdinary profit Profit attributable to owners of parent Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen % 25,281 22,533 12.2 (16.7) 3,355 2,091 60.4 (47.3) 3,514 2,266 55.1 (43.3) 1,927 1,549 24.4 (43.7) Note: Comprehensive income For the fiscal year ended March 31, 2022: ¥2,090 million [18.2%] For the fiscal year ended March 31, 2021: ¥1,767 million [(26.2)%] Basic earnings per share Diluted earnings per share Return on equity Ordinary profit/ total assets Operating profit/ net sales Fiscal year ended March 31, 2022 March 31, 2021 Yen94.99 76.08 Yen––%3.52.9%5.63.7%13.39.3Reference: Share of profit (loss) of entities accounted for using equity method For the fiscal year ended March 31, 2022: ¥– million For the fiscal year ended March 31, 2021: ¥– million (2) Consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 64,334 61,721 55,730 54,502 % 86.6 88.3 Yen 2,746.45 2,685.92 As of March 31, 2022 March 31, 2021 Reference: Equity As of March 31, 2022: ¥55,722 million As of March 31, 2021: ¥54,494 million (3) Consolidated cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen Millions of yen Millions of yen Millions of yen 2,953 3,758 3,639 (6,115) (1,152) (1,643) 14,781 9,270 2. Cash dividends Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) Annual dividends First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Total cash dividends (Total) Payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) Yen Yen Yen Yen Yen Millions of yen % – – – 12.50 24.00 24.00 – – – 18.50 31.00 16.50 40.50 26.00 50.00 628 821 40.6 42.6 40.4 % 1.2 1.5 3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) (Percentages indicate year-on-year changes) Six months ending September 30, 2022 Full year Net sales Operating profit Ordinary profit Millions of yen % Millions of yen Millions of yen % 4.67.91,785 3,620 % 5.4 4.1 1,809 3,660 13,755 11.4 27,560 9.0 Profit attributable to owners of parent Millions of yen % 1,218 0.6 2,510 30.2 Earnings per share Yen 60.03 123.71 * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None (2) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (3) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) (ii) Number of treasury shares at the end of the period As of March 31, 2022 As of March 31, 2021 As of March 31, 2022 As of March 31, 2021 (iii) Average number of shares outstanding during the period Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 21,803,295 shares 21,803,295 shares 1,514,396 shares 1,514,346 shares 20,288,913 shares 20,367,774 shares [Reference] Overview of non-consolidated financial results 1. Non-consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (1) Non-consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen % 24,081 20,831 15.6 (18.1) 2,250 1,218 84.7 (57.1) 2,644 1,471 79.7 (51.8) 1,913 1,050 82.2 (52.4) Fiscal year ended March 31, 2022 March 31, 2021 Basic earnings per share Diluted earnings per share Yen 94.30 51.57 Yen – – (2) Non-consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 53,129 50,997 46,681 45,685 % 87.9 89.6 Yen 2,300.82 2,251.76 As of March 31, 2022 March 31, 2021 Reference: Equity As of March 31, 2022: ¥46,681 million As of March 31, 2021: ¥45,685 million 2. Non-consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 (Percentages indicate year-on-year changes) to March 31, 2023) Six months ending September 30, 2022 Full year corporation. Net sales Ordinary profit Profit Earnings per share Millions of yen % Millions of yen % Millions of yen % 12,644 25,570 7.4 6.2 1,214 2,650 4.0 0.2 833 (1.3) 1,880 (1.7) Yen 41.05 92.66 * Financial results reports are exempt from audit conducted by certified public accountants or an audit * Proper use of earnings forecasts, and other special matters The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual results may differ substantially due to a variety of factors. For details on the assumptions used for the financial results forecasts and points to note when using the financial results forecasts, please see “(4) Future outlook” in “1. Overview of operating results, etc.” on page 4 of the attached material. Attached Material Index 1. Overview of operating results, etc. …………………………………………………………………………………………….. 2 (1) Overview of operating results for the fiscal year under review …………………………………………………. 2 (2) Overview of financial position for the fiscal year under review ……………………………………………….. 