北越工業（6364） – Consolidated Financial Results for the Fiscal Year Ended March 31,2022(Under Japanese GAAP)

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. May 10, 2022 Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Under Japanese GAAP) Company name: Hokuetsu Industries Co., Ltd. Tokyo Stock Exchange Listing: 6364 Securities code: https://www.airman.co.jp/ URL: Yoshimasa Horiuchi, President, CEO Representative: Goichi Sato, Director, General Manager of Administration Dept. Inquiries: Telephone: +81-256 93-5571 Scheduled 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: Yes Holding of financial results briefing: June 28, 2022 June 29, 2022 June 28, 2022 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 to March 31, 2022) (1) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary 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 % 36,650 32,929 11.3 (21.2) 3,570 2,489 43.4 (53.2) 4,055 2,920 38.8 (46.5) 2,748 1,944 41.4 (46.3) Note: Comprehensive income For the fiscal year ended March 31, 2022: For the fiscal year ended March 31, 2021: ¥2,516 million ¥2,370 million [6.1%] [(27.2)%] Basic earnings per share Diluted earnings per share Return on equity Fiscal year ended March 31, 2022 March 31, 2021 Yen 95.76 67.20 Yen – – Reference: Share of profit (loss) of entities accounted for using equity method For the fiscal year ended March 31, 2022: For the fiscal year ended March 31, 2021: ¥84 million ¥22 million Ratio of ordinary profit to total assets Ratio of operating profit to net sales % 9.0 6.6 % 9.1 6.6 % 9.7 7.6 (2) Consolidated financial position As of March 31, 2022 March 31, 2021 Reference: Equity Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 45,827 43,379 31,303 29,962 % 68.0 68.8 Yen 1,097.97 1,036.37 As of March 31, 2022: As of March 31, 2021: ¥31,161 million ¥29,834 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 2,276 4,099 (615) (2,017) (2,222) (1,731) 10,613 11,049 Annual dividends per share 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 Millions of yen % – – – 17.00 22.00 20.00 30.00 20.00 30.00 640 865 32.7 31.3 30.8 % 2.2 2.8 2. Cash dividends Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) Yen 5.00 10.00 10.00 – – – March 31, 2023) 3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to Net sales Operating profit Ordinary profit (Percentages indicate year-on-year changes.) Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen 19,500 15.5 1,620 (3.8) 1,700 (5.2) 1,190 (3.7) 41.93 40,000 9.1 3,820 7.0 4,000 (1.4) 2,760 0.4 97.25 Six months ending September 30, 2022 Fiscal year ending March 31, 2023 (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the * Notes 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 Note: For details, please refer to “3. Consolidated Financial Statements and Important Notes (5) Notes to Consolidated Financial Statements (Changes in Accounting Policies)” on the attached page 14. (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 30,165,418 shares 30,165,418 shares 1,784,261 shares 1,377,850 shares 28,703,998 shares 28,935,921 shares Note: The number of treasury shares at the end of the period includes the Company’s shares (345,900 shares for the fiscal year ended March 31, 2022 and 339,700 shares for the fiscal year ended March 31, 2021) held by “Custody Bank of Japan, Ltd. (Trust Account E).” The Company’s shares held by “Custody Bank of Japan, Ltd. (Trust Account E)” are included in treasury shares, which is deducted from the average number of shares outstanding during the period (329,823 shares for the fiscal year ended March 31, 2022 and 318,862 shares for the fiscal year ended March 31, 2021). (Reference) Overview of non-consolidated financial results 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 % 35,539 29,975 18.6 (21.7) 2,179 1,500 45.3 (48.4) 3,090 2,110 46.4 (43.2) 2,128 1,424 49.4 (45.0) Fiscal year ended March 31, 2022 March 31, 2021 Basic earnings per share Diluted earnings per share Yen 74.16 49.23 Yen – – (2) Non-consolidated financial position As of March 31, 2022 March 31, 2021 Reference: Equity corporation. Total assets Net assets Equity-to-asset ratio Net assets per share Millions of yen Millions of yen 37,611 35,556 23,252 22,685 % 61.8 63.8 Yen 819.28 788.02 As of March 31, 2022: As of March 31, 2021: ¥23,252 million ¥22,685 million * Financial results reports are exempt from audit conducted by certified public accountants or an audit * Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements and others) The forward-looking statements, including earnings forecasts, contained in this material 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. Moreover, actual business and other results may differ from the forecast due to various factors going forward. Please refer to “1. Overview of operating results and others, (1) Overview of operating results for the fiscal year” on page 2 for the assumptions used in the forecast of financial results and precautionary remarks regarding the use of the forecast of financial results. (How to obtain supplementary material on financial results) The Company is scheduled to hold a financial results briefing for institutional investors and analysts on Monday, May 30, 2022. Supplementary material on financial results to be used in this financial results briefing will be posted on the Company’s website shortly after the briefing. Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Attachment: Table of contents Index 1 Overview of operating results and others ……………………………………………………………………………………. 2 (1) Overview of operating results for the fiscal year ……………………………………………………………………. 2 (2) Overview of financial position for the fiscal year …………………………………………………………………… 3 (3) Basic policy on profit distribution and dividends for the current and following fiscal years …………. 4 2 Basic approach to selection of accounting standards …………………………………………………………………….. 5 3 Consolidated financial statements and significant notes thereto ……………………………………………………… 6 (1) Consolidated balance sheet …………………………………………………………………………………………………. 6 (2) Consolidated statements of income and comprehensive income ………………………………………………. 8 Consolidated statement of income ………………………………………………………………………………………… 8 Consolidated statement of comprehensive income …………………………………………………………………. 9 (3) Consolidated statement of changes in equity ……………………………………………………………………….. 