3 (3) Overview of cash flows for the fiscal year under review …………………………………………………………. 3 (4) Future outlook …………………………………………………………………………………………………………………… 4 (5) Basic policy on profit distribution and dividends for the fiscal year under review and next fiscal year ………………………………………………………………………………………………………………………………….. 4 2. Basic rationale for selecting accounting standards ……………………………………………………………………….. 6 3. Consolidated financial statements and significant notes thereto ……………………………………………………… 7 (1) Consolidated balance sheet …………………………………………………………………………………………………. 7 (2) Consolidated statement of income and consolidated statement of comprehensive income …………… 9 Consolidated statement of income ………………………………………………………………………………………… 9 Consolidated statement of comprehensive income ……………………………………………………………….. 10 (3) Consolidated statement of changes in equity ……………………………………………………………………….. 11 (4) Consolidated statement of cash flows …………………………………………………………………………………. 13 (5) Notes to consolidated financial statements …………………………………………………………………………… 14 Uncertainties of entity’s ability to continue as going concern …………………………………………………. 14 Changes in accounting policies ………………………………………………………………………………………….. 14 Change of presentation method ………………………………………………………………………………………….. 14 Additional information ……………………………………………………………………………………………………… 15 Segment information, etc. …………………………………………………………………………………………………. 16 Per share information ……………………………………………………………………………………………………….. 20 Significant events after reporting period ……………………………………………………………………………… 20 4. Other information ………………………………………………………………………………………………………………….. 21 Changes in officers …………………………………………………………………………………………………………… 21 – 1 – 1. Overview of operating results, etc. (1) Overview of operating results for the fiscal year under review In the world economy during the fiscal year under review, economic activities took a turn towards normalization owing to progress of vaccination and curative medicine against COVID-19, with developed countries in Europe and America at the core. Also in the domestic economy, economic activities resumed and personal consumption and capital investment by enterprises recovered as the number of infected people decreased. On the other hand, worldwide supply shortages of semiconductors and soaring of raw materials prices continued, the impact of the tense circumstances in Ukraine on the world economy spread gradually, and future prospects remain uncertain. Under such an operating environment, although the Company group (the “Group”) faced the impact of the spread of COVID-19 in areas such as restriction on face-to-face sales activities, securing raw materials, and procurement of parts, the Group worked to rationalize business processes through new work styles such as teleworking and web conferencing, and to reduce activity business costs throughout the Company. Meanwhile, the Group actively utilized product PR videos to expand business into new markets. The Group posted net sales of ¥25,281 million for the fiscal year under review, up 12.2% compared to ¥22,533 million in the previous fiscal year. Concerning profits, operating profit was ¥3,355 million, up 60.4% compared to ¥2,091 million in the previous fiscal year. Ordinary profit was ¥3,514 million, up 55.1% compared to ¥2,266 million in the previous fiscal year, and profit attributable to owners of parent was ¥1,927 million, up 24.4% compared to ¥1,549 million in the previous fiscal year. Results by business segment are described below. Quick Connect Couplings Business In the Quick Connect Couplings Business, demand in the semiconductor/industrial machine industries continued to be favorable, leading to net sales of ¥11,440 million, up 21.1% year on year. Concerning profits, operating profit was ¥2,696 million, up 58.1% year on year, due to increased revenue. Power & Machine Tools Business In the Power & Machine Tools Business, domestic and overseas net sales were on the track to recovery because the restriction on sales activities was relaxed and event holding and face-to-face sales activities resumed, leading to net sales of ¥7,748 million, up 10.3% year on year. Concerning profits, operating profit was ¥440 million, up 69.2% year on year, due to increased revenue. Pumps & Compressors Business In the Pumps & Compressors Business, demand of pumps to be embedded were favorable in Europe and America, leading to net sales of ¥4,176 million, up 2.2% year on year. Concerning profits, operating profit was ¥250 million, up 138.7% year on year. In the Door Closers Business, weak demand in construction in public/investment property led to net sales of ¥1,916 million, down 3.0% year on year. Concerning profits, operating loss was ¥32 million (compared to operating profit of ¥20 million in the previous fiscal year), Door Closers Business Overseas sales were ¥8,499 million, up 19.4% year on year, accounting for 33.6% of consolidated net sales. – 2 – (2) Overview of financial position for the fiscal year under review Assets, liabilities, and net assets The balance of assets as of the end of the fiscal year under review increased by ¥2,613 million, or 4.2%, from the end of the previous fiscal year to ¥64,334 million. This is mainly due to an increase of ¥598 million in electronically recorded monetary claims – operating, ¥300 million of securities, ¥686 million of merchandise and finished goods, ¥447 million of raw materials and supplies, ¥374 million of leased assets, ¥494 million of intangible assets, and decrease of ¥352 million of land. The balance of liabilities increased by ¥1,385 million, or 19.2%, from the end of the previous fiscal year to ¥8,604 million, mainly due to an increase of ¥110 million of notes and accounts payable – trade, ¥632 million of income taxes payable, and ¥567 million of lease (long term). The balance of net assets increased by ¥1,228 million, or 2.3%, from the end of the previous fiscal year to ¥55,730 million. This is mainly due to an increase of ¥1,065 million of retained earnings and ¥275 million of foreign currency translation adjustment. (3) Overview of cash flows for the fiscal year under review Cash and cash equivalents (“cash”) as of the end of the fiscal year under review stood at ¥14,781 million, an increase of ¥5,510 million from the end of the previous fiscal year, mainly due to increases resulting from proceeds from withdrawal of time deposits of ¥39,046 million, profit before income taxes of ¥2,898 million, and proceeds from redemption of securities of ¥1,600 million despite decreases resulting from payments into time deposits of ¥34,117 million, purchase of securities of ¥1,600 million, dividends paid by parent company of ¥858 million, and purchase of intangible assets of ¥693 million, and purchase of property, plant, and equipment of ¥534 million. Cash flows from operating activities Net cash provided by operating activities for the fiscal year under review was ¥2,953 million, down 21.4% year on year. This was mainly because there was a decrease in cash, due to an increase in inventories of ¥983 million and accounts receivables-trade of ¥734 million, despite an increase in cash due to profit before income taxes of ¥2,898 million and depreciation of ¥1,497 million. Cash flows from investing activities Net cash provided in investing activities for the fiscal year under review was ¥3,639 million (¥6,115 million was used in the previous fiscal year). This was because there was an increase in cash due to proceeds from withdrawal of time deposits of ¥39,046 million and proceeds from redemption of securities of ¥1,600 million, despite a decrease in cash due to payments into time deposits of ¥34,117 million, purchase of securities of ¥1,600 million, purchase of intangible assets of ¥693 million, and purchase of property, plant, and equipment of ¥534 million. Cash flows from financing activities Net cash used in financing activities for the fiscal year under review was ¥1,152 million, down 29.8% year on year. This was due to dividends paid by parent company of ¥858 million and repayments of lease obligations of ¥294 million. – 3 – 86.6 49.1 – 92.7 Trends in cash flow indicators for the Group are as follows: Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Equity-to-asset ratio (%) Equity-to-asset ratio based on market value (%) Interest-bearing debt to cash flow ratio (debt redemption period) Interest coverage ratio 88.3 63.2 – 652.2 Calculation methods of the above indicators are as follows: Equity-to-asset ratio = Equity / Total assets Equity-to-asset ratio based on market value = Market capitalization / Total assets Debt redemption period = Interest-bearing debt / Operating cash flow Interest coverage ratio = Operating cash flow / Interest payments Notes: 1. All indicators are calculated based on consolidated financial figures. 