10 (4) Consolidated statement of cash flows …………………………………………………………………………………. 12 (5) Notes to consolidated financial statements …………………………………………………………………………… 14 (Notes on the going-concern assumption) ……………………………………………………………………………. 14 (Changes in accounting policies) ………………………………………………………………………………………… 14 (Change in presentation) …………………………………………………………………………………………………… 15 (Additional information) …………………………………………………………………………………………………… 15 (Consolidated balance sheet) ……………………………………………………………………………………………… 16 (Consolidated statement of income) ……………………………………………………………………………………. 16 (Consolidated statement of changes in equity) ……………………………………………………………………… 17 (Consolidated statement of cash flows) ……………………………………………………………………………….. 20 (Segment information, etc.) ……………………………………………………………………………………………….. 20 (Per-share information) …………………………………………………………………………………………………….. 22 (Significant subsequent events) ………………………………………………………………………………………….. 22 4 Others …………………………………………………………………………………………………………………………………… 23 – 1 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 1 Overview of operating results and others (1) Overview of operating results for the fiscal year In the fiscal year under review (April 1, 2021 to March 31, 2022), the Japanese economy continued to be unpredictable due to the spread of new strain, despite the wider availability of the vaccine for COVID-19 and decline of new cases of infection since September seemed to show signs of recovery. There were concerns that the increase in demand from economy recovering and limited production activities due to measures to prevent the spread of COVID-19 may cause material shortages and rise in their costs. Worldwide, economy showed sign of rapid recovery mainly in developed countries with growing vaccination rates, but growing tension in Ukraine caused further increase of energy price and shortage of raw materials caused continued uncertainties toward the future. Amid these challenges, the Group has been striving to win orders in regions where the economies are rapidly recovering while continuing to follow the guidelines for preventing the spread of COVID-19. Company-wide efficiency drives and cost-cutting initiatives have also been promoted to improve profits. All of which has elicited the following results for the fiscal year under review: Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Year-on-year changes (Millions of yen) (Millions of yen) (%) Net sales [Domestic sales] [International sales] Operating profit Ordinary profit Profit attributable to owners of parent 32,929 (23,163) (9,765) 2,489 2,920 1,944 36,650 (21,708) (14,942) 3,570 4,055 2,748 11.3 [(6.3)] [53.0] 43.4 38.8 41.4 Group operations are divided into two business segments, the status of each of which is as follows: (Construction Machinery Business) The key areas of this segment are engine compressors, engine generators and scissors lifters. From a sales perspective, despite the continued high demand for public works projects in Japan to prevent and mitigate disasters as well as to build national resilience, delivery remained sluggish given the slow recovery of demand for privately funded construction works due to the ongoing impact of the COVID-19 pandemic. In overseas, sales increased significantly due to the jump in number of orders received thanks to the resurgence of demand from the previous year, especially in the North America, as well as the affects from depreciation of yen. Furthermore, sales increased year on year as a result of regions excluding China remaining steady. Profits increased year on year due to the recovery of plant operation rate thanks to the increase in product orders for overseas backed by the affects from depreciation of yen which improved the balance of profits and losses, despite the rise in marine transport costs and costs of steel and other materials increasing from the latter half of the fiscal year. Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Year-on-year changes (Millions of yen) (Millions of yen) (%) Net sales Segment profit 24,597 2,168 29,109 3,489 18.3 60.9 – 2 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Industrial Machinery Business) The key areas of this segment are motor compressors, emergency generators, components and services. In sales terms, despite sales of our mainstay motor compressors remaining strong due to the recovery of capital investment compared to the previous year and affect from the delivery of OEM for KOBELCO COMPRESSORS CORPORATION, which began in the latter half of the fiscal year, overall sales declined year on year since demand recessed for emergency generators as backups in gas stations in the event of a disaster and for powering drainage pumps in case of river flooding. Although profits in the components and service sectors remained intact despite the COVID-19 pandemic, profit declined year on year due to the decline in net sales. Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Year-on-year changes (Millions of yen) (Millions of yen) (%) 8,331 1,320 7,541 1,122 (9.5) (15.0) Net sales Segment profit Outlook for fiscal year ending March 31, 2023 Looking ahead, as the decline in the number of new COVID-19 infection cases in Japan cannot be guaranteed and taking into account the ongoing proliferation of mutant strains in certain overseas regions on top of the effects of invasion of Ukraine by Russian and economic sanctions imposed on Russia by various governments in response, economic recovery remains uncertain. Amid these economic conditions, the Group is striving to boost its corporate value on an ongoing basis by developing products that leverage its core technologies, developed over the years, to meet changing market needs. In Japan, given the expected upturn in capital investment as the economic recovery gathers pace, rise in new construction works are becoming more prominent. In Overseas, we expect continued rise in demand for construction machinery used in infrastructure and residential construction works in North America and other countries. Consolidated forecasts for the fiscal year ending March 31, 2023 is as follows: During the forecasting process, assumed exchange rates of ¥120 per US$ and ¥130 per Euro were used. Net sales Operating profit Ordinary profit Profit attributable to owners of parent Results for the