2. Market capitalization is calculated by multiplying the closing stock price at the end of the period by the total number of issued shares at the end of the period (excluding treasury shares). 3. The figure for operating cash flow is “net cash provided by (used in) operating activities” on the consolidated statement of cash flows. Interest-bearing debt refers to all debt (excluding lease obligations) posted on the consolidated balance sheet for which interest is paid. Furthermore, interest payments refer to “interest paid” on the consolidated statement of cash flows. (4) Future outlook Regarding sales forecasts of the Group going forward, although there are many uncertain factors such as concerns about the slowdown of the global economy due to the impact of the spread of COVID-19, the Group plans to increase sales by actively conducting sales activities that accurately capture demand trends. Concerning profits, the Group plans to increase profits in anticipation of increased sales. Under such circumstances, as for the consolidated financial results forecasts for the next fiscal year (fiscal year ending March 31, 2023), we forecast consolidated net sales of ¥27,560 million, operating profit of ¥3,620 million, ordinary profit of ¥3,660 million, and profit attributable to owners of parent of ¥2,510 million. The above forecasts are based on information available as of the date of the announcement of this document, and actual results may differ substantially due to a variety of factors going forward. (5) Basic policy on profit distribution and dividends for the fiscal year under review and next fiscal year To ensure both sustainable growth investments and business continuity even in unpredictable events such as natural disasters and novel infectious diseases, while enhancing internal reserves, the Company’s basic policy is to enhance the return of profits to its shareholders with at target dividend payout ratio of 40%. Based on this basic policy, as for the dividend for the fiscal year ended March 2022 (the 66th term), the Company has already paid ¥24 per share as an interim dividend and plans to pay ¥16.50 per share as a year-end dividend. Although the annual dividend payout ratio of the fiscal year ended March 2022 (the 66th term) will be 42.6% due to the impact of extraordinary losses, the Company intends to pay ¥16.50 as a year-end dividend making the annual dividends of ¥40.50 as it was planned. For the next fiscal year, we plan to pay an interim dividend of ¥24.00 per share and a year-end dividend of ¥26.00 per share, aiming for a dividend payout ratio of 40% based on the profit attributable to owners of parent presented in our consolidated earnings forecasts, for a total annual dividend of ¥50.00 per share. – 4 – Considering capital efficiency, the Company aims for a return on equity (ROE) of 8% or more over the medium-long term and will consider purchases of treasury shares based on a comprehensive evaluation of demand for capital, economic conditions, and the share price. – 5 – 2. Basic rationale for selecting accounting standards The policy of the Group for the time being is to prepare its consolidated financial statements using Japanese GAAP, taking into consideration that this enables comparison of the consolidated financial statements between periods and between companies. Furthermore, in preparation to apply International Financial Reporting Standards (IFRS) in the future, the Group is taking measures such as acquiring knowledge on IFRS and performing a gap analysis with Japanese GAAP, but the timing of the application of IFRS remains undecided. – 6 – 3. Consolidated financial statements and significant notes thereto (1) Consolidated balance sheet As of March 31, 2021 As of March 31, 2022 (Millions of yen) 26,298 4,070 2,802 5,499 4,420 272 2,695 616 (2) 46,675 11,353 (6,522) 4,830 4,718 (3,576) 1,141 7,430 (6,888) 542 3,313 2,581 (1,049) 1,531 128 11,487 1,546 1,546 3,070 32 1,239 300 (15) 4,625 17,659 64,334 26,004 3,898 2,203 5,199 3,734 308 2,248 459 (2) 44,054 11,285 (6,230) 5,054 4,615 (3,270) 1,345 7,336 (6,745) 591 3,665 2,034 (877) 1,156 262 12,076 1,051 1,051 3,118 37 1,126 273 (15) 4,539 17,667 61,721 Assets Current assets Cash and deposits Notes and accounts receivable – trade Electronically recorded monetary claims – operating Securities Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures, net Land Leased assets Accumulated depreciation