fiscal year ended March 31, 2022 Forecast for fiscal year ending March 31, 2023 Year-on-year changes (Millions of yen) (Millions of yen) (%) 36,650 3,570 4,055 2,748 40,000 3,820 4,000 2,760 9.1 7.0 (1.4) 0.4 (2) Overview of financial position for the fiscal year (Assets, liabilities and net assets) At the close of the fiscal year under review, total assets of ¥45,827 million meant an increase of ¥2,447 million compared to the end of the previous fiscal year. Current assets increased by ¥3,080 million to ¥32,492 million, mainly due to an increase in notes and accounts receivable, merchandise and finished goods thanks to the growth of production and sales. Non-current assets declined by ¥632 million to ¥13,335 million, due mainly to a drop in the number of investment securities following the partial redemption of foreign currency-denominated structured bonds and a fall in their market value and an increase in deferred tax assets. – 3 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 The increase in current liabilities, rising by ¥1,127 million to ¥11,938 million, was mainly due to an increase in notes and accounts payable thanks to the growth of production. Long-term liabilities declined by ¥20 million to ¥2,585 million. The main reason for this was a decline in long-term debt, due, in turn, to a transfer to current liabilities and the recording of an asset retirement obligation. The increase in net assets, which appreciated by ¥1,341 million to ¥31,303 million was mainly attributable due to an increase in retained earnings, more treasury shares following market purchases and a decline in the valuation difference on available-for-sale securities due to a fall in market value. Consequently, the equity ratio at the end of the fiscal year decreased by 0.8 points to 68.0% compared with the end of the previous fiscal year. (Cash flows) The level of cash and cash equivalents at the end of the fiscal year decreased by ¥436 million to ¥10,613 million compared with the end of the previous fiscal year. Cash flows from operating activities decreased by ¥1,822 million to ¥2,276 million, mainly due to increase in profit before income taxes and accounts receivable as well as inventory. Cash flows from investing activities increased by ¥1,401 million compared to the previous year to a surplus of ¥615 million, mainly due to purchase of property, plant and equipment and proceeds from redemption of investment securities. Cash flows from financing activities declined by ¥490 million compared to the previous year to a total of ¥2,222 million, most of which was for redemption of bonds, purchase of treasury shares and cash dividends paid. The Group includes the following cash flow-related indicators: Reference: Trend of consolidated cash flow indicators Equity ratio Market capitalization ratio Cash flow liabilities ratio to interest-bearing Fiscal year ended March 31, 2018 Fiscal year ended March 31, 2019 Fiscal year ended March 31, 2020 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 62.0% 85.6% 61.3% 78.0% 64.4% 71.1% 68.8% 71.9% 68.0% 54.1% 0.7 years 0.6 years 0.4 years 0.3 years 0.1 years Interest coverage ratio 348.1 times 218.0 time 263.0 times 349.9 times 279.1 times Notes: Equity ratio: Own capital / Total assets Market capitalization ratio: Market capitalization / Total assets Cash flow to interest-bearing debt ratio: Interest-bearing liabilities/Cash flow Interest coverage ratio: Cash flow / Interest payment All indicators are calculated based on consolidated financial figures. * * Market capitalization is calculated by multiplying the closing share price at the end of the period by the number of shares outstanding at the end of the period (excluding treasury shares). Cash flows are based on cash flows from operating activities in the consolidated statement of cash flows. Interest-bearing liabilities cover the entire scope of interest-bearing liabilities recorded in the consolidated balance sheet. For interest payments, the interest expenses paid in the consolidated statement of cash flows is used. * fiscal year (3) Basic policy on profit distribution, and dividends for the fiscal year under review and the following From the Company’s perspective, returning profit to shareholders is one of its top management priorities. As a general rule, dividends commensurate with earnings will continue to be paid, while – 4 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 efficiently using retained earnings for investments aiming to strength the business structure and boost profitability going forward. The Company plans to pay a year-end dividend of ¥20 per share for the fiscal year under review. Consequently, the annual dividend for the fiscal year, including the interim dividend of ¥10 per share, will be ¥30 per share. For the following fiscal year, the Company plans to pay a dividend of ¥30 per share (interim dividend of ¥10 and year-end dividend of ¥20). 2 Basic approach to selection of accounting standards The Group intends to prepare its consolidated financial statements in a manner compliant with the Japanese GAAP standard, taking into account comparability of consolidated financial statements between periods and between companies. Going forward, the Company intends to consider applying international accounting standards, taking into account trends in the ratio of foreign shareholders and the extent to which industry peers in Japan apply international accounting standards. – 5 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 3 Consolidated financial statements and significant notes thereto (1) Consolidated balance sheet As of March 31, 2021 As of March 31, 2022 (Thousands of yen) 11,380,014 13,629,839 – – 3,189,689 183,939 773,816 334,955 (80,908) 29,411,346 8,406,894 (4,077,475) 4,329,418 8,550,566 (6,164,612) 2,385,954 1,963,579*1 118,222 1,497,260 (1,380,625) 116,635 8,913,809 77,979 4,024,345 383,377 355,303 219,392 (6,067) 4,976,350 13,968,139 43,379,486 10,943,932 – 4,213,794 10,831,530 4,044,849 207,934 1,223,282 1,082,865 (56,172) 32,492,016 8,859,613 (4,443,267) 4,416,346 8,656,006 (6,391,950) 2,264,055 2,006,579*1 168,639 1,564,706 (1,430,233) 134,473 8,990,094 65,228 2,984,889 528,753 561,703 210,492 (5,876) 4,279,963 13,335,285 45,827,302 Assets Current assets Cash and deposits Notes and accounts receivable – trade Notes receivable – trade Accounts receivable – trade Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Land Construction in progress Other Accumulated depreciation Other, net Total property, plant and equipment Intangible assets Investments and other assets Investment securities Investments in capital of subsidiaries and associates Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets – 6 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 As of March 31, 2021 As of March 31, 2022 (Thousands of yen) 3,254,537 3,450,787 375,000 600,000 637,490 – 632,232 65,800 16,200 1,779,161 10,811,208 100,000 – 158,017 137,334 2,064,464 – 146,037 2,605,853 13,417,062 3,416,544 3,887,594 22,316,367 (967,748) 28,652,758 1,388,090 (113,584) (92,634) 1,181,871 127,795 29,962,424 43,379,486 4,237,599 4,052,298 100,000 – 904,937 305,666 683,160 50,240 18,600 1,586,362 11,938,864 – 2,440 174,896 124,106 2,049,661 114,438 119,457 2,585,000 14,523,865 3,416,544 3,887,594 24,278,736 (1,354,354) 30,228,520 999,897 20,966 (87,775) 933,088 141,827 31,303,436 45,827,302 Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term borrowings Current portion of bonds payable Income taxes payable Contract liabilities Provision for bonuses Provision for bonuses for directors (and other officers) Provision for product warranties Other Total current liabilities Non-current liabilities Long-term borrowings Deferred tax liabilities Provision for share awards Provision for share awards for directors (and other officers) Retirement benefit liability 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 – 7 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (2) Consolidated statements of income and comprehensive income Consolidated statement of income (Thousands of yen)Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Net sales Cost of sales Gross profit Selling, general and administrative expenses Packing and transportation costs Provision of allowance for doubtful accounts Provision for product warranties Remuneration, salaries and allowances for directors (and other officers) Provision for bonuses Provision for bonuses for directors (and other officers) Retirement benefit expenses Provision for share awards Provision for share awards for directors (and other officers) Other Total selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method Foreign exchange gains Other Total non-operating income Non-operating expenses Interest expenses Commission for syndicated loans Other Total non-operating expenses Ordinary profit Extraordinary income Gain on disposal of non-current assets Gain on sale of investment securities Total extraordinary income Extraordinary losses Loss on disposal 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 – 8 – 32,929,473 24,715,851*1 8,213,622 644,083 79,717 – 2,207,191 300,665 56,971 104,221 14,266 33,598 2,283,232*2 5,723,948 2,489,674 7,182 88,433 22,787 113,367 218,855 450,627 10,748 2,999 5,644 19,392 2,920,909 277*3 – 277 25,750*4 25,750 2,895,436 846,220 97,767 943,987 1,951,448 7,061 1,944,387 36,650,986 27,102,151*1 9,548,835 871,201 (24,927) 2,400 2,272,562 318,982 50,240 107,689 14,231 28,550 2,337,709*2 5,978,639 3,570,195 6,133 81,914 84,436 252,485 93,311 518,280 8,475 14,999 9,757 33,233 4,055,242 5,226*3 2,050 7,277 15,522*4 15,522 4,046,997 1,316,606 (34,535) 1,282,070 2,764,927 16,122 2,748,804 Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Consolidated statement of comprehensive income (Thousands of yen)Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Profit Other comprehensive income Valuation difference on available-for-sale securities 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 1,951,448 436,444 (29,752) 8,023 4,788 419,503 2,370,952 2,363,891 7,061 2,764,927 (388,193) 81,587 4,858 52,963 (248,782) 2,516,144 2,500,021 16,122 – 9 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (3) Consolidated statement of changes in equity Fiscal year ended March 31, 2021 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Thousands of yen)Total shareholders’ equity Balance at beginning of period 3,416,544 3,887,594 21,110,162 (413,091) 28,001,210 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity – (738,183) 1,944,387 (738,183) 1,944,387 (591,552) (591,552) 36,896 36,896 Total changes during period – 1,206,204 (554,656) 651,547 Balance at end of period 3,416,544 3,887,594 22,316,367 (967,748) 28,652,758 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 951,646 (88,620) (100,657) 762,367 123,394 28,886,972 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period 436,444 (24,964) 8,023 419,503 436,444 (24,964) 8,023 419,503 4,401 4,401 Balance at end of period 1,388,090 (113,584) (92,634) 1,181,871 127,795 29,962,424 (738,183) 1,944,387 (591,552) 36,896 423,904 1,075,452 – 10 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Fiscal year ended March 31, 2022 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Thousands of yen)Total shareholders’ equity Balance at beginning of period 3,416,544 3,887,594 22,316,367 (967,748) 28,652,758 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity – (786,435) 2,748,804 (786,435) 2,748,804 (442,726) (442,726) 56,119 56,119 Total changes during period – 1,962,369 (386,606) 1,575,762 Balance at end of period 3,416,544 3,887,594 24,278,736 (1,354,354) 30,228,520 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 1,388,090 (113,584) (92,634) 1,181,871 127,795 29,962,424 Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity (388,193) 134,551 4,858 (248,782) 14,032 (234,750) Total changes during period (388,193) 134,551 4,858 (248,782) Balance at end of period 999,897 20,966 (87,775) 933,088 14,032 141,827 1,341,012 31,303,436 (786,435) 2,748,804 (442,726) 56,119 – 11 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (4) Consolidated statement of cash flows Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Thousands of yen) Cash flows from operating activities Profit before income taxes Depreciation Increase (decrease) in retirement benefit liability Increase (decrease) in provision for share awards Increase (decrease) in provision for share awards for directors (and other officers) Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for product warranties Interest and dividend income Interest expenses Share of loss (profit) of entities accounted for using equity