Leased assets, net Construction in progress Total property, plant and equipment Intangible assets Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets – 7 – (Millions of yen) As of March 31, 2021 As of March 31, 2022 Liabilities Current liabilities Notes and accounts payable – trade Lease obligations Income taxes payable Provision for bonuses Provision for bonuses for directors (and other officers) Other Total current liabilities Non-current liabilities Lease obligations Retirement benefit liability Provision for retirement benefits for directors (and other officers) Asset retirement obligations 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 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 866 262 136 551 30 1,297 3,144 893 2,509 333 10 327 4,074 7,219 1,850 1,924 53,054 (2,892) 53,935 807 (204) (44) 559 7 54,502 61,721 977 275 769 585 30 1,487 4,124 1,460 2,491 123 32 372 4,479 8,604 1,850 1,924 54,119 (2,892) 55,000 751 71 (101) 721 7 55,730 64,334 – 8 – 25,281 13,492 11,788 2,468 290 174 28 126 917 4,427 8,433 3,355 19 55 8 1 41 75 202 31 – – 7 – 3 43 3,514 5 610 – 616 2,898 1,025 (54) 970 1,927 0 1,927 (2) Consolidated statement of income and consolidated statement of comprehensive income Consolidated statement of income (Millions of yen)Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 22,533 11,958 10,575 2,449 296 205 107 455 819 4,148 8,483 2,091 26 57 – 91 36 97 308 5 84 8 4 15 15 134 2,266 – – 8 8 2,257 646 61 707 1,549 0 1,549 Net sales Cost of sales Gross profit Selling, general and administrative expenses Salaries and allowances Provision for bonuses Retirement benefit expenses Provision for retirement benefits for directors (and otherofficers) Promotion expenses Research and development expenses Other Total selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Foreign exchange gains Subsidies for employment adjustment Rental income from buildings Other Total non-operating income Non-operating expenses Interest expenses Sales discounts Foreign exchange losses Loss on retirement of non-current assets Commission for purchase of treasury shares Other Total non-operating expenses Ordinary profit Extraordinary losses Loss on disaster Impairment losses Loss on sale of non-current assets 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 – 9 – Consolidated statement of comprehensive income Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) 1,927 (55) 275 (57) 162 2,090 2,090 0 1,549 297 (201) 121 218 1,767 1,768 (0) Profit Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests – 10 – (3) Consolidated statement of changes in equity Fiscal year ended March 31, 2021 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity Balance at beginning of period 1,850 1,924 52,201 (2,216) Restated balance 1,850 1,924 52,201 (2,216) Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity (697) 1,549 Total changes during period Balance at end of period – 1,850 – 1,924 852 53,054 Accumulated other comprehensive income Valuation difference on available-for-sale securities 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 509 (3) (165) 340 Restated balance 509 (3) (165) 340 (Millions of yen)Total shareholder’ equity (675) (675) (2,892) 7 7 (0) (0) 7 53,759 – 53,759 (697) 1,549 (675) 176 53,935 54,107 54,107 – (697) 1,549 (675) 218 394 54,502 Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period 297 297 807 121 121 (44) 218 218 559 (200) (200) (204) – 11 – Fiscal year ended March 31, 2022 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity Balance at beginning of period 1,850 1,924 53,054 (2,892) Restated balance 1,850 1,924 53,054 (2,892) Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity (862) 1,927 Total changes during period Balance at end of period – 1,850 – 1,924 1,065 54,119 Accumulated other comprehensive income Valuation difference on available-for-sale securities 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 807 (204) (44) 559 Restated balance 807 (204) (44) 559 Cumulative effects of changes in accounting policies Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period (55) (55) 751 275 275 71 (57) (57) (101) 162 162 721 (Millions of yen)Total shareholders’ equity (0) (0) (2,892) 7 7 0 0 7 53,935 – 53,935 (862) 1,927 (0) 1,064 55,000 54,502 54,502 – (862) 1,927 (0) 163 1,228 55,730 – 12 – (Millions of yen)Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (4) Consolidated