method Loss (gain) on sale of investment securities Subsidy income Loss (gain) on disposal of property, plant and equipment Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Decrease (increase) in consumption taxes refund receivable Increase (decrease) in accrued consumption taxes Other, net Subtotal Interest and dividends received Interest paid Subsidies received 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 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 Proceeds from redemption of investment securities Loan advances Proceeds from collection of loans receivable Proceeds from divestments Net cash provided by (used in) investing activities 2,895,436 938,707 (4,507) 25,283 33,428 80,117 (6,170) (95,616) 10,748 (22,787) – (170,667) 25,472 732,897 994,239 (625,733) 262,793 109,414 (233,661) 4,949,395 95,649 (11,714) 165,222 (1,099,544) 4,099,008 (630,250) 630,222 (1,964,972) 435 (26,321) (421,654) – 393,955 – 940 – (2,017,645) 4,046,997 1,022,086 (7,812) 25,279 28,419 (24,927) 2,400 (88,047) 8,475 (84,436) (2,050) (27,929) 10,296 (1,261,849) (1,174,172) 1,674,433 (628,967) (91,605) (236,232) 3,190,356 88,167 (8,156) 33,374 (1,027,577) 2,276,164 (630,273) 630,266 (1,105,124) 5,424 (22,311) (750) 9,450 497,950 (1,000) 290 180 (615,898) – 12 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Cash flows from financing activities Repayments of long-term borrowings Redemption of bonds Repayments of lease liabilities Purchase of treasury shares Dividends paid Dividends paid to non-controlling interests 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 (375,000) – (23,203) (591,552) (738,699) (2,660) (1,731,115) 26,709 376,956 10,672,908 11,049,865*1 (375,000) (600,000) (16,009) (442,726) (786,202) (2,090) (2,222,028) 125,672 (436,090) 11,049,865 10,613,775*1 – 13 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (5) Notes to consolidated financial statements (Notes on the going-concern assumption) Not applicable. (Changes in accounting policies) (Application of accounting standards for revenue recognition) The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant revised ASBJ regulations from the beginning of the fiscal year under review, and recognizes the amount of revenue that is expected to be received upon exchange of promised goods or services at the moment the control of said goods or services is transferred to customers. Consequently, for some transactions, the Group interpreted the gross consideration received from the customer as revenue. However, for transactions where the Group acts as an agent or intermediary in providing goods or services to the customer, revenue is recognized at the net amount received from the customer, excluding amounts paid to suppliers and others. Moreover, sales rebates and other considerations paid to customers, which were previously treated as selling, general and administrative expenses, are now deducted from net sales. Furthermore, for paid payment transactions to which the repurchase agreement applies, we recognize a “liability for paid-in transactions” for the amount equivalent to the end-of-term inventory of the supplies remaining at the paid payment destination. Pursuant to the transitional treatment stipulated in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition, the cumulative impact of applying the new accounting policy retrospectively, prior to the beginning of the fiscal year under review, is added to or deducted from retained earnings at the beginning of the fiscal year under review and the new accounting policy is applied from the balance at the beginning of that fiscal year. In the consolidated balance sheet for the previous fiscal year, “Notes and accounts receivable,” as presented in “Current assets,” is included in “Notes and accounts receivable” and “Other,” which was presented in “Current liabilities,” is included in “Contract liabilities” and “Other” from the fiscal year under review. However, pursuant to the transitional treatment set out in paragraph 89-2 of the Accounting Standard for Revenue Recognition, no reclassification has been made for the previous fiscal year using the new presentation. Consequently, raw materials and supplies increased by ¥85,861 thousand and other current liabilities increased by ¥85,861 thousand in the consolidated balance sheet for the fiscal year under review compared to before the Accounting Standard for Revenue Recognition was applied. The consolidated profit and loss statement for the fiscal year under review revealed a decline in net sales of ¥177,113 thousand, the cost of sales declined by ¥18,846 thousand and selling, general and administrative expenses decreased by ¥158,266 thousand, but operating profit, ordinary profit and profit before income taxes remained unaffected. The opening balance of retained earnings is unaffected. Furthermore, pursuant to the transitional treatment set out in paragraph 89-3 of the Accounting Standard for Revenue Recognition, information disaggregating revenue from contracts with customers for the previous fiscal year is not presented. (Application of accounting standards for fair value measurement) The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019.) and relevant revised ASBJ regulations from the beginning of the fiscal year under review, 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). The consolidated financial statements are unaffected. – 14 – Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Change in presentation) (Consolidated statement of income) 1 “Subsidy income” under “Non-operating income,” which was separately set out in the results for the previous fiscal year, is included in “Other” in the fiscal year under review, as it comprised less than 10/100 of total non-operating income. The consolidated financial statements for the previous fiscal year have been reclassified to reflect this change in the presentation detail. Consequently, the sum of ¥170,667 thousand presented as “Subsidy income” under “Non-operating income” in the consolidated profit and loss statement for the previous fiscal year has been reclassified as “Other.” 