statement of cash flows Cash flows from operating activities Profit before income taxes Depreciation Amortization of long-term prepaid expenses Increase (decrease) in provision for retirement benefitsfor directors (and other officers) Increase (decrease) in provision for bonuses Increase (decrease) in allowance for doubtful accounts Increase (decrease) in retirement benefit liability Interest and dividend income Interest expenses Impairment losses Loss (gain) on sale of property, plant and equipment Decrease (increase) in trade receivables Decrease (increase) in inventories Decrease (increase) in other current assets Increase (decrease) in trade payables Increase (decrease) in accrued consumption taxes Increase (decrease) in other current liabilities Increase (decrease) in other non-current liabilities 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 Payments into time deposits Proceeds from withdrawal of time deposits Purchase of securities Proceeds from redemption of securities Purchase of investment securities Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Purchase of long-term prepaid expenses Loan advances Proceeds from collection of loans receivable Other, net Net cash provided by (used in) investing activities Cash flows from financing activities Purchase of treasury shares Dividends paid Repayments of lease obligations 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 Cash and cash equivalents at end of period – 13 – 2,257 1,501 18 106 (10) 0 62 (84) 5 – 8 817 (11) 5 84 (97) (21) 0 102 4,745 89 (5) (1,070) 3,758 (37,733) 33,433 (2,699) 2,599 (19) (1,146) 4 (506) (31) (0) 9 (24) (6,115) (675) (696) (270) (1,643) (62) (4,063) 13,334 9,270 2,898 1,497 20 (210) 33 0 (102) (75) 31 610 – (734) (983) 22 105 (117) 208 44 34 3,285 80 (31) (379) 2,953 (34,117) 39,046 (1,600) 1,600 (18) (534) 4 (693) (30) (2) 7 (21) 3,639 (0) (858) (294) (1,152) 69 5,510 9,270 14,781 (5) Notes to consolidated financial statements Uncertainties of entity’s ability to continue as going concern Not applicable. Changes in accounting policies Application of Accounting Standard for Revenue Recognition, etc. “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31; 2020, “Accounting Standard for Revenue Recognition”), etc. has been applied from the beginning of the fiscal year under review. Accordingly, booking method of monetary contributions, etc. which had previously been recognized as promotion expenses, etc., has been changed to the reduction of net sales. The application of the Accounting Standard for Revenue Recognition has been implemented in accordance with the transitional measures set forth in the provisory clause of paragraph 84 of the Accounting Standard for Revenue Recognition. Accordingly, the cumulative effect of applying the new accounting policy retrospectively prior to the beginning of the current fiscal year was reflected in the opening balance of retained earnings of the current fiscal year, and the new accounting policy has been applied from the opening balance of the current fiscal year. As a result, net sales and gross profit of the fiscal year under review decreased by ¥662 million and operating profit decreased by ¥99 million. There was no impact on ordinary profit and profit before income taxes. Also, there was no impact on opening balance of retained earnings of the current fiscal year. Application of Accounting Standard for Fair Value Measurement, etc. The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019) and relevant ASBJ regulations from the beginning of the fiscal year under review, and has applied the new accounting policy provided for by the Accounting Standard for Fair Value Measurement, etc. prospectively in accordance with the transitional measures provided for 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 was no impact on consolidated financial statements from the application. Change of presentation method Consolidated statement of income “Interest expenses” and “Loss on retirement of non-current assets,” which were previously included in “Other” of Non-operating expenses, have been presented separately because their quantitative materiality has increased in the fiscal year under review. In order to reflect the change of their presentation method, consolidated financial statements of the previous fiscal year have been recombined. As a result, ¥25 million of “Other” of Non-operating expenses in the consolidated statement of income for the previous fiscal year have been reclassified as “Interest expenses” of ¥5 million, “Loss on retirement of non-current assets” of ¥4 million, and “Other” of ¥15 million. Consolidated statement of cash flows “Interest expenses” and “Interest paid,” which were previously included in “Other” of “Cash flows from operating activities”, have been presented separately from the fiscal year under review, because their quantitative materiality has increased. In order to reflect the change of their presentation method, consolidated financial statements of the previous fiscal year have been recombined. As a result, ¥102 million of “Other” of Cash flows from operating activities in the consolidated statement of cash flows of the previous fiscal year have been reclassified as “Interest expenses” of ¥5 million, “Interest paid” of ( ¥5 million) and “Other” of ¥102 million. – 14 – Additional information Accounting estimates on spread of COVID-19 Accounting estimates concerning the impact of COVID-19 have been made under the assumption that the situation will recover gradually in the fiscal year ending March 2023. There is no material change from the previous fiscal year on this matter. – 15 – Segment information, etc. Segment information 1. Description of reportable segments The reportable segments of the Company are constituent units of the Company whose separate financial information can be obtained. The Board of Directors periodically examines these segments to decide on the allocation of management resources and evaluate operating performance. The reportable segments of the Company are composed of four, by merchandise: “Quick Connect Couplings Business,” “Power & Machine Tools Business,” “Pumps & Compressors Business” and “Door Closers Business”. The Quick Connect Couplings Business is mainly involved in the development, manufacturing, and sales of couplings with push-to-connect design for industrial fluid piping. The Power & Machine Tools Business is involved in the development, manufacturing, and sales of labor-saving machine tools. The Pumps & Compressors Business is mainly involved in the development, manufacturing, and sales of septic tank blowers and miniature labor-saving pumps used in health and medical devices. The Door Closers Business is mainly involved in the development, manufacturing, and sales of armless door closers. 2. Explanation of measurements of net sales, profit (loss), and other items for each reportable segment As described in “Changes in accounting policies,” the Company has applied the “Accounting Standard for Revenue Recognition” from the beginning of the current fiscal year, and changed the accounting treatment for revenue recognition. Accordingly, the Company has changed the method of measuring profit or loss of operating segments. As a result of the change, net sales of the “Quick Connect Couplings” Segment decreased by ¥351 million and its segment profit decreased by ¥42 million; net sales of the “Power & Machine Tools” Segment decreased by ¥251 million and its segment profit decreased by ¥31 million; net sales of the “Pumps & Compressors” Segment decreased by ¥42 million and its segment profit decreased by ¥9 million; and net sales of “Door Closers” decreased by ¥16 million and its segment loss increased by ¥16 million in comparison with using the previous method. Segment profits of reportable segments are provided on an operating profit basis. 3. Disclosure of net sales, profit (loss), and other items for each reportable segment I Fiscal year ended March 31, 2021 Quick Connect Couplings Power & Machine Tools Pumps & Compressors Door Closers Total Net sales Reportable segment (Millions of yen) Revenues from external customers Transactions with other segments Total Segment profit Other items Depreciation 9,445 – 9,445 1,705 551 7,025 – 7,025 260 473 – 16 – 4,086 – 4,086 104 390 1,976 22,533 – 1,976 20 104 – 22,533 2,091 1,519 Notes: 1. Total amount of segment profit agrees with operating profit presented in the consolidated statement of income. 2. Segment assets and liabilities have not been presented, as they are not used as the basis for deciding the allocation of management resources or evaluating operating performance. 