2 The item “Commission for purchase of treasury shares” under “Non-operating expenses,” presented in the previous fiscal year as a separate item, was included in “Other” in the fiscal year under review, as it comprised less than 10/100 of total non-operating expenses. The consolidated financial statements for the previous fiscal year have been reclassified to reflect this change in the presentation detail. This means that ¥3,492 thousand, which was presented as “Commission for purchase of treasury shares” as part of “Non-operating expenses” in the consolidated profit and loss statement for the previous fiscal year, has been reclassified as “Other.” (Additional information) (Transactions of delivering the Company’s own shares to employees, etc. through trusts) The Company concludes transactions as part of efforts to deliver its own shares to employees, etc. through trust for the purpose of providing benefits to employees. As regards to how such trust agreements are usually accounted for, the Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts (ASBJ PITF No. 30, March 26, 2015), has been applied and the relevant accounting treatment implemented in accordance with the relevant guidelines. i) Transaction overview The Company issues points to its employees based on their individual contributions and other factors, and when they acquire entitlements under certain conditions, they will receive shares in the Company equivalent to the points thus granted. The shares to be provided to employees are acquired ahead of time using money set up in advance in a trust, then segregated and managed as trust assets. ii) Company shares remaining in trust The Company’s shares remaining in the trust are recorded as treasury shares under net assets at their book value in the trust (excluding the incidental expenses incurred). The book value and number of such treasury shares were ¥180,586 thousand and 180,500 shares for the previous fiscal year and ¥202,876 thousand and 200,400 shares in the fiscal year under review. (Performance-linked share-based remuneration scheme for officers). The purpose of the Company is to provide incentives to directors (excluding those appointed as audit committee members and outside directors), executive officers and directors appointed as audit committee members (excluding outside directors), (hereinafter referred to as “Officers”). The Company has entered into transactions to issue its shares through a trust to the Officers for the purpose of providing incentives to the Officers. As regards how such trust agreements are usually accounted for, the Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts (ASBJ PITF No. 30, March 26, 2015), has been applied and the relevant accounting treatment implemented in accordance with the relevant guidelines. – 15 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 i) Transaction overview The Company will award certain points to officers according to the monthly remuneration amount, achievement level, etc. for the relevant fiscal year, and will provide the Company’s shares according to the accumulated points when the officer retires. The shares to be provided to officers are acquired ahead of time using money set up in advance in a trust, then segregated and managed as trust assets. ii) Company shares remaining in trust The Company’s shares remaining in the trust are recorded as treasury shares under net assets at their book value in the trust (excluding the incidental expenses incurred). The book value and number of such treasury shares were ¥158,420 thousand and 159,200 shares for the previous fiscal year and ¥144,890 thousand and 145,500 shares in the fiscal year under review. (Consolidated balance sheet) *1 Idle fixed assets included in property, plant and equipment are as follows: As of March 31, 2021 As of March 31, 2022 1,000 1,000 (Thousands of yen) Land 2 The company has concluded commitment line agreements with four banks with which it does business, to ensure more flexible and stable fundraising. Undrawn borrowings and other balances relevant to commitment lines of credit for the fiscal year are as follows: Total commitment lines Outstanding borrowings Balance (Consolidated statement of income) *1 The book value of inventories held for sale in the ordinary course of business has been impaired due to a decline in profitability as follows: As of March 31, 2021 As of March 31, 2022 2,000,000 – 2,000,000 (Thousands of yen) 2,000,000 – 2,000,000 (Thousands of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 104,161 73,315 (Thousands of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 195,242 193,728 *2 Research and development expenses included in general and administrative expenses and manufacturing costs for the period under review are as follows: Cost of sales *3 Breakdown of gain on disposal of non-current assets are as follows: – 16 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Thousands of yen) *4 Breakdown of loss on disposal of non-current assets are as follows: Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Thousands of yen) Gain on the sale of machinery, equipment and vehicles Other Total Loss on disposal of buildings and structures Loss on disposal of machinery, equipment and vehicles Other Total (Consolidated statement of changes in equity) Fiscal year ended March 31, 2021 1 Type and number of issued shares and treasury shares 269 8 277 16,270 7,337 2,142 25,750 5,224 2 5,226 6,865 7,270 1,386 15,522 Increase Decrease Number of shares at beginning of the fiscal year (Shares) Number of shares at end of the fiscal year Issued shares Ordinary shares Total Treasury shares Ordinary shares (Note) Total 30,165,418 30,165,418 857,966 857,966 – – 557,884 557,884 – – 38,000 38,000 30,165,418 30,165,418 1,377,850 1,377,850 Notes: 1. The number of treasury shares of ordinary shares includes the Company’s shares held by Custody Bank of Japan, Ltd. (Trust Account E) (319,900 and 339,700 shares at the start and end of the fiscal year, respectively). Custody Bank of Japan, Ltd. was established on July 27, 2020 through the merger of JTC Holdings, Ltd., Japan Trustee Services Bank, Ltd. and Trust & Custody Services Bank, Ltd. 2. This increase in the number of treasury shares, to 557,884 ordinary shares, represents an increase of 500,000 shares from the acquisition of treasury shares based on a resolution of the Board of Directors, an increase of 84 shares from the purchase of shares of less than one unit, an increase of 26,600 shares from the acquisition of shares in the Japanese-style Employee Stock Ownership Plan (J-ESOP) and an increase of 31,200 shares from the acquisition of shares in the Board Benefit Trust (BBT). 3. The decrease of 38,000 ordinary shares in the number of treasury shares represents a decrease of 8,700 shares held in the J-ESOP and a decrease of 29,300 shares held in the BBT. 2 Matters related to dividends (1) Details of dividend paid – 17 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Resolution Classes of shares Total amount of dividends Dividend per share Base date Effective date (Thousands of yen) (Yen) Ordinary shares 592,547 20 March 31, 2020 June 26, 2020 June 25, 2020 Ordinary general meeting of shareholders November 5, 2020 Board of Directors Ordinary shares 145,636 5 September 30, 2020 December 2, 2020 Notes: 1. The total amount of dividends payable, as defined by the resolution of the ordinary general meeting of shareholders on June 25, 2020, includes dividends valued at ¥6,398 thousand for the Company’s shares held by Trust & Custody Services Bank, Ltd. (Trust Account E). 2. The total amount of dividends as defined by the resolution of the Board of Directors on November 5, 2020 includes a dividend valued at ¥1,563 thousand for the Company’s shares held by Japan Custody Bank, Ltd. (Trust Account E). Custody Bank of Japan, Ltd. was established on July 27, 2020 through the merger of JTC Holdings, Ltd., Japan Trustee Services Bank, Ltd. and Trust & Custody Services Bank, Ltd. (2) Dividends recorded in the fiscal year but with a base date that falls in the following fiscal year Resolution Classes of shares Source of dividend Dividend per share Base date Effective date (Yen) Total amount of dividends (Thousands of yen) June 25, 2021 Ordinary general meeting of shareholders Note: Ordinary shares Retained earnings 495,163 17 March 31, 2021 June 28, 2021 The total amount of dividends as defined by the resolution of the Ordinary General Meeting of Shareholders on June 25, 2021 includes a dividend valued at ¥5,774 thousand for the Company’s shares held by Japan Custody Bank, Ltd. (Trust Account E). Custody Bank of Japan, Ltd. was established on July 27, 2020 through the merger of JTC Holdings, Ltd., Japan Trustee Services Bank, Ltd. and Trust & Custody Services Bank, Ltd. – 18 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Fiscal year ended March 31, 2022 1 Type and number of issued shares and treasury shares Increase Decrease Number of shares at beginning of the fiscal year (Shares) Number of shares at end of the fiscal year Issued shares Ordinary shares Total Treasury shares Ordinary shares (Note) Total 30,165,418 30,165,418 1,377,850 1,377,850 – – 462,711 462,711 – – 56,300 56,300 30,165,418 30,165,418 1,784,261 1,784,261 Notes: 1. The number of treasury shares of ordinary shares includes the Company’s shares held by Japan Custody Bank, Ltd. (Trust Account E) (339,700 and 345,900 shares at the start and end of the fiscal year, respectively). 2. This increase in the number of treasury shares, to 462,711 ordinary shares, represents an increase of 400,000 shares from the acquisition of treasury shares based on a resolution of the Board of Directors, an increase of 211 shares from the purchase of shares of less than one unit, an increase of 27,500 shares from the acquisition of shares in the J-ESOP and an increase of 35,000 shares from the acquisition of shares in the BBT. 3. The decrease of 56,300 ordinary shares in the number of treasury shares represents a decrease of 7,600 shares held in the J-ESOP and a decrease of 48,700 shares held in the BBT. 2 Matters related to dividends (1) Details of dividend paid Classes of shares Total amount of dividends (Thousands of yen) Dividend per share (Yen) Base date Effective date Ordinary shares 495,163 17 March 31, 2021 June 28, 2021 Ordinary shares 291,271 10 September 30, 2021 December 2, 2021 Notes: 1. The total amount of dividends as defined by the resolution of the Ordinary General Meeting of Shareholders on June 25, 2021 includes a dividend valued at ¥5,774 thousand for the Company’s shares held by Japan Custody Bank, Ltd. (Trust Account E). 2. The total amount of dividends as defined by the resolution of the Board of Directors on November 8, 2021 includes a dividend valued at ¥3,151 thousand for the Company’s shares held by Japan Custody Bank, Ltd. (Trust Account E). (2) Dividends recorded in the fiscal year but with a base date that falls in the following fiscal year The following resolutions are planned: Resolution Classes of shares Source of dividend Dividend per share Base date Effective date (Yen) Total amount of dividends (Thousands of yen) June 28, 2022 Ordinary general meeting of shareholders Note: Ordinary shares Retained earnings 574,541 20 March 31, 2022 June 29, 2022 The total amount of dividends as defined by the resolution of the Ordinary General Meeting of Shareholders on June 28, 2022 includes a dividend valued at ¥6,918 thousand for the Company’s shares held by Japan Custody Bank, Ltd. (Trust Account E). Resolution June 25, 2021 Ordinary general meeting of shareholders November 8, 2021 Board of Directors – 19 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Consolidated statement of cash flows) *1 The cash and cash equivalents held at the end of the fiscal year were reconciled with the amounts shown in the consolidated balance sheet as follows: (Thousands of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Cash and time deposits Time deposits with a maturity of three month or more at date of purchase Cash and cash equivalents 11,380,014 (330,149) 11,049,865 10,943,932 (330,156) 10,613,775 (Segment information, etc.) 1 Description of reportable segments The Company’s reportable segments are corporate components for which separate financial information is available and which are regularly reviewed by the Board of Directors to determine how management resources should be allocated and evaluate their performance. The Company has established business departments by product and service at its headquarters. Each business department formulates comprehensive domestic and international strategies for the products and services for which it is responsible and develops its business activities accordingly. Accordingly, the Company comprises product and service segments based on business departments, with two reportable segments: Construction Machinery Business and Industrial Machinery Business. The key areas of the Construction Machinery Business are engine compressors, engine generators and scissors lifters. The key areas of the Industrial Machinery Business are motor compressors, emergency generators, components and services. 