3. Depreciation includes amortization of long-term prepaid expenses. II Fiscal year ended March 31, 2022 Quick Connect Couplings Power & Machine Tools Pumps & Compressors Door Closers Total Net sales Reportable segment (Millions of yen) Revenue from contracts with customers Other revenue Revenues from external customers Transactions with other segments Total Segment profit (loss) Other items Depreciation 11,440 7,748 4,176 1,916 25,281 11,440 7,748 4,176 1,916 25,281 – – 11,440 2,696 631 – – 7,748 440 462 – – 4,176 250 331 – – 1,916 (32) 89 – – 25,281 3,355 1,515 Notes: 1. Total amount of segment profit agrees with operating profit presented in the consolidated statement of income. 2. Segment assets and liabilities have not been presented, as they are not used as the basis for deciding the allocation of management resources or evaluating operating performance. 3. Depreciation includes amortization of long-term prepaid expenses. – 17 – Information associated with reportable segments Fiscal year ended March 31, 2021 1. Information for each product or service This information has been omitted, as identical information is disclosed in segment information. 2. Information for each region (1) Net sales Japan Americas Europe East Asia (Millions of yen) Southeast Asia Asia and Oceania Total 15,415 1,708 1,428 2,150 532 1,298 22,533 Note: Net sales are classified by country and region based on customer location. (2) Property, plant, and equipment Japan Americas Europe East Asia (Millions of yen) Southeast Asia Asia and Oceania Total 11,010 182 130 0 659 91 12,076 3. Information for each main customer Name of customer or individual YAMAZEN CORPORATION Net sales Related segment 3,628 Quick Connect Couplings, Power & Machine Tools, Pumps & Compressors, and others (Millions of yen) Fiscal year ended March 31, 2022 1. Information for each product or service This information has been omitted, as identical information is disclosed in segment information. 2. Information for each region (1) Net sales Japan Americas Europe East Asia (Millions of yen) Southeast Asia Asia and Oceania Total 16,781 1,991 1,629 2,581 785 1,511 25,281 Notes: Net sales are classified by country and region based on customer location. (2) Property, plant, and equipment Japan Americas Europe East Asia (Millions of yen) Southeast Asia Asia and Oceania Total 10,529 193 98 0 596 68 11,487 – 18 – (Millions of yen) 3. Information for each main customer Name of customer or individual YAMAZEN CORPORATION Net sales Related segment 4,633 Quick Connect Couplings, Power & Machine Tools, Pumps & Compressors, and others Disclosure of impairment loss on non-current assets for each reportable segment There were no impairment losses allocated to any reportable segment. Impairment losses which were not allocated to any reportable segment were ¥610 million, and their main details were “Land” and “Leased assets.” Amortization and unamortized balance of goodwill for each reportable segment Not applicable. Not applicable. Information about gain on bargain purchase for each reportable segment – 19 – Per share information Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Net assets per share 2,685.92 Net assets per share Basic earnings per share 76.08 Basic earnings per share Diluted earnings per share is not presented, because there are no potential shares. Diluted earnings per share is not presented, because there are no potential shares. Notes: 1. The basis for calculating basic earnings per share is as follows: Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen, unless otherwise noted) Basic earnings per share Profit attributable to owners of parent Amounts not attributable to common shareholders Profit attributable to owners of parent pertaining to common shares Average number of outstanding common shares during period (shares) Total net assets Amounts subtracted from total net assets [Non-controlling interests] Net assets attributable to common shares at end of period Number of common shares at end of period used for calculating net assets per share (shares) 20,367,774 20,288,913 2. The basis for calculating net assets per share is as follows: As of March 31, 2021 As of March 31, 2022 (Millions of yen, unless otherwise noted) Significant events after reporting period Not applicable. 20,288,949 20,288,899 (Yen) 2,746.45 94.99 1,927 – 1,927 55,730 7 [7] 55,722 1,549 – 1,549 54,502 7 [7] 54,494 – 20 – 4. Other information Changes in officers (i) Change in representative directors Not applicable. (ii) Changes in other officers Not applicable. – 21 –