2 Explanation of measurements of sales, profit (loss), asset, liability, and other items for each reportable segment The accounting method used for the business segments reported tallies with the accounting policies adopted when preparing the consolidated financial statements. Profit figures for reportable segments are based on operating profit. As stated in “Changes in accounting policies,” the Revenue Recognition Accounting Standard (ASBJ Statement No. 29, March 31, 2020) and relevant revised ASBJ regulations have been applied since the start of the fiscal year under review and the accounting method used to record revenue has changed, spawning similar changes in the method used to calculate profit or loss in the business segments. This change saw sales in Construction Machinery Business decline ¥161,630 thousand and sales in Industrial Machinery Business decline by ¥15,482 thousand in the fiscal year under review compared with the previous method. No impact on segment profit was recorded. 3 Information on sales, profit or loss, assets, liabilities and other items by reportable segment and breakdown of income. – 20 – Fiscal year ended March 31, 2021 Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Construction Machinery Business Industrial Machinery Business Total (Thousands of yen) Sales Revenues from external customers Transactions with other segments Total Segment profit Other items Depreciation 24,597,783 – 24,597,783 2,168,816 788,427 8,331,690 – 8,331,690 1,320,247 139,820 32,929,473 – 32,929,473 3,489,064 928,247 Notes: 1. Segment assets and liabilities have been omitted. The Company does not allocate these to individual reportable segments given the common processes applied from manufacturing to sales for all segments. 2. Depreciation is thus allocated to each reporting segment according to the percentage of sales in the Construction Machinery and Industrial Machinery businesses. Fiscal year ended March 31, 2022 Construction Machinery Business Industrial Machinery Business Total (Thousands of yen) Sales Finished goods Components Services Revenue from contracts with customers Other revenue Revenues from external customers Transactions with other segments Total Segment profit Other items Depreciation 27,345,093 996,501 767,723 29,109,317 – 29,109,317 – 29,109,317 3,489,217 891,072 5,316,257 1,049,046 1,176,364 7,541,668 – 7,541,668 – 7,541,668 1,122,618 125,129 32,661,350 2,045,547 1,944,088 36,650,986 – 36,650,986 – 36,650,986 4,611,836 1,016,202 Notes: 1. Segment assets and liabilities have been omitted. The Company does not allocate these to individual reportable segments given the common processes applied from manufacturing to sales for all segments. 2. Depreciation is thus allocated to each reporting segment according to the percentage of sales in the Construction Machinery and Industrial Machinery businesses. 4 Disparities between the total for the reportable segments and the amounts recorded in the consolidated financial statements and the main details of such disparities. (Differential adjustments) Profit Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Thousands of yen) 4,611,836 (1,041,640) 3,570,195 Total for reportable segments Corporate expenses (Note) Operating profit in the consolidated financial statements 3,489,064 (999,390) 2,489,674 – 21 -Note: Corporate expenses mainly comprise general and administrative expenses and R&D expenses outside the scope of the reportable segments. Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Total for reportable segments Adjustments Other items Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Depreciation 928,247 1,016,202 10,459 5,884 938,707 1,022,086 Note: Adjustments mainly comprise depreciation and amortization in administrative departments outside the reportable (Thousands of yen) Amount recorded in consolidated financial statements segments. (Per-share information) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Yen) Book value per share Earnings per share ¥1,036.37 ¥67.20 ¥1,097.97 ¥95.76 Notes: 1. Diluted earnings per share has been omitted, given the lack of potential shares. 2. Earnings per share is calculated as follows: Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 1,944,387 1,944,387 2,748,804 2,748,804 Profit attributable to owners of parent (Thousands of yen) Profit attributable to owners of parent for ordinary share (Thousands of yen) Average number of ordinary shares outstanding during the year (Shares) 28,935,921 28,703,998 3. Company’s shares held by Custody Bank of Japan, Ltd. (Trust Account E) is included in the number of treasury shares deducted from the number of shares issued at the end of the year when calculating “Net profit per share” (339,700 shares in the previous fiscal year and 345,900 shares in the fiscal year under review). When calculating “Earnings per share,” these shares are included in treasury shares, which is deducted from the average number of shares outstanding during the period (318,862 shares in the previous fiscal year and 329,823 shares in the fiscal year under review). (Significant subsequent events) Not applicable. – 22 -Hokuetsu Industries Co., Ltd. (6364) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 4 Others (1) Changes to officers i) Change to representative directors Not applicable. ii) Changes to other officers – Newly appointed director (excluding directors appointed as audit committee members) Candidate Director Production Dept.) Katsumi Kaneko (currently Executive Officer, General Manager of – Director scheduled to resign (excluding directors appointed as audit committee members) Director and Senior Advisor Manabu Takeishi – Candidate for new director appointed as audit committee member Director (Full-time Audit Committee Member) Junichi Kanai (currently Executive Officer, General Manager of Audit Committee Member Secretariat) – Director appointed as audit committee member that is scheduled to resign Director (Full-time Audit Committee Member) Masami Adachi iii) Date of appointment and resignation June 28, 2022 – 23 –